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Directors Report of Quadrant Televentures Ltd.

Mar 31, 2015

Dear Shareholders,

The Directors are pleased to present the 68th (Sixty Eighth) Annual Report together with the Audited Accounts and Auditors Report for the Financial Year ended on 31st March, 2015.

SUMMARY OF FINANCIAL RESULTS

The Company's financial results for the year ended 31st March, 2015 is summarized below: -

(Rs. In millions)

Particulars For the year For the year ended ended March 31,2015 March 31,2014

I. Revenue from operations 5207.94 4059.95

II. Other Income 36.24 29.44

III. Total Income(I II) 5244.18 4089.39

IV. Expenses

Networks operation Expenditure 4442.02 3784.12

Employee Benefits Expenses 803.85 688.30

Sales & Marketing Expenditure 368.44 281.01

Finance Cost 268.40 273.00

Depreciation and Amortization 1389.96 1267.80

Expenses 370.44 406.76

Other Expenses

Total Expenses 7643.12 6701.00

V. Profit /(Loss) before exceptional and (2398.93) (2611.61) extraordinary items and tax (III-IV)

VI. Exceptional Item - -

VII. Profit/(Loss) before extraordinary (2398.93) (2611.61) items and tax (V-VI)

VIII. Extraordinary items - -

IX. Profit before tax (VII-VIII) (2398.93) (2611.61)

X. Tax expenses - -

(1) Current Tax

(2) Deferred Tax

XI. Profit /(Loss) for the period from (2398.93) (2611.61) continuing operations (IX-X)

XII. Profit/(Loss) from discontinuing - - operations

XIII. Tax expenses of discontinuing - - operations

XIV. Profit/(Loss) from Discontinuing - - operations (after tax)(XII-XIII)

XV. Profit /(Loss) for the period(XI-XIV) (2398.93) (2611.61)

FINANCIAL PERFORMANCE REVIEW

The Company registered a growth in revenue by 28% from Rs.4,059.95 million in 2013-14 to Rs.5,207.94 million in 2014-15. Consequently, the operating losses decreased from Rs.2,611.61 million during 2013- 14 to Rs.2,398.93 million during the year ended 31.03.2015.

However, the total expenses during 2014-15 increased to Rs.7,643.12 million as against Rs.6,701.00 million in the previous year due to operational and other costs.

In consolidated terms, the Company recorded a consolidated revenue of Rs.5,289.24 Million during 2014-15 against the consolidated revenue of Rs.4,117.39 Million during 2013-14.The Company incurred a loss of Rs.2,406.62 Million in 2014-15, against loss of Rs.2,616.93 Million in 2013-14.

BUSINESS OPERATIONS

Your Company holds Unified Access Services License (UAS License) for providing Telephony Services in the Punjab Telecom Service Area comprising of the State of Punjab, Union Territory of Chandigarh and Panchkula Town of Haryana.

Earlier the Company was holding ISP Licence - Category-B (Punjab Circle) which was valid till June, 2015 and the Company had applied for its renewal/issuance of new ISP Licence Category-A. Considering the Company's request, the DoT has granted ISP Licence Category-A (PAN India) to the Company on January 6, 2015.

The Portfolio of services provided by the Company includes Data and Internet Connectivity across wireline technology, Fixed Line and Mobile voice services, Managed Services. The Company has also launched its post-paid services in the GSM Mobile Segment this year.

The Company provides broadband services through its fibre optic cable laid across Punjab and the Company has also entered into co-location agreements with other operators in order to expand its network.

As at 31.03.2015, the company had a total subscriber base of 3,119,797 telephony customers, including 2,711,867 GSM mobile customers, 227,707 fixed-line customers, 167,048 Broadband customers, 12,260 Wireless broadband customers and 915 FTITH customers.

During the year under review, there is no change in the nature of business of the Company.

MARKETING INITIATIVES

During the year, various marketing initiatives were taken in order to enhance the brand visibility through various programs such as Young Manch Contest, Connect Super Jodi Contest etc, in order to connect to and reach out to a larger segment of the populace especially the younger segment of society.

CORPORATE DEBT RESTRUCTURING SCHEME (CDR SCHEME)

The Corporate Debt Restructuring Cell (CDR Cell) had vide its letter no.CDR(JCP)563/2009-10 dated August 13, 2009 approved a Corporate Debt Restructuring Package (CDR Package) for the company, in order to write off the losses and also to enable the company to service its debts. As of March 31, 2015, the Company has duly complied with all the terms and conditions as stipulated in the aforesaid CDR Package.

