Home  »  Company  »  GTL Ltd.  »  Quotes  »  Directors Report
Enter the first few characters of Company and click 'Go'

Directors Report of GTL Ltd.

Mar 31, 2015

Dear Members,

The Directors submit Twenty Seventh Annual Report together with the Audited Accounts for the year ended March 31,2015. 1. STATE OF THE COMPANY'S AFFAIRS:

FINANCIAL HIGHLIGHTS (Rs in Crore)

Particulars FY 2014-15 Consolidated Standalone

Total Income 2,586.59 2,151.34

Profit / (Loss) before Depreciation, (274.67) (54.11) Interest and Financial Charges (Net) and Tax (PBDIT)

Profit / (Loss) before Depreciation and Tax (795.45) (522.35) (PBDT)

Less: Depreciation 139.99 126.22

Profit / (Loss) before Tax, exceptional item (935.44) (648.57) and extra-ordinary items

Exceptional items (152.72) (152.72)

Less: Provision for Taxation (incl. Short 15.47 Nil Provision for Income Tax and Deferred Tax)

Profit / (Loss) after Tax (PAT) before (1,103.63) (801.29) Extra-ordinary and Prior Period items

Add / (Less): Extra-ordinary item Nil Nil

Add: Minority Interest 0.55 N.A

Add: Share of Profits in Associates (11.81) N.A

Add: Balance brought forward from the last year (943.39) (1,138.23)

Profit / (Loss) available for Appropriation (2,058.28) (1,939.52)

Appropriations:

Recommended Equity dividend Nil Nil

Dividend Distribution Tax Amount transferred to N.A. N.A

- General Reserve Nil Nil

- Debenture Redemption Reserve Nil Nil

Balance Carried Forward (2,058.28) (1,939.52)

Particulars FY 2013-14 Consolidated Standalone

Total Income 2,716.82 2,338.22

Profit / (Loss) before Depreciation, Interest 228.46 205.99 and Financial Charges (Net) and Tax (PBDIT)

Profit / (Loss) before Depreciation and Tax (354.22) (333.64) (PBDT)

Less: Depreciation 126.72 110.95

Profit / (Loss) before Tax, exceptional item (480.94) (444.59) and extra-ordinary items

Exceptional items (26.65) Nil

Less: Provision for Taxation (incl. Short 29.25 25.18 Provision for Income Tax and Deferred Tax)

Profit / (Loss) after Tax (PAT) before Extra- (536.49) (469.77) ordinary and Prior Period items

Add / (Less): Extra-ordinary item Nil Nil

Add: Minority Interest 0.34 N.A

Add: Share of Profits in Associates (24.89) N.A

Add: Balance brought forward from the last year (382.00) (668.46)

Profit / (Loss) available for Appropriation (943.39) (1,138.23)

Appropriations :

Recommended Equity dividend Nil Nil

Dividend Distribution Tax NA NA

Amount transferred to :

-General Reserve Nil Nil

-Debenture Redemption Reserve Nil Nil

Balance Carried Forward (943.39) (1,138.23)

2. RESULTS OF OPERATIONS AND BUSINESS OVERVIEW Results of Operations

The financial highlights on standalone basis for the year are as follows:

- Revenue for the financial period under review was Rs. 2,069.41 Cr. as against Rs. 2,265.11 Cr. for the previous financial year.

GTL, a Global Group Enterprise is a diversified technology and Infrastructure services Company focused on Telecom and Power businesses.

Consequent to the enactment of the Companies Act, 2013 (the Act) applicable from April 1,2014, the Company has reassessed the remaining useful life of fixed assets under Schedule II to the Act. This has resulted in additional charge of depreciation of Rs. 26.54 Cr. for the year ended March 31,2015.

In January 2010, the Company had sought shareholders consent for investment in tower companies, GTL Infrastructure Limited (GIL) and Chennai Network Infrastructure Limited (CNIL), for expansion of telecom network

of tower companies by purchase of tower business of Aircel. CNIL acquired tower portfolio of Aircel in the year 2010 with commitment from Aircel for 20,000 additional telecom sites over three years. In turn, the Company was expecting revenue worth Rs. 17,100 Cr. from CNIL / Aircel during the year 2010 to 2015. Unfortunately, Aircel cancelled / terminated its plan to expand 20,000 towers in July 2013. Consequently, the Company suffered huge losses due to loss of business opportunities, which also resulted in pile-up of inventory and suppliers advances. The Company is negotiating with suppliers of advances given and as a prudent accounting practice, has provided an amount of Rs. 10,600 Lac against these advances.

As part of settlement, the Company received an amount of Rs. 34,500 Lac from Aircel Group of companies, which inter-alia includes payment for settlement towards the vendors various claims.

The Power Management segment has been substantially affected by the losses plagued by Discoms and their restructure and the reduction in tariffs by various Governments and also termination of Distribution Franchisee (DF) agreement during the third quarter of FY 2014-15 by the Maharashtra State Electricity Distribution Company Limited (MSEDCL) on account of certain contractual issues. This business has, as a result, been discontinued by the Company.

The Network Services segment continues to be impacted by cancellation of 2G licenses, Aircel group's suspension of ROFR commitments / tenancy commitments, slower 3G & BWA expansion, suspension of BSNL expansion and general economic slowdown.

Thus, in view of overall set-back in Company's business operations, cash losses have been incurred which has resulted in substantial erosion of the Company's net worth.

Going Concern

At the outset, it may be noted that the management neither intends to liquidate the Company nor cease operations entirely. Moreover, the management believes that there are realistic and concrete alternatives which would prevent the occurrence of such eventualities.

For reasons beyond the control of the Company's management (including the factors which have adversely impacted the telecommunication and power sectors in India as a whole), the Company was constrained to restructure its debt under the Corporate Debt Restructuring (CDR) mechanism effective July 2011. The CDR proposal also envisaged certain restructuring of the existing External Commercial Borrowings (ECB) and the Non-Convertible Debentures (NCDs) issued by the Company. However, on account of certain inter-creditor issues, these restructuring could not be implemented and are consequently delayed.

These issues have resulted in legal proceedings being initiated against the Company in few forums, including a winding up petition filed by the NCD Holder before the High Court of Bombay. In the said proceedings, the CDR and ECB lenders have intervened.

In view of the debt burden, the slow revival of the telecommunication sector and the termination of the power business, there may be doubts on the Company's ability to repay its creditors. However, the management is of the view that such events or conditions can be mitigated / counter balanced by the fact that the Company has submitted a negotiated / One-Time Settlement (OTS) plan for settlement of the outstanding debt with all of its lenders (CDR, ECB and NCD). The proceeds as may be realized from sale of certain business divisions and sale of assets and investments, some of which are already contemplated under the approved CDR package will be utilized towards meeting settlement proposal. The OTS proposal and certain other inter-creditor issues (as required by the High Court of Bombay) are currently being considered before the CDR lender forum. The issue is therefore sub-judice before the High Court of Bombay.

The management is of the reasonable opinion that the OTS proposal will be finally approved by ECB, NCD & CDR lenders of the Company. Post such approval and implementation of such OTS proposal, the above mentioned circumstances and events which could cast an impact on the Company's debt repayment would cease to exist. The Company, which is and always has been inherently a services company, would be in a position to continue with services operations which it currently undertakes as well. The Company currently retains required senior management personnel and proposes to draw on their expertise to pursue such services business going forward.

In view of the above, the financial statements have been prepared on the basis that the Company is a going concern and that no adjustments are required to the carrying value of assets and liabilities.

Business Overview and Recent Developments at Macro & Micro Economic levels

The wireless telecom industry has shown 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% y-o-y for this fiscal compared to approx. 5% growth the year before. 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 vis-a-vis the overall tele-density of 72.92 at the end of February 2014. (Source: Telecom Regulatory Authority of India, Press Release dated April 10, 2015)

India saw fastest growth in subscription base with approximately 65 million new connections in FY 2014-15.

Growth Drivers

It is observed, globally, 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 Lac 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. FDI attractive 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 FY 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 during the course of the last year

b. Use of 3G devices capable of supporting a speed of upto 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 during 2014, an increase of 48% during 2014.

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

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

9. Tower Network vital for growth mapping and to see growth in the near future

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

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

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

3. A probable joint venture between Japanese telecom player Softbank and Bharti Group. At beginning of the year SoftBank has announced its willingness to invest US$ 10 Bn. in India

4. Bharti Infratel plans to take over telecom towers of few operators at a valuation of approx US$ 785 Mn.

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

Salient Features of Spectrum Auctions 2015 (source: http://teiecomtaik.info)

a. Reliance Jio won 800MHz spectrum 10 circles, Reliance Communications in 11 circles and Tata Teleservices in 5 circles

b. Bharati Airtel won 2100MHz spectrum in 7 circles, Vodafone in 5 circles and Idea in 1 circle

c. Bharati Airtel won 900MHz spectrum in 10 circles, Vodafone in 8 circles, Idea in 9 circles and Reliance Communications in 2 circles

d. Bharati Airtel won 1800MHz spectrum in 6 circles, Vodafone in 3 circles, Idea in 6 circles, Reliance Jio in 6 circles, Reliance Communications in 5 circles, Aircel and Tata Teleservices in one circle.

e. Reliance Communications lost 900MHz spectrum in 5 out of 7 circles it held.

f. Latest auction won spectrum liberalized for use with any technology and valid till 2035.

The stability in the Government at Centre is expected to have a positive effect on policy and investment climate, leading to telecom industry growing in the coming years.

As the Indian telecom market moves from voice to data, the telcos face new technology and infrastructure related challenges in meeting their expansion and customer experience goals.

Termination of Power DF contract by MSEDCL

The Company had entered into Power Distribution Franchisee (DF) agreement with Maharashtra State Electricity Distribution Company Limited (MSEDCL) for Aurangabad Urban Circle I & II in February 2011 and commenced the power distribution activity from May 1, 2011. This contract was for period of 15 years, subject to terms and conditions thereof. The Company had incurred losses in its DF business on account of various factors such as, higher Transmission & Distribution (T&D) losses, non-revision of tariff from consumer and other several unresolved operational and contractual factors with MSEDCL. Moreover, Performance Guarantee to the extent required under the contract could not be provided to MSEDCL, as some of the lenders did not provide the same, though approved in CDR package. MSEDCL, vide its notice dated November 10, 2014, terminated DF agreement effective November 17, 2014 and also en-cashed guarantees of about Rs. 15,100 Lacs provided for performance.

The reconciliation and settlement of several claims of the Company and MSEDCL are under process and appropriate effect in respect of the same will be given in financials on conclusion of the said process. The Company has valid claims against MSEDCL, which are under discussion.

Pending reconciliation / settlement, the Company has made necessary disclosure as required by Accounting Standard (AS) 24 for Discontinued Operations.

Investments

The Company has investments in Associates, GTL Infrastructure Limited (GIL) and Chennai Network Infrastructure Limited (CNIL). Both, GIL and CNIL have been admitted into CDR. The CDR package provides various financial restraints on these associates for transferring funds to the Company. Based on the legal opinions sought by the Company, such restrains faced by GIL and CNIL constitutes severe long term restrictions, significantly impairs their ability to transfer any funds to the Company as envisaged by AS-23 para 7(b) and therefore, the Company has accounted investment in these associates as per AS-13.

The Company's share in Associate, Global Rural Netco Limited is accounted based on un-audited financial statements for the year ended March 31,2015.

Business Update - Pre & Post CDR

The Company, in the FY 2009-10, based on the award of a part of BSNL tender contract in its favor, additional business expected by one of the group companies viz. GTL Infrastructure Ltd. (GIL) having cemented business partnership with Aircel with assurance of 20,000 new tenancies on Right of First Refusal (RoFR) basis and other anticipated business avenues based on the 2G spectrum auction, issuing of new licenses and corresponding network expansion plans of the operators, had then projected a robust business plan over next five to six years.

- Bharat Sanchar Nigam Ltd. (BSNL) invited sealed tenders from Eligible Bidders, on 'Rupee Payment basis' for planning, engineering, supply, installation, testing & commissioning of GSM / UMTS based cellular mobile

network along with supply, installation, testing & commissioning of infrastructure for network of capacity for 93 million lines. This expansion was meant to be rolled out in three phases. The tenders were floated zone-wise with the North, West and South zones having 25 million lines each and the East Zone having 18 million lines.

a. In 2010 GTL had bid and won a contract from BSNL, being L2 and L3, out of the contract of 93 million fixed lines.

b. In Q4 of FY 2010-11, this business development contract was cancelled and thus leading to an estimated loss of Revenue of Rs. 3,000 Cr. to the Company spreading over the next three financial years.

c. Additionally, advances paid to suppliers for execution of BSNL and Aircel contracts led to increase in Current Assets some of which are yet to be realized.

- Aircel RoFR towers (20,000 Nos.) for 3 years from FY 2010-11 onwards. The additional business of Aircel ROFR towers to GTL Limited was in relation to the acquisition of 17,500 Aircel towers in July'10. The Company had informed these developments to shareholders vide notice of postal ballot dated January 14, 2010 and sought their approval for making investment in Tower companies.

a. GTL had invested over Rs. 2,200 Cr. in GIL and CNIL.

b. CNIL acquired 17,500 towers along with 21,000 active tenants and a commitment of 20,000 tenancies upto July 2013 under a RoFR agreement, further on the strength of this commitment, GTL entered into an Energy Management Contract with Aircel and its Affiliates, CNIL and GIL.

c. Aircel was unable to provide about 17,500 tenancies under the RoFR resulting into the estimated loss of Revenue of about Rs. 4,218 Cr. as stated below.

d. This Investment was expected to give GTL business opportunity of over Rs. 17,000 Cr. over a period of 5 years as detailed below:

Services Offering 2010-11 2011-12 2012-13

Network Deployment 1,250 1,250 1,250

Network Maintenance 486 594 702

Energy Management 540 660 780

Active Infrastructure 486 594 702 Management

Total Business Opportunity 2,762 3,098 3,434

Services Offering 2013-14 2014-15 Total

Network Deployment 1,250 1,250 6,250

Network Maintenance 810 918 3,510

Energy Management 900 1,020 3,900

Active Infrastructure 810 918 3,510 Management

Total Business Opportunity 3,770 4,106 17,170

- Network Deployment for other major operators.

The FY 2010-11, however, did not begin well for the telecom industry and the operators. Their future had become clouded because of the controversies, uncertainties and utter turmoil resulting there from. These developments were beyond the control of the Company, nevertheless adversely affected the existing and the future business of the Company. These events and happenings are affecting not only its performance but realization from its debtors and business creditors who were paid advances against future purchase and deliveries of materials.

The Company therefore approached CDR Empowered Group (EG) detailing the business difficulties it was facing resultant to the turmoil, uncertainties and controversies plaguing the telecom industry and operators in the FY 2011-12 and was admitted to the CDR mechanism with effect from July 1,2011.

To accelerate collection against long overdue debts, the Company had submitted a proposal for issuing necessary performance / financial guarantee on behalf of the Company in favor of these customers; however, this proposal was not acted upon in a timely manner by lenders.

The Company's relentless pursuit for realization of current assets has met with some success and it managed to recover an aggregate of Rs. 1,800 Cr. including Rs. 1,272.45 Cr. in cash till date which is actually well ahead of schedule. This amount has been deposited into the TRA for business operations, taxes, statutory dues and lender related payments.

While the Company and its Promoters have adhered to the most of the stipulations as per the Master Restructuring Agreement (MRA), developments in the telecom and power sector post CDR implementation have further impacted GTL's ability and cash flows in meeting its commitments under CDR packages moving forward.

