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Directors Report of GTL Infrastructure Ltd.

Mar 31, 2015

Dear Members,

The Directors are pleased to present their Twelfth Annual Report together with the Audited Financial Statements for the year ended March 31,2015.

1. STATE OF COMPANY'S AFFAIRS

Financial Highlights

(Rs. in Crore)

Particulars 2014-15 2013-14

Total Revenue 623.10 615.44

Profit / (Loss) before Depreciation / 220.46 276.44 Amortization, Finance Costs & Tax

Depreciation / Impairment & 255.99 389.03 Amortization Expenses

Profit / (Loss) before Finance (35.53) (112.59) Costs & Tax

Finance Costs 392.60 377.76

Profit / (Loss) Before Exceptional (428.13) (490.35) Items & Tax

Exceptional Items (Net) 86.58 60.00

Profit / (Loss) before Tax (514.71) (550.35)

Tax Expenses - 0.89

Net Profit / (Loss) (514.71) (551.24)

Figures regrouped / reclassified wherever necessary to make them comparable.

2. RESULTS OF OPERATIONS AND BUSINESS OVERVIEW Results Of Operations

During the year, total revenue of the Company was Rs. 623.10 Cr. against Rs. 615.44 Cr. for the previous year. Operating Profit (before Depreciation / Amortization, Finance Costs & Tax) was at Rs. 220.46 Cr. in comparison to previous year's Operating Profit (before Depreciation / Amortization, Finance Costs & Tax) of Rs. 276.44 Cr. Net Loss for the year was at Rs. 514.71 Cr. against Net Loss of Rs. 551.24 Cr. for the previous year.

The telecom scenario in the country changed drastically since the beginning of year 2012 due to cancellation of 122 2G licenses by the Hon'ble Supreme Court, slower 2G and 3G growth, failure of spectrum auctions, inflationary costs of power & fuel and general economic slowdown. Further, during this time, the Company was expected to get increased / additional business arising out of its acquisition of telecom tower portfolio from Aircel Limited and its subsidiaries (Aircel) through Chennai Network Infrastructure Limited (CNIL). However, owing to several external factors, the Company and CNIL could not garner the required 20,000 additional new tenancies on Right of First Refusal basis from Aircel. In the meanwhile, the Company had already placed orders on various vendors to procure tower assets and made expenses / advances against those orders. Consequently, the Company had to short close its commitment to vendors and is currently pursuing legal action against its vendors for recovery of these advances. However, as a matter of prudence, a provision for a sum of Rs. 208.75 Cr. has been made during the year under review. Further, pursuant to the settlement agreement between the Company, CNIL and Aircel, Rs. 150 Cr. has been recognized as income towards final settlement during the year under review. The above amounts have been shown as exceptional items in the Financial Statements.

Going Concern basis

Owing to factors as referred above, the Company's net worth has been eroded substantially and the Company has incurred cash losses. The Company continues to take various measures such as cost optimisation, improving operating efficiency, renegotiation of contracts with customers to improve Company's operating results and cash flows. Further the management believes that new spectrum auction will result in exponential growth in 3G, 4G & LTE which are expected to generate incremental cash flows to the Company. Based on the Master Services Agreement executed for passive infrastructure sharing with new operators, having BWA spectrum and preparing to launch 4G services Pan India, the Company has already commenced roll outs for it. In view of the above mentioned factors, the Company continued to prepare its Financial Statements on going concern basis.

Recent Developments at Macro And Micro Economic Level

The telecom industry has shown tremendous increase in subscriber base to 960.58 Mn. at the end of February 2015 against 903.36 Mn. at the end of February 2014, registering a growth of 6.33%. The share of urban subscribers declined to 58.01% at the end of February 2015 from 59.16% in February 2014 vis-a-vis the share of rural subscribers which increased to 41.99% at the end of February 2015 from 40.84% at the end of February 2014. With this, the overall tele-density in India has shown marginal improvement at 76.60 at the end of February 2015 visa-vis the overall tele-density of 72.92 at the end of February 2014. (Source: Telecom Regulatory Authority of India (TRAI), Press Release dated April 10, 2015)

India saw fastest growth in subscription base with 65 million new connections in FY 2014-15. Given this the Indian telecom industry has been one of the fastest growing and most competitive in the world. The Indian call tariffs are still among the lowest in the world.

Growth Drivers

It is observed, globally that telecom industry is a vital sector for the overall development of a nation. It is catalyst to growth and modernization of a nation. Given the recent developments, we have identified a few growth drivers for the coming few fiscals.

1) 2015 Spectrum Auction was successful with Rs. 1.10 Lacs Cr. investment by the industry signaling restored faith in business prospect

2) Industry Friendly and liberal policies

a. Government plans to allocate the Spectrum auctioned in March 2015 by end of this year

b. Government's ambitious US$ 1.1 Bn. Smart City program to facilitate telecom growth

3) Attractive FDI market

4) Subscriber base continues to see upward trend

5) 3G and 4G rollouts expected to lead to machine to machine (M2M) growth in India in F.Y. 2016-17

6) Reliance Jio the only Pan India license 4G provider to roll out 4G in this fiscal

7) India a Data usage driven economy (Nokia Networks' MBit Index study)

a. Mobile data traffic generated by 2G and 3G services has risen by a whopping 74 percent at the end of 2014

b. Use of 3G devices capable of supporting a speed of up to 21.1 Mbps increased from 23% in 2013 to 54% in 2014

c. Average monthly data consumption by a 2G consumer was seen to be 216 MB, an increase of 48% during 2014

d. The average data consumed by a 3G consumer, on the other hand, 688 MB, an increase of 29% during 2014

8) India to be 4th largest Smartphone market in the world

Since Tower Network plays vital role for growth mapping, the Company will see growth in the near future.

Major Developments in the industry (source: A brief Report on Telecom Sector in India - January 2015, Corporate Catalyst (India) Pvt. Ltd.)

1) Reliance Jio infocomm has signed an agreement to share telecom towers of GTL Infrastructure Limited. Seventh Tower sharing agreement by Reliance Jio;

2) Ericsson has won US$ 9.42 Mn. 3 years operations support system deal with Reliance Jio;

3) Japanese telecom Company softbank has planned to invest around US$ 10 billion in India's IT sector over next few years.

4) Bharti Infratel plans to take over telecom towers of few operators at a valuation of approx US$ 785.82 Mn.

5) Bharti Infratel plans to explore acquisition opportunities in neighboring countries

The Company believes that though the current scenario in telecom sector and in general economy is encouraging, it would take some time in improving overall economic scenario inter-alia the telecom and telecom infrastructure sector. Hence, in order to overcome the CDR scenario, the Company is contemplating bi-lateral / multi-lateral settlements, either one time, negotiated or otherwise, with the Lenders. The Company has already obtained requisite approvals from Members of the Company at the 11th Annual General Meeting (AGM) and through Postal Ballot, result of which was declared on September 25, 2014.

3. DEBT RESTRUCTURING

Further to information furnished in the Directors' Report for financial year 2013-14, after successful implementation of Corporate Debt Restructuring (CDR) mechanism for its Rupee Term Loans, as approved by CDR EG, the Company has complied and continues to comply with the terms and conditions of CDR package. The CDR Rupee Debt outstanding as on March 31,2015 is Rs. 3,417.49 Cr., details of which are as follows:

Principal - Rs. 3,245.09 Cr.

FITL - Rs. 169.22 Cr.

Interest - Rs. 3.18 Cr.

Subject to cash flow permitting, your Company has been continuing to pay on account of its debt service obligation and is committed to work towards honouring its debt obligation in future. However, due to the effect of continuing downturn in the economy in general and telecom sector in particular, there has been delay at times in debt servicing. The Company continues to explore opportunities to monetize its investment (held through Tower Trust) in CNIL, the proceeds of which will be utilized for meeting debt service obligations of the Company.

4. DIVIDEND

Since your Company has posted losses and is currently under CDR Mechanism, your Directors express their inability to recommend any dividend on the paid up Equity Share Capital of the Company for the financial Year ended March 31,2015.

5. SHARE CAPITAL

a. The movement of Equity Capital due to allotment of shares is as under:

Particulars No. of Equity Shares

Equity Share Capital as on April 1,2014 2,306,799,754

Add: Allotments of Equity Shares to FCCB 18,348,026 Holders upon conversion of FCCBs

Equity Share Capital as on May 6, 2015 2,325,147,780

The Company has only one class of equity shares and it has not issued equity shares with differential rights or sweat equity shares. Also, the Company has cancelled all its outstanding Employee Stock Option Schemes (ESOS) in FY 2012-13. Thus, the details required to be furnished for equity shares with differential rights and / or sweat equity shares and / or ESOSs as required under the Companies (Share Capital and Debentures) Rules, 2014 are not furnished.

b. Foreign Currency Convertible Bonds (FCCBs)

Further to information furnished in the Directors' Report for financial year 2013-14, during the year under review, as per Terms and Conditions of the Series B Bonds issued in terms of Offering Circular dated November 8, 2012, the Conversion Price of Series B Bonds i.e. US$ 207,546,000 Interest Bearing Convertible Bonds due 2017 convertible into share, have been reset to Rs. 10 against Rs. 11.38. The Status of FCCBs allotted is as under:

No. of No. of No. of Series A Series B Total No. Equity Particulars FCCBs FCCBs of FCCBs Shares (of US$ (of US$ (of US$ upon 1,000 1,000 1000 conversion each) each) each)

FCCBs allotted 111,740 207,546 319,286 -

Converted / 62,700 14,013 76,713 415,860,931 cancelled till date

Balance as on May 6, 49,040 193,533 242,573 - 2015

If all the balance 242,573 FCCBs are converted into equity shares of the Company, the total share capital would go up by 1,316,007,039 new equity shares of the Company.

c. Consideration to CNIL shareholders for merger

Consequent to the approval of CDR proposals of the Company and CNIL and further to the modifications to be made in the petitions by the Company and CNIL (subject to approval of CDR Lenders), the Company would be required to issue its equity shares to the shareholders of CNIL towards consideration of merger of CNIL with the Company as may be approved by Hon'ble High Courts of Bombay and Madras.

6. FIXED DEPOSITS

There are no unclaimed deposits lying with the Company and during the year under review, the Company has not accepted any fresh fixed deposits from Public or from its Shareholders.

7. SCHEME OF ARRANGEMENT

Further to information furnished in the Directors' Report for financial year 2013-14, the Company continues to pursue the Scheme of Arrangement for the merger of CNIL with the Company by way of modification of Scheme of Arrangement to give effect to financial and capital structure changes consequent upon restructuring under CDR. Once the modified Scheme of Arrangement between CNIL and Company is approved by the Hon'ble Bombay and Madras High Courts, the Company's financial statements will be re-casted / re-stated with effect from the Appointed Date as may be approved.

8. MATERIAL CHANGES AND COMMITMENTS

Save and except as discussed in this Annual Report, no material changes have occurred and no commitments were given by the Company thereby affecting its financial position between the end of the financial year to which these financial statements relate and the date of this report.

9. PROMOTER GROUP

The Company is a part of Global Group of Companies which is promoted by GTL Limited (GTL). The Members may note that the Promoter Group comprises of Global Holding Corporation Private Limited and such other persons as defined under SEBI Regulations. As on March 31,2015, the shareholding of promoters is 27.04%.

10. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(3)(c) of the Companies Act, 2013 (the "Act"), the Board of Directors, to the best of their knowledge and ability, in respect of financial year ended March 31,2015 confirm that:

a. in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b. they had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for that period;

c. they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. they had prepared the annual accounts on a going concern basis.

e. they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f. they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

11. DIRECTORS & KEY MANAGERIAL PERSONNEL

Pursuant to the provisions of Section 149 of the Act, which came into effect from April 1,2014, Mr. N. Balasubramanian, Dr. Anand Patkar, Mr. Vinod Agarwala and Mr. Vijay Vij were appointed as Independent Directors at the AGM of the Company held on September 16, 2014. The terms and conditions of appointment of Independent Directors are as per Schedule IV of the Act. They have submitted a declaration that each of them meets the criteria of independence as provided in Section 149(6) of the Act and there have been no change in the circumstances which may affect their status as Independent Directors during the year under review.

Mr. Milind Naik retires by rotation and being eligible has offered himself for re-appointment.

Pursuant to provisions of Section 149 of the Act and Clause 49 of the Listing Agreement entered into with the Stock Exchanges, Mrs. Sonali P. Choudhary was appointed as an Additional Director with effect from March 31,2015 by way of resolution passed by circulation and the same was taken on record by the Board of Directors in its meeting held on May 6, 2015. She will hold office up to the date of the ensuing AGM.

The resolutions seeking approval of the Members for the re-appointment / appointment of Mr. Milind Naik and Mrs. Sonali P. Choudhary have been incorporated in the notice of the forthcoming AGM of the Company. The background of the Directors proposed for re-appointment / appointment as stipulated under Clause 49 of the Listing Agreement entered into with Stock Exchanges is given under the Corporate Governance section of this Report. The Company has received a notice under Section 160 of the Act along with the requisite deposit proposing the appointment of Mrs. Sonali P. Choudhary as Director, liable to retire by rotation.

Pursuant to the provisions of Section 203 of the Act, which came into effect from April 1,2014, the appointments of Mr. Milind Naik, Whole-time Director, Mr. L. Y. Desai, Chief Financial Officer and Mr. Nitesh A. Mhatre, Company Secretary as key managerial personnel of the Company were formalized.

During the year under review, none of the managerial personnel have relinquished their positions.

12. NUMBER OF MEETINGS OF THE BOARD

The Board of Directors met four (4) times during the financial year, the details of which are given in Corporate Governance Report that forms part of this Report. The intervening gap between any two meetings was within the period prescribed under the Act.

13. BOARD EVALUATION

The Board of Directors has carried out an annual evaluation of its own performance, Board committees and individual directors pursuant to the provisions of the Act and Clause 49 of the Listing Agreement entered into with the Stock Exchanges.

The performance of the Board and its Committees was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as composition of the Board / Committee and structure, effectiveness of Board / Committee processes, information and functioning etc.

The Board and the Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual directors on the basis of the criteria such as attendance in Board / Committee meetings, contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed etc.

In a separate meeting of Independent Directors, performance of non-independent directors, performance of Board as a whole and performance of the Chairman was evaluated taking into account the views of executive directors and non-executive directors.

14. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS

The Company has put in place appropriate policy on Directors Appointment and remuneration and other matters as provided in Section 178(3) of the Act, which is provided in the Policy Dossier that has been uploaded on the Company's website www.gtlinfra.com. Further, salient features of the Company's Policy on Directors' remuneration have been disclosed in the Corporate Governance Report, which forms part of this Report.

15. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

The information required under Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given below:

a. The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year:

Particulars Ratio to median remuneration

Executive Directors

Mr. Milind Naik 10.16

Non-executive Directors* (sitting fees only)

Mr. Manoj G. Tirodkar N. A.

Mr. N. Balasubramanian N. A.

Dr. Anand Patkar N. A.

Mr. Charudatta Naik N. A.

Mr. Vinod Agarwala N. A.

Mr. Vijay Vij N. A.

Mrs. Sonali P. Choudhary N. A.

* Since Non-executive Directors received no remuneration, except sitting fee for attending Board / Committee meetings, the required details are not applicable.

b. The percentage increase in remuneration of each director, chief financial officer, company secretary in the financial year:

Directors, Chief Financial Officer % increase in remuneration in the and Company Secretary financial year

Mr. Manoj G. Tirodkar N. A.

Mr. N. Balasubramanian N. A.

Dr. Anand Patkar N. A.

Mr. Charudatta Naik N. A.

Mr. Vinod Agarwala N. A.

Mr. Vijay Vij N.A

Mrs. Sonali Choudhary N. A.

Mr. Milind Naik, Whole-time Director Refer Note*

Mr. L. Y. Desai, Chief Financial Officer 7.5

Mr. Nitesh A. Mhatre, Company Secretary 50.0

* The Company has made necessary application to the Central Government for payment of remuneration not exceeding Rs. 1.26 Cr. p.a. to Mr. Milind Naik during his tenure of 3 years w.e.f. July 21,2014, as approved by the Members at AGM held on September 16, 2014. Once the Company receives the approval from the Central Government, the Company shall compensate Mr. Milind Naik for his arrears accordingly.

c. The percentage increase in the median remuneration of employees in the financial year: 6.10%

d. The number of permanent employees on the rolls of the Company : 398

e. The explanation on the relationship between average increase in remuneration and the Company's performance:

On an average, employees received an annual increase of 10% in India. The individual increments varied from 3.5% to 75% based on individual performance. In order to ensure that remuneration reflects the Company's performance, the variable performance pay is also linked to the Company's performance, apart from an individual performance.

f. Comparison of the remuneration of Key Managerial Personnel against the performance of the Company:

Aggregate remuneration of the key managerial personnel (KMP) in FY 15 (Rs. in Cr.) 2.13

Revenue from Operations (Rs. Cr.) 599.65

Remuneration of KMPs (as % of revenue) 0.36

Profit / (Loss) before Tax (PBT) (Rs. in Cr.) (514.71)

Remuneration of KMP (as % of PBT) N.A.

g. Variation in the market capitalization of the Company, price earnings ratio as at March 31, 2015 and March 31,2014:

Particulars March 31,2015 March 31,2014 % change

Market Capitalization 453.40 334.49 35.55 (Rs. in Cr.)* Price Earnings Ratio (0.87) (0.61) (42.62)

*based on closing market price on NSE on the respective year end dates.

h. Percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with last public offer:

Particulars March 31,2015 September 28, % Change 2007 (Right Issue)

Market Price (BSE) Rs. 1.98 Rs. 10.00 (80.20)

Market Price (NSE) Rs. 2.00 Rs. 10.00 (80.00)

i. Average percentage increase already made in the salaries of employees other than the managerial personnel in last financial year and its comparison with the percentage increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

The average annual increase was around 10%.

As approved by the Members in the AGM held on September, 16, 2014, the Company has made necessary application to the Central Government for payment of remuneration not exceeding Rs. 1.26 Cr. p.a. to its

Whole-time Director, Mr. Milind Naik during his tenure of 3 years w.e.f. July 21,2014. The said remuneration is commensurate with the responsibilities shouldered and industry standards as explained in the explanatory statement to Notice of AGM held on September 16, 2014. Hence, comparison can not be provided.

j. Comparison of each remuneration of the key managerial personnel against the performance of the Company:

Mr. Milind Mr. L. Y. Desai, Mr. Nitesh Naik, Chief Financial A. Mhatre, Whole-time Officer Company Director Secretary

Remuneration in FY 15 0.47 1.11 0.55 (Rs. in Cr.)

Revenue from Operations 599.65 (Rs. in Cr.)

Remuneration as % of 0.08 0.19 0.09 revenue Profit / (Loss) before (514.71) Tax (PBT) (Rs. in Cr.)

Remuneration (as % of PBT) N.A. N.A. N.A.

k. The key parameters for any variable component of remuneration availed by the Directors: None

l. The ratio of remuneration of the highest paid Director to that of the employees who are not Directors but received remuneration in excess of the highest paid Director during the year: 1 : 1.85

m. Affirmation that the remuneration is as per the remuneration policy of the Company:

The Company affirms that the remuneration is as per the remuneration policy of the Company.

16. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The details in respect of internal financial control systems and their adequacy are included in the Management Discussion & Analysis (MD&A) Report, which forms part of this Report.

17. AUDIT COMMITTEE

The details pertaining to composition of Audit Committee are included in the Corporate Governance Report, which forms part of this report.

18. AUDITORS AND AUDITORS' REPORT

Pursuant to the provisions of Section 139 of the Act and rules framed there under, M/s. Chaturvedi & Shah, Chartered Accountants, Mumbai and M/s. Yeolekar & Associates, Chartered Accountants, Mumbai, were appointed as Joint Auditors at the Eleventh (11th) AGM of the Company held on September 16, 2014 to hold office from conclusion of the said meeting till the conclusion of the Fifteen (15th) AGM to be held in year 2018, subject to ratification of their appointment at every AGM. The Company has received the necessary certificates from the Joint Auditors respectively pursuant to Sections 139 and 141 of the Act regarding their eligibility for appointment.

The resolution seeking approval of the Members for ratification of the appointment of M/s. Chaturvedi & Shah, Chartered Accountants, Mumbai and M/s. Yeolekar & Associates, Chartered Accountants, Mumbai, as Joint Auditors of the Company have been incorporated in the notice of the forthcoming AGM of the Company.

As regards the Joint Auditors' comments / observations / emphasis of matters, the Company has furnished required details / explanations in Note nos. 22.1,29, 30 and 31 of Notes to the Financial Statements.

19. COST AUDITORS

Pursuant to provisions of Section 148 of the Act, on the recommendation of Audit Committee, the Board of Directors of the Company had appointed Mr. Vikas V. Deodhar, Cost Accountants as the Cost Auditor for the financial year 2014-15. However, the Government of India, Ministry of Corporate Affairs (MCA), New Delhi vide G.S.R. 425 (E) dated June 30, 2014 introduced the Companies (cost records and audit) Rules, 2014 repealing the then extant rules, regulation and orders, which has excluded the Company's business activity viz. passive telecom infrastructure and tower facilities from the list of industries to which these rules are applicable. Resultantly, the Company was not required to undertake audit of its cost record during the year under review.

The Company has duly filed the Cost Audit Report for financial year 2013-14 with Ministry of Corporate Affairs on September 27, 2014.

20. SECRETARIAL AUDITORS' REPORT

The Secretarial Auditors' Report does not contain any qualifications, reservations, disclaimers or adverse remark and the same is given in Annexure A (Form No. MR-3) to this Report.

21. RISKS

A separate section on risks and their management is provided in the MD&A Report forming part of this Report, which covers the development and implementation of risk management framework. The Audit Committee monitors the risk management plan and ensures its effectiveness. It is important for shareholders and investors to be aware of the risks that are inherent in the Company's businesses. The major risks faced by your Company have been outlined in this section to allow shareholders and prospective investors to take an independent view. We strongly urge Shareowners/ Investors to read and analyze these risks before investing in the Company.

22. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The particulars of loans, guarantees and investments have been disclosed in the Note nos. 11, 13 & 33 of Notes to the Financial Statements.

23. PARTICULARS OF RELATED PARTY TRANSACTION

All related party transactions that were entered into during the financial year were on arms' length basis and were in ordinary course of business. None of the transactions with related parties falls under the scope of Section 188(1) of the Act.

The Policy on Related Party Transactions as approved by the Board is uploaded on the Company's website www.gtlinfra.com.

The particulars as required under the Act are furnished in Annexure B (Form No. AOC - 2) to this Report.

24. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company does not have Subsidiary or Joint Venture Company. The Company has CNIL as the Associate Company. However, in the light of the amendment made in Rule 6 of the Companies (Account) Rule, 2014 vide Circular dated October 14, 2014, the Company does not require to consolidate the Financial Statements of the Associate Company with Financial Statements of the Company for the financial year ended March 31,2015.

