Home  »  Company  »  GTL Infrastructure  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of GTL Infrastructure Ltd.

Mar 31, 2015

1 Terms/rights attached to equity shares

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

2. Shares reserved for issue under options :

The Foreign Currency Convertible Bonds (FCCB) holders have the option to convert FCCB into 1,316,007,039 Equity Shares (Previous Year 1,207,031,848) (Refer Note No. 4.3)

3. A] Rupee Term Loans from Banks & Financial Institutions are secured by way of

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

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

B] Foreign currency Term Loan from financial institution is secured by way of

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

4. Terms of Repayment

(i) Rupee Term Loans from Banks and Financial Institutions and Current Maturities of Long-term borrowings having an effective yield of 10.75% over the tenure of the facility aggregating to Rs. 30,300,579,754 are repayable in 45 structured quarterly instalments ending on June 30, 2026

(ii) Rupee Term Loans from Banks and Financial Institutions and Current Maturities of Long-term borrowings having an Interest rate of 3% p.a. aggregating to Rs. 1,583,665,324 are repayable in 8 structured quarterly instalments ending on March 31,2017

(iii) Rupee Term Loans from Banks having an Interest rate of 8% p.a. aggregating to Rs. 2,112,179,389 are repayable only after the Final Settlement date of all other restructured Loans, i.e., June 30, 2026.

(iv) The Foreign Currency Term Loan and Current Maturities of Long term borrowings relating to Foreign Currency Term Loan are repayable in 24 equated quarterly instalments of € 375,000 ending on March 15, 2021. The loan carries Interest rate of 3 months Euribor 200 bps.

5. Foreign Currency Convertible Bonds (FCCBs) :

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

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

(iii) Series A Bonds of US$ 111,740,000 are compulsorily convertible into equity shares. Each Series A bond is convertible into 5425.20 fully paid up equity shares of Rs. 10 each. As on March 31,2015, 49,040 Series A Bonds were outstanding.

(iv) The Series B Bonds of US$ 207,546,000 are interest bearing optionally convertible bonds. Each bond carries an Interest at the rate of 0.5335% p.a. payable semi annually on the outstanding principal plus the margin for period under consideration with effect from November 8, 2013 as defined in Offering Circular. The Conversion Price shall be determined in terms of 'Offering Circular'. As on date, applicable Conversion Price for each Bond is Rs. 10 per equity share, accordingly Series B Bondholder have an option to convert each bond into 5,425.20 fully paid up equity shares of Rs. 10 each. As on March 31,2015, 193,533 Series B Bonds were outstanding.

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

6. Salaries and allowances include remuneration to Whole Time Director Rs. 4,970,616 (Previous year Rs. 4,970,616) which is subject to the approval of Central Government.

7. Employee Benefits:

Defined Benefit Plan

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

(i) 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 & 3G growths, failure of spectrum auctions and general economic slowdown. During this time, the Company which was mandated to support the planned deployment of 20000 tenancies of Aircel / CNIL could not do so since Aircel was unable to honour its commitment. In the meanwhile, the Company had already placed orders on various vendors to procure tower assets and made advances against those orders. Consequently, the Company had to short close its commitment to vendors and is currently pursuing legal action against them for recovery of these advances. However, as a matter of prudence, a provision for doubtful advances of Rs. 2,087,466,114 (Previous year Rs. 600,000,000) has been made during the year ended March 31, 2015. Further, pursuant to the settlement agreement between the Company, CNIL and Aircel Group of Companies Rs. 1,500,000,000 (Previous year Nil) has been recognised as income towards final settlement during the year ended March 31,2015. The above amounts have been shown as exceptional items.

(ii) The Company evaluated its non current investments for the purpose of determination of potential diminution in value based on the latest available financial statements of the investee companies. Based on such evaluation, the Company has recognised a provision for diminution as on March 31,2015 amounting to Rs. 278,302,500. The above mentioned amount has been shown as exceptional item.

8. Contingent Liabilities:

A] (Amount in Rs.)

Sr. As at As at No. Particulars March March 31,2015 31,2014

Contingent Liabilities not provided for (No Cash Outflow is expected)

i. Bank Guarantees 21,775,642 19,346,614 (Bank Guarantees are provided under contractual / legal obligation)

ii. Corporate Guarantee 8,310,000,00 8,310,000,000 (Given to Banks and Financial Institution for loans taken by the erstwhile subsidiary company)

iii. Claims against the Company not 160,562,890 106,029,485 acknowledged as debts

iv. Disputed liability in respect of - 1,402,120,217 Service Tax Matters under appeal

v. Disputed liability in respect of 122,586,058 73,892,075 Sales Tax Matters under appeal (Amount deposited Rs. 21,186,705) (Previous Year Rs. 21,008,127)

B]

Certain Legal issues outstanding against the Company relating majorly to alleged non-compliance of policies of municipal corporations,levy of taxes,cases pending for permanent injunctions,objections by local residents,disputes with site owners,where the disputed amounts are non-quantifiable and therefore contingent liability in respect of this could not be determined.

