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Accounting Policies of GTL Infrastructure Ltd. Company

Mar 31, 2015

I. Basis of Preparation of Financial Statements:

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP),including the Accounting Standards notified under the relevant provisions of the Companies Act, 2013 as adopted consistently by the Company. The financial statements have been prepared on going concern basis under the historical cost convention on accrual basis.

ii. Use of Estimate:

The preparation of financial statements in conformity with Indian GAAP requires judgements,estimates and assumptions to be made that affect the reported amount of assets and liabilities,disclosures of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. The difference between the actual results and estimates are recognised in the year in which the results are known / materialised.

iii. Revenue Recognition:

a. Revenue from Infrastructure / Equipment provisioning is recognised in accordance with the Contract / Agreement entered into. Revenues are recognised when it is earned and no significant uncertainty exists as to its ultimate collection and includes service tax, wherever applicable.

b. Interest income is recognised on a time proportion basis. Dividend is considered when the right to receive is established.

iv. Fixed Assets:

a. Fixed Assets are stated at cost net of eligible Cenvat and VAT less accumulated depreciation, amortisation and impairment loss, if any. All costs attributable to acquisition and/or construction, including borrowing costs upto the date asset is ready to use and exchange difference on Long Term Foreign Currency Monetary Items related to fixed assets are capitalised.

b. The Fixed Assets at the cellular sites, which are ready to use during a particular month are capitalised on the last day of that month.

c. Expenses incurred relating to project, prior to commencement of commercial operation, are considered as pre operative expenditure and shown under Capital Work-in-Progress.

v. Depreciation:

a. Depreciation on Fixed Assets is provided to the extent of depreciable amount on Straight Line Method over the useful life of the assets as prescribed in schedule II to the Companies Act, 2013 except in respect of following Fixed Assets where the assessed useful life is different than those prescribed in Schedule II.

i) Assets with lower assessed useful life

Sr. Asset Years

i. Network Operation Assets 9

ii. Air Conditioners 9

iii. Electrical & Power Supply Equipments 9

iv. Office Equipments 3

v Furniture & Fittings 5

vi. Vehicles 5

The management believes that the useful lives as given above represent the period over which these assets are expected to be used.

ii) The towers have been depreciated on straight line method at the rate of 2.72% per annum based on useful life of 35 years in terms of specific approval received from the Ministry of Corporate Affairs, Government of India vide Order no.45/2/2010-CL-III dated May 26, 2010 issued under Section 205(2)(d) of the Companies Act, 1956. The approval continues to be valid vide letter no.51/9/2014-CL-III dated September 19, 2014 received from Ministry of Corporate Affairs, Government of India.

iii) In respect of Fixed Assets whose actual cost does not exceed Rs. 5,000, depreciation is provided at 100% in the year of addition.

b. The leasehold improvements have been depreciated over the lease period.

c. In respect of additions forming an integral part of existing assets and exchange difference capitalised, depreciation has been provided over residual life of the respective fixed assets.

d. The revised carrying amount of the assets identified as impaired have been depreciated over residual useful life of the respective assets.

vi. Intangible Assets:

Intangible Assets are stated at cost of acquisition less accumulated amortisation. Software which is not an integral part of the related hardware is classified as an Intangible Asset and is amortised over three years.

vii. Impairment of Assets:

The carrying amount of assets is reviewed at each Balance Sheet date, if there is any indication of impairment based on internal/external factors. An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

viii. Investments:

Current Investments are carried at the lower of cost or quoted / fair value computed script wise. Long Term Investments are stated at cost. Provision for diminution in the value of long term investments is made only if such decline is other than temporary.

ix. Assignment of Recoverables:

In case of assignment of recoverables, the amounts are derecognised when all the rights and titles in receivables are assigned. The charges paid on assignment are charged to Statement of Profit & Loss.

x. Inventory of Stores, Spares and Consumables:

Inventory of stores, spares and consumables are accounted for at costs, determined on weighted average basis, or net realisable value, whichever is less.

xi. Foreign Currency Transactions:

a. Transactions in Foreign Currencies are normally recorded at the exchange rate prevailing on the date of the transaction.

b. Monetary items denominated in Foreign Currency at the Balance Sheet date are restated at the exchange rates prevailing at the Balance Sheet date. In case of monetary items which are covered by forward exchange contracts, the difference between the exchange rates prevailing at the Balance Sheet date and rate on the date of the contract is recognised as exchange difference in the Statement of Profit & Loss and the premium paid on forward contracts has been recognised over the life of the contract.

c. Non monetary Foreign Currency items are carried at cost.

d. Gains or losses on account of exchange difference either on settlement or on translation are recognised in the Statement of Profit and Loss except in respect of Long Term Foreign Currency Monetary Items which, if related to acquisition of depreciable fixed assets, are adjusted to the carrying cost of the depreciable fixed assets and in other cases transferred to Foreign Currency Monetary Item Translation Difference Account and amortised over the balance period of such long term Foreign Currency Monetary items but not beyond March 31,2020

xii. Employee Benefits:

a. Short-term employee benefits are recognised as an expense at the undiscounted amount in the Statement of Profit & Loss of the year in which the related service is rendered.