Developments Post CDR

The CDR package approved by the lenders in December 2011 envisaged improvement in the telecom and power sectors, additional capex deployment by telecom operators in 3G/4G buoyed by new equity investments into these sectors.

However, since CDR implementation, below mentioned developments in the telecom and power sector have impacted the financial performance of GTL.

Telecom Sector

- Cancellation of 2G licenses upheld by Hon'ble Supreme Court in February 2012;

- Aircel Group's suspension of tenancy commitments in July 2013;

- Slower 3G & BWA growth since auctions;

- Freeze on expansion by Telecom Operators; and

- Suspension of BSNL expansion.

As commented by Vodafone India CEO in the recent articles in Business Standard dated September 12, 2014 and Times of India dated October 10, 2014, the Indian Telecom industry continues to be in a mess due to lack of clarity on taxation issues, M&A policy, high regulations, spectrum scarcity and preferential treatment / benefits to selective telecom operators with very little action to accept responsibility and bring about change. The impact of this is clearly visible with investments in network in India of only US$ 5 Bn. in the last one year vis-a-vis US$ 50 Bn. in China.

Negative impact arising out of downward trend in telecom industry, delay in policy decisions not only affected the business outlook of the Company but the expected valuation of its investments in Tower Companies in the group expected out of acquisition of Aircel Towers based on the future business outlook.

Power Sector

- No tariff revisions;

- Slash in power tariffs by 20% in Maharashtra; and

- Refusal of lenders to offer SBLC despite approval in CDR package.

To add to the woes, the recent cancellation by the Hon'ble Supreme Court of all but four of the 218 coal block allocations by the government over the past two decades has had major implications for the power and energy sector.

Almost 30% of GTL's annual revenue, approx Rs. 1,200 Cr., was from DF business. Already strained revenues and margins and cash flow will be irreparably impacted further due to the termination by MSEDCL of the DF contract. MSEDCL additionally has claimed Rs. 393 Cr. from the Company and invoked SBLC of Rs. 150 Cr. held by it under DF agreement.

These factors that are beyond management control, continue to impact GTL's financial performance and are affecting its ability to meet debt service obligations.

Inter Creditor Issues:

The Company has ever since made all reasonable efforts within its control to implement the restructuring of the ECB and NCD facility.

However, restructuring of the ECB Facility could not close on account of certain factors beyond management control such as the financial impact of adverse developments in the telecom and power sectors, inter-creditor issues among various lenders of the Company on matters relating to pari-passu sharing of security, payment of interest to ECB lenders etc. Resignation by the ECB Facility Agent and also the ECB Authorized Dealer has further hampered GTL's efforts to restructure the ECB debt.

Similarly, with respect to the restructured NCD facility, while the Company and NCD lender have bilaterally agreed the terms, necessary approval from CDR lenders and consequent execution of the amended agreements and security documents to ensure pari-passu rights to NCD lenders to the Cash Flows and Security package of GTL is still awaiting approval of CDR Lenders.

Requests of GTL for release of certain interest / principal dues of ECB and NCD lenders have been denied by CDR lenders and not acted upon as CDR lenders are secured lenders and have no obligation towards NCD and ECB lenders.

In light of the inter creditor issues, developments post CDR and alleged non pari-passu treatment to ECB / NCD lenders vis-a-vis CDR lenders, notices have been sent by ECB / NCD lenders to GTL and IDBI Bank Ltd. (as Monitoring Institution to CDR Lenders) advising the Company to desist from:

i. Making any further payment to CDR lenders till ECB / NCD interest / principal dues are paid;

ii. Sharing the proceeds of Trust and Retention Account (TRA) on pari-passu basis with the CDR lenders going forward; and

iii. Creating security in their favor.

Actions by ECB Lenders

Furthermore, certain ECB lenders have even filed recovery proceedings in the Hon'ble High Court of Justice, Queens Bench Division, Commercial Court, London. The Hon'ble Court vide its Order dated February 20, 2015 directed the Company to make payments in respect of the outstanding principal amount relating to these lenders in terms of the Loan Agreement dated September 8, 2006 executed by participants in ECB.

The Hon'ble Court has dismissed the application of the claimants for a summary judgment on their claims for interest. Further, the Court has also ordered payment of GBP 31,500 towards Claimants legal costs by the Company.

Actions by NCD Lenders

In addition to the aforesaid proceeding, on January 09, 2015 the NCD lender has filed a petition before the High Court of Judicature at Bombay inter alia seeking winding up of the Company and in the interim seeking an injunction against any disposal of assets & against making payments to the secured CDR lenders. Notice of filing was served on the Company on January 16, 2015. The CDR lenders and ECB lenders of the Company intervened. By its order dated January 28, 2015, the High Court asked the CDR lenders' position on the NCD holder's treatment on pari-passu basis. The matter is currently sub-judice.

Since all funds of the Company are subject matter of the TRA which is controlled by the CDR lenders, the question of payment to the NCD holder and ECB lenders does not arise, until and unless the CDR lenders decide on the issue directed by the Hon'ble Bombay High Court. In view thereof, as on March 31, 2015, none of the Directors of the Company are disqualified under Section 164(2)(b) of the Act from being appointed as Directors.

Initiatives by GTL

The Company continues to make efforts to improve cash flow to facilitate an equitable settlement of its debt amongst CDR, ECB and NCD lenders.

Reeling under industry happenings, beyond its control, the Company had submitted proposals without altering end date of debt repayment:

a. Consolidating GTL Group Level debt at Holding Company (HoldCo) level (April 2013).

b. GTL consolidated debt through Debt Realignment Proposal through fresh ECB and SBLC for repayment of rupee debt (September 2013); could not be implemented because of various delays in conclusive decisions till April 2014. RBI issued a circular on April 22, 2014 disallowing ECB and SBLC route for repaying rupee debt.

Under current proposal the steps envisaged, subject to necessary approvals, are:

- Sale of Operations, Maintenance & Energy business;

- Monetization of Investments in Tower Companies;

- Realization of Current Assets;

- Monetization of non-core assets;

- Formation of JV or raising new Capital; and

- Such other actions as may be deemed fit in the interest of all stakeholders.

For these initiatives, requisite approvals from Shareholders of the Company have been obtained at the 26th Annual General Meeting held on September 16, 2014 and through Postal Ballot for creation of charges / mortgages and for sale / disposal of the whole or substantially the whole of the undertaking(s) of the Company result of which was declared on September 25, 2014.

The Company has appraised CDR / NCD lenders of the above initiatives and presented a plan for their consideration at the Joint Lender Forum meetings held on November 13, 2014, September 01,2014 and June 17, 2014.

While the Company continues to engage with all the 3 sets of lenders, viz. ECB Lenders, NCD Lender and CDR Lenders separately to find a resolution to such challenges, which are beyond management control, we believe that given the challenges of telecom and power sector scenario and its resultant impact on the financial performance of GTL, a joint engagement between all the sets of lenders and GTL to draw a long term road map to resolve the issues is essential.

The Company believes that in view of the current unsustainable debt levels and the continued bleak outlook in the telecom sector, the most viable option for the Company would be to divest its assets and enter into a negotiated / one-time settlement with its lenders. The Company has submitted this proposal before the forum of lenders in the context of winding-up petition filed by the NCD holder against the Company, where the CDR / ECB Lenders have also intervened. The matter is currently sub-judice and has impacted GTL's ability to meet commitment under MRA.

3. CORPORATE DEBT RESTRUCTURING

The Company has implemented Corporate Debt Restructuring CDR) Plan for its Rupee Term Loan.

In view of overall set-back in the Company's business operations, cash losses have been incurred which has resulted in substantial erosion of the Company's net worth.

In addition to the above, certain disputes among inter-creditor has caused delay in restructuring of ECB facility and execution of amended agreement with NCD lender and has resulted in initiation of legal proceedings against the Company which inter-aliaseeks an injunction against disposal of any asset and making payments to secured CDR lenders and liquidation of the Company. The Company has taken appropriate legal steps in these matters to defend / protect its interest.

Considering the developments post-CDR, inter-creditor issues (which is beyond management control) and actions initiated by ECB and NCD lenders, the Company has submitted Settlement proposal for which the Company has envisaged / planned steps, such as sale of Operation Maintenance & Energy (OME) business (part of Network Services), monetization of investment including in Tower Companies, monetization of non-core assets. The Company is awaiting lenders approval / consent and resolution to inter-creditor issues.

4. DIVIDEND

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

5. SHARE CAPITAL

a. Equity:

The movement of Equity Capital due to allotment of shares, if any, is as under:

Particulars No. of Equity Shares

Equity Capital as on April 1,2014 157,296,781

Add: Allotment of equity shares during the year Nil

Equity Capital as on March 31,2015 157,296,781

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 ESOS as required under the Companies (Share Capital and Debentures) Rules, 2014 are not furnished.

b. Preference:

During the FY 2012-13, the Company had issued and allotted 650,000,000 Non Participating Optionally Convertible Cumulative Preference Shares of the face value of Rs. 10/- each aggregating Rs. 650 Cr. The Preference shareholder had option for conversion into equity shares at any time after six months but before eighteen months from the date of allotment viz. September 28, 2012, on the terms and conditions as detailed in Note No. 2.1.4. of Notes to Accounts. However, the Preference shareholder did not exercise its right for conversion of these preference shares into equity within the stipulated time period and resultantly, there will not be any impact on the Company's equity capital.

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. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

In terms of the provisions of the CDR documents, IDBI Bank Limited nominated Mr. Dilip Kumar Mandal, Chief General Manager, RBG in the month of October 2014 in place of Mr. Ajay Sharma - Chief General Manager who served on the Board as Nominee Director w.e.f. October 8, 2012.

The Board of Directors through resolution passed by circulation on December 19, 2014 appointed Mr. Sunil Sadanand Valavalkar as an Additional Director and also a Whole-time Director effective December 16, 2014 and the same was taken on record by the Board of Directors in its meeting held on February 5, 2015. The Board also through resolution passed by circulation on March 30, 2015 appointed Mrs. Siddhi M. Thakur as an Additional Director and also an Independent Director with effect from March 31,2015 and the same was taken on record by the Board of Directors in its meeting held on May 5, 2015. Both the appointees hold office upto the date of the ensuing Annual General Meeting. The Company having received respective notice under Section 160 of the Companies Act, 2013, proposes appointment of Mr. Sunil S. Valavalkar as a Director, liable to retire by rotation and Mrs. Siddhi M. Thakur as a Director not liable to retire by rotation. Also the Company has incorporated appropriate resolutions for appointing Mr. Sunil S. Valavalkar as the Whole-time Director for a period of three years from December 16, 2014 to December 15, 2018 and Mrs. Siddhi M. Thakur as an Independent Director from March 31,2015 to March 31,2018 as detailed in the notice convening ensuing Annual General Meeting and Explanatory Statement annexed thereto for consideration of the members.

In light of the provisions of the Companies Act, 2013, out of the current strength of the Board consisting of 7 Directors, 3 Directors are Independent and thus not to be computed for the strength of total directors liable for retirement by rotation. Out of the balance 4 Directors, the Company can have one third as permanent directors, consisting of

Mr. Manoj G. Tirodkar - Chairman & Managing Director. Of the balance 3 Directors, one is a Nominee Director, who is not liable for retirement by rotation and rest 2 Directors are Additional Directors whose term is upto the date of the ensuing Annual General Meeting and would be considered for regular appointment. Thus, no director will be retiring by rotation in the ensuing Annual General Meeting.

Maharashtra State Electricity Distribution Company Limited terminated the Company's Power Distribution Franchisee (DF) contract for Aurangabad, Maharashtra, Urban Circle I & II, effective November 17, 2014. Since Mr. Arun Prabhukhanolkar - Whole-time Director (who was also appointed as key managerial personnel effective April 1, 2014) was looking after the said Power DF business, has relinquished his position as a Whole-time Director and also as a director w.e.f. December 16, 2014.

Prof. Shamkant B. Navathe based in USA and who was associated with the Company as an Independent Director since July 30, 2001, has relinquished his position as a Director w.e.f. January 20, 2015, in view of his busy schedule and difficulty in making frequent trips to India for attending Board Meetings.

The Board places on record its deep appreciation and respect for the valuable advice and guidance received from Prof. S. B. Navathe, Mr. Ajay Sharma and Mr. Arun Prabhukhanolkar during their tenure as Directors of the Company.

The background of the Directors proposed for appointment / reappointment is given in the Corporate Governance Report, which forms part of the Directors' Report.

Pursuant to the provisions of Section 203 of the Companies Act, 2013, which came in to effect from April 1,2014, the appointment of Mr. Manoj G. Tirodkar - Chairman & Managing Director, Mr. Arun Prabhukhanolkar - Whole- time Director, Mr. Vidyadhar A. Apte - Company Secretary and Mr. Milind V. Bapat - Chief Financial Officer as the key managerial personnel were formalized. Also, the Board appointed Mr. Sunil S. Valavalkar as an Additional & Whole-time Director and also as the key managerial personnel w.e.f. December 16, 2014 in place of Mr. Arun Prabhukhanolkar - Whole-time Director, who has relinquished his position as a Whole-time Director and also as Director effective December 16, 2014.

8. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:

The information required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is given below:

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

Executive Directors Ratio to median remuneration

Mr. Manoj G. Tirodkar 7

Mr. Arun Prabhukhanolkar (upto December 16, 2014)* 7.6

Mr. Sunil S. Valavalkar (w.e.f. December 16, 2014)* 3

Non-executive Directors (Sitting Fees only) **

Prof. Shamkant B. Navathe (upto January 20, 2015)* N.A.

Mr. Vijay M. Vij N.A.

Mr. D. S. Gunasingh N.A.

Mr. Navin J. Kripalani N.A.

Mr. Hemant Desai (upto September 16, 2014)* N.A.

Mr. Ajay Sharma (upto October 1,2014)* N.A.

Mr. Dilip Kumar Mandal (w.e.f. October 1,2014)* N.A.

Mrs. Siddhi M. Thakur (w.e.f. March 31,2015)* N.A.

* Since this information is for part of the year, the same is not comparable

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

ii. The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year:

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

Mr. Manoj G. Tirodkar - Chairman & Managing Director No change

Mr. Arun Prabhukhanolkar - Whole-time Director No change (upto December 16, 2014)*

Mr. Sunil S. Valavalkar - Additional & Whole-time Director No change ( w.e.f. December 16, 2014)*

Prof. Shamkant B. Navathe (upto January 20, 2015)* N.A.

Mr. Vijay M. Vij N.A.

Mr. D. S. Gunasingh N.A.

Mr. Navin J. Kripalani N.A.

Mr. Hemant Desai (upto September 16, 2014)* N.A.

Mr. Ajay Sharma (upto October 1,2014)* N.A.

Mr. Dilip Kumar Mandal ( w.e.f. October 1,2014)* N.A.

Mrs. Siddhi M. Thakur (w.e.f. March 31,2015)* N.A.

Mr. Milind V. Bapat - Chief Financial Officer 7.5

Mr. Vidyadhar A. Apte - Company Secretary 7.5

* Associated for part of the year.

iii) The percentage increase in the median remuneration of employees in the financial year: 9.6%

iv) The number of permanent employees on the rolls of Company: 429

v) The explanation on the relationship between average increase in remuneration and Company performance:

On an average, employees received an annual increase of 9.6% in India. The individual increments varied between 3% to 50%, based on individual performance.