Pursuant to provisions of Section 129(3) of the Act, a statement containing salient features of the Financial Statements of the Company's Associate is furnished in Annexure C (Form No. AOC-1) to this Report.

25. CORPORATE SOCIAL RESPONSIBILITY

The Company continued, during the period under review, to contribute through Global Foundation, a Public Charitable Trust, towards social causes as described in the MD&A Report under the caption 'Corporate Social Responsibility (CSR)'. The details as prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014 are set out in Annexure D to this Report.

26. EXTRACT OF ANNUAL RETURN AS ON MARCH 31,2015

In terms of Section 134(3)(a) read with Section 92(3) of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014, an extract of Annual Return as on March 31, 2015 is annexed as Annexure E (Form No. MGT- 9) to this Report.

27. CORPORATE GOVERNANCE AND VIGIL MECHANISM

The Company continues to comply with Clause 49 of the Listing Agreement entered into with the Stock Exchanges. A separate Report on Corporate Governance along with the Certificate of the Joint Auditors, M/s. Chaturvedi & Shah, Chartered Accountants and M/s. Yeolekar & Associates, Chartered Accountants confirming compliance of conditions

of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India is given elsewhere in this Report.

The Company has formulated and published a Whistle Blower Policy, details of which are furnished in the Corporate Governance section, thereby establishing a vigil mechanism for directors and employees for reporting genuine concerns, if any.

28. MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis (MD&A) for the year under review, as stipulated under Clause 49 of the Listing Agreement entered into with the Stock Exchanges, on the Company's performance, industry trends and other material changes with respect to the Company is presented in a separate section forming part of this Annual Report.

29. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

a. Conservation of Energy:

The Company has continued its enhanced focus on reduction of diesel consumption at telecom tower sites through several initiatives of energy efficiency and fuel savings. Further, trials of various green energy solutions are carried out through pilot deployment of Solar Photovoltaic panels, Deep discharge and Lithium Ion batteries which have technological superiority and/or lesser carbon footprint. Through deployment of additional battery banks at sites and site electrification works for non-grid diesel generator operated sites, the Company has about 1,650 tower sites which are identified as Green Sites (each of which consumes diesel less than 35 litre per month).

The various initiatives for conservation of energy in respect of telecom towers taken by the Company are enumerated below:

i) the steps taken or impact on conservation of energy:

a. Installation of Free Cooling / Emergency Free Cooling systems to utilize cool ambient temperatures for saving electrical energy consumption of air-conditioning systems

b. Installation of High Efficiency Rectifiers with wide input voltage range SMPS with minimum derating at lower input voltages

c. Upgradation of DC power plants with compatible high efficiency rectifiers

d. Deployment of additional battery banks for increasing backup power and thereby minimizing diesel consumption at sites

e. Fuel optimizer feature of DG controller for optimum utilization of battery backup and air-conditioning system

f. Implemented Stage-wise capacity enhancement with upgradeability as and when site load increased

g. Aircon efficiency improvement solutions for better heat transfer of refrigerant

h. Deployment of Integrated Power Management Units for AC power line conditioning and AC to DC conversion

i. Remote monitoring of site health parameters through NOC (Network Operations Centre)

ii) the steps taken by the Company for utilizing alternate source of energy:

a. Deployment of Deep discharge and Lithium Ion batteries for faster charging / better utilization of backup power and thereby reducing diesel consumption

b. Deployment of DC type Diesel Generator of smaller capacity at pilot sites

iii) the capital investment on energy conservation equipment: Not Applicable

b. Technology Absorption:

1. Efforts made towards technology absorption :

2. The benefits derived like product improvement, cost reduction, : product development or import substitution

The Company has not 3. In case of imported technology : absorbed, adopted and (imported during last three years innovated any new reckoned from the beginning : technology. Hence, the of the financial year) details relating to technology absorption are not furnished. a. the details of technology imported

b. the year of import



c. whether the technology been fully absorbed?

d. if not fully absorbed, the areas where absorption has not taken place, reasons thereof

4. the expenditure incurred on Research and : No significant Development expenditures were incurred during the year.

c. Foreign Exchange Earnings and Outgo:

There were no actual inflow of Foreign Exchange during the year and the particulars regarding actual outflow of Foreign Exchange appear in Note No. 38 of Notes to the Financial Statements.

30. PARTICULARS OF EMPLOYEES

The statement containing particulars of employees as required under Section 197(12) of the Act read Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in a separate annexure forming part of this Report. Further, the Report and the Financial Statements are being sent to the Members excluding the aforesaid annexure. In terms of Section 136 of the Act, the said annexure is open for inspection at the Registered Office of the Company. Any Member interested in obtaining a copy of the same may write to the Company Secretary. None of the employees listed in the said annexure are related to any Director of the Company.

31. SPECIAL BUSINESS

As regards the items of the Notice of the AGM relating to Special Business, the Resolutions incorporated in the Notice and the Explanatory Statement relating thereto, fully indicate the reasons for seeking the approval of members to those proposals. Members' attention is drawn to these items and Explanatory Statement annexed to the Notice.

32. GENERAL

Notes forming parts of the Accounts are self - explanatory.

33. ACKNOWLEDGEMENT

Your Directors wish to place on record their appreciation and acknowledge with gratitude the support and cooperation extended by the clients, employees, vendors, bankers, financial institutions, investors, media and both the Central and State Governments and their Agencies and look forward to their continued support.

On behalf of the Board of Directors,

Mumbai Manoj G. Tirodkar May 6, 2015 Chairman


Mar 31, 2014

The Members,

The Directors are pleased to present their Eleventh Annual Report together with the Audited Accounts for the year ended March 31, 2014.

1. FINANCIAL RESULTS

(Rs. in Crores)

Particulars 2013-14 2012-13

Total Income 615.44 570.92

PBDIT 276.44 283.53

Depreciation 389.03 486.43

PBIT (112.59) (202.90)

Interest and Finance Charges (Net) 377.76 350.53

Profit / (Loss) Before Exceptional (490.35) (553.43)

Items & Tax

Exceptional Item 60.00 133.21

Profit/(loss) before tax (550.35) (686.64) Provision for Taxation 0.89 -

Net Profit / (Loss) (551.24) (686.64)

Figures regrouped / reclassified wherever necessary to make them comparable.

Financial Performance

During the year, revenue of the Company was Rs. 615.44 Cr. against Rs. 570.92 Cr. for the previous year. Operating Profit (before Depreciation, Interest and Tax) was at Rs. 276.44 Cr. in comparison to previous year''s Operating Profit (before Depreciation, Interest and Tax) of Rs. 283.53 Cr. Net Loss for the year was at Rs. 551.24 Cr. against Net Loss of Rs. 686.64 Cr. for the previous year.

2. MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, on the Company''s performance, industry trends and other material changes with respect to the Company is presented in a separate section forming part of this Annual Report.

3. DIVIDEND

The Company is in the business of providing telecom towers on a shared basis to multiple wireless telecom service providers and is a capital intesive in nature. In view of high depreciation, interest and in absence of distributable profits, your Directors express their inability to recommend any dividend on the paid up Equity Share Capital of the Company for the financial Year ended March 31,2014.

4. BUSINESS OVERVIEW AND RECENT DEVELOPMENTS AT MACRO AND MICRO ECONOMIC LEVEL

The Indian telecom industry has been one of the fastest growing and most competitive in the world. The Indian call tariffs are still among the lowest in the world.

The telecom industry has shown marginal increase in subscriber base to 904.51 Mn. at the end of March 2014 against 861.66 Mn. at the end of February 2013, registering a growth of 4.97%, however, the growth is still below the subscriber base registered at 919.70 Mn. at the end of March 2012. The share of urban subscribers declined to 58.90% at the end of March 2014 from 60.50% in February 2013 vis-a-vis the share of rural subscribers which increased to 41.10% at the end of March 2014 from 39.50% in February 2013. With this, the overall tele-density in India has shown marginal improvement at 72.94 at the end of March 2014 vis-a-vis the overall tele-density of 70.42 in February 2013.

(Source: Telecom Regulatory Authority of India, Press Release dated May 12,2014)

The Telecom industry continues to be under stress and had been dealing with several challenges on the financial, revenue and profitability fronts on one hand and Regulatory, Government and Judicial scrutiny on other hand. The various factors adversely impacting the telecom sector post CDR of the Company were discussed in detail in earlier reports and the same are enumerated hereunder:

a. Cancellation of 2G licenses upheld by the Hon''ble Supreme Court;

b. Slower 3G and BWA growth;

c. Failed spectrum auction;

d. Declining performance of Telecom Operators;

e. Freeze on fresh debt and equity;

f. Operators'' defaults and penalties;

Further, the Company was expected to get increased / additional business arising out of its acquisition of telecom tower portfolio from Aircel Limited and its subsidiaries through Chennai Network Infrastructure Limited (CNIL) from FY 2010-11. However, owing to various factors stated above, the Company and CNIL could not garner the required 20,000 additional new tenancies on Right of First Refusal basis from Aircel. Due to this the Company faces several claims from its suppliers and Network operators.

With the stability in the Government at the Centre, it is expected to have positive effect on policy and investment climate. The telecom industry is poised for growth in the coming years.

Major developments in the Industry

The following are some of the major industry developments that are going to have an impact on the earnings and profitability of the sector:

1. Clarity in regulatory policy

During the recent period, there have been several policy initiatives by the Government in the areas of spectrum auction, unified licensing, liberalization of the M&A norms etc as mentioned below.

2. Spectrum:

- All spectrums required for access services are being allotted through a transparent auction process. The recently concluded spectrum auction in February 2014 is testimony to this fact

- Incumbent telecom operators like Vodafone, Bharti Airtel and Idea Cellular displayed vigorous participation in the auction especially for Metros and Circle A cities where the Company has presence

- New operators namely Reliance Jio contested for 1800 MHz spectrum in 14 circles.

- A sum of Rs. 61,162 Cr. has been spent on this auction.

- The Government has taken a decision to allow spectrum sharing. Detailed guidelines are expected soon

- The government has indicated a roadmap on the spectrum availability as well

3. FDI Policy:

- Foreign Direct Investment (FDI) is allowed up to 49% under automatic route and equity infusion beyond 49% up to 100% is with the approval of Foreign Investment Promotion Board

4. M&A norms

- The new rules require the acquiring telco to pay market rates (to the Government) for spectrum above 4.4Mhz in the acquired telco,

- The market share of the combined entity not to exceed 50%

5. Unified licensing

- All future telecom licenses will be granted as Unified Licenses, which will allow the provision of all voice and data services

- All Unified Licenses to have the validity of 20 years

Salient features of spectrum auctions - February 2014

- Reserve Price was lower than the previous Auctions

- Total winning bids amounted to Rs. 61,162 Cr.

- 900 MHz auction saw competitive bidding. Delhi circle received bids of more than 200% of Reserve Price

- The quantum of spectrum available for 1800MHz band was higher

- Operators hedged against the upcoming 900 MHz Auction in 2015, by buying spectrum in 1800MHz

- 8 major operators participated in the auction

- Airtel, Vodafone, Idea and Reliance Jio acquired 95% of the auctioned spectrum

Given the successful auction of 900MHz and 1800 MHz, expected increase in adoption of 3G and 4G with exponential growth in data usage, introduction of national telecom policy, M&A policy approval and 100% foreign equity approval, 2014 onwards we hope to see growth and consequently stability in the telecom industry.