b. Post employment and other long term employee benefits are recognised as an expense in the Statement of Profit and Loss for the year in which the employee has rendered services. The expense is recognised at the present value of the amount payable determined using actuarial valuation techniques based on projected unit credit method. Actuarial gains and losses in respect of post employment and other long term benefits are charged to the Statement of Profit & Loss.

c. In respect of employee's stock options, the excess of market price on the date of grant over the exercise price is recognised as deferred employee compensation expense amortised over vesting period.

xiii. Borrowing Costs:

Borrowing costs include interest,amortisation of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Borrowing cost attributable to the acquisition or construction of a qualifying asset (net of income earned on temporary deployment of funds) are capitalised as a part of the cost of such assets upto the date when such assets are ready for their intended use. All other borrowing costs are charged to Statement of Profit & Loss.

xiv. Leases:

In respect of operating leases, lease rentals are expensed with reference to the terms of lease and other considerations except for lease rentals pertaining to the period upto the asset is put to use, which are capitalised.

xv. Provision for Current and Deferred Tax:

a. Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act, 1961.

b. Deferred tax resulting from the timing differences between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the Balance Sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is a virtual certainty that the assets will be realised against future taxable profits.

xvi. Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the financial statements. Contingent Assets are neither recognised nor disclosed in the financial statements.

xvii. Financial Derivatives Hedging Transactions:

In respect of derivatives contracts, premium paid, provision for losses on restatement and gains / losses on settlement are recognised in the Statement of Profit and Loss.

xviii. Issue Expenses:

Expenses related to issue of equity and equity related instruments are adjusted against the Securities Premium Reserve Account.

xix. Premium on Redemption of Bonds/Debentures

Premium on redemption of bonds/debentures, net of tax impact, is adjusted against the Securities Premium Reserve Account.

xx. Provision for Doubtful receivables and Loans and Advances:

Provision is made in the accounts for doubtful receivables and loans and advances in cases where the management considers the debts, loans and advances, to be doubtful of recovery.

xxi. Cash & Cash Equivalents

Cash &Cash Equivalents for the purpose of Cash flow Statement comprises Cash at bank and in hand, cheques in hand, funds in transit and demand deposits with banks having maturity of less than 3 months.


Mar 31, 2014

I. Basis of Preparation of Financial Statements:

The Accounts have been prepared on a going concern basis under historical cost convention on accrual basis and in accordance with the generally accepted accounting principles in India and the provisions of Companies Act, 1956.

ii. Use of Estimate:

The preparation of financial statements in conformity with the generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. The difference between the actual results and estimates are recognised in the year in which the results are known / materialised.

iii. Revenue Recognition:

a. Revenue from Infrastructure / Equipment provisioning is recognised in accordance with the Contract / Agreement entered into. Revenues are recognised when it is earned and no significant uncertainty exists as to its ultimate collection and includes service tax, wherever applicable.

b. Interest income is recognised on a time proportion basis. Dividend is considered when the right to receive is established.

iv. Fixed Assets:

a. Fixed Assets are stated at cost net of eligible Cenvat and VAT less accumulated depreciation, amortisation and impairment loss, if any. All costs, including borrowing costs up to the date asset is ready to use and exchange difference on Long Term Foreign Currency Monetary Items related to fixed assets are capitalised.

b. The Fixed Assets at the cellular sites, which are ready to use during a particular month are capitalised on the the last day of that month.

c. Expenses incurred relating to project, prior to commencement of commercial operation, are considered as pre operative expenditure and shown under Capital Work In Progress.

v. Depreciation:

a. Depreciation on Fixed Assets is provided on Straight Line Method at the rates and in the manner prescribed in schedule XIV to the Companies Act, 1956 except in respect of certain Fixed Assets where the higher rates are applicable considering the estimated useful life as mentioned below and Towers:

b. The towers have been depreciated on straight line method at the rate of 2.72% per annum in terms of specific approval received from the Ministry of Corporate Affairs, Government of India vide Order no.45/2/2010-CL-III dated May 26, 2010 issued under Section 205(2)(d) of the Companies Act, 1956.

c. The leasehold improvements have been depreciated over lease period.

d. In respect of additions forming an integral part of existing assets and exchange difference capitalised, depreciation has been provided over residual life of the respective fixed assets.

e. In respect of Fixed Assets whose actual cost does not exceed Rs. 5,000, depreciation is provided at 100% in the year of addition.

f. In respect of Fixed Assets acquired upon demerger pursuant to the Scheme of Arrangement between GTL Infrastructure Limited and GTL Limited, depreciation is provided for the balance period of economic useful life of those assets.

g. The revised carrying amount of the assets identified as impaired have been depreciated over residual life of the respective assets.

vi. Intangible Assets:

Intangible Assets are stated at cost of acquisition less accumulated amortisation. Software which is not an integral part of the related hardware is classified as an Intangible Asset and is amortised over three years.