SHARE CAPITAL

In terms of the CDR Package, the issued, subscribed and Paid up equity share capital of the Company was required to be reduced by 90% i.e. from Rs. 612.26 Crores to Rs.61.23 Crores by extinguishing/ cancelling Rs.9/- (Rupee Nine Only) per equity share out of each equity share of Rs.10/- (Rupees Ten Only) each fully paid up, in order to write-off the accumulated losses of the Company.

Pursuant to the approval by BSE vide its letter dated October 23, 2013, the Company had fled the Petition for reduction of Equity Share Capital with the Hon'ble Bombay High Court. The Hon'ble Bombay High Court had vide its Order dated July 4, 2014 granted its approval for the Reduction of Capital. The Certified copy of the Order has already been filed with the Registrar of Companies, Mumbai, Maharashtra for registration. The Registrar of Companies, Mumbai vide Order dated September 3, 2014, registered the said Order. The Reduction of Capital (in terms of the CDR Package) was effected in the Books of Accounts of the Company w.e.f. September 3, 2014. Trading in respect of the reduced equity share capital comprising of 61,22,60,268 equity shares with the reduced face value and paid up value of Re. 1/- per share, had commenced on BSE Ltd. w.e.f. December 29, 2014.

MATERIAL CHANGES

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year of the Company i.e. 31 March 2015 and the date of Directors' Report i.e. 13th August, 2015.

Further, there were no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future.

SHARE CAPITAL AND LISTING OF SHARES

The Company's shares are listed on BSE Limited and are actively traded.

Consequent to the Reduction in Share Capital during the financial year, the paid-up share capital of the Company is Rs.61,22,60,268/- comprising of 61,22,60,268 equity shares of Re.1/- each.

DIVIDEND

As on 31.03.2015, the Company had accumulated losses. Your Directors, therefore, have not recommended any dividend for the financial year 2014-15.

TRANSFER TO RESERVES

During the year under review, no amount has been transferred to reserves.

FIXED DEPOSITS

Your Company has not accepted / renewed any deposits within the meaning of Section 73 of the Companies Act, 2013 and as such, no amount of principal or interest was outstanding as on the Balance Sheet date.

HUMAN RESOURCE (HR) DEVELOPMENT

Human Resource Development is considered to be vital in any organisation for the effective implementation of its business plans. Constant endeavors' are being made by the Company through various HR policies and processes aimed for professional growth and opportunities and recognitions of the employees in order to effectively motivate the employees at all levels in the drive for growth and expansion of the business. Regular innovative programs for learning and development are also drawn up constantly in order to create an encouraging and conducive work environment for empowering the employees at all levels and maintaining a well structured reward and recognition mechanism. The Company encourages its employees to strengthen their entrepreneurial skills in order to enhance the Organization's productivity and creativity.

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

The Company, being in the telecommunications sector is not involved in carrying on any manufacturing activity; accordingly, the information required under Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 with respect to Conservation of Energy, Technology Absorption and Foreign Exchange earnings/outgo are not applicable.

However, the following information would give adequate idea of the continuous efforts made by the Company in this regard:

(i) Energy Conservation:

(a) Electricity is used for the working of the Company's telephone exchanges and other network infrastructure equipment. The Company regularly reviews power consumption patterns across its network and implements requisite changes in the network or processes in order to optimize power consumption and thereby achieve cost savings.

(b) Reduction in the running of the Diesel Generator (DG) Sets during power cuts in its various tower sites.

(ii) Technology Absorption: The Company has not imported any technology. The Company has not yet established separate Research & Development facilities.

FOREIGN EXCHANGE EARNINGS AND OUTGO:

During the year, there were no foreign exchange earnings; the total foreign exchange outgo was to the tune of Rs. 1.94 millions, which was on account of finance charges and travel expenses.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is appended as Annexure-5 to the Board's Report.

The Company does not have any employee whose particulars are required to be furnished under Section 197 of the Companies Act, 2013, read with Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

The remuneration paid to all Key Managerial Personnel is in accordance with remuneration policy adopted by the company.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The details in respect of internal financial control and their adequacy are included in the Management Discussion & Analysis, which forms part of this report.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has formulated and published a Whistle Blower Policy to provide Vigil Mechanism for employees including Directors of the Company to report genuine concerns. The provisions of this policy are in line with the provisions of Section 177(9) of the Act and the revised Clause 49 of the Listing Agreement with Stock Exchange (URL: http://www.connectzone.in/corporate_governance.php)

EXTRACT OF ANNUAL RETURN

Pursuant to Section 92 of the Act and Rule 12 of The Companies (Management and Administration) Rules, 2014, the extract of Annual Return in Form MGT-9, is provided in Annexure-1 which forms part of this report.