However, in our opinion, it would take a considerably prolonged time in improving the economic scenario inter- alia the telecom sector and in order to overcome the CDR scenario, the Company is contemplating bi-lateral / multi- lateral settlements, either one time, negotiated or otherwise, with the Lenders for which the Company may be required to initiate appropriate actions as elaborated in the proposals put forward before the shareholders for approval.

5. DEBT RESTRUCTURING

Further to information furnished in the Directors'' Report for financial year 2012-13, after successful implementation of Corporate Debt Restructuring (CDR) mechanism for its Rupee Term Loans, as approved by CDR EG, the Company has complied and continues to comply with the terms and conditions of CDR package. The CDR Rupee Debt outstanding as on March 31, 2014 is Rs. 3,529.02 Cr., details of which are as follows:

Principal - Rs. 3,256.57 Cr.

FITL - Rs. 207.09 Cr.

Interest - Rs. 65.36 Cr.

The Company has sizeable amount of overdue receivables from CNIL, an associate company but the same is yet to be released by CNIL''s lenders. Your Company has been honouring its debt service obligation in time and is committed to honour its debt obligation in time but due to non-release of the funds from CNIL coupled with the effect of downturn in the economy in general and telecom sector in particular, there has been delay at times in debt servicing. The Company is also exploring opportunities to monetize its investment (held through Tower Trust) in CNIL, the proceeds of which will be utilized for meeting debt service obligations of the Company.

6. SCHEME OF ARRANGEMENT

Further to information furnished in the Directors'' Report for financial year 2012-13, the Company continues to pursue the Scheme of Arrangement for the merger of CNIL with the Company by way of modification of Scheme of Arrangement to give effect to financial and capital structure changes consequent upon restructuring under CDR. The Company and CNIL proposes to seek approvals for modified Scheme of Arrangement from the Stakeholders, CDR EG, Lenders, the Hon''ble Courts and other regulatory / statutory authorities, as may be required. Once the modified Scheme of Arrangement between the Company and CNIL is approved, the Company''s financial statements will be re-casted / re-stated with effect from the Appointed Date as may be approved.

7. SHARE CAPITAL:

a. The movement of Equity Share Capital due to allotment of shares is as under:

Particulars No. of Equity Shares

Equity Share Capital as on April 1,2013 2,306,799,754

Add: Allotment of Equity Shares to FCCB Holders upon conversion of FCCBs 1,855,418

Equity Share Capital as on May 21,2014 2,308,655,172

b. Foreign Currency Convertible Bonds (FCCBs)

Further to information furnished in the Directors'' Report for financial year 2012-13, during the year under review, as per terms and conditions of the Series B Bonds issued in terms of Offering Circular dated November 8, 2012, the Conversion Price of Series B Bonds i.e. US$ 207,546,000 Interest Bearing Convertible Bonds due 2017 convertible into share, have been reset to Rs. 11.38 as against Rs. 12.64. The Status of FCCBs allotted is as under:

If all the balance 245,613 FCCBs are converted into equity shares, the total share capital would go up by 1,205,176,429 new equity shares.

c. Consideration to CNIL shareholders for merger

Consequent to the approval of CDR proposals of the Company and CNIL and further to the modifications to be made in the petitions by the Company and CNIL (subject to approval of CDR Lenders), the Company would be required to issue its equity shares to the shareholders of CNIL towards consideration on merger of CNIL with the Company as may be approved by Hon''ble High Courts of Bombay and Madras.

8. EMPLOYEE STOCK OPTION SCHEME (ESOS)

Further to the information furnished in the Directors'' Report for financial year 2012-13, the Company has obtained necessary approvals of the members in their Annual General Meeting held on September 17, 2013 for cancellation of unvested options and options pending for conversion and also for closure of "GTL Infrastructure Limited - Employees Stock Option Scheme 2005 (ESOS 2005)". Accordingly, the Company has closed ESOS 2005 w.e.f. September 17, 2013. Hence the details as required under Securities Exchange Board of India (Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are not furnished.

9. FIXED DEPOSITS

There are no unclaimed deposits lying with the Company and during the year under review, the Company has not accepted any fresh fixed deposits from Public or from its Shareholders.

10. CORPORATE GOVERNANCE

The Company continues to comply with Clause 49 of the Listing Agreement with the Stock Exchanges. A separate report on Corporate Governance along with the Certificate of the Joint Auditors, M/s. Chaturvedi & Shah, Chartered Accountants and M/s. Yeolekar & Associates, Chartered Accountants confirming compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the stock exchanges is given elsewhere in this Report.

11. DIRECTORS

Pursuant to Sections 149, 152 and other applicable provisions, if any, of the Companies Act, 2013, one-third of such of the Directors as are liable to retire by rotation, shall retire every year and, if eligible, offer themselves for re- appointment at every Annual General Meeting. Consequently, Mr. Manoj Tirodkar and Mr. Charudatta Naik will retire by rotation at the ensuing Annual General Meeting, and being eligible, offer themselves for re-appointment in accordance with the provisions of the Companies Act, 2013.

Further as per Section 149(5) of the Companies Act, 2013, the Company is required to appoint Independent Directors under Section 149(4) within a period of one year from April 1, 2014 i.e. the date of commencement of the said Section and Rules made there under. Since the Company had already appointed Mr. N. Balasubramanian, Mr. Anand Patkar, Mr. Vinod Agarwala and Mr. Vijay Vij as Non-Executive Independent Directors subject to retirement by rotation in the past, in terms of clause 49 of the Listing Agreement, as per the recommendations of Nomination and Remuneration Committee the Board of Directors proposes to re-appoint all the aforesaid Directors as Non-Executive Independent Directors within the meaning of Section 149 of the Companies Act, 2013 read with Schedule IV attached thereto and Rules made there under, not subject to retirement by rotation, for a term of 5 (five) consecutive years from September 16, 2014 to September 15, 2019.

Brief resumes of the Directors being appointed / re- appointed, nature of their expertise in specific functional areas and names of companies in which they hold directorships and memberships / chairmanships of Board Committees, shareholding and relationships between directors inter-se as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges are provided in the Corporate Governance Report forming part of the Annual Report.

Your Directors recommend their appointment / re- appointment at the ensuing Annual General Meeting.

12. PROMOTER GROUP

The Company is a part of Global Group of Companies which is promoted by GTL Limited (GTL). The members may note that the Promoter Group comprises of Global Holding Corporation Private Limited and such other persons as defined under SEBI Regulations.

Consequent to the settlement reached between GTL, CNIL and IFCI Limited (IFCI), IFCI has returned 175,536,793 equity shares of the Company to GTL, which were earlier appropriated by IFCI in July 2011. Resultantly, GTL''s shareholding in the Company has been restored to 14.99% of the total paid-up capital of the Company. Hence Promoter Group''s total shareholding in the Company stood at 27.26 % of the total paid-up capital of the Company.

13 DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956 the Directors, to the best of their knowledge and belief, state, in respect of the year ended March 31,2014, that:

a. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at the end of financial year and of the loss of the Company for that period;

c. the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act,1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

d. the Directors have prepared the annual accounts of the Company on a ''going concern'' basis.

14. AUDITORS & AUDITORS'' REPORT

M/s. Chaturvedi & Shah, Chartered Accountants and M/s. Yeolekar & Associates, Chartered Accountants, were appointed as Joint Auditors of the Company at the Tenth Annual General Meeting of the Company to hold office from the conclusion of the said meeting till the conclusion of the next Annual General Meeting. The Company has received the necessary written consents and certificates from the Joint Auditors respectively, pursuant to Section 139 and 141 the Companies Act, 2013, regarding their eligibility for re-appointment. Accordingly, in terms of Section 139 of the Companies Act, 2013, approval of the members to the appointment of M/s. Chaturvedi & Shah, Chartered Accountants and M/s. Yeolekar & Associates, Chartered Accountants as Joint Auditors of the Company is being sought at the ensuing Annual General Meeting.

The Auditors'' Report to the shareholders on the Accounts of the Company for the financial year ended March 31, 2014 does not contain any qualification or adverse remarks.

15. COST AUDITORS

Pursuant to directions issued by Government of India, Ministry of Corporate Affairs (MCA) for appointment of Cost Auditors, the Board of Directors has appointed Mr. Vikas V. Deodhar, a Cost Accountant as a Cost Auditor of the Company for the financial year ended March 31,2014.

The relevant Cost Audit Report for financial year 2012-13 was duly filed with Ministry of Corporate Affairs on September 26, 2013.

Pursuant to the provisions of Section 148 of the Companies Act, 2013 and Rules there under as may be prescribed on the recommendations of Audit Committee, the Board of Directors has appointed Mr. Vikas V. Deodhar, Cost Accountant as the Cost Auditor for the financial year 2014-15.

16. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The Company has continued to focus aggressively on reduction of diesel consumption at telecom tower sites through various initiatives of energy efficiency improvement and fuel savings. The Company has carried out trials and pilot installations of various energy saving and green energy solutions through deployment of Solar Photovoltaic (SPV), Lithium Ion batteries and aircon performance improvement solutions.

The details relating to conservation of energy and environmental improvement are given in the Annexure to this Report.

The Company is engaged in the business of providing Passive Infrastructure Services and has no manufacturing activities. During the year under review, the Company has not absorbed, adopted any technology and innovated any new technology. Hence, the details relating to Technology Absorption are not furnished.

In line with Department of Telecommunications (DoT) directives of Green Initiatives to Telecom Service Providers, the Company has worked out plan to outsource the supply of Renewable Energy through RESCO (Renewable Energy Service Companies) model in phase-wise manner.

Also, the Company is in advance stage of MoU for a project on energy management improvement project jointly with New Energy and Industrial Technology Development Organization of Japan (NEDO), (DoT) and Ministry of New and Renewable Energy (MNRE). The objectives of the project are to contribute to the efficient use of energy and the protection of the environment in India by installing PV Power Generation solution and advanced energy management system including energy storage solutions at the telecommunication towers in India and demonstrating the energy management system using diesel power generators and /or grid power. The initial surveys and identification of site are completed.

There were no actual inflow of Foreign Exchange during the year and the particulars regarding actual outflow of Foreign Exchange appear at item number 28 in Notes on Financial Statements to the Balance Sheet as at March 31, 2014 forming part of this Annual Report.

17. PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, names and other particulars of the employees are required to be set out in an annexure to this Report. However, in terms of the Section 219(1 )(b)(iv) of the Companies Act, 1956, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. Any shareholder interested in obtaining a copy of the same may write to the Joint Company Secretary at the Registered Office address. None of the employees listed in the said annexure are related to any Director of the Company.

18. SPECIAL BUSINESS

As regards the items of the Notice of the Annual General Meeting relating to Special Business, the Resolutions incorporated in the Notice and the Explanatory Statement relating thereto, fully indicate the reasons for seeking the approval of members to those proposals. Members'' attention is drawn to these items and Explanatory Statement annexed to the Notice.

19. GENERAL

Notes forming parts of the Accounts are self - explanatory.

20. ACKNOWLEDGEMENT

Your Directors wish to place on record their appreciation and acknowledge with gratitude, the support and co-operation extended by the clients, employees, vendors, bankers, financial institutions, investors, media and both the Central and State Governments and their Agencies and look forward to their continued support.

On behalf of the Board of Directors,

Mumbai Manoj Tirodkar

May 21,2014 Chairman


Mar 31, 2013

To The Members''

The Directors are pleased to present their Tenth Annual Report together with the Audited Accounts for the year ended March 31'' 2013.

1. FInAncIAl Results

(Rs.in Cr.)