vii. Impairment of Assets:

The carrying amount of assets is reviewed at each Balance Sheet date if there is any indication of impairment based on internal/external factors. An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the year in which the carrying amount of an asset exceeds its recoverable amount. The impairment loss recognised in prior accounting periods is reversed if there is a change in the estimate of recoverable amount.

viii. Investments:

Current Investments are carried at the lower of cost or quoted / fair value computed script wise. Long Term Investments are stated at cost. Provision for diminution in the value of long term investments is made only if such decline is other than temporary.

ix. Assignment of Recoverables:

In case of assignment of recoverables, the amounts are derecognised when all the rights and titles in receivables are assigned. The charges paid on assignment are charged to Statement of Profit & Loss.

x. Inventory of Stores, Spares and Consumables:

Inventory of stores, spares and consumables are accounted for at costs, determined on weighted average basis, or net realisable value, whichever is less.

xi. Foreign Currency Transactions:

a. Transactions in Foreign Currencies are normally recorded at the exchange rate prevailing on the date of the transaction.

b. Monetary items denominated in Foreign Currency at the Balance Sheet date are restated at the exchange rates prevailing at the Balance Sheet date. In case of the items which are covered by forward exchange contracts, the difference between the exchange rates prevailing at the Balance Sheet date and rate on the date of the contract is recognised as exchange difference. The premium on forward contracts is amortised over the life of the contract.

c. Non monetary Foreign Currency items are carried at cost.

d. Gains or losses on account of exchange difference either on settlement or on translation are recognised in the Statement of Profit and Loss except in respect of Long Term Foreign Currency Monetary Items which, if related to acquisition of depreciable fixed assets, are adjusted to the carrying cost of the depreciable fixed assets and in other cases transferred to Foreign Currency Monetary Item Translation Difference Account and amortised over the balance period of such long term Foreign Currency Monetary items but not beyond March 31,2020

xii. Employee Benefits:

a. Short-term employee benefits are recognised as an expense at the undiscounted amount in the Statement of Profit & Loss of the year in which the related service is rendered.

b. Post employment and other long term employee benefits are recognised as an expense in the Statement of Profit and Loss for the year in which the employee has rendered services. The expense is recognised at the present value of the amount payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to the Statement of Profit & Loss.

c. In respect of employee''s stock options, the excess of market price on the date of grant over the exercise price is recognised as deferred employee compensation expense amortised over vesting period.

xiii. Borrowing Costs:

Borrowing costs that are attributable to acquisition or construction of a qualifying asset (net of income earned on temporary deployment of funds) are capitalised as a part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to Statement of Profit & Loss.

xiv. Leases:

In respect of operating leases, lease rentals are expensed with reference to the terms of lease and other considerations except for lease rentals pertaining to the period up to the asset is put to use, which are capitalised.

xv. Provision for Current and Deferred Tax:

a. Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act, 1961.

b. Deferred tax resulting from the timing differences between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the Balance Sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is a virtual certainty that the assets will be realised in the future.

xvi. Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.

xvii. Financial Derivatives Hedging Transactions:

In respect of derivatives contracts, premium paid, provision for losses on restatement and gains / losses on settlement are recognised in the Statement of Profit and Loss.

xviii. Issue Expenses:

Expenses related to issue of equity and equity related instruments are adjusted against the Securities Premium Account.

xix. Premium on Redemption of Bonds/Debentures

Premium on redemption of bonds / debentures, net of tax impact, is adjusted against the Securities Premium Account.

xx. Provision for Doubtful receivables and Loans and Advances:

Provision is made in the accounts for doubtful receivables and loans and advances in cases where the management considers the debts, loans and advances, to be doubtful of recovery.

2.2 Terms / rights attached to equity shares

The Company has only one class of equity shares having par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all the preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

2.3 Shares reserved for issue under options :

(i) The Employee Stock Option Schemes (ESOS) holders under the ESOS have the option to exercise/convert ESOS into Nil Equity Shares (Previous Year 13,465,454)

(ii) The Foreign Currency Convertible Bonds (FCCB) holders have the option to convert FCCB into 1,207,031,848 Equity Shares (Previous Year 1,115,163,217) (Refer Note No. 4.3)

(iii) Refer note No. 34 in respect of Shares to be issued pursuant to the Scheme of Arrangement

3.1 As approved by the Shareholders in the Annual General Meeting held on September 17, 2013, during the year the Company has cancelled 13,465,454 options which were in force and closed "GTL Infrastructure Limited- Employee Stock Option Scheme 2005 (ESOS 2005)". Accordingly Employee Share Option Outstanding amounting to Rs. 105,966,938 has been credited to Surplus/Deficit account of the Company

4.1 Rupee Term Loans from Banks & Financial Institutions are secured by way of

(i) Mortgage by first pari-passu charge on all immovable assets, both present and future and on all movable assets, both present and future, including first floating charge on all the current assets of the Company.