The Company has not expect any material financial effect of the above matters under litigation.

During the year 2008-09 the Company had imported OFC (Optical Fiber Cable) on which the Custom department issued Show Cause Notice for the demand of Custom Duty of Rs. 9,294,731. The Company deposited the whole amount under protest and subsequently the Commissioner granted the relief to the Company of Rs. 7,794,792. As against the said order of the Commissioner, the Custom department has filed an appeal with the CESTAT, Mumbai on 11th Oct 2010. The Company feels there will not be any further liability on this account.

9. Capital Commitments:

Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances) as at March 31,2015 is Rs. 165,048,290 (Previous year Rs. 1,006,680,790) Cash outflow is expected on execution of such contracts on progressive basis.

10. The Company has entered into a Master Services Agreement (MSA) with respective Telecom Operators for a tenure upto 15 years. Invoices are raised on these operators for provisioning fees and recovery of pass through expenses as part of the said MSA. Retention of amounts by certain operators for the earlier periods was resultant upon different interpretations of MSA. Subject to confirmation/reconciliation of balances, Provision towards doubtful trade receivables & energy recoverable of Rs. 727,109,570 (Previous year Rs. 255,185,342) has been made during the year ended March 31, 2015 for such receivables on a prudent basis, in respect of which, the Company will continue to pursue for its recovery. The management is of the view that all the outstanding trade receivables & energy recoverables are good for recovery except for which provision has already been made.

11. The Scheme of arrangement between the Company and Chennai Network Infrastructure Limited (CNIL) under section 391 to 394 of Companies Act, 1956 was approved by the Hon'ble High Court of Judicature of Bombay but is pending for approval before Hon'ble High Court of Judicature of Madras. Consequent upon restructuring due to CDR, the above scheme is being modified, subject to the approval of all competent authorities and stakeholders

12. During the last few years, the telecom industry has been adversely affected by the general economic slowdown and various other factors such as slower growth of 3G technology; failure of spectrum auctions and inflationary costs of power & fuel. This has resulted into substantial erosion of the Company's net worth 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 Reliance Jio, one of the operators with BWA spectrum 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.

13. Segment Reporting:

The Company is predominantly in the business of providing "Telecom Towers" on shared basis and as such there are no separate reportable segments. The Company's operations are only in India.

14. Related Party Disclosures:

A. Related Parties

I. Trust

Tower Trust (the Company is the sole beneficiary)

II. Associates

Chennai Network Infrastructure Limited (CNIL)

III. Key Managerial Personnel

a. Mr. Manoj G. Tirodkar (Chairman)

b. Mr. Milind Naik, Whole-time Director

c. Mr. L.Y. Desai (Chief Financial Officer)

IV. Others

a. GTL Limited (GTL)

b. Global Holding Corporation Pvt Ltd

15. Particulars of foreign currency exposures that are not hedged by derivative instruments as at March 31,2015

a) Receivables- Rs. 1,011,298,354 (Previous year Rs. 1,011,298,354)

b) Payables- Rs. 16,393,300,001 (Previous year Rs. 15,882,678,732)

16. Operating Lease

The Company's significant leasing arrangements are in respect of operating leases for premises and network sites. These lease agreements provide for cancellation by either parties thereto as per the terms and conditions of the agreements.

17. In the opinion of the Management, Non Current / Current Assets, Loans and Advances are approximately of the value stated, if realised in the ordinary course of business.

18. In accordance with clause 32 of Listing Agreement the details of Loans and Advances are as under:

a. To Chennai Network Infrastructure Limited (CNIL), an Associate, closing balance as on March 31, 2015 is Rs. 65,313,541 (Previous year 2,265,493,079). Maximum balance outstanding during the year was Rs. 2,265,493,079 (Previous year Rs. 3,391,395,602).

b. CNIL has not made investment in the shares of the Company.

c. As per the Company's policy loans to employees are not considered for this clause.

19. The previous year's figures, wherever necessary, have been regrouped, reclassified and rearranged to make them comparable with those of the current year.


Mar 31, 2014

Note -1

Pursuant to the Company''s application to the appropriate Income Tax Authorities for AY 2005-06 to AY 2012-13, orders have been received during the year. As per these orders, net income tax payable relating to earlier years aggregating to Rs. 8,870,435 has been provided for and Rs. 447,516,712 has been accounted as Income Tax Refund receivable.

Note - 2 Contingent Liabilities:

(Amount in Rs.)