Particulars 2012-13 2011-12

Total Income 570.92 557.17

PBDIT 283.53 301.10

Depreciation 486.43 243.42

PBIT (202.90) 57.68

Interest and Finance Charges (Net) 350.53 428.51

Profit / (Loss) Before Exceptional (553.43) (370.83)

Items & Tax

Exceptional Item 133.21

Profit / (Loss) before tax (686.64) (370.83)

Provision for Taxation

Net Profit / (Loss) (686.64) (370.83)

Figures regrouped / reclassified wherever necessary to make them comparable.

Financial performance

During the year'' despite the deceleration in growth rate in the Indian Economy and a challenging macroeconomic environment'' revenue of the Company grew to R 570.92 Cr. in comparison to previous year’s revenue at R 557.17 Cr. Operating Profit (before Depreciation'' Interest and Tax) was at R 283.53 Cr. in comparison to previous year’s Operating Profit (before Depreciation'' Interest and Tax) of R 301.10 Cr. Net Loss for the year was at R (686.64) Cr. in comparison to previous year’s Net Loss of R (370.83) Cr.

The factors contributing to the financial performance are discussed more elaborately in the Management Discussion and Analysis Report which forms part of this Annual Report.

2. MAnAGeMent DIscussIon AnD AnAlysIs

The Management Discussion and Analysis for the year under review'' as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India'' on the Company’s performance'' industry trends and other material changes with respect to the Company is presented in a separate section forming part of this Annual Report.

3. suBsIDIARy coMpAny

Chennai Network Infrastructure Limited (CNIL) ceased to be a subsidiary of the Company with effect from December 20'' 2012'' consequent upon allotment of equity shares to CDR Lenders and Promoters in terms of Corporate Debt Restructuring Scheme.

4. scHeMe oF ARRAnGeMent

In the year 2010-11'' the Company and CNIL filed petitions in the High Courts of Judicature at Bombay & Madras respectively for approval of the Scheme of Arrangement between the Company and CNIL. The Hon’ble Bombay High Court has sanctioned the Scheme of Arrangement for the merger of CNIL with the Company'' however'' approval is awaited from the Hon’ble Madras High Court.

In the meantime the Company and CNIL had approached the Lenders with a proposal to restructure its debts under the CDR Mechanism which has been implemented successfully in both the entities. Consequent to these approvals the financials and capital structure of both the Companies have undergone substantial changes and therefore the Company and CNIL have decided to modify the Scheme of Arrangement and shall seek various approvals inter alia Shareholders'' CDR EG'' Lenders and the Hon’ble Courts. Once the modifed Scheme of Arrangement between CNIL and Company is approved by the Hon’ble Bombay and Madras High Courts'' the Company’s financial statements will be re-casted / re-stated with effect from the Appointed Date as may be approved.

5. Recent DevelopMents At MAcRo AnD MIcRo econoMIc level

The Indian telecom industry has shown marginal decrease in subscriber base in the year under review. The mobile subscriber base in India has decreased to 861.66 Mn. at end of February 2013 as against 919.17 Mn. at the end of March 2012'' registering a de-growth of 6.26 %. The share of Urban subscribers that was giving higher average revenue per user has declined to 60.50 % in February 2013 from 64.83 % in March'' 2012 whereas share of Rural subscribers has increased to 39.50 % in February 2013 from 35.17 % in the month of March 2012. With this'' the overall Teledensity in India has fallen to 70.42 at the end of February 2013.

The Telecom Industry today is undergoing stress and has been dealing with several challenges on the financial'' revenue and profitability fronts on one hand and Regulatory Policies on the other.

Some of the developments we believe that had negative impact on the sector are:

a. cancellation of 2G licenses by Hon’ble supreme court upheld: Cancellation of 122 telecom licenses including that of Uninor'' Videocon'' Etisalat by the Hon’ble Supreme Court of India in February 2012 and the rejection of their final plea in January 2013 leading to a grinding halt of all 2G capital expenditure plans of these Operators;

b. slower 3G and BwA growth: While Operators have invested Rs. 1''20''000 Cr. towards 3G and BWA services'' their initial rollouts have been very selective. Further'' ongoing litigations over 3G roaming agreements has dented the growth prospects of data service revenues;

c. spectrum auction response: Due to high reserve prices set for the November 2012 auction'' the response from Operators was mild with no single operator bidding for a pan India spectrum. Further'' in March 2013 spectrum auction'' GSM operators refrained themselves from participation;

d. Declining performance of telecom operators: On account of falling subscribers along with operating losses'' even leading operators like Bharti reported consolidated losses over 12 consecutive quarters;

e. operators’ defaults and penalties: Several Operators faced huge penalties from regulator'' on various counts'' including for spectrum'' 3G roaming pacts'' under reporting of revenues'' non-compliance of KYC norms etc.

As the telecom sector is facing difficulty in raising fresh capital from banks or investors'' this has resulted in their reduced ability to spend and lower capital expenditure. Nevertheless'' the Operators are in process for aggressive rollouts for network expansion for financial year 2013-14. The factors that will drive growth for network services business in India are as follow:

a. Growth of Data services in Indian telecom Market:

The increasing usage of smart phones'' and the growth of Value Added Services and the resultant growth in the data usage would require further investments in augmenting the network;

b. Focus on rural expansion: Though mobile coverage is increasing'' the rural area still holds large untapped potential. With Rural teledensity at 40.01 as at February 2013'' there is good opportunity for growth in rural areas. With a good footprint in rural India'' our Company expects revenue to grow in the long run as a result of growth in demand from the Rural areas;

c. Roll out of 3G and BwA services: The expansion of the 3G networks and rollout of BWA networks will also impact positively'' leading to growth in network services;

d. Quality of services: As the coverage targets have been achieved by most of the operators'' the focus has now shifted to the quality of service and differentiating the customer experience. This is expected to drive consulting revenue in terms of benchmarking networks and optimization.

It is general consensus among market participants and policy makers that given the current state of associated uncertainties in telecom sector'' it may take 2-3 years for this sector to recover'' stabilize and get into growth mode.

6. DeBt RestRuctuRInG

Further to information furnished in the Directors’ Report for financial year 2011-12'' after successful implementation of Corporate Debt restructuring (CDR) package for its Rupee Term Loans'' as approved by CDR EG'' the Company has complied and continues to comply with the terms and conditions of CDR package. Further'' during the year'' Promoter'' Global Holding Corporation Pvt. Ltd. (GHC)'' have infused Rs. 90.16 Cr. towards Promoter Contribution into the Company.

7. RestRuctuRInG oF FoReIGn cuRRency conveRtIBle BonDs (FccBs)

During the year under review'' the Company'' with the approval of shareholders and the Reserve Bank of India has restructured its outstanding principal amount of FCCBs of US$ 228.30 Mn. (issued in 2007 and due in 2012) aggregating US$ 319.286 Mn. (including redemption premium) by way of cashless exchange with and for the following:

(i) 111''740 Zero Coupon Convertible Bonds'' having face value of US$ 1''000 due 2017 ("Series A Bonds”)'' aggregating principal amount of US$ 111.740 Mn. at a conversion price of R 10 per share; and

(ii) 207''546 Interest Bearing Convertible Bonds'' having face value of US$ 1''000 due 2017 ("Series B Bonds”)'' aggregating principal amount of US$ 207.546 Mn. at conversion price of:

8. sHARe cApItAl

a. The authorized share capital was increased from R 3''500 Cr. to R 5''000 Cr. by creation of 150 Cr. equity shares of R 10 each;

b. The movement of Equity Capital due to allotment of shares is as under:

No. of particulars equity shares

Equity Share Capital as on April 1'' 2012 957''348''604

Add: Allotments of Equity Shares during the year:

a) CDR Lenders (on conversion of Zero Percent & 880''609''132 One Percent CCDs)

b) Promoters (on conversion of Zero Percent CCDs) 71''329''113

c) FCCBs Holders (on conversion of restructured 397''512''905

FCCBs Series A & B)

Equity Share Capital as on May 9'' 2013 2''306''799''754

9. DIvIDenD

The Company is in the business of providing telecom towers on a shared basis to multiple wireless telecom service providers which is capital intensive in nature. In view of high depreciation'' interest and in the absence of distributable profits'' no dividend has been recommended.

10. FIXeD DeposIts

The Company has not invited or accepted any fixed deposits and'' as such'' no amount of principal or interest was outstanding as of the Balance Sheet date.

11. coRpoRAte GoveRnAnce

The Company is complying with Clause 49 of the Listing Agreement with the Stock Exchanges. A separate Report on Corporate Governance along with the Certificate of the Joint Auditors'' M/s. Chaturvedi & Shah'' Chartered Accountants and M/s. Yeolekar & Associates'' Chartered Accountants confirming compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the stock exchanges is given elsewhere in this Annual Report.

12. DIRectoRs

Mr. Vijay Vij'' Mr. Vinod Agarwala and Mr. Satya Pal Talwar'' Directors retire by rotation at the forthcoming Annual General Meeting. Mr. Vijay Vij and Mr. Vinod Agarwala being eligible offer themselves for re-appointment.

Mr. Satya Pal Talwar has conveyed that due to his health problem'' he is not seeking re-appointment as a Director of the Company at the ensuing Annual General Meeting.

The background of the Directors proposed for reappointment is given under the Corporate Governance Section of this Annual Report.

13. pRoMoteR GRoup

The Company is a part of Global Group and is promoted by GTL Limited (GTL). The members may note that beside GTL'' the Promoter Group comprises of Global Holding Corporation Private Limited and such other persons as defined under the SEBI Regulations. The Promoter Group holding in the Company is currently 19.65% of the Company’s Paid-up Share Capital.

pledge of promoter shareholding in the company:

Further to the information furnished in the Directors’ Report for the financial year 2011-12'' GTL (Promoter) and Chennai Network Infrastructure Limited (CNIL) have arrived at an agreement to resolve the dispute with IFCI Limited (IFCI). Successful completion of the same would result in restoration of promoters’ shareholding in the Company to 27.26 %.

14. AuDItoRs & AuDItoRs’ RepoRt

M/s. Chaturvedi & Shah'' Chartered Accountants and M/s. Yeolekar & Associates'' Chartered Accountants'' were appointed as Joint Auditors of the Company at the Ninth Annual General Meeting of the Company to hold office from the conclusion of the said meeting till the conclusion of the next Annual General Meeting. The Company has received the necessary certificates from the Joint Auditors respectively'' pursuant to Section 224(1B) of the Companies Act'' 1956'' regarding their eligibility for re-appointment. Accordingly'' approval of the members to the appointment of M/s. Chaturvedi & Shah'' Chartered Accountants and M/s. Yeolekar & Associates'' Chartered Accountants as Joint Auditors of the Company is being sought at the ensuing Annual General Meeting.

The Auditors’ Report to the shareholders on the Accounts of the Company for the financial year ended March 31'' 2013 does not contain any qualification or adverse remarks.

15. cost AuDItoRs

The Cost Audit Branch of Government of India'' Ministry of Corporate Affairs (MCA)'' New Delhi vide Cost Order No. 52/26/CAB-2010 dated November 6'' 2012 have issued industry wise Orders'' which includes Infrastructure Providers (IP-1)'' for appointment of

Cost Auditors. Accordingly'' the Board of Directors has appointed Mr. Vikas V. Deodhar'' a Cost Accountant as a Cost Auditor of the Company for the financial year 2013-14.

16. DIRectoRs’ ResponsIBIlIty stAteMent

In accordance with the provisions of Section 217(2AA) of the Companies Act'' the Directors'' to the best of their knowledge and belief'' state'' in respect of the year ended March 31'' 2013'' that:

a. in the preparation of the annual accounts'' the applicable accounting standards have been followed along with proper explanation relating to material departures;

b. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at the end of financial year and of the loss of the Company for that period;

c. the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act''1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

d. the Directors have prepared the annual accounts of the Company on a ‘going concern’ basis.