Employees outside India were granted wage increase between 1% to 3%. The increase in remuneration is in line with the market trends in the respective countries. Considering the subdued market conditions majorly affecting telecom and power sectors, the Company's performance was adversely affected. However, since the Company did not grant any wage increase to its employees for last 3 years, increments were granted, for keeping the morale high.

vi) Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company:

(Rsin Crore) Standalone Consolidated

Aggregate remuneration of Key Managerial Personnel (KMPs) in FY 2014-15 2.88 2.88

Revenue 2,069.41 2,495.93

Remuneration of KMPs (as % of revenue) 0.14 0.12

Profit Before Tax (PBT) (prior to Exceptional item) (648.57) (935.45)

Profit Before Tax (PBT) (post Exceptional item) (801.29) (1,088.16)

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

vii) Variations in the market capitalization of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year:

Particulars March 31,2015 March 31,2014 % Change

Market Capitalization (Rs. Crore) * 192.69 224.93 (14.34)

Price Earnings Ratio (0.24) (0.48) (50.00)

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

viii) 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 the last public offer:

Particulars March 31,2015 April 18, 1994 % Change (FPO)

Market price (BSE) 12.35 20.00 (38.25)

Market price (NSE) 12.25 20.00 (38.75)

PATICULAR April 18, 1994 % Change (Rights)

Market price (BSE) Rs. 17.50 (29.43)

Market price (NSE) Rs. 17.50 (30.00)

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

Average percentile increase in salaries of employees is 9.6% and there is no change in managerial remuneration during the year.

x) Comparison of the each remuneration of the Key Managerial Personnel against the performance of the Company:

Mr. Manoj G.Tirodlkar Mr. Arun Prabhukhandkar Chairman and Whole time director Manging Director Upto Dec 16 2014

Remuneration in FY 2014-15 0.35 0.38

Revenue (Rs. Cr.)

Remuneration as % of revenue 0.02 0.02

Profit Before Tax (PBT) (Rs. Cr.) (before Exceptional item)

Profit Before Tax (PBT) (Rs. Cr.) (after Exceptional item)

Remuneration as % of PBT N.A N.A

Mr. Sunil S. Mr.Millind V. Mr.Vidyadhar Addl and Whole Bapatchief A Aptecompany Director w.e.f Financial Secretary Dece 16 2014 Officer

Remuneration in FY 2014-15 0.04 1.15 0.95

Revenue (Rs. Cr.) 2,069.41

Remuneration as % of revenue 0.00 0.06 0.05

Profit Before Tax (PBT) (648.57) (before Exceptional item)

Profit Before Tax (PBT) (801.29) (after Exceptional item)

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

xi) The key parameters for any variable component of remuneration availed by the directors:

Key parameter for variable component is the collection target.

xii) The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year: 1:2.02

xiii) Affirmation that the remuneration is as per the remuneration policy of the Company:

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

9. DIRECTORS RESPONSIBILITY STATEMENT:

In terms of the provisions of Section 134(3)(c) of the Companies Act, 2013, we, the Directors of GTL Limited, to the best of their knowledge and ability, in respect of the 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 this Act 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.

10. DECLARATION BY INDEPENDENT DIRECTORS

All the Independent Directors of the Company have furnished a declaration to the effect that they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013.

11. POLICY ON DIRECTORS' APPOINTMENT & REMUNERATION ETC.

The Company has put in place appropriate policy on Directors' appointment and remuneration and other matters provided in Section 178(3) of the Companies Act, 2013, which is provided in the Policy Dossier that has been uploaded on the Company's website www.gtllimited.com. Further, salient features of the Company's Policy on Directors' remuneration have been disclosed in the Corporate Governance Report, which forms part of the Directors' Report.

12. PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

The Board of Directors has carries out annual evaluation of its own performance, Board Committees and individual Directors pursuant to the provisions of the Act and corporate governance requirements as prescribed under Clause 49 of the Listing Agreement.

The performance of the Board and its Committees was evaluated by the Board after seeking inputs from the Board / Committee members on the basis of the criteria such as composition of the Board / Committees and structure, effectiveness of Board / Committee processes, information and functioning etc. The Board also reviewed the performance of individual Directors on the basis of criteria such as attendance in Board / Committee meetings, contribution in the meetings like preparedness on issued to be discussed etc.

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

13. MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis (MD&A) on the Company's performance, industry trends and other material changes with respect to the Company and its subsidiaries, wherever applicable is attached to this Report.

14. CORPORATE GOVERNANCE & VIGIL MECHANISM

The Company is complying with Clause 49 of the Listing Agreement with the Stock Exchanges. A separate Corporate Governance Report on compliance on Clause 49 of the Listing Agreement with the Stock Exchanges as reviewed and certified by M/s. Godbole Bhave & Co., Chartered Accountants and M/s. Yeolekar & Associates, Chartered Accountants the Joint Auditors of the Company is given in Annexure A to this Report.

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

15. 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 ensure its effectiveness. It is important for shareowners 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.

16. CORPORATE SOCIAL RESPONSIBILITY:

The Company continued, during the year 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) and implemented CSR Policy. The details as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is furnished in Annexure B to this report.

17. AUDIT COMIITTEE:

The details in respect of composition of the Audit Committee are included in the Corporate Governance Report, which forms part of the Directors' Report.

18. AUDITORS AND AUDITORS' REPORT:

Joint Auditors:

M/s. Godbole Bhave & Co., Chartered Accountants, Mumbai and M/s. Yeolekar & Associates, Chartered Accountants, Mumbai, were appointed as Joint Auditors at the Twenty Sixth (26th) Annual General Meeting to hold office from conclusion of the said meeting till the conclusion of the Twenty Ninth (29th) Annual General Meeting. The Company has received the necessary certificates from the Joint Auditors respectively pursuant to Sections 139 and 141 of the Companies Act, 2013 (the Act) regarding their eligibility for appointment. In pursuance of the provisions of Section 139 of the Act, appropriate resolution for ratification of the appointment of M/s. Godbole Bhave & Co., Chartered Accountants, Mumbai and M/s. Yeolekar & Associates, Chartered Accountants, Mumbai, as Joint Auditors of the Company is being placed at the ensuing Annual General Meeting.

Cost Auditors:

Pursuant to the provisions of the Section 148 of the Act and Rules made there under as may be prescribed and on the recommendations of the Audit Committee, the Board has appointed M/s V. G. Phadke & Co., Cost Accountants, Mumbai, as the Cost Auditor for the financial year 2014-15. Also, in accordance with the provisions of Section 148 of the Act and the Companies (Audit and Auditors) Rules, 2014, remuneration payable to the Cost Auditor as recommended by the Audit Committee and the Board had been ratified by the members in the 26th Annual General Meeting held on September 16, 2014.

The relevant cost audit reports of FY 2013-14 were filed with Ministry of Corporate Affairs on September 23, 2014.

In terms of the Companies (Cost Records and Audit) Amendment Rules, 2014, since the Company's business (telecom networking services) is not included in the list of industries to which these rules are applicable, the Company has not considered appointment of Cost Auditor for the financial year 2015-16.

Joint Auditors' Report

As regards the Joint Auditors' comment / observation / emphasis of matters, the Company has furnished required details / explanations in Note Nos. 2.8.1,2.39, 2.11.3 and 2.23.1 of Notes to Stand-alone financial statements.

Secretarial Auditors' Report

The Secretarial Auditors' Report does not contain any qualifications, reservations, disclaimers or adverse remarks and the same is given in Annexure C (Form No. MR-3)forming part of this report.

19. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The particulars of loans, guarantees and investments have been disclosed in the financial statements.

Details of investments made by the Company are given under the respective heads (refer note 2.11 of notes to the financials).

No loans are given by the Company to any person / entity except to its employees as at March 31,2015.

Corporate Guarantees given by the Company as at March 31,2015: (Rs in Crore)

Name of the Company As at March 31,2015 As at March 31,2014

1 Subsidiaries 166.82 169.79

2 Other Body Corporate 425.00 425.00

Refer Note No 2.12.2 of notes to financial statements

GTL has given above guarantees in its normal course of business in India and abroad. The guarantees are normally given :

- for performance of their business obligations; and

- to enable them to avail financial assistance.

20. PARTICULARS OF RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website www.gtllimited.com. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company.

The particulars as required under the Companies Act, 2013 is furnished in Annexure D (Form No. AOC-2) to this report.

21. 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.

22. SUBSIDIARIES

Pursuant to Accounting Standard 21 (AS 21) on Consolidated Financial Statements issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company include information about its subsidiaries. The Company's revenue from its overseas subsidiaries for the year ended March 31, 2015, on a consolidated basis was ' 427.42 Cr. (US$ 69.25 Mn.)

As required by the Companies (Accounts) Rules, 2014, a report on performance and financial position of each of the subsidiaries and associate companies included in the Consolidated Financial Statement, is presented in Annexure E (Form No. AOC-1).

In response to the evolving industry and technology, the Company is continuing plans and operations in those projects and countries, which have potential for growth at high margin and low working capital. At the same time, the Company having been admitted into CDR is not in a position to extend further financial support to some of the subsidiaries, which are making losses / having financial difficulty. The need is also felt at this juncture to streamline the operations in respect of some of the subsidiaries. Further, as per the negotiated / one-time settlement plan submitted for settlement of the outstanding debt with all of its lenders, the Company has to dispose of some of its investments as contemplated under the approved CDR package.

On the above background, the Company has started its operations in Myanmar, where it has a potential for growth. At the same time while it has closed / is in the process of closing its operations in subsidiaries in Sri Lanka, Kenya, Bangladesh, Taiwan, China, Malaysia, Indonesia, Tanzania and Nigeria; it is continuing its operations in UK, Myanmar, Nepal, Philippines, KSA, UAE and Singapore.

It is also pertinent to note the legal actions in respect of some of the Subsidiaries. During the course of audit, certain irregularities committed by some of the former employees came to the notice of GTL (USA) Inc. accordingly, based on legal advice, GTL (USA) Inc filed a case against those officials. In the meanwhile, one of the creditors with whom GTL (USA) Inc has dispute, as regards the amount payable, filed a case and GTL (USA) Inc. has filed a petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the Court of Eastern District of Texas, USA. That filing, however, affords GTL (USA) Inc the right to reorganise under a plan that will assure the fair treatment of all its creditors, while GTL (USA) Inc continues its business in the ordinary course.

A similar legal action initiated by the Bank, which has advanced money for working capital (subsequently withdrawn), has led to the appointment of liquidator in the subsidiary in Malaysia.

On account of the delay in payment by the ultimate customer who could not keep up its commitment, leading to the Bank filing recovery proceedings against its subsidiary viz. International Global Tele Systems Ltd. and the Insurance Company in the Court at Mauritius. In the said matter the Bank has impleaded the Company as a party defendant, based on the Letter of Comfort. The matter is pending before the Court.

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

a. Conservation of Energy:

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

Opportunity to increase green portfolio complying to Green mandate for Telecom Towers issued by DoT

Reduction in Carbon footprints with the help of clean technology

Operational efficiency through less power and cost efficiency resulting in high up time

ii. the steps taken by the Company for utilizing alternate sources of energy:

GTL Limited initiated a pilot project of installation of Fuel Cell System (FCS) instead of Diesel Generators (DG) on 54 Tower sites under OPEX model with a partner

- 54 FCS will run as per the preferred duty cycle to provide backup power to the sites and will operate during the grid power unavailability

iii. the capital investment on energy conservation equipments: Not Applicable

b. Technology Absorption:

i. the efforts made towards technology absorption:

- Installation of additional 100 FCS across various circles

- Undertaking the pilot project of Bio Mass Installation for ascertaining the implication on alternate energy initiatives and cost reduction

- Increasing portfolio of solar power site cover for existing sites

- Tower monitoring methodology for operators using NMS and bespoke portals to monitor additional sites across different operators and circles

- Automation of Trouble Tickets (TTs) from OSS alarms via BMC Remedy TT application

- Testing and implementation of solutions such as video surveillance and workforce tracking (WFT) on Pan India basis

ii. the benefits derived like product improvement, cost reduction, product development or import substitution:

- Enhanced ability with higher efficiency, optimizing technological resources, value for money returns and simplification of management of technical architecture

- Additional sites and tenancies being now monitored across 24x7 resulting enhancing the Up-time

- This can help in managing the operations error free with no human intervention as well higher alarm load to trouble tickets can be handled more precisely

- Real time view of activities from sites and people movement to take corrective actions and business decisions in time which should result in higher Up-time of sites

iii. in case of imported technology (imported during the last three years reckoned from the beginning of the financial year):

a. the details of technology imported:

b. the year of import:

c. whether the technology been fully absorbed : Not Applicable

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

iv. the expenditure incurred on Research and Development:

a. Capital Rs 1.54 Cr.

b. Recurring Rs 4.66 Cr.

C. Foreign exchange earnings and Outgo:

During the year under review the Company earned in terms of actual inflows foreign exchange of Rs. 0.89 Cr. and the foreign exchange outgo during the year under review in terms of actual outflows was Rs. 28.88 Cr. the particulars of which are appearing in Note No. 2.34 of the Notes to the Accounts.

24. INTERNAL FINANCIAL CONTROL SYSTEM

The details in respect of adequacy of internal financial control with reference to the financial statements are included in the MD&A Report, which forms part of this Report.

25. HUMAN RESOURCES

Our associate base stood at 5043 as on March 31,2015 as against 6383 as on March 31,2014. For full details refer to the Human Resources write up in the MD&A Report.

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

The required details are furnished in Annexure F (Form No. MGT-9) to this report.

27. NUMBER OF BOARD MEETINGS HELD DURING THE FY 2014-15

4 (Four) meetings of the Board were held during the year, details of which are furnished in the Corporate Governance Report that forms part of the Directors' Report.

28. PROMOTER GROUP

The Company is a part of Global Group of Companies which is promoted by Mr. Manoj. G. Tirodkar. The promoter group holding in the Company currently is 44.23% of the Company's Paid-up Equity Capital. The members may note that the Promoter Group, in ter-alia comprises of Mr. Manoj. G. Tirodkar and Global Holding Corporation Pvt. Ltd.

29. PARTICULARS OF EMPLOYEES

In terms of the provisions of sub-rule 2 of Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, names and other particulars of the employees are required to be set out in an annexure to this report. Further, the report and the Financial Statement are being sent to the shareholders excluding the aforesaid annexure. In term of Section 136 of the Act, the said annexure is open for inspection at the Registered Office of the Company. 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.

30. 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.

31. 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 G. Tirodkar May 5, 2015 Chairman & Managing Director


Mar 31, 2014

Dear Members,

The Directors take pleasure in presenting their Twenty Sixth Annual Report together with the Audited Accounts for the year ended March 31, 2014.

1. FINANCIAL RESULTS Rs. in Crores

FY 2013-14 FY 2012-13

Particulars Consolidated Standalone Consolidated Standalone

Total Income 2,633.04 2,265.11 2,601.32 2,171.58

Profit before Depreciation, Interest and Financial Charges (Net) and Tax (PBDIT) 228.46 205.99 192.93 179.16

Profit before Depreciation and Tax (PBDT) (380.87) (333.64) (373.86) (361.76)

Less: Depreciation 126.72 110.95 177.65 157.24

Profit before Tax and extra-ordinary items (480.94) (444.59) (551.51) (519.00)

Less: Provision for Taxation (incl. Short Provision for Income Tax and Deferred Tax) 29.25 25.18 3.26 0.37

Profit after Tax (PAT) before Extra-ordinary and Prior Period items (536.49) (469.77) (554.77) (519.37)

Add/(Less): Extra -ordinary Item 26.65 Nil Nil Nil

Add: Minority Interest 0.34 N.A. 0.13 N.A.

Add: Share Profits in Associates (24.89) N.A. 0.30 N.A.