(ii) Sponsor support from Global Holding Corporation Private Limited (GHC) and guarantee of Mr. Manoj Tirodkar (Promoter) towards debt servicing of CDR Lenders and personal gurantee aggregating to Rs. 6,010,400,000 by Mr. Manoj Tirodkar.

4.2 Terms of Repayment

(i) Rupee Term Loans from Banks and Financial Institutions and Current Maturities of Long-term borrowings having an effective yield of 10.75% over the tenure of the facility aggregating to Rs. 30,453,009,958 are repayable in 53 structured quarterly instalments starting from June 30, 2013 and ending on June 30, 2026

(ii) Rupee Term Loans from Banks and Financial Institutions and Current Maturities of Long-term borrowings having an Interest rate of 3% p.a aggreegating to Rs. 2,070,946,959 are repayable in 16 structured quarterly instalments starting from June 30, 2013 and ending on March 31,2017

(iii) Rupee Term Loans from Banks having an Interest rate of 8% p.a aggregating to Rs. 2,112,575,718 are repayble only after the Final Settlement date of all other restructured Loans, i.e., June 30, 2026.

(iv) The Foreign Currency Term Loan and Current Maturities of Long term borrowings relating to Foreign Currency Term Loan are repayable in 32 equated quarterly instalments of Euro 375,000 starting from June 15, 2013 and ending on March 15, 2021. The loan carries Interest rate of 3 months Euribor 200 bps.

4.3 Foreign Currency Convertible Bonds (FCCBs) :

(i) In terms of Offering Circular dated October 17, 2012 ("Offering Circular"), on November 8, 2012 outstanding Foreign Currency Convertible Bonds (FCCBs) of US$ 228,300,000 together with premium of US$ 90,986,000 on them aggregating to US$ 319,286,000 were restructured by way of cashless exchange with 111,740 Zero Coupon Compulsorily Convertible Bonds due 2017 (Series A) and 207,546 Interest Bearing Convertible Bonds due 2017 (Series B) of US$ 1,000 each.

(ii) Series A and Series B Bondholders have an option to convert these bonds into equity shares at a fixed exchange ratio of 1 US$=Rs. 54.252 at any time upto the Close of Business on November 2, 2017 ("Maturity Date") except during the ''closed period'' as defined in the ''Offering Circular''.

(iii) Series A Bonds of US$ 111,740,000 are compulsorily convertible into equity shares with Bondholders having an option to convert each bond into 5,425.20 fully paid up equity shares of Rs. 10 each. As on March 31,2014, 52,422 Series A Bonds were outstanding.

(iv) The Series B Bonds of US$ 207,546,000 are interest bearing optionally convertible bonds. Each bond carries an Interest at the rate of 0.5335% p.a. payable semi annually on the outstanding principal plus the margin for period under consideration with effect from November 8, 2013 as defined in Offering Circular. The Conversion Price shall be determined in terms of ''Offering Circular''. As on date, applicable Conversion Price for each Bond is Rs. 11.38 per equity share, accordingly Series B Bondholder have an option to convert each bond into 4,767.31 fully paid up equity shares of Rs. 10 each. As on March 31,2014, 193,533 Series B Bonds were outstanding.

(v) Unless previously converted, redeemed, repurchased or cancelled, the Company will redeem each Series B Bond at 114.5047% of its principal amount on the maurity date i.e November 9, 2017.

4.4 Pursuant to Trust Deeds dated November 8, 2012 executed between the Company and the Trustee, constituting

US$ 111,740,000 Zero Coupon Compulsorily Convertible Bonds due 2017 (Series A Bonds) and US$ 207,546,000

Interest Bearing Convertible Bonds due 2017 (Series B Bonds) respectively, the Company has cancelled fractional

Series A Bonds of US$11,000 and fractional Series B Bonds of US$ 10,000 (aggregating US$ 21,000).

10.7 Impairment of Assets

The Company, during the year, carried out an annual exercise of identifying assets that may have been impaired in accordance with the Accounting Standard AS 28 "Impairment of Assets". Considering the continued unfavourable telecom environment prevailing in the country and consequential under utilization of passive telecom infrastructure, the management has identified certain plant & equipments (including those under installation) as impaired. Accordingly, an impairment of Rs. 1,302,069,866/- (Previous Year Rs. 2,211,353,763/-) (including CWIP of Rs. 974,975,545/- (Previous Year Rs. 351,861,506/-)) has been charged to the Statement of Profit & Loss.

11.2 The Company is the sole beneficiary in the Tower Trust and has contributed as at March 31,2014Rs.18,162,277,122 (Previous Year Rs. 18,157,224,000) towards the Corpus of the said Trust. The Trust has invested the aforesaid amount in "Chennai Network Infrastructure Ltd." (CNIL) a special purpose vehicle (SPV) and holds 1,815,722,400 Equity Shares of Rs. 10 each (Previous Year 1,815,722,400) representing 27.53% (Previous Year 28.84%) of total issued and paid up Equity Share Capital of CNIL as on March 31,2014

11.3 Based on the latest available Audited Financial Statements of the Investee companies, the book value per share is considerably less than cost. However in the opinion of the Management, having regard to the long-term nature of the business and future plans of action, there is no diminution in the value of investments which is other than temporary and hence no provision for diminution in the value of non-current investments has been considered.