17. conseRvAtIon oF eneRGy'' tecHnoloGy ABsoRptIon AnD FoReIGn eXcHAnGe eARnInGs AnD outGo:

The Company has enhanced its focus on reduction of diesel consumption at telecom tower sites through several initiatives of energy efficiency and fuel savings. Further'' trials of various green energy solutions are carried out through pilot deployment of Solar Photovoltaic panels'' Deep discharge and Lithium Ion batteries which have technological superiority.

The details relating to conservation of energy and environmental improvement are given in the Annexure to this Report.

The Company is engaged in the business of providing Passive Infrastructure Services and has no manufacturing activities. During the year under review'' the Company has not absorbed'' adopted any technology and innovated any new technology. Hence'' the details relating to Technology Absorption are not furnished. During the year under review'' the Company has carried out R&D activity for reduction of energy consumption at Telecom Tower Sites. The details relating to R&D are given in the Annexure to this Report.

In line with DoT directives dated January 23'' 2012 on Green initiatives to Telecom Service Providers'' the Company as a member of Tower And Infrastructure Providers Association (TAIPA)'' has been actively in the tower industry’s collective efforts for renewable energy solutions on Opex model'' through RESCO (Renewable Energy Service Companies) concept. It is planned to engage through this model in phase-wise manner.

There were no Foreign Exchange Earning during the year and the particulars regarding Foreign Exchange Expenditures appear at item numbers 37 and 38 in Notes on Financial Statements to the Balance Sheet as at March 31'' 2013 forming part of this Annual Report.

18. pARtIculARs oF eMployees

In terms of the provisions of Section 217(2A) of the Companies Act'' 1956'' read with the Companies (Particulars of Employees) Rules'' 1975'' as amended'' names and other particulars of the employees are required to be set out in an annexure to this Report. However'' in terms of the Section 219(1)(b)(iv) of the Companies Act'' 1956'' the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary at the Registered Office. None of the employees listed in the said annexure are related to any Director of the Company.

19. eMployee stocK optIon scHeMe (esos)

ESOS was introduced and implemented in the year 2005 for the benefits of the employees of the Company. The shareholders have authorized issue of shares'' not exceeding 5% of issued equity capital of the Company'' to its employees in the form of stock options. As on March 31'' 2013 a total 166 employees hold 13''465''454 stock options allotted under various scheme. As required by Clause 12 of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines'' 1999'' the particulars of ESOS are furnished in Annexure to this Report. However'' considering current market conditions'' the stock options granted to employees became unfavourable for conversions and hence'' the management has proposed to cancel all pending options in the hands of employees and also to close the entire ESOS 2005.

20. specIAl BusIness

As regards the items of the Notice of the Annual General Meeting relating to special business'' the resolutions incorporated in the Notice and the Explanatory Statement relating thereto'' fully indicate the reasons for seeking the approval of members to those proposals. Members’ attention is drawn to these items and Explanatory Statement annexed to the Notice.

21. GeneRAl

Notes forming parts of the Accounts are self-explanatory.

22. AcKnowleDGeMents

Your Directors wish to place on record their appreciation and acknowledge with gratitude the support and co-operation extended by the clients'' vendors'' bankers'' financial institutions'' investors'' media and both the Central and State Governments and

their Agencies and look forward to their continued support. Your Directors also thank the employees at all levels'' who through their dedication'' co-operation and support'' have enabled the Company to achieve sustained growth.

For and on behalf of the Board of Directors

Mumbai Manoj G. tirodkar

May 9'' 2013 Chairman


Mar 31, 2012

The Members,

The Directors are pleased to present their Ninth Annual Report together with the Audited Accounts for the year ended March 31, 2012.

1. FINANCIAL RESULTS

(Rs. in Crore)

Consolidated Standalone

Particulars 2010-11 2011-12 2010-11 2011-12

Total Income 1,082.64 1407.78 534.06 557.16

PBDIT 657.45 770.95 324.64 301.10

Depreciation 574.77 791.36 207.66 243.42

PBIT 82.68 (20.41) 116.98 57.68

Interest and Finance Charges (Net) 657.03 977.31 256.27 428.51

Profit/(Loss) Before Tax (574.35) (997.72) (139.29) (370.83)

Provision for Taxation - - - -

Net Profit / (Loss) (574.35) (997.72) (139.29) (370.83)

Figures regrouped / reclassified wherever necessary to make them comparable.

Financial Performance

Operating Profit / (Loss) was at Rs. 51.07 Cr. in comparison to previous year's Operating Profit / (Loss) of Rs. 73.34 Cr. Net Profit/(Loss) for the year was at (Rs. 370.83) Cr. in comparison to previous year's net profit /(loss) of (Rs. 139.29) Cr.

On a consolidated basis, total income for the year under review was at Rs. 1407.78 Cr. Operating Profit / (Loss) (profit before taxes excluding other income and finance costs) was at (Rs. 30.23) Cr. Net Profit / (Loss) for the year was at (Rs. 997.72) Cr.

The factors contributing to the financial performance are discussed more elaborately in the Management Discussion and Analysis Report which forms part of this Annual Report.

2. MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis for the year under review, as stipulated under Clause 49 of the listing agreement with the stock exchanges in India, on the Company's performance, industry trends and other material changes with respect to the Company and its subsidiary, wherever applicable, is presented in a separate section forming part of this Annual Report.

3. SUBSIDIARY COMPANY

Chennai Network Infrastructure Limited (CNIL), promoted by Global Group, became subsidiary of the Company during FY 2010-11.

In terms of the general approval granted under Section 212(8) of the Companies Act, 1956 by the Ministry of Corporate Affairs, Government of India vide its Circular No. 2/2011 dated February 8, 2011, copies of Balance Sheet, Profit & Loss Account and other documents of the subsidiary company have not been attached with the Balance Sheet of the Company. Financial information of the subsidiary company, as required by the said general approval has been furnished separately in the Consolidated Balance Sheet in this Annual Report. The Company will make available the Annual Accounts of the subsidiary company and related detailed information to the Company's and the subsidiary company's shareholders, seeking such information at any point of time. The Annual Accounts of the subsidiary company will also be kept open for inspection by any shareholder at the Registered/Head Office of the Company and that of the subsidiary company.

In the year 2010-11, the Company and its subsidiary, CNIL filed petitions in the High Courts of Judicature at Bombay & Madras respectively for approval of the Scheme of Arrangement between the Company and CNIL. The Hon'ble Bombay High Court had sanctioned Scheme of Arrangement for the merger of CNIL with the Company, however, approval is awaited from the Hon'ble Madras High Court.

In the meantime the Company and its subsidiary had approached the Lenders with a proposal to restructure its debts under the CDR Mechanism. Both the proposals of the Company and CNIL respectively have been approved by the CDR Empowered Group. Consequent to these approvals the financials and capital structure of both the Companies have changed substantially and therefore the Company has decided to modify the Scheme of Arrangement and submit it afresh for the approval of the Hon'ble Courts. Approval of the revised Scheme is not likely to be received on or before the date of convening of the ensuing Annual General Meeting, and therefore the financial statements of the Company for the financial year ended March, 31, 2012 are prepared without considering the CNIL financial statements and once the modifed merger scheme between CNIL and Company is approved by the Hon'ble Bombay and Madras High Courts, the Company's financial statements will be re-casted with effect from the Appointed Date as approved by the High Courts.

The consolidated financial statements of the Company prepared in accordance with applicable accounting standards forms part of this Annual Report.

4. RECENT DEVELOPMENTS AT MACRO AND MICRO ECONOMIC LEVEL

The Indian telecom industry has shown minimal growth in the last year. The mobile subscriber base in India has increased to 919.17 Million at the end of March 2012, registering a growth of 0.88%. The share of Urban subscribers that was giving higher average revenue per user has declined to 65.23% from 65.59% whereas share of Rural subscribers has increased to 34.77% in the month of March 2012. With this, the overall Teledensity in India has reached 78.66 at the end of March, 2012.

The industry today is undergoing stress and has been dealing with several challenges on the financial, revenue and profitability fronts on one hand and Regulator, Government and Judiciary on the other hand.

Some of the developments that had negative impact on the sector are

- Cancellation of 122 2G licenses by Supreme Court

- TRAI recommendations for

Rs. Fixation of higher reserve price for spectrum auction

Rs. Re farming of 900 MHz spectrum leading to higher investment by all telecom operators

- Shutting down of Indian operations partially or fully by Etisalat DB, Loop Telecom, S-Tel and cancellation of all 122 2G licences.

- Slower than expected offtake of the 3G roll outs, and the delay in rolling out the BWA networks even after a year of paying out the license fees

The above factors have resulted in lack of investor interest in telecom sector. This had a direct impact on the telecom operator's ability to spend and has resulted into lower capital expenditure. The 3G rollouts were limited to the top 40 cities in India and the primary focus has been on upgrading and utilizing the existing infrastructure. However as the roll out spreads it will lead to the growth of telecom tower sector.

Since the operators have reduced their capital expenduture the expansion is happenning through sharing. The tower industry shifted its focus from building more towers to increasing tenancies. Single-tenant towers are not viable and tower sharing is likely to augment industry profitability.

Moving forward the growth drivers for the tower sector would be as follows

- Growth of Data Services in Indian Telecom Market: the increasing usage of smart phones, and the growth of Value added services and the resultant growth in the data usage would require further investments in augmenting the network

- Focus on rural expansion: with mobile coverage expected to increase, especially in rural areas, there will be a steady increase in tenancies and telecom towers in rural areas

- Rollout of 3G and BWA services: The expansion of the 3G networks and rollout of BWA networks will also impact positively, leading to growth in tenancies

- Quality of Service: the recently launched mobile number portability has encouraged competition amongst operators to lure new customers and retain the existing user base. This is expected to drive additional investment into tower infrastructure to support the Quality of Service (QoS) indicators and differentiation strategies for operators.

Pledge of Promoter shareholding in the Company

Further to the information furnished in the Directors' Report for the FY 2010-11, GTL Limited (GTL), Chennai Network Infrastructure Limited (CNIL) and IFCI Limited (IFCI) are at the final stage of settlement of the dispute, whereupon the shares appropriated by IFCI would be returned to GTL. Also as part of the settlement, IFCI is likely to convert its loan in CNIL into equity shares of CNIL, with the consent from CDR Lenders.

5. CORPORATE DEBT RESTRUCTURING

The Company had filed its proposal for Restructuring its Debts through CDR process in July 2011, which was admitted by the Corporate Debt Restructuring Empowered Group (CDR EG) on September 26, 2011. Further the Company received a Letter of Approval bearing Number BY.CDR(ATR)No./6117/2011-12 dated December 23, 2011 from the CDR EG approving the Restructuring Package, the salient features of which are as under;

1. The debt restructuring of the Company, involves the conversion of part of the Indian Rupee Debt of Rs. 1,062.29 Cr. from CDR lenders into Compulsorily Convertible Debentures ("CCDs") to be converted into equity shares. CCDs will also be issued to CDR lenders against part of the Funded Interest Term Loan of Rs. 78.78 Cr. and interest on CCDs of Rs. 6.67 Cr.

2. Promoter Contribution of Rs. 90.16 Cr. to be brought into the Company by Promoter (Global Holding Corporation Private Limited & and /or its affiliates) as stipulated in the CDR package, in the form of CCDs to be converted into equity shares.