Add: Excess Provision of Equity Dividend and Dividend Distribution Tax written back Nil Nil Nil Nil

Add: Balance brought forward from the last year (382.00) (668.46) 172.34 (149.09)

Profit available for Appropriation (943.39) (1,138.23) (382.00) (668.46)

Appropriations:

Recommended Equity dividend Nil Nil Nil Nil

Dividend Distribution Tax N.A. N.A. N.A. N.A.

Amount transferred to

- General Reserve Nil Nil Nil Nil

- Debenture Redemption Reserve Nil Nil Nil Nil Balance Carried Forward (943.39) (1,138.23) (382.00) (668.46)

2. RESULTS OF OPERATIONS AND BUSINESS OVERVIEW Results of Operations

The financial highlights for the year are as follows: On a consolidated basis:

- Revenue for the financial period under review was Rs. 2,633.04 Cr. as against Rs. 2,601.32 Cr. for the previous financial year.

- GTL, a Global Group Enterprise is a diversified technology and Infrastructure services Company focused on Telecom and Power businesses.

Business Overview and Recent Developments at Macro and Micro Economic levels

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-à-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-à-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 and power sectors in general and the Company in particular, even post restructuring of its debts under Corporate Debt Restructuring mechanism 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 auctions;

d. Worsening performance of Telecom Operators;

e. Difficulty in raising fresh debt and equity;

f. Operators face huge penalties;

g. Debt woes of DISCOMs; h. Fuel supply issues; and

i. Delay in power tariff hikes.

Further, the Company was expected to get increased / additional business arising out of acquisition of telecom tower portfolio of Aircel Limited and its subsidiaries by the Company''s associate viz. Chennai Network Infrastructure Limited (CNIL). However, owing to various factors as stated above, Aircel failed to fulfil its minimum commitment of providing the required increased / additional business arising out of 20,000 new tenancies on Right of First Refusal basis to CNIL that resultantly affected adversely the Company''s business.

The stability in the Government at Centre is expected to have a positive effect on policy and investment climate, leading to telecom industry growing in the coming years.

As the Indian telecom market moves from voice to data, the telcos face new technology and infrastructure related challenges in meeting their expansion and customer experience goals. The advent of technologies like 4G LTE is further adding to those challenges. Additionally, with the recent success of the spectrum auctions, the sentiments of telecom operators have improved. Operators are now opening up to the possibility of embracing the next wave of mobile broadband revolution - both on coverage and capacity increase of 3G, and the adoption of 4G / LTE. (source: Light reading).

Major developments in the Industry

The year has been a turnaround year with signs of stability and clarity in regulation returning to the sector. The following are some of the major industry developments that are going to have an impact on the earnings and profitability of the sector.

Clarity in regulatory policy

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.

Spectrum:

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

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

- The Government has also come out with a roadmap on spectrum availability as well 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

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%

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 - Feb. 2014

- Reserve Price was lower than the previous auctions

- Total winning bids amounted toRs. 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 1800 MHz band, was higher

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

- 8 Major operators participated in the auction

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

Power

The distribution segment plays a crucial role in the overall functioning of the power sector because it is a part of the system which generates revenues needed to pay generation and transmission utilities. The viability of the power sector as a whole is therefore critically dependent on the health of the distribution sector.

The distribution sector continuous to be plagued by losses. Indian Banks started an exercise to restructure the debt of Discoms in 2012 under a government-sponsored Rs.2 Trillion bailout package. The efforts of the banks might not bear fruits if there is a downward revision of tariffs in the run up to or post elections.

The Delhi government took the lead on December 31, 2013 to cut tariffs by 50% for households consuming up to 400 units of power per month. On January 16, 2014, Haryana withdrew a tariff increase of up to 13% levied last year on households consuming 500 units a month. The Maharashtra government as well slashed power tariffs by 15-20% in all parts of the state except Mumbai on January 20, 2014.

The above said developments are substantially impacting the profitability and operations of the Discoms / Franchisee business (DF) for our Company.

However, in our opinion, it would take a considerably prolonged time in improving the economic scenario inter- alia the telecom and power sectors 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 steps as elaborated in the proposals put forward before the members for approval.

Investment in GTL Infrastructure Limited (GIL)

GTL is the promoter of GIL and has invested Rs. 591.55 Cr. in GIL''s equity capital. GTL has also invested Rs. 1,637.48 Cr. in Chennai Network Infrastructure Limited (CNIL), an associate of GIL. Thus, GTL''s total investment in Tower business at cost is Rs. 2229.03 Cr.

After reaching settlement of dispute with IFCI and required approval obtained from the Regulators, on November 21, 2013, IFCI returned 17.55 Cr. equity shares of GIL and also released pledge on 9.71 Cr. equity shares of GIL, thereby restoring the shareholding of the Company in GIL to the earlier level of 27.26 Cr. equity shares.

3. CORPORATE DEBT RESTRUCTURING

a. Domestic Debt:

The Company has successfully implemented the Corporate Debt Restructuring (CDR) plan for its Rupee Term Loan. As on March 31, 2014, the amounts due and payable to CDR Lenders are as under:

Principal – Rs. 2,173.31 Cr.

FITL - Rs. 334.34 Cr.

Interest - Rs. 25.67 Cr.

The CDR Debt outstanding in the books as of March 31, 2014, is Rs. 2,533.32 Cr.

b. Non-Convertible Debentures (NCDs):

The Company has also successfully completed restructuring of its debt in the form of Rated Redeemable Unsecured Rupee Non-Convertible Debentures (NCDs) as on March 22, 2014. In terms of the Restructuring Agreement, a sum of Rs. 123.80 Cr. is payable by the Company to the NCD holders in respect of interest on Funded Interest Term Loan and interest on restructured NCDs.

The Company is in the process of completion of documents for giving effect to restructuring and creation of security favouring NCD holders with the concurrence of CDR Lenders. As on March 31, 2014, the amounts due and payable to NCD holders are as under:

Principal – Rs. 1,400.00 Cr.

Interest - Rs. 421.77 Cr.

The NCDs Debt outstanding in the books as of March 31, 2014, is Rs. 1821.77 Cr.

c. External Commercial Borrowings (ECB):

The Company availed loan in the form of External Commercial Borrowings (ECB) of US$ 150 Mn. in September 2006, due for repayment in September 2011. The Company and ECB lenders had agreed to an indicative term sheet for restructuring of the said loan and the same has been approved by Reserve Bank of India (RBI).

GTL has in the past and even today endeavours to take steps towards creation of security in favour of ECB lenders, closure of the ECB facility agreements, within its control to complete the ECB restructuring process. However, submissions by Standard Chartered Bank Mauritius (NCD Lender) against creation of security in favour of ECB lenders and resultant positions taken by certain ECB lenders and CDR Lenders have made it difficult for the Company to progress with the closure of the ECB restructuring process.

Despite all possible efforts taken by the Company, some ECB lenders have issued legal notice / threatened legal action against the Company for non-payment of interest and defaults, for which the Company has given suitable replies through its advocates. With the withdrawal of objection by SCB, the Company continues to take necessary steps to resolve inter-creditor issues among ECB and CDR Lenders. Subsequently the Facility Agent and Authorised Dealer have resigned and the Company is awaiting approval of new Facility Agent and Authorised Dealer.

As on March 31, 2014, the amounts due and payable to ECB lenders are as under:

Principal – Rs. 899.25 Cr.

Interest - Rs. 86.67 Cr.

The ECB Debt outstanding in the books as of March 31, 2014 is Rs. 985.92 Cr.

4. DIVIDEND:

Since your Company is currently under Corporate Debt Restructuring Mechanism and moreover, in view of the accumulated losses, the Directors express their inability to recommend any dividend on the paid-up Equity and Preference Share Capital of the Company for the financial year ended March 31, 2014.

5. SHARE CAPITAL AND COMPULSORILY CONVERTIBLE DEBENTURES (CCDs)

Share Capital:

i) Equity:

The movement of Equity Capital due to allotment of shares consequent upon conversion of CCDs is as under:

No. of Particulars Equity Shares

Equity Capital as on April 1, 2013 156,957,693

Add: Allotment of Equity Shares on account of conversion of CCDs 339,088

Equity Capital as on March 31, 2014 157,296,781

The Company has only one class of equity shares and it has not issued equity shares with differential rights or sweat equity shares. Thus, the details required to be furnished for equity shares with differential rights and / or sweat equity shares as required under the Companies (Share Capital and Debentures) Rules, 2014 are not furnished.

Also, since the Company has cancelled all its outstanding Employee Stock Option Schemes in FY 2012-13, the details as required under the Companies (Share Capital and Debentures) Rules, 2014 and Securities and Exchange Board Of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are not furnished.

ii) Preference:

During the FY 2012-13, the Company had issued and allotted 650,000,000 Non Participating Optionally Convertible Cumulative Preference Shares of the face value of Rs. 10/- each aggregating Rs. 650 Cr. The Preference shareholder had option for conversion into equity shares at any time after six months but before eighteen months from the date of allotment viz. September 28, 2012, on the terms and conditions as detailed in Note No. 2.1.4. of Notes to Accounts for FY 2012-13. Since CDR documents do not permit issuance of fresh securities, the preference shareholder did not exercise its right for conversion of these preference shares into equity within the stipulated time period and resultantly; there will not be any impact on the Company''s equity capital.

iii) CCDs:

Consequent upon allotment of CCDs worth Rs. 0.93 Cr. to CDR Lender on April 3, 2013 under the CDR Scheme and its conversion into equity shares on April 4, 2013, the Share Capital of the Company has gone up from Rs. 156.96 Cr. to Rs. 157.30 Cr.

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. SUBSIDIARIES

a. 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 General Circular No. 2/2011 dated February 8, 2011 copies of the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies have not been attached with the Balance Sheet of the Company. Financial Information of the subsidiary companies, as required by the said general approval has been furnished separately in the Consolidated Balance Sheet in the Annual Report. The Company will make available the Annual Accounts of the subsidiary companies and related detailed information to the Company''s and the subsidiary companies shareholders, seeking such information at any point of time. The Annual Accounts of the subsidiary companies will also be kept open for inspection by any shareholder at the Registered/ Head Office of the Company and that of the respective subsidiary companies.

Further, pursuant to Accounting Standard 21 (AS 21) on Consolidated Financial Statements issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company include information about its subsidiaries. The Company''s revenue from its overseas subsidiaries for the year ended March 31, 2014, on a consolidated basis was Rs. 371.19 Cr. (US$ 60.14 Mn.).

b. GTL has given guarantees to its subsidiaries and affiliates in its normal course of business in India and abroad. The guarantees are normally given:

- for performance of its Subsidiaries, Associates and affiliates for business obligations; and

- to enable its Subsidiaries & Associate companies to avail financial assistance.

8. CORPORATE GOVERNANCE

The Company is complying with Clause 49 of the Listing Agreement with the Stock Exchanges. A separate Corporate Governance Report on compliance on Clause 49 of the Listing Agreement with the Stock Exchanges as reviewed and certified by M/s. Godbole Bhave & Co., Chartered Accountants and M/s. Yeolekar & Associates, Chartered Accountants the Joint Auditors of the Company is given in Annexure ''B'' to this Report.

9. MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis on the Company''s performance, industry trends and other material changes with respect to the Company and its subsidiaries, wherever applicable is attached to this Report.

10. HUMAN RESOURCES

Our associate base stood at 6,383 as on March 31, 2014 as against 6,478, as on March 31, 2013. For full details refer to the Human Resources write up in the MD&A Report.

11. RISKS

A separate section on risks and their management is provided as a part of this Annual Report. 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.

12. SOCIAL COMMITMENTS

The Company continued, during the year under review, to contribute towards social causes as described in the MD&A Report under the caption ''Corporate Social Responsibility''.

13. DIRECTORS

Pursuant to the provisions of Clause 49 of the Listing Agreement, Prof. Shamkant B. Navathe, Mr. Vijay M. Vij, Mr. D. S. Gunasingh, Mr. Navin J. Kripalani and Mr. Hemant Desai were appointed as Independent Directors. In terms of the provisions of the Companies Act, 1956, these directors were liable to retire by rotation.

In terms of the provisions of Section 149(4) of the Companies Act, 2013 (the Act), which came into effect from April 1, 2014, every listed public company is required to have at least one third of the total number of directors, as Independent Directors.

Mr. Vijay M. Vij, Mr. D. S. Gunasingh and Mr. Hemant Desai are due for retirement and eligible for appointment at the ensuing Annual General Meeting (AGM) of the Company. Accordingly, at the recommendations of the Nomination and Remuneration Committee, the Board proposes the appointment of Mr. Vijay M. Vij, Mr. D. S. Gunasingh, Prof. Shamkant B. Navathe and Mr. Navin J. Kripalani as Independent Directors under the provisions of Section 149 of the Act. These directors are being appointed as Independent Directors to hold office as per their tenure of appointment mentioned in the Notice of the ensuing AGM of the Company.

Mr. Hemant S. Desai, Director, has conveyed that due to ill health, he is not opting for re-appointment as a Director of the Company at the ensuing AGM.

Mr. B. L. Salian – General Manager, Bank of India was appointed as Nominee of Bank of India on the Board of the Company w.e.f. February 5, 2013. Since Mr. Salian retired from the services of Bank of India and as conveyed to the Company by the Bank in February 2014, Mr. Salian has relinquished the office of Director since then. The Bank has identified replacement of Mr. Salian as a Nominee Director and the Company is awaiting completion of formalities for making the appointment.

The term of appointment of Mr. Sukanta Kumar Roy as Whole-time Director expired on July 26, 2013 and he did not opt for reappointment. Mr. Roy also retired as Director of the Company at the 25th Annual General Meeting held on September 17, 2013.

The Board places on record its deep appreciation and respect for the valuable advice and guidance received from Mr. S. K. Roy, Mr. Hemant S. Desai and Mr. B. L. Salian during their respective tenure as Directors of the Company.

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

14. PROMOTER GROUP

The Company is a part of Global Group of Companies which is promoted by Mr. Manoj. G. Tirodkar. The promoter group holding in the Company currently is 44.23% of the Company''s Paid-up Equity Capital. The members may note that the Promoter Group, inter-alia comprises of the following persons/entities: (1) Mr. Manoj. G. Tirodkar (2) Global Holding Corporation Pvt. Ltd. (3) Global SmartPower Private Limited.

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

i) Conservation of Energy:

As the Company is engaged in Network Services in the Telecom space and Power Distribution Franchisee business and has no activity pertaining to manufacturing, furnishing of details on conservation of energy is not applicable. However, the Company is working towards incorporating energy management solutions while it carries out the deployment and maintenance of the cell sites. The Company has carried out energy audits to optimize energy consumption in its office premises. The Company continues to invest in research and development towards green energy for towers.

ii) Technology Absorption:

The particulars as prescribed under sub-section (1) (e) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, in respect of technology absorption are set out in the Annexure A to this Report.

iii) Foreign Exchange Earnings and Outgo:

During the year under review the Company earned foreign exchange of Rs. 1.89 Cr. and incurred foreign exchange expenditure of Rs. 43.64 Cr. the particulars of which are appearing in Note No. 2.32 of the Notes to the Accounts.

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. DIRECTORS'' RESPONSIBILITY STATEMENT

In terms of the provisions of Section 217(2AA) of the Companies Act, 1956, we, the Directors of GTL Limited, in respect of the year ended March 31, 2014, state that:

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

ii) 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 at the end of the Financial Year and of the loss of the Company for that period;

iii) 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

iv) The Directors have prepared the annual accounts on a going concern basis.