11.3 Refer Note No. 1 (viii) for basis of valuation

12.1 As per the Business Purchase Agreement of July 2010 between Aircel and the Company, in order to meet their planned deployment of 20,000 contracted tenancies under Right of First Refusal (ROFR), the Company had placed orders on various parties to procure tower assets and made advances against those orders. Since the beginning of year 2012, the telecom scenario in the Country changed drastically due to cancellation of 122 2G licenses by the Hon''ble Supreme Court, slower 2G & 3G growth, failure of spectrum auctions and general economic slowdown. As a result, Aircel failed to honor its ROFR commitment to the Company and since the telecom scenario further worsened, the Company did not lift the materials against those orders for capital goods to various vendors. The Company is negotiating with the vendors for the recovery of these advances and the management is confident of recovering substantial amount from the vendors but as a matter of prudence and based on the best estimates a provision for doubtful advances of Rs. 600,000,000 (Previous year Rs. 1,332,100,863) has been made which has been disclosed as an exceptional item in the statement of profit and loss.

17.1 During earlier years, as legally advised, the Company''s Cenvat credit aggregating to Rs. 799,256,619/- was utilised for discharging service tax liability of Chennai Network Infrastructure Limited (CNIL), the then Subsidiary Company and now, an associate which is in the process of merger with the Company. Subsequently, during the year CNIL has paid the same to the Service Tax Authority under Voluntary Compliance Encouragement Scheme (VCES). In this regard the Company has already filed a writ petition in High Court of judicature at Mumbai for seeking restoration of this cenvat credit. Further, CNIL has also given an undertaking to the Company to make good the entire amount in case the Company''s claim of restoration stands rejected or not fully allowed.

22.1 Employee Benefits:

As per Accounting Standard 15 "Employee Benefits" the disclosure of Employee Benefit, as defined in Accounting Standard are given below:

Defined Benefit Plan

The employee''s Gratuity Fund Scheme, which is a defined benefit plan, is managed by the Trust maintained with Life Insurance Corporation of India [LIC]. The present value of obligation is determined based on actuarial valuation using Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for compensated absences is recognised in same manner as gratuity.

a. Reconciliation of opening and closing balances of the present value of the defined benefit obligation


Mar 31, 2013

I. Basis of preparation of Financial statements:

The Accounts have been prepared on a going concern basis under historical cost convention on accrual basis and in accordance with the generally accepted accounting principles in India and the provisions of Companies Act'' 1956.

ii. use of estimate:

The preparation of financial statements in conformity with the generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. The difference between the actual results and estimates are recognised in the year in which the results are known/materialised.

iii. Revenue Recognition:

a. Revenue from Infrastructure/Equipment provisioning is recognised in accordance with the Contract/ Agreement entered into. Revenues are recognised when it is earned and no significant uncertainty exists as to its ultimate collection and includes service tax'' wherever applicable.

b. Interest income is recognised on a time proportion basis. Dividend is considered when the right to receive is established.

iv. Fixed Assets:

a. Fixed Assets are stated at cost net of eligible Cenvat and VAT less accumulated depreciation'' amortisation and impairment loss'' if any. All costs'' including borrowing costs up to the date asset is ready to use and exchange difference on Long-Term Foreign Currency Monetary Items related to fixed assets are capitalised.

b. The Fixed Assets at the cellular sites'' which are ready to use during a particular month are capitalised on the last day of that month.

c. Expenses incurred relating to project'' prior to commencement of commercial operation'' are considered as pre-operative expenditure and shown under Capital Work-In-Progress.

v. Depreciation:

a. Depreciation on Fixed Assets is provided on Straight Line Method at the rates and in the manner prescribed in Schedule XIV to the Companies Act'' 1956 except in respect of certain Fixed Assets where the higher rates are applicable considering the estimated useful life as mentioned below and Towers:

b. The towers have been depreciated on straight line method at the rate of 2.72% per annum in terms of specific approval received from Ministry of Corporate Affairs'' Government of India vide Order no.45/2/2010-CL-III dated May 26'' 2010 issued under Section 205(2)(d) of the Companies Act'' 1956.

c. The leasehold improvements have been depreciated over lease period.

d. In respect of additions forming an integral part of existing assets and exchange difference capitalised'' depreciation has been provided over residual life of the respective fixed assets.

e. In respect of Fixed Assets whose actual cost does not exceed Rs. 5''000'' depreciation is provided at 100% in the year of addition.

f. In respect of Fixed Assets acquired upon demerger pursuant to the Scheme of Arrangement between GTL Infrastructure Limited and GTL Limited'' depreciation is provided for the balance period of economic useful life of those assets.

g. The revised carrying amount of the assets identified as impaired have been depreciated over residual life of the respective assets.