Sr. As at As At Particulars No. March 31,2014 March 31,2013

Contingent Liabilities not provided for (No Cash Outflow is expected)

i Bank Guarantees 19,346,614 20,130,206

(Bank Guarantees are provided under contractual / legal obligation)

ii. Corporate Guarantee 8,310,000,000 10,810,000,000

(Given to Banks and Financial Institution for loans taken by the erstwhile subsidiary company)

iii. Claims against the Company not acknowledged as debts 106,029,485 44,504,728

IV Disputed liability in respect of Service Tax Matters under appeal 1,402,120,217 -

V Disputed liability in respect of Sales Tax Matters under appeal (Amount 73,892,075 91,317,125 deposited Rs. 21,008,127) (Previous Year Rs. 31,899,647)

Note - 3 During the year 2008-09 the Company had imported OFC (Optical Fiber Cable) on which the Custom department issued Show Cause Notice for the demand of Custom Duty of Rs. 9,294,731/- The Company deposited the whole amount under protest and subsequently the Commissioner granted the relief to the Company of Rs. 7,794,792/-. As against the said order of the Commissioner, the Custom department has filed an appeal with the CESTAT, Mumbai on October 11,2010. The Company feels there will not be any further liability on this account.

As at March 31,2014, the Company has Net Deferred Tax Assets of Rs. 3,099,548,323. In The absence of virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised, the same has not been recognised in the books of accounts in line with Accounting Standard 22 dealing with "Accounting for taxes on Income".

Note - 4 Particulars of foreign currency exposures that are not hedged by derivative instruments as at 31st March 2014

a) Receivables- Rs. 1,011,298,354 (Previous year Rs. 1,011,298,354)

b) Payables- Rs. 15,882,678,732 (Previous year Rs. 14,387,442,124)

Note - 5 Operating Lease

The Company''s significant leasing arrangements are in respect of operating leases for premises and network sites. These lease agreements provide for cancellation by either parties thereto as per the terms and conditions of the agreements.

Note - 6 In the opinion of the Management, Non Current/Current Assets, Loans and Advances are approximately of the value stated, if realised in the ordinary course of business.

Note - 7 In accordance with clause 32 of Listing Agreement the details of Loans and Advances are as under:

a. To Chennai Network Infrastructure Limited (CNIL), an Associate, closing balance as on March 31,2014 is Rs. 2,265,493,079 (Previous year Rs. 3,376,164,755). Maximum balance outstanding during the year was Rs. 3,391,395,602 (Previous year Rs. 3,376,164,755).

b. CNIL has not made investment in the shares of the Company.

c. As per the Company''s policy loans to employees are not considered for this clause.

Note - 8 The previous year''s figures, wherever necessary, have been regrouped, reclassified and rearranged to make them comparable with those of the current year.


Mar 31, 2013

1.1 a. On February 12'' 2007 and February 27'' 2007'' the Company granted 7''490''000 Options ("Grant 2”) and 25''000 Options ("Grant 3”)'' both'' convertible into Equity Shares of Rs. 10 each at an exercise price of Rs. 29.81 per share.

On October 9'' 2007'' with a view to compensate the Option holders considering the Rights Issue'' the Exercise Price of the Options in respect of ("Grant 2”) and ("Grant 3”) was re-fixed to Rs. 19.90 per share in place of Rs. 29.81 per share.

b. On October 9'' 2007'' the Company granted 650''000 Options ("Grant 4(A)”)'' convertible into Equity Shares of Rs.10 each at an exercise price of Rs. 26.48 per share.

c. On October 9'' 2007'' the Company also granted 249''000 Options ("Grant 4 (B)”)'' convertible into Equity Shares of Rs. 10 each at an exercise price of Rs. 26.48 per share.

d. On October 9'' 2007'' with a view to compensate the Option holders considering the Rights Issue'' the Company has granted-

Rs. 1''007''500 Options ("Grant 5”) at the exercise price of Rs. 10 each to ("Grant 1”) Option holders.

Rs. 7''190''000 Options ("Grant 6”) at the exercise price of Rs. 19.90 to ("Grant 2”) Option holders.

Rs. 25''000 Options ("Grant 7”) at the exercise price of Rs. 19.90 each to ("Grant 3”) Option holders.

e. On March 11'' 2008'' the Company granted 1''700''000 Options ("Grant 8”)'' convertible into Equity Shares of Rs. 10 each at an exercise price of Rs. 33.60 per share

f. Pursuant to approval of Shareholders in Annual General Meeting held on July10'' 2009 all the unvested Options as of April 29'' 2009 were vested on April 29'' 2009.

g. On November 23'' 2009 the Company granted 600''000 Options ("Grant 9”) convertible into Equity Share of Rs. 10 each at an exercise price of Rs. 24.37 per share.

note - 2 contingent liabilities:

(Amount in Rs.) sr. As at As At particulars no. March 31'' 2013 March 31'' 2012

Contingent Liabilities not provided for (No Cash Outflow is expected) i. Bank Guarantees 20''130''206 25''851''074