18. AUDITORS

M/s. Godbole Bhave & Co., Chartered Accountants, Mumbai and M/s. Yeolekar & Associates, Chartered Accountants, Mumbai, were appointed as Joint Auditors at the Twenty Fifth Annual General Meeting to hold office from 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 Sections 139 & 141 of the Companies Act, 2013 regarding their eligibility and qualifications for re-appointment. Accordingly, approval of members to the appointment of M/s. Godbole Bhave & Co., Chartered Accountants, Mumbai and M/s. Yeolekar & Associates, Chartered Accountants, Mumbai, as Joint Auditors of the Company is being sought at the ensuing Annual General Meeting.

19. 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 May 2, 2011 have issued industry wise Orders for appointment of Cost Auditors from FY 2011- 12 onwards for companies carrying Telecom & Electricity activity. Also, as per the provisions of The Companies (Cost Accounting Records) Rules, 2011, applicable to all other products / activities of the Company, the Board of Directors of the Company has appointed M/s. V. G. Phadke & Co., Cost Accountants, Mumbai, as the "Cost Auditor" and "Cost Accountant" under Section 233B and Section 209(1)(d) respectively, of the Companies Act, 1956 for the Financial year 2013-14.

The relevant cost audit reports of FY 2012-13 were filed with Ministry of Corporate Affairs on September 26, 2013.

Pursuant to the provisions of Section 148 of the Companies Act, 2013, and Rules thereunder as may be prescribed, on the recommendation of the Audit Committee the Board of Director has appointed M/s. V. G. Phadke & Co., Cost Accountants, Mumbai, as the Cost Auditor for the financial year 2014-15.

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 part of the Accounts are self-explanatory.

22. 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 G. Tirodkar

May 20, 2014 Chairman & Managing Director


Mar 31, 2013

The Directors take pleasure in presenting their Twenty Fifth Annual Report together with the Audited Accounts for the year ended March 31, 2013.

1. FINANCIAL RESULTS

Rs. in Crore FY 2012-13 FY 2011-12 (12 months) (9 months) Particulars Consol idated Standa lone Consoli dated Standa lone

Total Income 2,601.32 2,171.58 1,864.69 1,506.99

Profit before Depreciation, Interest and Financial Charges (Net) andTax

(PBDIT) 192.92 179.16 115.96 133.93

Profit before Depreciation and Tax (PBDT) (373.86) (361.76) (335.97) (296.89)

Less: Depreciation 177.65 157.24 101.71 88.57

Profit before Tax and extra-ordinary items (551.51) (519.09) (437.68) (385.46)

Less: Provision for Taxation (incl. Short Provision for Income Tax and

Deferred Tax) 3.26 0.37 19.70 15.28

Profit after Tax (PAT) before Extra-ordinary and Prior Period items (554.77) (519.37) (457.38) (400.74)

Add/(Less): Extra-ordinary Item NIL NIL NIL NIL

Add: Minority Interest 0.13 (519.37) (0.23) N.A.

Add: Share Profits in Associates 0.30 N.A. (1.46) N.A.

Add: Excess Provision of Equity Dividend and Dividend Distribution Tax written back NIL NIL 20.41 11.35

Add: Balance brought forward from the last year 172.34 (149.09) 611.00 240.30

Profit available for Appropriation (382.00) (688.46) 172.34 (149.09)

Appropriations:

Recommended Equity dividend NIL NIL NIL NIL

Dividend Distribution Tax N.A. N.A. N.A. N.A.

Amount transferred to:

- General Reserve NIL NIL NIL NIL

- Debenture Redemption Reserve NIL NIL NIL NIL

Balance Carried Forward (382.00) (668.46) 172.34 (149.09)

2. RESULTS OF OPERATIONS AND BUSINESS OVERVIEW Results of Operations

The financial highlights for the year are as follows: On a consolidated basis:

- Revenue for the financial period under review was Rs. 2,601.32 Cr. as against Rs. 1,864.69 Cr. for the previous financial year.

- Order visibility as on March 31, 2013 stood at Rs. 2,650 Cr.

- GTL, a Global Group Enterprise is a diversified technology and Infrastructure services Company focused on Telecom and Power businesses.

Business Overview and Recent Developments at Macro and Micro Economic levels

In the year 2011, GTL shifted its focus from being only telecom centric company to a company that also focuses on the power sector.

The Indian telecom industry has shown marginal decrease in subscriber base in the last year. 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 65.23% in March 2012 whereas share of Rural subscribers has increased to 39.50 % in February 2013 from 34.77% in the month of March 2012. With this, the overall Tele-density 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, Government and Judiciary on the other hand.

Some of the developments we believe that had negative impact on the Telecom and Power sectors are:

i. Cancellation of 2G licenses by SC upheld: Cancellation of 122 telecom licenses including that of Uninor, Videocon, Etisalat by the Supreme Court 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.

ii. Slower 3G and BWA growth: Barely 3-4% of the 3G and BWA revenue/subscriber targets achieved for which Rs. 1.20 lakh crores has been spent by Operators towards license fees for 3G & BWA. Ongoing litigations over 3G roaming agreements has further dented the growth prospects of data service revenues.

iii. Failed Spectrum auctions: High reserve prices set for the November 20, 2012 auctions resulted into a poor response from Operators with no single operator bidding for a pan India license. More worse was the response for the March 2013 spectrum auctions with not even a single GSM operator participating in bidding leading to stagnation of tenancies on telecom towers.

iv. Worsening Performance of Telecom Operators: Falling subscribers and mounting operating losses with even leading operators like Bharti reporting consolidated losses over 12 consecutive quarters.

v. Freeze on fresh debt and equity: Anxiety and negative sentiments towards the sector due to financial stress, contentious tax claims and criminal investigations of Promoters and Banks related to previous spectrum allocations etc. resulted into complete freeze of fresh capital outlays towards the sector.

vi. Operators face huge penalties: On various counts almost every operator is facing some penalty from the regulator be it for spectrum, 3G roaming pacts, under reporting of revenues, non-compliance of KYC norms.

vii. Debt woes of DISCOMS: High indebtedness of the power generation and distribution companies has forced them to restructure their debts of Rs. 1.5 -1.7 lakh Cr.

viii. Fuel supply issues: Ongoing legal process in the alleged coal block allocation irregularities and non-honoring of fuel supply agreements continues to affect uninterrupted coal supply to power generation companies.

ix. Delay in power tariff hikes: Tariff hikes which are inevitable for financial sustainability and growth of the sector are delayed due to the regulatory and political interventions.

As a result, the telecom and power sectors are facing great difficulty in raising fresh capital from banks or investors. This has a direct impact on the telecom operators’ ability to spend and has resulted into lower capital expenditure.

This on the other hand, has led to reduced opportunities for Network Services Companies in India. The factors that will drive growth for network services business in India are as follows:

i) 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;

ii) Focus on rural expansion: With mobile coverage expected to increase, especially in rural areas, the operators are expected to invest in rural region;

iii) 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 network services;

iv) Quality of Service: 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 term of benchmarking networks and optimization services.

Global uncertainties, especially in Europe have led to reduced spending by telecom operators and OEMs across the world. The operators are focusing on optimizing their existing networks and are spending minimum on rolling out new networks.

We believe that sectoral woes need favorable consideration not only from the point of view of affected Corporates and Lenders but also from the systemic impact it shall have on consumers/users in Telecom and Power sector.

It is general consensus among market participants and policy makers that given the current state of associated uncertainties in both the telecom and the power sector it may take atleast 2-3 years for these sectors to recover, stabilize and get into a growth mode again.

Investment in GTL Infrastructure Limited (GIL)

GTL is the promoter of GIL and has invested Rs. 291.23 Cr. in GIL’s equity capital. GTL has also invested in Chennai Network Infrastructure Limited (CNIL), an associate of GIL, Rs. 1,637.48 Cr. in CNIL’s equity capital. Thus, GTL’s total investment in Tower business at cost is Rs. 1,928.71 Cr.

GTL has arrived at an agreement to resolve the dispute with IFCI. On successful completion of the pact with IFCI and resultant return of the pledged/ invoked 17.65 Cr. equity shares of the Company’s investment in GIL, GTL’s total investment in Tower business at cost will be Rs. 2,230.79 Cr.

3. CORPORATE DEBT RESTRUCTURING

Debt Restructuring

The Company has successfully implemented the Corporate Debt Restructuring plan for its Rupee Term Loan. The CDR Debt outstanding in the books as of March 31, 2013, is Rs. 2,310.88 Cr.

Currently, the Company is in negotiation with the ECB lenders and NCD holders for restructuring of US$ 150 Mn. and Rs. 1,400 Cr. loans respectively.

4. DIVIDEND:

Since your Company has posted losses and is currently under Corporate Debt Restructuring 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, 2013.

5. SHARE CAPITAL, EMPLOYEE STOCK OPTION PLANS (ESOPs) AND COMPULSORILY CONVERTIBLE DEBENTURES (CCDs)

i. Share Capital:

a. Equity:

The movement of Equity Capital due to allotment of shares consequent upon conversion of ESOPs & CCDs is as under:

Particulars No. of Equity Shares

Equity Capital as on April 1, 2012 97,267,833

Add: Allotment of Equity Shares on NIL account of Conversion of ESOPs

Add: Allotment of Equity Shares on 59,689,860 account of conversion of CCDs

Equity Capital as on March 31, 2013 156,957,693



b. Preference:

During the year under review, the Company has issued and allotted 65,00,00,000 Non Participating Optionally Convertible Cumulative Preference Shares of the face value of Rs. 10/- each aggregating Rs. 650 Cr. The Preference shareholder has option for conversion into equity shares at any time after six months but before eighteen months from the date of allotment viz. September 28, 2012, on the terms and conditions as detailed in Note No. 2.1.4. of Notes to Accounts. In view of the ''pricing formula’ it is not possible for furnishing number of shares that may be issued on conversion and also the likely impact on equity.

ii. ESOPs:

During the year under review the Company closed all the outstanding ESOP Schemes and cancelled / lapsed 23,70,903 warrants in the hands of employees pending conversion along with 70,10,636 warrants in the kitty and hence the information required to be furnished in this report under SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, is not furnished.

iii. CCDs:

Consequent upon allotment of CCDs worth Rs. 187.84 Cr. and Rs. 45.15 Cr. to CDR Lenders and the Promoter respectively on April 28, 2012 under the CDR Scheme and its conversion into equity shares on June 12, 2012 and further allotment of CCDs worth Rs. 38.30 Cr. to the Promoter on July 12, 2012 under the CDR Scheme and its conversion into equity shares on July 19, 2012, the Share Capital of the Company has gone up from Rs. 97.27 Cr. to Rs. 156.96 Cr.

6. CAPITAL MARKET DEVELOPMENTS

Trading Group

The Company’s equity shares are listed with the BSE Limited (BSE) under the category ''Group B’. The Company’s equity shares are listed with National Stock Exchange of India Limited (NSE) under the category ''S&P CNX 500’. The Rated Redeemable Unsecured Rupee Non-Convertible Debentures privately placed by the Company are listed with BSE under the Debt Segment.

Average daily traded volumes

The average daily traded volume in the Company’s shares on BSE and NSE was 268,646 and 476,254 shares respectively, in the year ended March 31, 2013 as against 1,550,725 and 3,033,266 shares respectively in the previous financial year ended March 31, 2012 (9 months).

7. 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.

8. SUBSIDIARIES

a) 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 General

Circular No. 2/2011 dated February 8, 2011 copies of the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies have not been attached with the Balance Sheet of the Company. Financial Information of the subsidiary companies, as required by the said general approval has been furnished separately in the Consolidated Balance Sheet in the Annual Report. The Company will make available the Annual Accounts of the subsidiary companies and related detailed information to the Company’s and the subsidiary companies shareholders, seeking such information at any point of time. The Annual Accounts of the subsidiary companies will also be kept open for inspection by any shareholder at the Registered/ Head Office of the Company and that of the respective subsidiary companies.

Further, pursuant to Accounting Standard 21 (AS 21) on Consolidated Financial Statements issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company include information about its subsidiaries. The Company’s revenue from its overseas subsidiaries for the year ended March 31, 2013, on a consolidated basis was Rs. 431.39 Cr. (US$ 79.43 Mn.).

b) GTL has given guarantees to its subsidiaries and affiliates in its normal course of business in India and abroad. The guarantees are normaly given:

- for performance of its Subsidiaries, Associates and affiliates for business obligations; and

- to enable its Subsidiaries & Associate companies to avail financial assistance.

9. CORPORATE GOVERNANCE

The Company is complying with Clause 49 of the Listing Agreement with the Stock Exchanges. A separate Corporate Governance Report on compliance on Clause 49 of the Listing Agreement with the Stock Exchanges as reviewed and certified by M/s. Godbole Bhave & Co., Chartered Accountants and M/s. Yeolekar & Associates, Chartered Accountants the Joint Auditors of the Company is given in Annexure ''B’ to this Report.

10. MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis on the Company’s performance, industry trends and other material changes with respect to the Company and its subsidiaries, wherever applicable is attached to this Report.

11. HUMAN RESOURCES

Our associate base stood at 6,478, as on March 31, 2013 as against 8,710 as on March 31, 2012. For full details refer to the Human Resources write up in the MD&A Report.

12. RISKS

A separate section on risks and their management is provided as a part of this Annual Report. 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.

13. SOCIAL COMMITMENTS

The Company continued, during the year under review, to contribute towards social causes as described in the MD&A Report under the caption ''Corporate Social Responsibility’.

14. DIRECTORS

Prof. Shamkant B. Navathe and Mr. Sukanta Kumar Roy, Directors retire by rotation at the forthcoming Annual General Meeting. Prof. Navathe Director being eligible offers himself for re-appointment.

Mr. Sukanta Kumar Roy – Whole-time Director is retiring as a Director in the ensuing Annual General Meeting and in view of his personal commitments has decided not to seek re-appointment.

Prof. S. C. Sahasrabudhe – Independent Director and Mr. Charudatta Naik – Whole-time Director retired as Directors of the Company at the 24th Annual General Meeting held on September 12, 2012. Since Mr. Sadanand D. Patil – Senior Director has been assigned executive responsibility in the Group Company; he relinquished the position as Director of the Company effective March 28, 2013.

The Board places on records its deep appreciation and respect for the valuable advice and guidance received from Prof. Sahasrabudhe, Mr. Naik and Mr. Patil during their tenure as Directors of the Company.

Mr. Ajay Sharma – General Manager IDBI Bank Limited and Mr. B. L. Salian – General Manager Bank of India were appointed as Nominees of IDBI Bank and Bank of India on the Board of the Company w.e.f. October 8, 2012 and February 5, 2013 respectively.

Based on the recommendations of the Nomination & Remuneration Committee, the Board of Directors in its meeting held on August 3, 2013 appointed Mr. Arun Prabhukhanolkar as an Additional Director and Whole-time Director of the Company. He holds office up to the date of the ensuing Annual General Meeting. The Company has received notice under Section 257 of the Companies Act, 1956, proposing his appointment as a Director liable to retire by rotation. Also, the Board has placed an appropriate resolution for appointment of Mr. Prabhukhanolkar as a Director and the Whole-time Director respectively for a period of 3 years effective August 1, 2013, for consideration of members.

Based on the recommendations of the Nomination & Remuneration Committee, the Board of Directors of the Company in its meeting held on August 3, 2013 re-appointed Mr. Manoj G. Tirodkar as the Chairman & Managing Director of the Company. The Board has placed an appropriate resolution for re-appointment of Mr. Tirodkar as Chairman & Managing Director for a period of 5 years effective August 18, 2013, for consideration of members.