vi. Intangible Assets:

Intangible Assets are stated at cost of acquisition less accumulated amortisation. Software which is not an integral part of the related hardware is classified as an Intangible Asset and is amortised over the useful life of three years.

vii. Impairment of Assets:

The carrying amount of assets is reviewed at each Balance Sheet date if there is any indication of impairment based on internal/external factors. An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the year in which the carrying amount of an asset exceeds its recoverable amount. The impairment loss recognised in prior accounting periods is reversed if there is a change in the estimate of recoverable amount.

viii. Investments:

Current Investments are carried at the lower of cost or quoted/fair value computed scrip wise'' Long-Term Investments are stated at cost. Provision for diminution in the value of long-term investments is made only if such decline is other than temporary.

ix. Assignment of Recoverables:

In case of assignment of recoverables'' the amounts are derecognised when all the rights and titles in receivables are assigned. The charges paid on assignment are charged to Statement of Profit and Loss.

x. Inventory of stores'' spares and consumables:

Inventory of stores'' spares and consumables are accounted for at costs'' determined on weighted average basis'' or net realisable value'' whichever is less.

xi. Foreign currency transactions:

a. Transactions in Foreign Currencies are normally recorded at the exchange rate prevailing on the date of the transaction.

b. Monetary items denominated in Foreign Currency at the Balance Sheet date are restated at the exchange rates prevailing at the Balance Sheet date. In case of the items which are covered by forward exchange contracts'' the difference between the exchange rates prevailing at the Balance Sheet date and rate on the date of the contract is recognised as exchange difference. The premium on forward contracts is amortised over the life of the contract.

c. Non monetary Foreign Currency items are carried at cost.

d. Gains or losses on account of exchange difference either on settlement or on translation are recognised in the Statement of Profit and Loss except in respect of Long-Term Foreign Currency Monetary Items which'' if related to acquisition of depreciable fixed assets'' are adjusted to the carrying cost of the depreciable fixed assets and in other cases transferred to Foreign Currency Monetary Item Translation Difference Account and amortised over the balance period of such Long-term Foreign Currency Monetary items but not beyond March 31'' 2020.

xii. employee Benefits:

a. Short-term employee benefits are recognised as an expense at the undiscounted amount in the Statement of Profit and Loss of the year in which the related service is rendered.

b. Post employment and other long-term employee benefits are recognised as an expense in the Statement of Profit and Loss for the year in which the employee has rendered services. The expense is recognised at the present value of the amount payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long-term benefits are charged to the Statement of Profit and Loss.

c. In respect of employee’s stock options'' the excess of market price on the date of grant over the exercise price is recognised as deferred employee compensation expense amortised over vesting period.

xiii. Borrowing costs:

Borrowing costs that are attributable to acquisition or construction of a qualifying asset (net of income earned on temporary deployment of funds) are capitalised as a part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to Statement of Profit and Loss.

xiv. leases:

In respect of operating leases'' lease rentals are expensed with reference to the terms of lease and other considerations except for lease rentals pertaining to the period up to the asset put to use'' which are capitalised.

xv. provision for current and Deferred tax:

a. Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act'' 1961.

b. Deferred tax resulting from the timing differences between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the Balance Sheet date. The deferred tax asset is recognised and carried forward only to the extent that there is a virtual certainty that the assets will be realised in the future.

xvi. provisions'' contingent liabilities and contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.

xvii. Financial Derivatives Hedging transactions:

In respect of derivatives contracts'' premium paid'' provision for losses on restatement and gains/losses on settlement are recognised in the Statement of Profit and Loss.

xviii. Issue expenses:

Expenses related to issue of equity and equity related instruments are adjusted against the Securities Premium Account.

xix. premium on Redemption of Bonds/Debentures

Premium on redemption of bonds/debentures'' net of tax impact'' is adjusted against the Securities Premium Account.

xx. provision for Doubtful receivables and loans and Advances:

Provision is made in the accounts for doubtful receivables and loans and advances in cases where the management considers the debts'' loans and advances'' to be doubtful of recovery.


Mar 31, 2012

I. Basis of Preparation of Financial Statements:

The Accounts have been prepared on a going concern basis under historical cost convention on accrual basis and in accordance with the generally accepted accounting principles in India and the provisions of Companies Act, 1956.

ii. Use of Estimate:

The preparation of financial statements in conformity with the generally accepted accounting principles requires management to make estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. The difference between the actual results and estimates are recognised in the year in which the results are known / materialised.

iii. Revenue Recognition:

a. Revenue from Infrastructure / Equipment provisioning is recognised in accordance with the Contract / Agreement entered into. Revenues are recognised when it is earned and no significant uncertainty exists as to its ultimate collection and includes service tax, wherever applicable.

b. Interest income is recognised on a time proportion basis. Dividend is considered when the right to receive is established.

iv. Fixed Assets:

a. Fixed Assets are stated at cost net of eligible Cenvat and VAT less accumulated depreciation, amortisation and impairment loss, if any. All costs, including borrowing costs up to the date asset is ready to use are capitalised.