(Bank Guarantees are provided under contractual/legal obligation) ii. Corporate Guarantee 10''810''000''000 10''810''000''000

(Given to Banks and Financial Institution for loans taken by the erstwhile subsidiary company)

iii. Claims against the Company not acknowledged as debts 44''504''728 15''234''109

iv. Premium on Foreign Currency Convertible Bonds issued nIl 4''073''033''598

v. Disputed liability in respect of Sales Tax Matter under appeal (Amount deposited Rs. 31''899''647 91''317''125 170''931''249

(Previous Year Rs. 38''869''569)

note - 3 During the year 2008-09 the Company had imported OFC (Optical Fibre Cable) on which the Custom department issued Show Cause Notice for the demand of Custom Duty of Rs. 9''294''731/- The company deposited the whole amount under protest and subsequently the Commissioner granted the relief to the Company upto amount of Rs. 7''794''792/-. As against the said order of the Commissioner'' the Custom department has filed the appeal with the CESTAT'' Mumbai on Oct 11'' 2010. The Company feels there will not be any further liability on this account.

note - 4 capital commitments:

Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances) as at March 31'' 2013 is Rs. 9''585''559''405 (Previous year Rs. 12''031''399''019). Cash outflow is expected on execution of such contracts on progressive basis.

note - 5 As per the Business Purchase Agreement of July 2010 between Aircel and the Company'' in order to meet their planned deployment of 20''000 contracted tenancies under Right Of First Refusal (ROFR)'' the Company had placed orders on various parties to procure tower assets. Since the beginning of year 2012'' the telecom scenario in the Country changed drastically due to cancellation of 122 2G licenses by the Hon’ble Supreme Court'' slower 2G & 3G growth'' failure of spectrum auctions'' regulatory challenges and general economic downturn. As a result'' Aircel failed to honour its ROFR commitment to the Company. The telecom scenario further worsened and the Company was unable to pick up the deliveries against few of its orders. As these orders were backed by letter of credit the bank honoured the commitment aggregating to Rs. 1''332''100''863 and debited to the Company and as prescribed in the Master Restructuring Agreement (MRA) of Corporate Restructuring Debt (CDR) scheme'' the same was converted to Rupee term loan. The Company has initiated appropriate steps for recovery of the same. As a matter of prudence Rs. 1''332''100''863 has been provided and disclosed as an exceptional item in the Statement of Profit and Loss.

note - 6 The Company has entered into Master Services Agreement (MSA) with the Telecom Operators for a period of 10-15 years. Invoices are raised on these operators for provisioning fees and recovery of pass through expneses as part of the said MSA. The Company has requested for the balance confirmations from these operators and in respect of certain operators'' confirmations are still awaited.

note - 7 The board of directors of the Company'' in the earlier years'' had approved the Scheme of Arrangement (the "Scheme”) under Section 391 to Section 394 of the Companies Act'' 1956'' providing for the merger of "Chennai Network Infrastructure Limited” (CNIL) with the Company w.e.f. August 1'' 2010 (the appointed date) subject to necessary approvals from various statutory authorities. This scheme was approved by the Hon’ble Bombay High Court and approval of Hon’ble Madras High Court is awaited. Pursuant to the corporate debt restructuring of the borrowings of the Company'' the Company is in the process of modifying the scheme and once the scheme is finalised'' the same will be subjected to the necessary approval of various competent authorities.

note - 8 segment Reporting:

The Company is predominantly in the business of providing "Telecom Towers” on shared basis and as such there are no separate reportable segments. The Company’s operations are predominantly only in India.

note - 9 Related party Disclosures:

a. Related Parties

I. Trust

Tower Trust (The Company is sole beneficiary)

II. Associates

a. GTL Limited

b. Chennai Network Infrastructure Limited (subsidiary up to December 19'' 2012)

c. Global Holding Corporation Private Limited

III. Key Managerial Personnel

a. Mr. Manoj Tirodkar'' Chairman

b. Mr. Milind Naik'' Whole-Time Director & Co-COO

c. Mr. Bhupendra Kiny'' Chief Financial Officer

note - 10 particulars of foreign currency exposures that are not hedged by derivative instruments as at 31st March 2013

a) Receivables - Rs. 1''011''298''354 (Previous year Rs. 1''011''312''057)

b) Payables - Rs. 14''387''442''124 (Previous year Rs. 12''728''403''666)

note - 11 operating lease

The Company’s significant leasing arrangements are in respect of operating leases for premises and network sites. These lease agreements provide for cancellation by either parties thereto as per the terms and conditions of the agreements.

note - 12 In the opinion of the Management'' Non Current/Current Assets'' Loans and Advances are approximately of the value stated'' if realised in the ordinary course of business.

note - 13 In accordance with clause 32 of Listing Agreement the details of advance is as under:

a. To Chennai Network Infrastructure Limited (CNIL)'' an Associate (Subsidiary upto December 19'' 2012)'' closing balance as on March 31'' 2013 is Rs. 3''376''164''755 (Previous year 1''735''813''873). Maximum balance outstanding during the year was Rs. 3''376''164''755 (Previous year Rs. 1''735''813''873).

b. CNIL has not made investment in the shares of the Company.

c. As per the Company’s policy loans to employees are not considered for this clause.

note - 14 The previous year’s figures'' wherever necessary'' have been regrouped'' reclassified and recast to make them comparable with those of the current year.