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

15. PROMOTER GROUP

The Company is a part of Global Group of Companies which is promoted by Mr. Manoj. G. Tirodkar. The promoter group holding in the Company currently is 44.33% of the Company’s Paid- up Equity Capital. The members may note that the Promoter Group, inter-alia comprises of the following persons/entities: (1) Mr. Manoj. G. Tirodkar (2) Global Holding Corporation Pvt. Ltd. (3) Global SmartPower Private Limited.

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

a) Conservation of Energy:

As the Company is engaged in Network Services and has no activity pertaining to manufacturing, furnishing of details on conservation of energy is not applicable. However, the Company is working towards incorporating energy management solutions while it carries out the deployment and maintenance of the cell sites. The Company has carried out energy audits to optimize energy consumption in its office premises. The Company continues to invest in research and development towards green energy for towers.

b) Technology Absorption:

The particulars as prescribed under sub-section (1)(e) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, in respect of technology absorption are set out in the Annexure ''A’ to this Report.

c) Foreign Exchange Earnings and Outgo:

During the year under review the Company earned foreign exchange of Rs. 1.56 Cr. and incurred foreign exchange expenditure of Rs. 33.36 Cr. the particulars of which are appearing in Note No. 2.28 of the Notes to the Accounts.

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 Company Secretary at the Registered Office. None of the employees listed in the said annexure are related to any Director of the Company.

18. DIRECTORS’ RESPONSIBILITY STATEMENT

In terms of the provisions of Section 217(2AA) of the Companies Act, 1956, we, the Directors of GTL Limited, in respect of the year ended March 31, 2013, state that:

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

ii) The Directors have selected such accounting policies and applied them consistently and made judgements 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;

iii) 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;

iv) The Directors have prepared the annual accounts on a going concern basis.

19. AUDITORS

M/s. Godbole Bhave & Co., Chartered Accountants, Mumbai and M/s. Yeolekar & Associates, Chartered Accountants, Mumbai, were appointed as Joint Auditors at the Twenty Fourth Annual General Meeting to hold office from 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 members to the appointment of M/s. Godbole Bhave & Co., Chartered Accountants, Mumbai and M/s. Yeolekar & Associates, Chartered Accountants, Mumbai, as Joint Auditors of the Company is being sought at the ensuing Annual General Meeting.

20. 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 May 2, 2011 have issued industry wise Orders for appointment of Cost Auditors from FY 2011-12 onwards for companies carrying Telecom & Electricity activity. Also, as per the provisions of The Companies (Cost Accounting Records) Rules, 2011, applicable to all other products / activities of the Company, the Board of Directors of the Company has appointed M/s. V. G. Phadke & Co., Cost Accountants, Mumbai, as the "Cost Auditor” and "Cost Accountant” under Section 233B and Section 209(1)(d) respectively, of the Companies Act, 1956 for the Financial year 2012-13.

The relevant cost audit reports of FY 2011-12 were filed with Ministry of Corporate Affairs on January 16, 2013.

21. 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.

22. GENERAL

Notes forming part of the Accounts are self-explanatory.

23. 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 G. Tirodkar

August 3, 2013 Chairman & Managing Director


Mar 31, 2012

The Directors take pleasure in presenting their Twenty Fourth Annual Report together with the Audited Accounts for the year ended March 31, 2012 (Nine months).

1. FINANCIAL RESULTS

Rs. in Crores

F.Y. 2011-12 F.Y. 2010-11

Particulars (9 months) (15 months)

Consolidated Standalone Consolidated Standalone

Total Income 1,914.02 1,550.85 4,214.77 3,352.56

Profit before Depreciation, Interest and Financial Charges (Net) and Tax (PBDIT) 87.08 105.35 631.31 520.63

Profit before Depreciation and Tax (PBDT) (335.97) (296.88) 390.26 301.86

Less: Depreciation 101.71 88.57 104.40 87.56

Profit before Tax and extra-ordinary items (437.68) (385.45) 285.86 214.30

Less: Provision for Taxation (incl. Short Provision for Income Tax and Deferred Tax) 19.70 15.28 73.70 72.12

Profit after Tax (PAT) before Extra-ordinary and Prior Period items (457.38) (400.73) 212.16 142.18

Add/(Less): Extra- ordinary Item NIL NIL NIL NIL

Add: Minority Interest (0.23) N.A. (0.08) N.A.

Add: Share Profits in Associates (1.46) N.A. (13.82) N.A.

Add: Excess Provision of Equity Dividend and Dividend Distribution Tax written back 20.41 11.35 1.06 1.07

Add: Balance brought forward from the last year 611.00 240.30 563.04 248.39

Profit available for Appropriation 172.34 (149.09) 762.34 391.64 Appropriations:

Recommended Equity dividend NIL NIL 9.73 9.73

Dividend Distribution Tax N.A. N.A. 1.62 1.62 Amount transferred to

- General Reserve NIL NIL NIL NIL

- Debenture Redemption Reserve NIL NIL 140.00 140.00 Balance Carried Forward 172.34 (149.09) 611.00 240.30

In giving effect to the Accounting Standard 21 (AS 21) on Consolidated Financial Statements, brought out by the Institute of Chartered Accountants of India during the FY 2003-04, the Company has prepared its accounts on a consolidated basis.

The Company has accounted investment in its associates under the criteria set under (AS 23) on "Accounting for Investment in Associate in Consolidated Financial Statement", using Equity method and has classified these Investments as long term.

The Company's Share in Associate, Global Rural Netco Limited is accounted for based on Un-audited financial results for the period ended March 31, 2012. The Company has, as at March 31, 2012 investment in GTL Infrastructure Limited (GIL) of Rs. 291.23 Crs. and in Chennai Network

Infrastructure Limited (CNIL) Rs. 1,637.48 Crs., aggregating Rs. 1,928.71 Crs., which includes investment made for acquisition of tower assets from Aircel and its subsidiaries.

GIL and CNIL have proposed a merger and merger petitions were filed with the High Courts at Bombay and Madras respectively. The Bombay High Court has granted its approval for the proposed merger; however, the approval from the High Court at Madras is awaited.

In order to give appropriate financial impact, the share in associate in the resulting merged entity will be accounted post merger. This treatment being in preference to the Accounting Standard has been reported by Auditors. The Share in Associate, GIL is considered up to September 30, 2010.

GTL extended its FY 2010-11 for 15 months period ended on June 30, 2011. Resultantly, the FY 2011-12 consists of 9 months period and hence, the financial results for FY 2010-11 and FY 2011-12 are not comparable.

The Previous period figures, wherever necessary, have been regrouped/ rearranged/ recast to make them comparable with those of the current period.

2. RESULTS OF OPERATIONS AND BUSINESS OVERVIEW Results of Operations

The financial highlights for the year are as follows:

On a consolidated basis,

- Revenue for the financial period under review was Rs. 1,864.69 Crs. as against Rs. 3,943.15 Crs. for the previous financial year.

- Order visibility as on March 31, 2012 stood at Rs. 2,800 Crs.

GTL, a Global Group Enterprise is a diversified technology and Infrastructure services Company focused on Telecom and Power. Over the last year the Company has diversified into the Power sector.

Some of the significant contracts received are as follows:

- GTL won its first contract in the Canadian market for offering Network Planning & Design Service of a 3G network for a new integrated communications company.

- GTL Power Division bagged two separate turnkey contracts worth Rs. 188 Crs. approx. (USD 35 Mn. approx.) to be implemented over a period of 24 months from Maharashtra State Electricity Development Corporation Limited (MSEDCL) under Re-structured Accelerated Power Development and Reform Program (R-APDRP) Part-B scheme for Jalgaon and Kalyan Zone, Maharashtra State.

- GTL Americas awarded a prestigious contract by AT&T. It's the first project of its kind where a specialized application is used on Android Handsets (Smartphone's & Tablets) to measure Quality of Service and Key performance indicators on AT&T's LTE Network.

- GTL Africa recently won its first Managed Services contract from Huawei in Uganda for a duration of two years.

Business Overview

Last year, GTL shifted its focus from being only telecom centric company to a company that also focuses on the power sector. The Indian telecom industry has shown minimal growth in the last year. The mobile subscriber base in India has increased to 919.17 Mn. 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 tele-density in India has reached 78.66 at the end of March, 2012.

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, Government and Judiciary on the other hand.

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

i) Cancellation of 122 - 2G licenses by Supreme Court;

ii) TRAI recommendations for fixation of higher reserve price (13 times) for spectrum auction;

iii) Re-farming of 900 MHz spectrum leading to higher investment by all telecom operators;

iv) Shutting down of Indian operations by Etisalat DB, Loop Telecom and S Tel & divestment by Qualcomm;

v) Slower than expected off take of the 3G roll outs, and the delay in rolling out the BWA networks even after a year of paying out the license fees.

As a result, the telecom sector has great difficulty to raise any capital from banks or investors. This has a direct impact on the telecom operators' 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 growth of telecom sector.

This has led to reduced opportunities for Network Services Companies in India. The factors that will drive growth for network services business in India are as follows:

i) 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;

ii) Focus on rural expansion: with mobile coverage expected to increase, especially in rural areas, the operators are expected to invest in rural region;

iii) 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 network services;

iv) 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 consulting revenue in term of benchmarking networks.

Global uncertainties, especially in Europe have led to reduced spending by telecom operators and OEMs across the world. The operators are focusing on optimizing their existing networks and are spending minimum on rolling out new networks.

Investment in GTL Infrastructure Limited (GIL)

GTL is the promoter of GIL and has invested Rs. 291.23 Crs. in Equity Capital. GTL has also invested in CNIL, a subsidiary of GIL, Rs. 1,068.12 Crs. in Equity Capital and Rs. 569.36 Crs. in 0% Unsecured Compulsorily Convertible Debentures. Thus GTL's total investment in Tower business at cost is Rs. 1,928.71 Crs.

GTL is in negotiations for resolution of dispute with IFCI and based on such negotiations, the proposed return of pledged/ invoked 17.65 Crs. Equity Shares of Company's investment in GIL, GTL's total investment in Tower business at cost will be Rs. 2,230.79 Crs.

3. MACRO & MICRO ECONOMIC SCENARIO, CORPORATE DEBT RESTRUCTURING AND PLEDGE OF PROMOTER/PROMOTER GROUP SHAREHOLDING IN THE COMPANY.

Global Macro Economic Scenario

The sluggish recovery shall remain the most likely global macro economic scenario, where the world economy will continue to recover from the 2009 recession at a moderate pace, returning to trend growth rates with persistent unemployment and budget deficits in developed markets.

FY 2011-12 saw deleveraging efforts, elevated unemployment levels, lingering real estate market problems, and a shift of policy priorities towards fiscal consolidation which will continue to constrain growth in a number of high-income economies. At the same time, the solid economic pace in emerging markets will limit the risk of a 'double- dip' recession.

There is a downside risk to the outlook, which has risen and may continue through FY 2012-13.The global economy is facing headwinds coming from every major region of the world. The continuation of the economic recovery depends on all of the following:

- There is a need to maintain the momentum of the US economic recovery which incorporates unresolved issues of the medium- term fiscal consolidation plan and the debt ceiling and which if ensured would help preserve market confidence;

- The Euro Zone has been fighting to prevent the debt problems affecting peripheral sovereigns from spreading to larger countries vis-a-vis European-wide financial system;

- The Chinese and Indian economies are also not insulated from the global economic conditions as the economies need engineering of a 'soft landing' for the overheating faced by both the countries. If these factors are taken care of, they will help restart the growth engines, compensating for the de growth in other economies;

- There is also the concern that lingers which is the inflation in commodity prices worldwide. An oil supply-side shock could not only have direct negative implications for growth but could also contribute to inflationary pressures and consequent increases in interest rates.

Thus Global Macroeconomic condition is very fluid due to various socio-economic, socio-political reasons.

Indian Macro Economic Scenario and Telecom Industry

Economists have viewed that the global macro economic situation would not have much impact on the Indian economy considering the large population thereby generating automatic demand for industrial products. The Indian economy is also experiencing turbulences for past about two years due to various factors such as high interest rates, increase in cost of fuel mainly due to dependency of our economy on import of large quantum of fuel from overseas market, policies addressing various issues affecting our economy due to political compulsions etc. Certain Global Credit rating agencies have downgraded India's economic prospective as downside risks to India have increased, most recently with the sharp depreciation of the currency, which will add to already-high inflationary pressures. With growth decelerating quite rapidly, this leaves policy makers with a dilemma. If they raise rates to protect the currency, the headwinds to demand will worsen, but if they cut rates to support output, the currency may fall further. But if the country is able to boost demands and bring harmony to the varied policies and stabilize its political scenario there could be a probable upgrade in the credit rating.

Besides the uncertainty prevailing in Indian Economy, the telecom sector has been affected to a great extent due to ongoing investigations in 2G Scam and the aftermath, uncertainty on new telecom policy and order passed by the Supreme Court in the recent past thereby cancelling 122 telecom licenses and utter confusion prevailing as to re-allotment of these licenses through bidding process. Due to various negative actions or inaction by the government in implementing right policies, the overseas telecom operators who have entered the Indian Telecom Market have moreover decided to exit from the Indian market that will have further blow on investment climate in the country and particularly the Telecom Sector. This has major adverse effect on development of the telecom industry as the uncertainty created over licensing and pricing by various authorities including Telecom Regulatory Authority of India and Department of Telecommunication is likely to make the telecom business unviable. The steep increase in the cost of license and telephone rates would result in creating low demand for telecom products thereby affecting the revenue and profitability of telecom operators. Players in the Telecom business are reeling under various pressures as narrated under:

a) Telecom operators deposited more than Rs. 1,00,000 Crs. as spectrum money for 3G networks and BWA related networks. However, there has not been corresponding income related thereto;

b) The 2G scam and its impact on telecom rollout has been negative. Operators have deferred Capex, new equity is not coming into the telecom sector and FDI for telecom / tower space has been virtually non-existent for last about two years;

c) Several International Investors e.g. Etisalat, Telenor, Vodafone, Maxis Aircel have been engaged in various investigations and related issues resulting in lack of confidence in the telecom sector by International strategic investors;

d) The landmark judgment passed by the Honorable Supreme Court of India on February 2, 2012 thereby cancelling 122 telecom licenses; and

e) Dampening investment climate in the Telecom Sector by announcing the exit by one of the service providers Etisalat due to after effect of cancellation of its telecom license and likelihood of other foreign telecom partners / operators following suit.

Recent recommendations by TRAI about re-farming of spectrum and putting up a reserve price for spectrum auction has further vitiated the already confused regulatory scenario and has led to a huge uproar from the incumbent telecom operators who have made representations to the Telecom ministry to relook at the TRAI recommendations.

Due to the uncertain scenario at the Global and Indian macro level, many overseas reputed companies were witness to face liquidation and similarly Indian companies from different industries are also reeling under pressure of demand supply mechanism, unviable business conditions that turned many companies from black into red resulting into unviable business units in the current scenario. To overcome various pressures, some companies are required to restructure their debts and refer it to Corporate Debt Restructuring Cell (CDR Cell).