3. Rescheduling of repayment of the balance rupee debt to CDR lenders of the Company which are part of the ongoing corporate debt restructuring process, over the period of 15 years and with a moratorium of one year and nine months, the repayment of which begins from quarter ending June 30, 2013.

4. Moratorium in the payment of interest for the period of one year and six months, requiring the payment of interest to begin from quarter ending March 31, 2013 and an overall reduction in the interest rate with an effective yield of 10.75% over the term of the facility.

Also, Promoter Group has contributed in the subsidiary of the Company, viz. Chennai Network Infrastructure Limited (CNIL) Rs. 82.72 Cr. towards equity through CCDs and Rs. 758.53 Cr. by way of conversion of unsecured loans into equity through CCDs. Thus the promoters of the Company have contributed Rs. 931.41 Cr. in aggregate in the Company and CNIL towards equity enhancement.

6. SHARE CAPITAL

During the year under review, there was no change in the Equity Share Capital of the Company. As on March 31, 2012 the Equity Share Capital of the Company was Rs. 957.35 Cr.

As per the Terms of the Master Restructuring Agreement executed between the Company and the Lenders a portion of Restructured Loan was to be converted into Equity, through Compulsorily Convertible Debentures (CCDs) to be allotted to them in tranches. The Promoters were also required to contribute additional amount as their contribution into the Equity Capital also through CCDs. The Company on April 21, 2012 had allotted 109,947,737 CCDs of face value of Rs. 100/- each to the Lenders and Promoters. Consequent to the conversion of the CCDs, the Company on May 5, 2012 allotted 869,839,670 Equity Shares of face value of Rs. 10/- per share at a Premium of Rs. 2.64 per share to the Lenders and Promoter thereby increasing the Paid-up Equity Share Capital of the Company to Rs. 18,271,882,740.The Equity Share Capital is subject to dilution on account of -

a) Foreign Currency Convertible Bonds (FCCBs)

During the FY 2007-08, the Company raised US $ 300 Million through Zero Coupon FCCBs at a conversion price of Rs. 53.04 per share for meeting the capital expenditure, acquisition and other expenses permitted by the regulatory authorities. The status of FCCBs allotted is as under.

No. of FCCBs No. of Equity Shares Particulars (of US $ 1 Lac each) upon conversion (In Crore)

FCCBs allotted 3,000 22.23

Conversion till March 31, 2012 717 5.31

Balance as on March 31, 2012 / July 03, 2012 2,283 16.92

If all the balance 2,283 FCCBs are converted into equity shares, the total share capital would go up by 169,158,948 new equity shares.

b) Employees Stock Option Scheme

The shareholders have authorized issue of shares, not exceeding 5% of issued equity capital of the Company, to its employees in the form of stock options. As on March 31, 2012, a total of 166 Employees (Previous Year 166) hold 13,495,004 Stock Options (Previous Year - 13,651,804) as under:

Particulars No. of Options

No. of outstanding Options as on April 01, 2011 13,651,804

Add: No. of Options issued during the year Nil

Less: No. of Options converted during the year Nil

Less: No. of Options lapsed during the year 156,800

Outstanding Options as on March 31, 2012 13,495,004

If all the outstanding Options are converted into equity shares, the total share capital would go up by 13,495,004 new equity shares.

As required by SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, the particulars of Employee Stock Option Scheme 2005 are set out in the Annexure to Directors' Report.

c) Consideration to CNIL Shareholders for merger

Consequent to the approval of the CDR proposals of the Company and its subsidiary and further to the revision to be made in the petitions by the Company and CNIL, the Company would be required to issue its equity shares to the shareholders of CNIL towards consideration on merger of CNIL with the Company as may be approved by Hon'ble High Courts of Bombay & Madras respectively.

d) Conversion of CCDs

Consequent to the conversion of CCDs proposed to be alloted to the CDR Lenders and Promoters in Tranche II and III the equity capital of the Company would increase.

7. DIVIDEND

The Company is in the business of providing telecom towers on a shared basis to multiple wireless telecom service providers which is capital intensive in nature. In view of high depreciation, interest and in absence of distributable profits, no dividend has been proposed.

8. FIXED DEPOSITS

The Company has not invited or accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date.

9. CORPORATE GOVERNANCE

Report on Corporate Governance along with the Certificate of the Joint Auditors, M/s. Chaturvedi & Shah, Chartered Accountants and M/s. Yeolekar & Associates, Chartered Accountants confirming compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the stock exchanges is given elsewhere in this Annual Report.

10. DIRECTORS

Dr. Anand Patkar, Mr. N. Balasubramanian and Mr. Vivek Kulkarni retire by rotation at the forthcoming Annual General Meeting and Dr. Anand Patkar & Mr. N. Balasubramanian being eligible offer themselves for re-appointment. Mr. Vivek Kulkarni, however, had expressed his desire to retire and not to seek re-appointment.

The background of the Directors proposed for reappointment / appointment is given under the Corporate Governance Section of this Annual Report.

11. PROMOTER GROUP

The Company is a part of Global Group and is promoted by GTL Limited. The members may note that beside GTL the Promoter Group comprises of Global Holding Corporation Private Limited and such other persons as defined under the SEBI Regulations. The Promoter Group holding in the Company is currently 23.19% of the Company's Paid-up Share Capital.

12. AUDITORS & AUDITORS ' REPORT

M/s. Chaturvedi & Shah, Chartered Accountants and M/s. Yeolekar & Associates, Chartered Accountants, were appointed as Joint Auditors of the Company at the Eighth Annual General Meeting of the Company to hold office from the conclusion of the said meeting till the conclusion of the next Annual General Meeting.

The Company has received the necessary certificates from the Joint Auditors respectively, pursuant to Section 224(1B) of the Companies Act, 1956, regarding their eligibility for re-appointment.

Accordingly, approval of the members to the appointment of M/s. Chaturvedi & Shah, Chartered Accountants and M/s. Yeolekar & Associates, Chartered Accountants as Joint Auditors of the Company is being sought at the ensuing Annual General Meeting.

The Auditors' Report to the shareholders on the Accounts of the Company for the financial year ended March, 31, 2012 does not contain any qualification or adverse remarks.

13. COST AUDITORS

The Government of India, Ministry of Corporate Affairs have, vide its Notification dated 7th December, 2011, made rules namely Cost Accounting Records (Telecommunication Industry) Rules, 2011, which would be applicable to Infrastructure Provider (IP-1). Accordingly, the Board of Directors have appointed Mr. V. V. Deodhar, a Practicing Cost Auditor as a Cost Auditor of the Company for the financial year 2012-13, subject to approval of Central Government.

14. DIRECTORS ' RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956 and based on the information provided by the management, your Directors state that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2012 and of the loss of the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act,1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

d) the Directors have prepared the annual accounts of the Company on a 'going concern' basis.

15. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The Company has enhanced its focus on reduction of diesel consumption at telecom tower sites through several initiatives of energy efficiency and fuel savings. Further, trials of various green energy solutions are carried out through deployment of Solar Photovoltaic, Methanol based Fuel Cells and Lithium Ion batteries. The details relating to conservation of energy and environmental improvement are given in the Annexure to this Report.

The Company is engaged in the business of providing Passive Infrastructure Services and has no manufacturing activities. During the year under review, the Company has not absorbed, adopted any technology and innovated any new technology. Hence, the details relating to Technology Absorption are not furnished. During the year under review, the Company has carried out R&D activity for reduction of energy consumption at Telecom Tower Sites. The details relating to R&D are given in the Annexure to this Report.

In line with DoT directives dated January 23, 2012 on Green initiatives to Telecom Service Providers , the Company has worked out plan to outsource supply of Renewable energy through RESCO (Renewable Energy Service Providers) model in phase-wise manner, FY2012-13 onwards.

The particulars regarding Foreign Exchange Expenditures and Earnings appear as item numbers 33 and 34 respectively, in Notes on Financial Statements to the Balance Sheet as at March 31, 2012 forming part of this Annual Report.

16. PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, names and other particulars of the employees are required to be set out in an annexure to this Report. However, in terms of the Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary at the Registered Office. None of the employees listed in the said annexure are related to any Director of the Company.

17. SPECIAL BUSINESS

As regards the items of the Notice of the Annual General Meeting relating to special business, the resolutions incorporated in the Notice and the Explanatory Statement relating thereto, fully indicate the reasons for seeking the approval of members to those proposals. Members' attention is drawn to these items and Explanatory Statement annexed to the Notice.

18. GENERAL

Notes forming parts of the Accounts are self-explanatory.

19. ACKNOWLEDGEMENTS

Your Directors wish to place on record their appreciation and acknowledge with gratitude the support and co-operation extended by the clients, vendors, bankers, financial institutions, investors, media and both the Central and State Governments and their Agencies and look forward to their continued support. Your Directors also thank the employees at all levels, who through their dedication, co-operation and support, have enabled the Company to achieve sustained growth.

For and on behalf of the Board of Directors

Mumbai Manoj G. Tirodkar

July 03, 2012 Chairman


Mar 31, 2010

The Directors are pleased to present their Seventh Annual Report along with the Audited Accounts for the year ended March 31, 2010.

1. Financial Results

Rupees in Crore

Year Ended Year Ended

March 31,2010 March 31, 2009

Total Income 381.32 274.58

PBDIT 224.17 167.83

Depreciation 198.32 141.15

PBIT 25.85 26.68

Interest and Finance Charges (Net) 28.43 97.46

Profit / (Loss) Before Tax (2.58) (70.78)

Provision for Taxation - -

- Current - -

-Deferred - (7421)

- Fringe Benefit - 0.59

Net Profit (2.58) 2.84 /(Loss)

Figures regrouped I reclassified wherever necessary to make them comparable.

2. Dividend

The Company is in the process of rolling out 23,700 towers. It is also acquiring 17,500 towers from Aircel Limited and its subsidiaries (Aircel). Thus in view of the ongoing project execution and the acquisition of Aircel Towers, the capital-intensive nature of the business and inadequate profit on account of high depreciation and interest, no dividend has been proposed.

3. Acquisition

The Company has entered into an agreement to purchase the Tower business of Aircel through Chennai Network Infrastructure Limited, a Special Purpose Vehilce (SPV) formed for the said purpose. The highlights of the transaction are as follows;

- Purchase of 17,500 telecom towers;

- 21,000 active tenants on these towers;

- Transaction Value Rs.8,400 Crores;

- Aircel has committed additional 20,000 tenancies over the next 3 years;

The transaction is expected to be consummated by July 2010, subject to fulfilment of legal formalities.

This transaction is proposed to be funded through a mix of Debt and Equity as follows:

Equity investment of Rs.3,400 Crores from the Company and its Promoters. While the Company is subscribing through Trust for 51 % of the Equity, GTL Limited and Global Holding Corporation Private Limited, the Promoter Group companies are subscribing for the balance of 49%.

Debt funding of Rs.5,000 Crores has been syndicated and lead managed by SBI Capital Markets Limited.

The purchase of Aircel tower business will deliver strong revenue growth for the Company as the deal assures immediate revenue of Rs. 700 crore p.a. for next 15 years. The Company has also received additional commitment of 20,000 tenancies over a period of next 3 years which will provide additional revenue of Rs. 700 crore p.a. This will be in addition to the existing revenue base of the Company.

The Company will continue to be an independent and neutral player with focus on reducing the capital and operational expenditure of telecom service providers.