Mar 31, 2012

1. Terms/rights attached to equity shares

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

1.1 Shares reserved for issue under options to :

(i) The Employee Stock Option Schemes (ESOS) holders under the ESOS have the option to exercise/convert ESOS into 13,495,004 (Previous Year 13,651,804) (Refer Note No. 22.1)

(ii) The Foreign Currency Convertible Bonds (FCCB) holders have the option to convert FCCB into 169,158,948 (Previous Year 169,158,948) (Refer Note No. 4.3)

(iii) Compulsorily Convertible Debenture (CCD) holders to be allotted pursuant to the Corporate Debt restructuring package (Refer Note No. 4.4) (iv) Refer Note No. 27 in respect of shares to be issued pursuant to the Scheme of Arrangement.

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

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

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

1.4 Terms of Repayment

(i) Rupee Term Loans from Banks and Financial Institutions having an effective yield of 10.75% over the tenure of the facility aggreegating to Rs. 30,189,971,635 are repayable in 53 structured quarterly instalments starting from June 30, 2013 and ending on June 30, 2026.

(iii) The Foreign Currency Term Loan includes overdue amount of Rs. 277,890,240 as on March 31, 2012. Subsequently on May 14, 2012 the terms of the loan have been amended and as per the amended terms the repayment of loans will commence only from June 15. 2013 and is accordingly repayble in 32 equated quarterly instalments of Euro 375,000 starting from June 15, 2013 and ending on March 15, 2021. The loan carries Interest rate of 3 months Euribor 200 bps.

(iv) Rupee Term Loans from Banks having an Interest rate of 8% p.a aggregating to Rs. 308,929,836 are reapayble only after the Final Settlement date of all other restructured Loans, i.e., June 30, 2026.

1.5 Zero Coupon Foreign Currency Convertible Bonds (FCCBs) :

(i) 2,283 Foreign Currency Convertible Bonds (FCCBs) of USD 100,000 each, aggregating to USD 228.30 Million were outstanding as on March 31, 2012 convertible at the option of the bondholders into Equity shares of the Company by November 22, 2012. In the event the FCCBs holders do not exercise their option by the due date, the FCCBs are redeemable at a premium of 40.4064 percent of the principal amount. The pro-rata premium as on March 31, 2012 works out to Rs. 4,073,033,598. At the time of redemption, the Company will adjust the premium on redemption to Securities Premium Account and it will not have any impact on profit or loss of the Company. Meanwhile, the Company has also initiated the process of restructuring the FCCB's.

(ii) Zero Coupon Foreign Currency Convertible Bonds (FCCBs) of USD 100,000 each are :

(a) Convertible by the bond holders at any time on and after January 27, 2008 but prior to close of business on November 22 , 2012. Each bond will be converted into fully paid up Equity Shares of Rs. 10 each at an initial Conversion Price of Rs. 53.04 per share translated from U.S. dollars at the Fixed exchange rate of Rs. 39.30 per U.S. dollar.

(b) Redeemable, in whole but not in part, at the option of the Company at any time on or after November 28, 2010 but not less than seven business days prior to maturity date subject to fulfillment of certain terms and obtaining requisite approvals.

(c) Redeemable on maturity date at 140.4064 percent of its principal amount, if not redeemed or converted earlier.

1.6 CDR Empowered Group (CDR EG) vide their letter dated December 23, 2011 ('CDR Letter') approved the Company's financial restructuring package under the corporate debt restructuring mechanism (CDR) effective from July 1, 2011. As per the above mentioned restructuring package, a part of the debts outstanding in respect of CDR lenders who have signed the agreement as on that date and CCD contribution received from promoters, aggregating to Rs. 10,994,773,700 has been disclosed as CCD Application Money in Note No. 8 "Other Current Liabilities". Further, as per the above package the balance Rupee debt of the CDR lender are repayable over the period of 15 years with a moratorium of one year nine months from the effective date carrying interest on step up basis with an effective yield of 10.75% over the tenure of the facility and payable after one year six months from the effective date. Subsequent to March 31, 2012 the Company allotted Compulsorily Convertible Debentures against the above CCD Application Money of Rs. 10,994,773,700. Further, on May 5, 2012 these CCD's have been converted into 869,839,670 equity shares of Rs. 10/- each fully paid up.