Corporate Debt Restructuring

Due to the factors affecting economies at macroeconomic and industry related issues, your Company had referred proposal for restructuring its debts to CDR Cell and the Company received approval vide their Letter of Approval dated December 23, 2011. We give herein below in nutshell the restructuring proposal approved to the Company:

a) Out of the outstanding Credit Facilities in Rupee terms as of cut- off date viz. July 1, 2011, part of the amount viz. Rs. 2,299.42 Crs. shall continue as Rupee Term Loan, repayable within 10 years (by March 2021) having 21 months moratorium for repayment viz. till March 31, 2013 and some facilities would continue in the form of Continuing Working Capital facilities of about Rs. 495.96 Crs.

b) Interest on Term Loan from cut-off date till March 31, 2013 is converted into Funded Interest Term Loan repayable from FY 2014 to FY 2017;

c) Overall reduction in interest rates during the term of the loan;

d) Part of the outstanding credit facilities as of cut-off date will be converted into Compulsorily Convertible Debentures (CCDs) to be issued to CDR Lenders carrying coupon rate of 1% per annum. After completion of formalities inter-alia obtaining various approvals, the Company has allotted CCDs amounting Rs. 187.84 Crs. to the CDR Lenders on April 28, 2012 and the same were converted into Equity Shares on June 12, 2012;

e) Credit Facilities of Rs. 650 Crs. availed by the Company from ICICI Bank have been transferred to Chennai Network Infrastructure Limited (CNIL). Accordingly, the Company owes an amount of Rs. 650 Crs. to CNIL;

f) Outstanding amount towards Non-Convertible Debentures (NCDs) issued by the Company of Rs. 1,400 Crs. plus interest outstanding thereon would also be restructured on the same basis as other CDR loans;

g) Credit Facilities availed by the Company in the form of External Commercial Borrowings (ECBs) of US$ 150 Mn. are being restructured separately. ECB of US$ 66.67 Mn. (Rs. 333.34 Crs.) would be converted into Rupee Term Loan under the CDR mechanism and balance US$ 83.33 Mn. to be continued as ECB, subject to regulatory clearances and would correspondingly be restructured;

h) CCDs worth Rs. 83.45 Crs. would be issued to the Promoters of the Company against their contribution.

Pledge of Promoter & Promoter Group shareholding in the Company

Further to the information furnished in the Directors' Report for the FY 2010-11, the Company's shares held by one of the promoters and pledged with ICICI Bank that were subsequently appropriated by ICICI Bank have been transferred back to the Promoter. Resultantly, the Promoter shareholding in the Company has been restored to original level of 52.66% from 23.47% based on the outstanding capital of the Company as on March 31, 2012.

The Promoters shareholding in the Company is about 41.17% based on the expanded capital post allotment of Equity Shares upon conversion of Compulsorily Convertible Debentures issued to CDR Lenders and Promoter under the CDR Scheme.

4. DIVIDEND:

Since your Company is currently under Corporate Debt Restructuring Mechanism, your Directors express their inability for recommending any dividend on the paid up Equity Share Capital of the Company for the financial year ended March 31, 2012.

5. SHARE CAPITAL, EMPLOYEE STOCK OPTION PLANS (ESOPs) AND COMPULSORILY CONVERTIBLE DEBENTURES (CCDs):

i. Equity:

The movement of Equity Capital due to allotment of shares consequent upon conversion of ESOPs is as under:

Particulars No. of Equity Shares

Equity Capital as on June 30, 2011 97,267,833

Add: Allotment of Equity Shares on NIL

account of Conversion of ESOPs

Equity Capital as on March 31, 2012 97,267,833

ii. Preference:

During the year under review, the Company has not issued, allotted or redeemed any preference shares.

iii. ESOPs:

ESOP was introduced and implemented in FY 1998-99 to enable the employees of the Company to participate in the future growth and success of the Company. As on March 31, 2012 a total of 143 employees hold 2,370,903 stock options, allotted under various schemes. As required by Clause 12 of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, the particulars of ESOPs are furnished in Annexure 'B' to this Report.

Assuming full conversion of options into equity shares to the eligible employees of the Company and its subsidiaries, the fully diluted equity capital of the Company would be as under:

Particulars No. of Equity Shares

Equity Capital on March 31, 2012 97,267,833

Add: Full ESOP Conversion 2,370,903

Fully Diluted Equity Capital 99,638,736

iv. CCDs:

Consequent upon allotment of CCDs worth Rs. 187.84 Crs. and Rs. 45.15 Crs. to CDR Lenders and the Promoter respectively on April 28, 2012 under the CDR Scheme and its conversion into equity shares on June 12, 2012, the Share Capital of the Company has gone up from Rs. 97.27 Crs. to Rs. 148.53 Crs.

6. CAPITAL MARKET DEVELOPMENTS:

Trading Group

The Company's equity shares are listed with the BSE Limited (BSE) under the category 'Group B'. The Company's equity shares are listed with National Stock Exchange of India Limited (NSE) under the category 'S&P CNX 500'. The Rated Redeemable Unsecured Rupee Non-Convertible Debentures privately placed by the Company are listed with BSE under the Debt Segment.

Average daily traded volumes

The average daily traded volume in the Company's shares on BSE and NSE was 1,550,725 and 3,033,266 shares respectively, in the year ended March 31, 2012 (9 months period) as against 381,928 and 822,754 shares respectively in the previous financial year consisting of 15 months.

7. 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.

8. SUBSIDIARIES

a) 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 the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies have not been attached with the Balance Sheet of the Company. Financial Information of the subsidiary companies, as required by the said general approval has been furnished separately in the Consolidated Balance Sheet in the Annual

Report. The Company will make available the Annual Accounts of the subsidiary companies and related detailed information to the Company's and the subsidiary companies shareholders, seeking such information at any point of time. The Annual Accounts of the subsidiary companies will also be kept open for inspection by any shareholder at the Registered / Head Office of the Company and that of the respective subsidiary companies.

Further, pursuant to Accounting Standard 21 (AS 21) on Consolidated Financial Statements issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company include information about its subsidiaries. The Company's revenue from its overseas subsidiaries for the period ended March 31, 2012, on a consolidated basis was Rs. 359.90 Crs. (US$ 71.66 Mn.).

b) GTL has given guarantees to its subsidiaries and affiliates in its normal course of business in India and abroad. The guarantees are given:

- for performance of its Subsidiaries, Associates and affiliates for business obligations; and

- to enable its Subsidiaries & Associate companies to avail financial assistance.

9. CORPORATE GOVERNANCE

The Company is complying with Clause 49 of the Listing Agreement with the Stock Exchanges. A separate Corporate Governance Report on compliance on Clause 49 of the Listing Agreement with the Stock Exchanges as reviewed and certified by M/s. Godbole Bhave & Co., Chartered Accountants and M/s. Yeolekar & Associates, Chartered Accountants the Joint Auditors of the Company is given elsewhere in this Annual Report.

10. MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis on the Company's performance, industry trends and other material changes with respect to the Company and its subsidiaries, wherever applicable is attached to this Report.

11. HUMAN RESOURCES

Our associate base stood at 8,204 as on June 30, 2012 as against 9,612 as on June 30, 2011. For full details refer to the Human Resources write up in the MD&A Report.

1 2. RISKS

A separate section on risks and their management is provided as a part of this Annual Report. 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.

13. SOCIAL COMMITMENTS

The Company continued, during the year under review, to contribute towards social causes as described in the MD&A Report under the caption 'Corporate Social Responsibility'.

14. DIRECTORS

Prof. S. C. Sahasrabudhe, Mr. Charudatta Naik and Mr. Vijay Vij, Directors retire by rotation at the forthcoming Annual General Meeting. Mr. Vijay Vij - Independent Director being eligible offers himself for re-appointment.

Prof. Sahasrabudhe has conveyed that he would be crossing age of 70 years in July 2012, and in view of the maximum age stipulated for the Directors in the Company's Policy Dossier viz. 70 years, he is not opting for re-appointment as a Director of the Company at the ensuing Annual General Meeting. Also Mr. Charudatta Naik, Whole-time Director, being associated with the Company as well as with Group Company viz. GTL Infrastructure Limited, in order to avoid any conflict of interest, has decided not to seek re-appointment.

Mr. Dipak Kumar Poddar, Mr. Vinod Sethi and Mr. N. Balasubramanian, Directors have relinquished from the Board w.e.f. October 20, August 23 and October 19, 2011, respectively.

The Board places on records its deep appreciation and respect for the valuable advice and guidance received from Mr. Poddar, Mr. Sethi and Mr. Balasubramanian during their tenure as Directors of the Company.

The Board of Directors in its meeting held on December 29, 2011 appointed Mr. D. S. Gunasingh, Mr. Navin Kripalani and Mr. Hemant Desai as Additional Directors. They hold office up to the date of the ensuing Annual General Meeting. The Company having received notice under Section 257 of the Companies Act, 1956, proposes appointment of Mr. D. S. Gunasingh, Mr. Navin Kripalani and Mr. Hemant Desai as Directors, liable to retire by rotation.

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

15. PROMOTER GROUP

The Company is a part of Global Group of Companies which is promoted by Mr. Manoj. G. Tirodkar. The promoter group holding in the Company currently is 41.17% of the Company's Equity Capital. The members may note that the Promoter Group, inter-alia comprises of the following persons/entities: (1) Mr. Manoj. G. Tirodkar (2) Global Holding Corporation Pvt. Ltd.

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

a) Conservation of Energy:

As the Company is engaged in Network Services and has no activity pertaining to manufacturing, furnishing of details on conservation of energy is not applicable. However, the Company is working towards incorporating energy management solutions while it carries out the deployment and maintenance of the cell sites. The Company has carried out energy audits to optimize energy consumption in its office premises. The Company continues to invest in research and development towards green energy for towers.

b) Technology Absorption:

The particulars as prescribed under sub-section (1)(e) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, in respect of technology absorption are set out in the Annexure 'A' to this Report.

c) Foreign Exchange Earnings & Outgo:

During the year under review the Company earned foreign exchange of Rs. 9.97 Crs. and incurred foreign exchange expenditure of Rs. 21.66 Crs. the particulars of which are appearing in Note No. 2.28 of the Notes to the Accounts.

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 Company Secretary at the Registered Office. None of the employees listed in the said annexure are related to any Director of the Company.

18. DIRECTORS' RESPONSIBILITY STATEMENT

In terms of the provisions of Section 217(2AA) of the Companies Act, 1956, we, the Directors of GTL Limited, in respect of the year ended March 31, 2012, state that:

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

ii) 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 at the end of the Financial Year and of the loss of the Company for that period;

iii) 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;

iv) The Directors have prepared the annual accounts on a going concern basis.

19. AUDITORS

M/s Godbole Bhave & Co., Chartered Accountants, Mumbai and M/s. Yeolekar & Associates, Chartered Accountants, Mumbai, were appointed as Joint Auditors at the Twenty Third Annual General Meeting to hold office from 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(1 B) of the Companies Act, 1956 regarding their eligibility for re-appointment. Accordingly, approval of members to the appointment of M/s. Godbole Bhave & Co., Chartered Accountants, Mumbai and M/s. Yeolekar & Associates, Chartered Accountants, Mumbai, as Joint Auditors of the Company is being sought at the ensuing Annual General Meeting.

20. 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 May 2, 2011 have issued industry wise Orders for appointment of Cost Auditors from FY 2011-12 onwards for companies carrying Electricity activity. Also, as per the provisions of The Companies (Cost Accounting Records) Rules, 2011, applicable to all other products / activities of the Company and The Companies (Cost Accounting Records) Rules, 2011, the Board of Directors of the Company has appointed M/s. V. G. Phadke & Co., Cost Accountants, Mumbai, as the "Cost Auditor" and "Cost Accountant" under Section 233B and Section 209(1)(d) of the Companies Act, 1956 for the Financial year 2011-12.

21. 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.

22. GENERAL

Notes forming part of the Accounts are self-explanatory.

23. 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 G. Tirodkar

July 3, 2012 Chairman & Managing Director


Mar 31, 2010

The Directors take pleasure in presenting their Twenty Second Annual Report together with the Audited Accounts for the year ended March 31,2010.

1. FINANCIAL RESULTS

Rs. Cr.

F.Y. F.Y. Particulars 2009-10 2008-09 Consolidated Standalone Consolidated Standalone

Total Income 2,239.26 1,553.43 1,948.01 1,452.68

Profit before Depreciation, Interest and Financial Charges (Net) and Tax (PBDIT) 341.66 267.69 296.64 243.72

Profit before Depreciation and Tax (PBDT) 305.24 244.67 222.39 174.53

Less: Depreciation 59.43 48.01 52.85 43.41

Profit before Tax and extra- ordinary items 245.81 196.66 169.54 131.12

Less: Provision for Taxation 40.62 39.33 23.99 21.35

Profit after Tax (PAT) before Extra-ordinary and Prior Period items 205.19 157.33 145.56 109.77

Less: Prior Period Items 0.89 1.03 (8.34) (8.34)

Add/(Less): Extra-ordinary Item NIL NIL (10.00) (10.00)

Add: Minority Interest 0.08 N.A (0.21) N.A

Add: Share Profits in Associates (008) N.A. 3.51 N.A.

Add: Reserve on Consolidation 0.07 N.A. (0.02) N.A.

Add: Balance brought forward from the last year 463.07 196.21 377.82 150.01

Profit available for Appropriation 669.22 354.57 508.32 241.45 Appropriations:

Recommended Equity dividend 29.93 29.93 28.42 28.42

Dividend Distribution Tax 5.09 5.09 4.83 4.83 Amount transferred to

- General Reserve 20.00 20.00 12.00 12.00

- Debenture Redemption Reserve 51.16 51.16 NIL NIL

Balance Carried Forward 563.04 248.39 463.07 196.21

Total of Appropriation and Balance C/F 669.22 354.57 508.32 241.45

In giving effect to the Accounting Standard 21 (AS 21) on Consolidated Financial Statements, brought out by the Institute of Chartered Accountants of India during the FY 2003-04, the Company has prepared its accounts on a consolidated basis.

The Associates, GTL Infrastructure Limited (GIL), Chennai Network Infrastructure Limited (CNIL) and Global Rural Netco Limited (GRNL) in which Company has significant influence, is accounted under the equity method in accordance with Accounting Standard on "Accounting for Investment in Associates in Consolidated Financial Statements" (AS 23). The financials are considered based on i) In respect of GIL for the nine months period ended December 31,2009 ii) In respect of CNIL and GRNL for the year ended March 31,2010.

2. RESULTS OF OPERATIONS AND BUSINESS OVERVIEW

The revenue for the financial year under review was Rs. 2,236.94 crores as against Rs. 1,945.09 crores for the previous financial year registering an increase of 15%. Revenue contribution from the domestic market grew by 7% due to increase in competition among telecom operators. However, international market excelled with 37% growth due to our increased recognition as a leading network service provider. The Company has presence in 46 countries and worked with over 70 cellular operators.

Other financial highlights for the year are as follows:

On a consolidated basis,

- Revenue increased by 15% to Rs. 2,236.94 Cr (US$478.80 Mn)

- Operating Profit increased by 15% to Rs. 341.66 Cr (US$ 73.13 Mn)

- Profit after tax without extra-ordinary item increased by 50% to Rs. 206.08 Cr(US$ 44.11 Mn)

- Order visibility as on March 31, 2010 stood at Rs. 4,223 Cr (US$ 938.23 Mn)

- The Board has recommended a dividend of Rs.3/- per equity share.

GTL is a leading Network Services company that addresses the Network Life- Cycle requirements of Telcos/Operators, Tower companies and Technology Providers (OEMs).

During the year, GTL strengthened its relationship with all major OEMs/ Operators and increased its level of engagement with them. Few of the major contracts entered into by GTL during the year are given below:

- GTL entered into energy management services contract with Aircel for a period of 6 years. The Service offerings will include energy management of 17,500 towers and incremental Aircel site rollouts through GTL Infrastructure Limited (GTL Infra).