b. The Fixed Assets at the cellular sites, which are ready to use in the first fifteen days of a month are capitalised on the fifteenth day of that month, whereas, if they are ready to use in the second half of a month, they are capitalised on the last day of that month.

c. Expenses incurred relating to project, prior to commencement of commercial operation, are considered as pre-operative expenditure and shown under Capital Work In Progress.

v. Depreciation:

b. The towers have been depreciated on Straight Line Method at the rate of 2.72% per annum in terms of specific approval received from the Ministry of Corporate Affairs, Government of India vide Order No.45/2/2010-CL-III dated May 26, 2010 issued under Section 205(2)(d) of the Companies Act, 1956.

c. The leasehold improvements have been depreciated over lease period.

d. In respect of additions forming an integral part of existing assets depreciation has been provided over residual life of the respective fixed assets.

e. In respect of Fixed Assets whose actual cost does not exceed Rs. 5,000, depreciation is provided at 100% in the year of addition.

f. In respect of Fixed Assets acquired upon demerger pursuant to the Scheme of Arrangement between GTL Infrastructure Limited and GTL Limited, depreciation is provided for the balance period of economic useful life of those assets.

vi. Intangible Assets:

Intangible Assets are stated at cost of acquisition less accumulated amortisation. Software which is not an integral part of the related hardware is classified as an Intangible Asset and is amortised over the useful life of three years.

vii. Investments:

Current Investments are carried at the lower of cost or quoted/fair value computed scrip wise, Long Term Investments are stated at cost. Provision for diminution in the value of long term investments is made only if such decline is other than temporary.

viii. Assignment of Recoverables:

In case of assignment of recoverables, the amounts are derecognised when all the rights and titles in receivables are assigned and charges paid on assignment are charged to Statement of Profit & Loss.

ix. Inventory of Stores, Spares and Consumables:

Inventory of stores, spares and consumables are accounted for at costs, determined on weighted average basis, or net realisable value, whichever is less.

x. Foreign Currency Transactions:

a. Transactions in Foreign Currencies are normally recorded at the exchange rate prevailing on the date of the transaction.

b. Monetary items denominated in Foreign Currency at the Balance Sheet date are restated at the exchange rates prevailing at the Balance Sheet date. In case of the items which are covered by forward exchange contracts, the difference between the exchange rates prevailing at the Balance Sheet date and rate on the date of the contract is recognised as exchange difference. The premium on forward contracts is amortised over the life of the contract.

c. Non monetary Foreign Currency items are carried at cost.

d. Exchange difference arising on Long Term Foreign Currency Monetary Items related to acquisition of fixed asset are capitalized and depreciated over the remaining useful life of the asset.

e. All other exchange differences are recognized as income or expenses in the period in which they arise.

xi. Employee Benefits:

a. Short-Term employee benefits are recognised as an expense at the undiscounted amount in the Statement of Profit & Loss of the year in which the related service is rendered.

b. Post employment and other long term employee benefits are recognised as an expense in the Statement of Profit and Loss for the year in which the employee has rendered services. The expense is recognised at the present value of the amount payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to the Statement of Profit & Loss.

c. In respect of employee's stock options, the excess of market price on the date of grant over the exercise price is recognised as deferred employee compensation expense amortised over vesting period.

xii. Borrowing Costs:

Borrowing costs that are attributable to acquisition or construction of a qualifying asset (net of income earned on temporary deployment of funds) are capitalised as a part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to Statement of Profit & Loss.

xiii. Leases:

In respect of operating leases, lease rentals are expensed with reference to the terms of lease and other considerations except for lease rentals pertaining to the period up to the asset put to use, which are capitalised.

xiv. Provision for Current and Deferred Tax:

a. Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act, 1961.

b. Deferred tax resulting from the timing differences between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the Balance Sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is a virtual certainty that the assets will be realised in the future.

xv. Impairment of Assets:

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss account in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

xvi. Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.

xvii. Financial Derivatives Hedging Transactions:

In respect of derivatives contracts, premium paid, provision for losses on restatement and gains / losses on settlement are recognised in the Statement of Profit and Loss.

xviii. Issue Expenses:

Expenses related to issue of equity and equity related instruments are adjusted against the Securities Premium Account.

xix. Provision for Doubtful Debts and Loans and Advances:

Provision is made in the accounts for doubtful debts and loans and advances in cases where the management considers the debts, loans and advances, to be doubtful of recovery.


Mar 31, 2010

1. Basis of Preparation of Financial Statements:

The Accounts have been prepared on a going concern basis under historical cost convention on accrual basis and in accordance with the generally accepted accounting principles in India and the provisions of Companies Act, 1956.

2. Use of Estimate:

The preparation of financial statements in conformity with the generally accepted accounting principles requires management to make estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. The difference between the actual results and estimates are recognised in the period in which the results are known / materialised.