1.7 Employee Stock Option Scheme:

a. On February 12, 2007 and February 27, 2007, the Company granted 7,490,000 Options ("Grant 2") and 25,000 Options ("Grant 3"), both, convertible into Equity Shares of Rs. 10 each at an exercise price of Rs. 29.81 per share.

On October 9, 2007, with a view to compensate the Option holders considering the Rights Issue, the Exercise Price of the Options in respect of ("Grant 2") and ("Grant 3") was re-fixed to Rs. 19.90 per share in place of Rs. 29.81 per share.

b. On October 9, 2007, the Company granted 650,000 Options ("Grant 4(A)"), convertible into Equity Shares of Rs. 10 each at an exercise price of Rs. 26.48 per share.

c. On October 9, 2007, the Company also granted 249,000 Options ("Grant 4 (B)"), convertible into Equity Shares of Rs. 10 each at an exercise price of Rs. 26.48 per share.

d. On October 9, 2007, with a view to compensate the Option holders considering the Rights Issue, the Company has granted-

Rs. 1,007,500 Options ("Grant 5") at the exercise price of Rs. 10 each to ("Grant 1") Option holders.

Rs. 7,190,000 Options ("Grant 6") at the exercise price of Rs. 19.90 to ("Grant 2") Option holders.

Rs. 25,000 Options ("Grant 7") at the exercise price of Rs. 19.90 each to ("Grant 3") Option holders.

e. On March 11, 2008, the Company granted 1,700,000 Options ("Grant 8"), convertible into Equity Shares of Rs. 10 each at an exercise price of Rs. 33.60 per share.

f. Pursuant to approval of Shareholders in Annual General Meeting held on July10, 2009 all the unvested Options as of April 29, 2009 were vested on April 29, 2009.

g. On November 23, 2009 the Company granted 600,000 Options ("Grant 9") convertible into Equity Share of Rs. 10 each at an exercise price of Rs. 24.37 per share.

h. On December 09, 2009 the Company granted 5,907,850 Options ("Grant 10") convertible into Equity Share of Rs. 10 each at an exercise price of Rs. 28 per share. Out of above 156,800 Options lapsed during the year. (Previous years options lapsed 117,100).

1.8 Employee Benefits:

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

Defined Benefit Plan :

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

Note - 2 Contingent Liabilities

(Amount in Rs.)

Sr. As at As at Particulars No. March 31, 2012 March 31, 2011

Contingent Liabilities not provided for (No Cash Outflow is expected)

i. Bank Guarantees (Bank Guarantees are provided under contractual / legal obligation) 25,851,074 85,753,419

ii. Corporate Guarantee (Given to Banks and Financial Institution for loans taken by the subsidiary company) 10,810,000,000 10,560,000,000

iii. Claims against the Company not acknowledged as debts 15,234,109 11,504,898

iv. Premium on Foreign Currency Convertible Bonds issued 4,073,033,598 4,187,849,528

v. Disputed liability in respect of Sales Tax Matter under appeal (Amount deposited Rs. 38,869,569 (Previous Year Rs. 27,576,360) 170,931,249 108,202,338

Note - 3 Capital Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances) as at March 31, 2012 is Rs. 12,031,399,019 (previous year Rs. 12,088,984,317) Cash outflow is expected on execution of such contracts on progressive basis.

Note - 4 The Board of Directors of the Company in its meeting held on December 16, 2010 had considered and approved the Scheme of Arrangement providing for merger of "Chennai Network Infrastructure Limited" (CNIL) with the Company w.e.f. August 1, 2010 (the appointed date) subject to necessary approvals from various statutory authorities. On July 22, 2011, the Hon'ble High Court of Judicature at Bombay has sactioned the above scheme of arrangement between Chennai Network Infrastructure Limited (CNIL) and GTL Infrastructure Limited and their respective shareholders (Scheme) under Section 391 to 394 of the Companies Act, 1956. Sanction of Hon'ble High Court of Judicature at Madras is awaited. In terms of the CDR package (Refer note no 4.4), the above scheme of arrangement will be modified / revised and once the scheme is effective, these accounts will undergo change w.e.f. the appointed date.

Note - 5 Segment Reporting

The Company is predominantly in the business of providing "Telecom Towers" on shared basis and as such there are no separate reportable segments. The Company's operations are predominantly only in India.