- GTL also extended its network deployment capabilities into Power sector. During the year GTL executed orders worth Rs. 42 crores for MSEDCL (Maharashtra State Electricity Distribution Company Limited). At the end of FY 2009-10, the order book visibility for these services is in the range of around Rs. 427 crores. GTL also emerged as the top bidder for power distribution franchisee contract floated by MSEDCL to distribute power to most parts of Aurangabad.

Business Overview

During the year, GTL increased its operations in the Middle East & African countries. With this, GTL has now executed projects in more than 46 countries and helped build more than 70 wireless Networks across the world.

GTL continues to remain focused on innovations and operational excellence to adapt quickly to changing business requirements of the telecom operators and OEMs. As part of sustainability initiatives, the Company has focused on reducing the energy consumption and carbon footprint of the telecom industry. GTL aims to reduce the energy expenses by 15%-20% by deploying innovative Energy Management Solutions and use of clean and green energy on telecom sites.

Strategic Investment

GTL owns 33% equity of GTL Infra which has been continuously looking for inorganic growth opportunities both in the domestic and international markets and has entered into an agreement to purchase Aircels tower asset business. The highlights of the transaction are as under:

- Purchase of 17,500 telecom towers;

- 21,000 active tenants on these towers;

- Enterprise Value of Rs. 8,400 Crore;

- Right of first refusal for additional 20,000 tenancies to GTL Infra over the next three years.

Aircel is one of the leading GSM operators in the country. GTL has a strong working relationship with Aircel and provides them services like network planning & design, network optimisation, network deployment and network operations and maintenance. In addition to the above mentioned services, there is opportunity to GTL for energy management business which may result into revenue of Rs. 8,500 crores over the period of next 5 years. The purchase of the Aircel tower business is not only expected to be a transformational transaction for GTL Infra but also significantly benefit GTL by building a strong partnership with one of the leading national operators in the country.

So far, GTL has invested Rs. 398.09 Crore in GTL Infra. This strategic investment has resulted into following benefits for our Shareholders:

Revenue growth

Since inception of GTL Infra in 2004-05, GTL has earned total revenue of Rs.2,924.15 Crore and net profit in excess of Rs. 200 crores. Thus GTL has already recouped more than 60% of its investments so far through the profit from the business done with GTL Infra.

Growth in Investment value

GTL has invested Rs. 398.09 Crore in GTL Infra. As on March 31, 2010 mark to market value of this investment is Rs. 1,254.19 Crore.

In view of the new order visibility of around Rs. 8,500 crores through purchase of Aircel Tower business, GTL has additionally invested Rs. 1,067.79 Crore towards the equity contribution of a Special Purpose Vehicle of GTL Infra for the acquisition of Aircels Telecom Towers. GTL believes that the said investment will provide sufficient returns to our shareholders as has been demonstrated in the past.

3. UNLOCKING VALUE FOR THE SHAREHOLDERS Buyback & Dividend:

a) Buyback of Equity Shares:

The Board of Directors of the Company in its meeting held on January 15,2009 had recommended buyback of fully paid up equity shares of Rs. 10/- (Rupees Ten Only) each at a maximum price of Rs. 260/- per share through open market route in accordance with the extant statutory provisions and subject to approvals from the Shareholders and Lenders. The Company obtained approval of the shareholders for the said buyback program by way of passing a Special Resolution through Postal Ballot, the result of which was declared on March 25, 2009.

With the improvement in the macro-economic conditions coupled with political stability in the country post announcement of results of general elections in May 2009, the stock market moved up considerably that led to trading of the Companys share price consistently above the maximum buyback price approved by the shareholders. Thus, the Board of Directors of the Company in its meeting held on July 22, 2009 had decided not to act on the enabling approval received from the shareholders for buyback of equity shares.

b) Dividend:

The Directors recommend a dividend of Rs. 3/- per share (30%) on the equity capital for the year ended March 31,2010.

4. SHARE CAPITAL, NON-CONVERTIBLE DEBENTURES AND EMPLOYEE STOCK OPTION PLANS (ESOPs)

i. Equity:

The movement of Equity Capital due to allotment of shares consequent upon conversion of ESOPs is as under:

Particulars No. of Equity Shares

Equity Capital as on March 31,2009 94,723,153

Add: Allotment of Equity Shares on account of 2,001,312

Conversion of ESOPs

Equity Capital as on March 31,2010 96,724,465

ii. Preference:

During the year under review, the Company has not issued, allotted or redeemed any preference shares.

iii. Non-Convertible Debentures (NCDs):

During the year under review, the Company has privately placed 14,000 Rated Redeemable Unsecured Rupee Non-Convertible Debentures of the face value of Rs.10 Lakhs each aggregating Rs. 1,400 Crore with reputed companies for meeting ongoing working capital and / or any capital expenditure (including acquisition / investment) requirements. These NCDs were issued in two issuances of Rs.700 Crore having 3 series each. Series I and IV will be redeemed at the end of 36 months from the date of allotment, series II and V will be redeemed at the end of 48 months from the date of allotment and series III and VI will be redeemed at the end of 60 months from the date of allotment. In terms of the issue documents, the Company has put option for each series of NCDs.

iv. Employee Stock Option Plans (ESOPs)

ESOP was introduced and implemented in FY 1998-99 to enable the employees of the Company to participate in the future growth and success of the Company. As on March 31,2010 a total of 250 employees hold 3,038,980 stock options, allotted under various schemes. As required by Clause 12 of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, the particulars of ESOPs are furnished in Annexure B to this Report.

No. of outstanding ESOPs as on March 31,2009 5,133,733

Add: Grants issued during the year 73,500

Less: No. of Options Exercised during the year 2,001,312

Less: Forfeited during the year 166,941

Total no. of outstanding ESOPs as on March 31,2010 3,038,980

Assuming full conversion of options into equity shares to the eligible employees of the Company and its subsidiaries, the fully diluted equity capital of the Company would be as under:

Particulars No. of Equity

Shares

Equity Capital on March 31,2010 96,724,465

Add : Full ESOP Conversion 3,038,980

Fully Diluted Equity Capital 99,763,445

5. CAPITAL MARKET DEVELOPMENTS:

Trading Group and Futures and Options (F&O) Segment

The Companys equity shares are listed with the Bombay Stock Exchange Limited (BSE) under the category Group A. The Companys equity shares are listed with National Stock Exchange of India Limited (NSE) under the category CNX Midcap 200. Effective December 29, 2006, the Companys equity shares were introduced in the Futures & Options Segment (F&O).

The Rated Redeemable Unsecured Rupee Non-Convertible Debentures privately placed by the Company are listed with BSE under the Debt Segment.

Average daily traded volumes

The average daily traded volume in the Companys shares on BSE and NSE was 70,005 and 152,289 shares respectively, in the year ended March 31,2010 as against 128,687 and 210,090 shares respectively in the previous financial year.

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. SUBSIDIARIES

a. In terms of the approval granted by the Ministry of Corporate Affairs, Government of India under Section 212(8) of the Companies Act, 1956, copies of the Balance Sheet, Profit & Loss Account and other documents of the subsidiary companies have not been attached with the Balance Sheet of the Company. Financial Information of the subsidiary companies, as required by the said approval has been furnished separately in the Consolidated Balance Sheet in the Annual Report. The Company will make available the Annual Accounts of the subsidiary companies and related detailed information to the Companys and the subsidiary companies investors, seeking such information at any point of time. The Annual Accounts of the subsidiary companies will also be kept open for inspection by any investor at the Registered Office of the Company and that of the respective subsidiary companies.

Further, pursuant to Accounting Standard 21 (AS 21) on Consolidated Financial Statements issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company include financial information about its subsidiaries. The Companys revenue from its overseas subsidiaries for the year ended March 31,2010, on a consolidated basis was Rs. 793.22 Cr. (US$ 169.78 Mn.)

b. GTL has given guarantees to its subsidiaries and affiliates in its normal course of business in India and abroad. The guarantees are given:

- for performance of its Subsidiaries, Associates and affiliates for business obligations;

- to enable its Subsidiaries & Associate companies to avail financial assistance.

The details of Guarantees outstanding (including for subsidiaries) as at March 31,2010 & March 31,2009 are as under:

As at March 31,2010 As at March 31,2009

Nature of Guarantees Rs. Cr US$(Mn) Rs. Cr US$(Mn)

Performance Guarantees 379.30 84.27 386.14 75.64

Financial Guarantees 210.001 46.661 185.001 36.24

8. CORPORATE GOVERNANCE

Apart from complying with Clause 49 of the Listing Agreement with the Stock Exchanges, GTL is also benchmarking itself against well established Corporate Governance Practices such as Blue Ribbon Committee, Cadbury Committee and Confederation of Indian Industry. A separate Corporate Governance Report on compliance with various recommendations, as reviewed and certified by M/s. Godbole Bhave & Co., Chartered Accountants and M/s. Yeolekar & Associates, Chartered Accountants the Joint Auditors of the Company is given elsewhere in this Annual Report. The said section also includes the certificate of the Joint Auditors for compliance with Clause 49 of the Listing Agreement with the Stock Exchanges.

Given the emerging pivotal role of Independent Directors in bringing about good governance, your Company continues its efforts in optimum utilization of their expertise by providing them regular updates on the industry and business, inviting them to participate in analyst meets held every quarter and involving them in all critical decision making processes.

9. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis on the Companys performance, industry trends and other material changes with respect to the Company and its subsidiaries, wherever applicable is attached to this Report.

10. HUMAN RESOURCES

The Human Resources function at GTL has made a paradigm shift from being a support function to a core and strategic business partner. HR works with executives to clarify the business direction and Performance expectations and actively contributes to deciding what strategies are required for managing talent to achieve business goals. Our Human Resource strategy is aimed at integrating HR processes to result in overall organizational effectiveness, which consequently fuels the business growth.

Human Resources embraces the philosophy that people are the foremost factor in the success of an organization and strive to develop a culture to place people in the organisation on priority. Our intention is toenhance all aspects of the employment experience, attract and retain quality manpower.

We have worked consciously at creating a work environment that is flexible, supportive and empowering. We believe in an environment that promotes performance, nurtures teamwork, strengthens quality consciousness, encourages transparency and facilitates professional growth.

We believe in an achievement - oriented culture, as culture is the blue print that drives the organization initiatives. GTL leadership spends immense time in terms of building a healthy, participative and competitive culture that provides opportunities to its young work force purely based on merit and driven by performance.

Our HR strategy aims at attracting, retaining and developing talent in the organisation and continuously providing a sense of fulfillment to each employee.

Our associate base grew from 5,947 as on March 31, 2009 to 7,066 as on March 31, 2010.

For full details refer to the Human Resources write up in the MD&A Report.

11. AWARDS

In the Financial Year 2009-10 GTL received many prestigious awards, a brief of which is stated below:

Awards won

1 GTL wins the Indian Merchant Chambers (IMC) RBNQA "Outstanding Achievement Trophy" in the service category from RamKrishna Bajaj National Quality Award Trust. GTL was chosen for the award for its integrated model to deliver services in each segment of the network services value chain.

2 GTL features in Standard & Poors Environment, Society and Governance (ESG) India Index for 3 years in a row.

3 GTL received the "Greentech Environment Excellence Award 2009 and 2008" in the infrastructure sector for outstanding achievement in environment management.

4 GTL has been named as "No. 1 Telecom Turnkey Company of the year" for FY 2007-08 and 2008-09 for the leadership in offering Network Services by Voice & Data.

5 GTL received the "Certificate for strong Commitment" from CII-ITC Center of Excellence for Sustainable Development, for its initiatives on Sustainability and Energy Management.

6 GTL received the Amity HR Excellence award for its initiatives in the HR management.

7 "Global Engineering Partner" Award - Huawei Technologies Co. Ltd.

12. LIQUIDITY

As on March 31, 2010, GTL had liquid assets (including quoted investments) of Rs. 1,944.57 Cr. as against Rs. 1,375.28 Cr. in the previous year. These represented investments worth Rs. 370.77 Cr. (net of share of associates); cash and bank balances of Rs. 1,573.80 Cr. maintained by your Company in current, margin fixed deposit accounts. The Board has recommended a dividend of Rs.3/- per share subject to the shareholders approval. The aggregate of Dividend and Tax thereon will result into distribution of Rs.35.02 Cr. to the shareholders for the year March 31,2010.

The amount of liquid assets stated above excludes our mark to market value of investment in GTL Infrastructure Limited, which is quoted at Rs.1,254.19 Cr. as on March 31, 2010 as against original investments of Rs. 398.09 Cr., which has been considered in the liquid assets.

13. RISKS

A separate section on risks and their management is provided as a part of this Annual Report. It is important for shareholders and investors to be aware of the risks that are inherent in the Companys 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.

14. SOCIAL COMMITMENTS

The Company continued, during the year under review, to contribute towards social causes as described in the MD&A Report under the caption Corporate Social Responsibility.

15. DIRECTORS

Mr. T. N. V. Ayyar and Prof. Shamkant B. Navathe, Directors retire by rotation at the forthcoming Annual General Meeting and Prof. Navathe being eligible offers himself for re-appointment. Mr. Ayyar is associated with the Company in his capacity as an Independent Director since April 2000. He has conveyed that he would like to devote considerable time in non-profit/charitable causes and thus expressed his desire not to seek re-appointment. The Board places on record its deep appreciation and respect for the valuable advice and guidance received from Mr. Ayyar during his tenure as a Director of the Company.

The background of the Director proposed for reappointment is given under the Corporate Governance section of the Annual Report.

16. PROMOTER GROUP

The Company is a part of Global Group of Companies which is promoted by Mr. Manoj. G. Tirodkar. The promoter group holding in the Company currently is 48.02% of the Companys Equity Capital. The members may note that Global Group inter-alia comprises of the following persons / entities: (1) Mr. Manoj. G. Tirodkar and his relatives as defined under the Companies Act, 1956, (2) Global Holding Corporation Pvt. Ltd. (3) GAH International PTE Limited (4) GHC International Limited.

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

a. Conservation of Energy:

As the Company is engaged in Network Services and has no activity pertaining to manufacturing, furnishing of details on conservation of energy is not applicable. However, the Company is working towards incorporating energy management solutions

while it carries out the deployment and maintenance of the cell sites. The Company has carried out energy audits to optimize energy consumption in its office premises. The Company continues to invest in research and development towards green energy for towers.

b) Technology Absorption:

The particulars as prescribed under sub-section (1)(e) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, in respect of technology absorption are set out in the Annexure A to this Report.

c) Foreign Exchange Earnings & Outgo:

During the year under review the Company earned foreign exchange of Rs. 62.58 Cr. out of which the Company earned a dividend of Rs. 10.75 Cr. from all its overseas subsidiaries the details of which are appearing in the Note No. 14 of the Notes to the Accounts. The particulars regarding foreign exchange expenditure of Rs. 36.10 Cr. during the year are appearing in Note No. 15 of the Notes to the Accounts.

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. DIRECTORS RESPONSIBILITY STATEMENT

In terms of the provisions of Section 217(2AA) of the Companies Act, 1956, we, the Directors of GTL Limited, in respect of the year ended March 31,2010, state that:

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

ii. 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 at the end of the Financial Year and of the profit of the Company for that period;

iii. 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;

iv. The Directors have prepared the annual accounts on a going concern basis.

20. AUDITORS

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

21. 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.

22. GENERAL

Notes forming part of the Accounts are self-explanatory.

23. ACKNOWLEDGEMENT

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.

On behalf of the Board of Directors,

Manoj G. Tirodkar

Chairman & Managing Director

Mumbai April 20, 2010

 
Subscribe now to get personal finance updates in your inbox!