4. Operations

During the year under review, the Company earned total Income of Rs. 381.32 Crore (which includes net income from operations of Rs. 347.95 Crore and other income of Rs. 33.37 Crore). The revenues are in the form of infrastructure provisioning fees in respect of our passive infrastructure. The PBDIT has improved from Rs. 167.83 Crore in the previous year to Rs. 224.17 Crore in the year under review. While the Company has a depreciation charge of Rs. 198.32 Crore, Interest & Finance Charges (Net) is Rs. 28.43 Crore. The operations have resulted in a Profit/(Loss) before tax of Rs. (2.58) Crore. However, the operations (before depreciation) have resulted in cash profit before tax of Rs. 195.74 Crore.

Business Strategy

Having achieved considerable size, post the Aircei tower acquisition, the Company has set a vision to be the most efficient tower Company in the World. The goal of the Company is to increase per tower revenue and cashflows. This is being done by increasing the tenancy per tower. The expansion by existing dual technology operators, rollout by new 2G operators and impending 3G network rollout present the Company with opportunity to improve tenancy on towers.

The Company post Aircei should have significant tower presence on pan-India basis. The Company plans to deploy new towers as well as grow inorganically to improve its tower penetration in the interiors of the Country. Existing tower sharing will give operators an opportunity for speedy 2G & 3G network rollout while enjoying the sharing benefits in the form of reduced operational and energy cost.

Future Outlook

With a subscriber base of over 621 Mn, India is the 2nd largest Telecom.market in the World. The introduction of low cost handsets and impending 3G & WiMAX rollout is expected to be the next growth driver for the industry. Presence of more than 12 operators in each circle, increasing subscriber base and spectrum scarcity for incumbent operators in key markets will augur well for the tower industry.

Post acquisition of Aircei Towers, the Company will be in a better position to capture the growth opportunity offered by the Network rollout by new 2G & 3G operators and thereby improve tenancy on its towers.

5. Awards and Recognitions

During the year the Company won the prestigious "Greentech Environment Excellence Award 2009". This Award in its 10th year was presented to companies demonstrating the highest level of commitment to environmental management, business excellence & sustainability. The Company had also been voted as the "Best Independent Infrastructure Provider" in the Telecom Operator Awards 2010 organized by Tele.Net.

6. Share Capital

The Equity Share Capital of the Company has increased from Rs. 816.16 Crore as on March 31, 2009 to Rs. 957.35 Crore as of date as under:

Particulars Share Capital (Rs,in Crore)

Share Capital as on 31.03.09 816.16

Allotment during the year:

a) Promoter Group / Pre-demerger Shareholders (On conversion of Warrants issued on preferential basis) 120.50

b) FCCB Holders (On conversion of 2007 FCCBs) 10.00

c) ESOS Holders (On conversion of 2005 ESOSs) 10.69 Share Capital as on 31.03.10 / 29.04.10 957.35

The details of the above allotments done during the year are as under:

a) Convertible Warrants

The Company allotted 26.36 Crore Convertible Warrants (Warrants) on November 30, 2007 to the promoter group / predemerger shareholders on preferential basis at a conversion price of Rs.40 per share, convertible into one Equity Share for each Warrant within 18 months aggregating to Rs.1,054.60 Crore, for meeting the capital expenditure, acquisition and other expenses. The status of Warrants issued is as under:

Particulars Total

No. of Warrants issued (in Crs.) 26.36

No. of Warrants converted till March 31, 2010 (in Crs.) 21.75

No. of Warrants forfeited (in Crs.) 4.61

No. of Warrants pending conversion (in Crs.) - Total amount received against Warrants (Rs.Crs.) 888.46

b) Foreign Currency Convertible Bonds (FCCBs)

During the FY 2007-08, the Company raised US $ 300 Million through Zero Coupon FCCBs at a conversion price of Rs.53.04 per share for meeting the capital expenditure, acquisition and other expenses permitted by the regulatory authorities. The status of FCCBs allotted is as under.

Particulars No. of FCCBs No. of Equity

(of US $ 1 Lac each) Shares upon conversion

(InCrore)

FCCBs allotted 3,000 22.23

Conversion till March 31,2010 717 5.31

Balance as on 31.03.10/29.04.10 2.283 16.92

c) Employees Stock Option Scheme

The shareholders have authorized issue of shares, not exceeding 5% of issued equity capital of the Company, to its employees in the form of stock options. As on March 31, 2010, a total of 173 Employees (Previous Year 76) hold 11,968.904 Stock Options (Previous Year -16,179,644) as under:

Particulars No. of Options

No. of outstanding Options as on April 01, 2009 16,179,644 Add: No. of Options issued during the year 6,507,850

Less: No. of Options converted during the year 10,686,690 Less: No. of Options lapsed during the year 31,900

Outstanding Options as on March 31, 2010 11,968,904

As required by SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, the particulars of Employee Stock Option Scheme 2005 are set out in the Annexure to Directors Report.

7. Liquidity

The Company has secured financial closure for the total project cost of Rs. 7,265 Crore.

The paid-up share capital of the Company as at March 31, 2010 was Rs. 957.35 Crore. With a view to strengthen the capital base of the Company and also to improve on the Debt Equity Ratio, the Company in 2007 has raised US $ 300 Million through Foreign Currency Convertible Bonds (FCCB), of which FCCBs aggregating to US $ 71.70 Million have been converted into Equity Shares of the Company. The Company has also issued Convertible Warrants worth Rs. 1,054.60 Crore in 2007 on preferential basis, out of which, on subscription by the Warrantholders. 21.75 Crore Warrants amounting to Rs. 870 Crore have been converted into Equity Shares of the Company. Accordingly, the total Shareholders funds aggregate to Rs. 1,865.37 Crore.

Out of the long term funding commitments received from the domestic and international lenders aggregating to Rs. 4,999 Crore, the Company has drawn Rs. 2,826.82 Crore as at March 31, 2010.

The Company has Cash and Bank balance of Rs. 460.25 Crore as at March 31, 2010 after providing a sum of Rs. 1,815.72 Crores towards purchase of Aircel Tower business.

8. Fixed Deposits

The Company has not invited or accepted any deposits during the year under review from the public/shareholders.

9. Listing

The Equity Shares of the Company are listed at Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE). The Foreign Currency Convertible Bonds of the Company are listed at Singapore Exchange Securities Trading Limited. Singapore.

10. Corporate Governance

Report on Corporate Governance along with the Certificate of the Auditors, M/s. Chaturvedi & Shah. Chartered Accountants and M/s. Yeolekar & Associates, Chartered Accountants confirming compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the stock exchanges is given elsewhere in this Annual Report.

11. Management Discussion and Analysis Report

Management Discussion and Analysis on the Companys performance, industry trends and other material changes with respect to the Company, as required under the Listing Agreements with the Stock Exchanges is given else where in this Annual Report.

12. Particulars of Employees

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, the names and other particulars of employees are required to be set out in an Annexure to this Report.

However, in terms of Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. Any Shareholder interested in obtaining a copy of the same may write to the Company Secretary at the Registered Office. None of the employees listed in the said Annexure are related to any Director of the Company.

13. Particulars regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo:

The Company has focused on reduction of energy consumption at telecom tower sites through several initiatives for deployment of energy efficient solutions. The details relating to conservation of energy are given in the Annexure to this Report.

During the year under review, the Company has actively participated in EOI (Expression of Interest) invited by Universal Service Obligation Fund (USOF), Department of Telecommunications, Government of India for Renewable Energy Solutions Pilot Project. The Company has successfully received confirmation from USOF for deployment of Solar Solution Site in UP-E Circle and Solar+Wind Hybrid Solution in Andhra Pradesh.

The Company is engaged in the business of providing Passive Infrastructure Services and has no manufacturing activities. Its projects are under various stages of implementation. During the year under review, the Company has not absorbed, adopted any technology and innovated any new technology. Hence, the details relating to Technology Absorption are not furnished. During the year under review, the Company has carried out R&D activity for reduction of energy consumption at Telecom Tower Sites. The details relating to R&D are given in the Annexure to this Report.

The particulars regarding Foreign Exchange Expenditures and Earnings appear as item numbers 27 and 28 respectively, in Schedule, P to the Balance Sheet as at March 31, 2010 forming part of this Annual Report.

14. Subsidiary

During the year under review, the wholly owned subsidiary of the Company M/s. Towers Worldwide Limited ceased to be subsidiary.

15. Directors

In accordance with the Companies Act, 1956 and the Articles of Association of the Company, Mr. Balasubramanian N., Dr. Anand Patkarand Mr. Vivek Kulkarni retire by rotation at the ensuing Annual General Meeting. Accordingly, Mr. Balasubramanian N., Dr. Anand Patkar and Mr. Vivek Kulkarni, based on their consent and eligibility are proposed for re-appointment. Their re-appointment forms part of the notice of the ensuing Annual General Meeting.

On reaching the prescribed age for retirement, Mr. Deepak Vaidya ceased to be a Director with effect from January 14, 2010.

The Board places on record its appreciation of the contribution of Mr. Deepak Vaidya during his tenure as the Director of the Company.

The Board of Directors regret to inform the sad demise of Mr. Prakash Samant on 2nd January 2010 and place on record its appreciation and deep gratitude for his valuable contribution during his tenure as the Director of the Company.

While Mr. Vinod Agarwala and Mr. Vijay Vij were appointed as Additional Directors on July 20, 2009, Mr. Satya Pal Talwar was appointed as Additional Director on August 13, 2009, pursuant to the provisions of Section 260 of the Companies Act, 1956 and as such they hold office up to the date of the ensuing Annual General Meeting. In terms of Section 257 of the Companies Act, 1956 they are proposed to be appointed in the ensuing Annual General Meeting.

The background of the Directors proposed for reappointment is given under the Corporate Governance Section of this Annual Report.

None of the Directors are disqualified from being appointed as Directors as specified in terms of Section 274 (1) (g) of the Companies Act, 1956.

16. Auditors & Auditors Report

M/s. Chaturvedi & Shah, Chartered Accountants and M/s. Yeolekar & Associates, Chartered Accountants, were appointed as Auditors of the Company at the 6lh Annual General Meeting of the Company to hold office from the conclusion of the 6"1 Annual General Meeting until the conclusion of the 7th Annual General Meeting of the Company.

The Company has received the necessary certificates from the Joint Auditors respectively, pursuant to Section 224(1 B) of the Companies Act, 1956 and other applicable regulations regarding their eligibility for re-appointment.

Accordingly, the approval of the shareholders to the appointment of M/s. Chaturvedi & Shah, Chartered Accountants and M/s. Yeolekar & Associates, Chartered Accountants as Joint Auditors of the Company is being sought at the ensuing Annual General Meeting.

The Board has duly reviewed the Statutory Auditors Report on the Accounts for the year ended March, 31, 2010, and wish to report that the same does not have any reservation, qualification or adverse remarks.

17. Directors Responsibility Statement

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956 and based on the information provided by the management, your Directors state that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) they have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2010 and of the loss of the Company for the year ended on that date;

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities:

d) the annual accounts of the Company have been prepared on a going concern basis.

18. Special Business

As regards the items of the Notice of the Annual General Meeting relating to special business, the resolutions incorporated in the Notice and the Explanatory Statement relating thereto, fully indicate the reasons for seeking the approval of members to those proposals. Your attention is drawn to these items and Explanatory Statement annexed to the Notice.

19. General

Notes forming part of the Accounts are self-explanatory.

20. Acknowledgements

Your Directors wish to place on record their appreciation and acknowledge with gratitude the support and co-operation extended by the clients, vendors, bankers, financial institutions, investors, media and both the Cemtral and State Governments and their Agencies and look forward to their continued support. Your Directors also thank the employees at all levels, who through their dedication, co-operation and support, have enabled the Company to achieve sustained growth.

For and on behalf of the Board of Directors

Mumbai Manoj G. Tirodkar

April 29, 2010 Chairman

 
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