Note - 6 Related Party Disclosures

a Related Parties

I Subsidiary

Chennai Network Infrastructure Limited

II Trust

Tower Trust (The Company is sole beneficiary)

III Associates

a GTL Limited

b Technology Infrastructure limited

c Global Holding Corporation Private Limited

IV Key Managerial Personnel

a. Mr. Manoj Tirodkar, Chairman

b. Mr. Prakash Ranjalkar, CEO & Whole-time Director (Upto December 31, 2011)

c. Mr. Milind Naik, Whole-time Director & Co-COO (w.e.f. July 21, 2011)

d. Mr. Ravi Ananth, Whole-time Director (w.e.f. April 29, 2011 upto July 21, 2011)

e. Mr. Prasanna Bidnurkar, Chief Financial Officer (Upto December 29, 2011)

f. Mr. Bhupendra J. Kiny, Chief Financial Officer (w.e.f. December 29, 2011)


Mar 31, 2010

1. Contingent Liabilities:

(No cash outflow is expected in near future)

(Amount in Rupees)

Sr. Particulars As at As At

No. March

31,2010 March 31,2009

Contingent Liabilities not provided for:

i. Bank Guarantees 139,681,002 110,080,894

(Bank Guarantees are provided under contractual / legal obligation)

ii. Claims against the Company not acknowledged as debts 4,679,818 2,479,568

iii. Premium on Foreign Currency Convertible Bonds issued (Refer Note 9 below) 4,153,926,318 5,097,568,687

iv. Disputed liability in respect of Income-tax demand (including interest) matter under appeal NIL 232,664

v. Disputed liability in respect of Sales Tax Matter under appeal (Amount deposited Rs. 3,170,596) 46,057,883 25,974,925

vl. Disputed liability in respect of Custom Duty NIL 9,294,371

2. Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances) as at March 31,2010 is Rs. 10,418,448,426 (Previous Year Rs. 16,030,962,514). Cash outflow is expected on execution of such capital contracts, on progressive basis.

3. The Company has entered into Master Services Agreement (MSA) with the Telecom Operators for a period of 10-15 years. Invoices are raised on these operators for provisioning fees and recovery of pass through expenses as part of the said MSA. The Company has requested for the balance confirmations from Sundry Debtors and Sundry Creditors. Confirmations are awaited in respect of some of them.

4. During the year the Company has carried out technical evaluation of all of its fixed assets to determine the estimated useful life of them. This has resulted into revision in the useful life of certain fixed assets and consequent reduction in depreciation for the year ended March 31,2010 by Rs. 164,954,028.

5. In the opinion of the Management, the Current Assets, Loans and Advances are approximately of the value stated, if realised in the ordinary course of business.

6. Employee Stock Option Scheme:

a. The Employee Stock Option Scheme, 2005 (ESOS) was first time introduced and implemented during the Accounting Period 2005-06 for which the approval was obtained from the shareholders at their Extra Ordinary General Meeting held on November 26,2005.

b. On November 26, 2005, the Company granted 1,550,000 Options ("Grant 1") convertible into Equity Shares of Rs. 10 each at an exercise price of Rs. 10 per share.

c. On February 12,2007 and February 27,2007, the Company granted 7,490,000 Options ("Grant 2") and 25,000 Options ("Grant 3"), both, convertible into Equity Shares of Rs. 10 each at an exercise price of Rs. 29.81 per share.

On October 9, 2007, with a view to compensate the Option holders considering the Rights Issue, the Exercise Price of the Options in respect of ("Grant 2") and ("Grant 3") was re-fixed to Rs. 19.90 per share in place of Rs. 29.81 per share.

d. On October 9, 2007, the Company granted 650,000 Options ("Grant 4 (A)"), convertible into Equity Shares of Rs. 10 each at an exercise price "of Rs. 26.48 per share. Out of above 3,400 Options lapsed during the year.

e. On October 9, 2007, the Company also granted 249,000 Options ("Grant 4 (B)"), convertible into Equity Shares of Rs. 10 each at an exercise price of Rs. 26.48 per share.

f. On October 9,2007, with a view to compensate the Option holders considering the Rights Issue, the Company has granted-

- 1,007,500 Options ("Grant 5") at the exercise price of Rs. 10 each to ("Grant 1") Option holders.

- 7,190,000 Options ("Grant 6") at the exercise price of Rs. 19.90 to ("Grant 2") Option holders.

- 25,000 Options ("Grant 7") at the exercise price of Rs. 19.90 each to ("Grant 3") Option holders.

g. On March 11,2008, the Company granted 1,700,000 Options ("Grant 8"), convertible into Equity Shares of Rs. 10 each at an exercise price of Rs. 33.60 per share.

h. Pursuant to approval of Shareholders in Annual General Meeting held on July 10, 2009 all the unvested Options were vested on April 29, 2009, as a consequence of which the outstanding deferred ESOS cost of Rs. 12,701,054 has been charged to Profit and Loss account during the year.

i. During the year, on November 23,2009 the Company granted 600,000 Options ("Grant 9") convertible into Equity Share of Rs. 10 each at an exercise price of Rs. 24.37 per share.