3. Revenue Recognition:

a. Revenue from Infrastructure/Equipment provisioning is recognised in accordance with the Contract/Agreement entered into. Revenues are recognised when it is earned and no significant uncertainty exists as to its ultimate collection and includes service tax, wherever applicable.

b. Interest income is recognised on a time proportion basis. Dividend is considered when the right to receive is established.

4. Fixed Assets:

a. Fixed Assets are stated at cost net of Cenvat less accumulated depreciation, amortisation and impairment loss, if any. All costs, including borrowing costs up to the date asset is put to use are capitalised.

b. The Fixed Assets at the cellular sites, which are put to use in the first fifteen days of a month are capitalised on the fifteenth day of that month, whereas, if they are put to use in the second half of a month, they are capitalised on the last day of that month.

c. Expenses incurred relating to project, prior to commencement of commercial operation, are considered as pre-operative expenditure and shown under Capital Work-in-Progress.

5. Depreciation:

a. Depreciation on Fixed Assets is provided on Straight Line Method at the rates and in the manner prescribed in schedule XIV to the Companies Act, 1956 except in respect of certain Fixed Assets where higher rates are applicable considering the estimated useful life, which are as follows:

i. Shelters 20 years

ii. Network Operation Assets 4 to 10 years

iii. Air Conditioners 9 years

iv. Electrical & Power Supply Equipments 6 to 9 years

v. Computers 3 years

vi. Office Equipments 3 to 5 years

vii. Furniture & Fittings 5 years

viii. Vehicle 5 years

b. The leasehold improvements have been depreciated over lease period.

c. In respect of additions forming an integral part of existing assets depreciation has been provided over residual life of the respective fixed assets.

d. In respect of Fixed Assets whose actual cost does not exceed Rs. 5,000, depreciation is provided at 100% in the year of addition.

e. In respect of Fixed Assets acquired upon demerger pursuant to the Scheme of Arrangement between GTL Infrastructure Limited and GTL Limited, depreciation is provided for the balance period of economic useful life of those assets.

6. Intangible Assets:

Intangible Assets are stated at cost of acquisition less accumulated amortisation. Software which is not an integral part of the related hardware is classified as an Intangible Asset and is amortised over the useful life of three years.

7. Investments:

Current Investments are carried at the lower of cost or quoted / fair value computed scrip wise, Long Term Investments are stated at cost. Provision for diminution in the value of long term investments is made only if such decline is other than temporary.

8. Assignment of Recoverables:

In case of assignment of recoverables, the amounts are derecognised when all the rights, title, future receivables are assigned and charges paid on assignment are charged to Profit and Loss account.

9. Inventory of Stores, Spares and Consumables:

Inventory of stores, spares and consumables are accounted for at costs, determined on weighted average basis, or net realisable value, whichever is less.

10. Foreign Currency Transactions:

a. Transactions in Foreign Currencies are normally recorded at the exchange rate prevailing on the date of the transactions.

b. Monetary items denominated in Foreign Currency at the Balance Sheet date are restated at the exchange rates prevailing at the Balance Sheet date. In case of the items which are covered by forward exchange contracts, the difference between the exchange rates prevailing at the Balance Sheet date and rate on the date of the contract is recognised as exchange difference. The premium on forward contracts is amortised over the life of the contract.

c. Non monetary Foreign Currency items are carried at cost.

d. Any gain or loss on account of exchange difference either on settlement or on restatement is recognised in the Profit and Loss account.

11. Employee Benefits:

a. Short-term employee benefits are recognised as an expense at the undiscounted amount in the Profit and Loss account of the year in which the related service is rendered.

b. Post employment and other long term employee benefits are recognised as an expense in the Profit and Loss account for the year in which the employee has rendered services. The expense is recognised at the present value of the amount payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to the Profit and Loss account.

c. In respect of employees stock options, the excess of market price on the date of grant over the exercise price is recognised as deferred employee compensation expense amortised over vesting period.

12. Borrowing Costs:

Borrowing costs that are attributable to acquisition or construction of a qualifying asset (net of income earned on temporary deployment of funds) are capitalised as a part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to Profit and Loss account.

13. Leases:

In respect of operating leases, lease rentals are expensed with reference to the terms of lease and other considerations except for lease rentals pertaining to the period up to the asset put to use, which are capitalised.

14. Provision for Current and Deferred Tax:

a. Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act, 1961.

b. Deferred tax resulting from the timing differences between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the Balance Sheet date. The deferred tax asset is recognised and carried forward only to the extent that there is a virtual certainty that the assets will be realised in the future.

15. Impairment of Assets:

An-asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss account in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

16. Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.

17. Financial Derivatives Hedging Transactions:

In respect of derivatives contracts, premium paid, provision for losses on restatement and gains / losses on settlement are recognised in the Profit and Loss account.

18. Issue Expenses:

Expenses related to issue of equity and equity related instruments are adjusted against the Securities Premium Account. 19. Provision for Doubtful Debts and Loans and Advances:

Provision is made in the accounts for doubtful debts and loans and advances in cases where the management considers the debts, loans and advances, to be doubtful of recovery.

 
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