7. During the year the Company has formed a Trust namely "Tower Trust", the sole beneficiary of which is GTL Infrastructure Ltd. The Company has contributed Rs.18,157,224,000 towards the Corpus of the above Trust. The trust has invested the aforementioned amount in "Chennai Network Infrastructure Ltd." (CNIL) a special purpose vehicle (SPV) formed for the purchase of 17,500 towers along with tenancies from Aircel Limited and its subsidiaries.

As sponsors to CNIL, GTL Infrastructure Ltd., along with its associates GTL Ltd., Tower Trust and Global Holding Corporation Pvt. Ltd., have agreed to hold and maintain at least 26% (twenty six percent) of the total paid-up equity share capital of the CNIL and to further contribute in the form of equity, in future, if required to meet needs of CNIL and to replenish the Debt Service Reserve Account Letter of Credit (DSRA LC), in case if the DSRA LC is invoked by the lenders of CNIL.

8. During the year the wholly owned subsidiary "Towers Worldwide Ltd.", ceased to be the subsidiary of the Company and hence the Company does not have any subsidiary company as on March 31,2010 and accordingly no consolidated accounts under Accounting Standard 21 are prepared.

9. Foreign Currency Convertible Bonds:

In the year 2007-08, the Company issued 3,000 Zero Coupon Foreign Currency Convertible Bonds (FCCBs) of USD 100,000 each. The bonds are redeemable only if there is no conversion of the bonds earlier. Hence, the payment of premium on redemption is contingent in nature, the outcome of which is dependent on uncertain future events and accordingly, no provision is considered necessary nor has been made in the accounts in respect of such premium. In case the bonds are redeemed then in such scenario the Company intends to adjust the premium on redemption to Securities Premium Account. The pro-rata premium as on March 31,2010 works out to Rs. 1,940,619,844.

10. In the year 2007-08 the Company had issued 263,650,000 Preferential Convertible Warrants (Exercise Price of Rs. 40 each) on preferential basis to various investors, out of above 217,500,000 warrants have been converted into Equity Shares. Balance 46,150,000 warrants were forfeited and amount received on issue of them was credited to Capital Reserve in the previous year. No Preferential Convertible Warrants were outstanding as on March 31, 2010. Entire proceeds of Preferential Convertible Warrants amounting to Rs. 8,884,600,342 has been utilised towards roll out of telecom towers and acquisition as on March 31,2010.

14. Segment Reporting:

The Company is predominantly in the business of providing "Telecom Towers" on shared basis and as such there are no separate reportable segments. The Companys operations are predominantly only in India.

11. Related Party Disclosures:

a. Related Parties:

I. Subsidiary Company

Towers Worldwide Limited (up to March 30,2010)

II. Associates

a. GTL Limited

b. Technology Infrastructure Limited

c. Global Holding Corporation Private Limited

d. Chennai Network Infrastructure Limited (with effect from March 12, 2010)

e. Tower Trust (with effect from December 29,2009)

III. Key Managerial Personnel

a. Mr. Manoj Tirodkar, Chairman

b. Mr. Prakash Ranjalkar, Whole-time Director

c. Mr. Shishir Parikh, Chief Financial Officer

12. In accordance with the Accounting Standard (AS-28) on "Impairment of Assets" the management during the year carried out an exercise of identifying the assets that may have been impaired in respect of each cash generating unit. On the basis of this review carried out by the management, there was no impairment loss on fixed assets during the year ended March 31,2010.

13. During the year the Company entered into an agreement for assignment of Energy Recoverables with GTL Ltd (Associate Company) which is also in the business of providing the Operation and Maintenance Services and the Energy management of sites. The Energy recoverable assigned and derecognised in the Balance Sheet as on March 31,2010 is Rs. 431,200,534. The Company has an obligation to pay GTL Ltd in case the amount assigned is not recovered within the mutually agreed period. Assignment charges amounting to Rs. 23,337,582 incurred during the year has been charged to Profit and Loss Account.

14. Operating lease:

The Companys significant leasing arrangements are in respect of operating leases for premises and network sites. These lease agreements provide for cancellation by either parties thereto as per the terms and conditions of the agreements.

15. In accordance with Clause 32 of Listing Agreement the details of advance is as under:

a. To Towers Worldwide Limited, a wholly owned subsidiary closing balance as on March 31,2010 is Rs. NIL (Previous Year Rs. 3,271,718,997). Maximum balance outstanding during the year was Rs. 3,271,718,997 (Previous Year Rs. 4,282,212,800).

b. None of the loanees have made, per se, investment in the shares of the Company.

c. As per the Companys policy loans to employees are not considered in a above.

16. The previous years figures, wherever necessary, have been regrouped, reclassified and recast to make them comparable with those of the current year.

 
Subscribe now to get personal finance updates in your inbox!