RELATED PARTY TRANSACTIONS

In line with the requirements of the Act and the Listing Agreement, the Company has formulated a Policy on Related Party Transactions and the same is posted on the Company's website (URL: http:// www.connectzone.in/corporate_governance.php).

Information on transaction with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Annexure-3 in Form AOC-2 and the same forms part of this report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The particulars of loans, guarantees and investments pursuant to Section 186 of the Companies Act, 2013 are provided in Notes no. 3, 11 and 25 respectively to the the financial statements.

BOARD EVALUATION

The board of directors has carried out an annual evaluation of its own performance, Board committees and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by Securities and Exchange Board of India ("SEBI") under Clause 49 of the Listing Agreement.

The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc. The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.

The Board and the Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, 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 into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

The Company proactively keeps its Directors informed of the activities of the Company, its management and operations and provides an overall industry perspective as well as issues being faced by the industry. The familiarization programme adopted by the Company is posted on the website of the Company. (URL: http://www.connectzone.in/corporate_governance.php).

REMUNERATION POLICY FOR THE DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES

In terms of the provisions of Section 178(3) of the Act and Clause 49(IV) (B)(1) of the Listing Agreement, the Nomination & Remuneration Committee (NRC) is responsible for formulating the criteria for determining qualification, positive attributes and independence of a Director. The NRC is also responsible for recommending to the Board a policy relating to the remuneration of the Directors, Key Managerial Personnel and other employees.

In line with this requirement, the Board has adopted the Policy relating to the remuneration of the Directors, Key Managerial Personnel and other employees and the same has been disclosed in the Corporate Governance Report, which forms part of the Directors' Report. The same is also available on the Company's website (URL: http://www.connectzone.in/corporate_governance.php).

NUMBER OF MEETING OF THE BOARD

Six Meetings of the Board were held during the year. For details of the meetings of the Board, refer to the Corporate Governance Report, which forms part of this report.

THE DETAILS OF DIRECTORS WHO WERE APPOINTED OR HAVE RESIGNED DURING THE YEAR

Pursuant to the provisions of Section 149 of the Companies Act, 2013, Mr. Rahul Amarnath Sethi and Mr. Babu Mohanlal Panchal were appointed as Independent Directors to hold Office of Director upto a term of five consecutive years from the date of 67th Annual General meeting held on September 30, 2014. Further, Ms. Mitu Mehrotra Goel was appointed as Director liable to retire by rotation at the Annual General Meeting of the Company held on September 30, 2014.

Subsequently, in order to further comply with the new requirements of the provisions of Section 149 of the Companies Act, 2013 and the provisions of Clause 49 of the Listing Agreement and so as to ensure optimum composition of Independent Directors on various committees, the Board of Directors thought it fit to appoint Mr. Vinay Kumar Monga as Independent Director for a period of 5 years. Accordingly, the Board of Directors of the Company at its meeting held on 17th October, 2014, have made to continue the appointment of Mr. Vinay Kumar Monga as Independent Director to hold Office upto a term of 5 consecutive years from 17th October, 2014, not liable to retire by rotation. The terms and conditions of appointment of Independent Directors are as per Schedule IV of the Act. He has submitted a declaration that he meets the criteria of Independence as provided in Section 149(6) of the Act and there has been no change in circumstances which may affect his status as Independent Director during the year.

The Company has also received a notice in writing along with requisite deposit, from a member under Section 160 of the Companies Act, 2013, signifying its intention to propose candidature of Mr. Vinay Kumar Monga for confirmation/appointment to the Office of Director of the Company as an Independent Director. On the recommendation of the Nomination & Remuneration Committee, your Directors recommend the confirmation/appointment of Mr. Vinay Kumar Monga as an Independent Director at the ensuing Annual General Meeting, on the board upto a term of five consecutive years w.e.f. October 17, 2014, not liable to retire by rotation.

In terms of the provisions of Section 152 (6) of the Companies Act, 2013 and the Rules made there under, Ms. Mitu Mehrotra Goel, Director retires by rotation and being eligible, has offered, herself for re-appointment. The Board recommends her re-appointment at the ensuing Annual General Meeting.

A brief profile of Directors seeking confirmation/appointment, nature of expertise in specific functional area, name of other companies in which he/she holds Directorship(s) and Membership(s)/ Chairmanship(s) of the Committees of the Board of Directors and the particulars of the shareholding as stipulated under Clause 49 of the Listing Agreement entered with the Stock Exchange forms part of the Notice.

IDBI Bank Limited has with effect from April 21, 2014 nominated Mr. Rajiv Kumar as its Nominee Director in the Board in place of Mr. Viney Kumar. Further, Mr. Yatinder Vir Singh retired by rotation at the 67th Annual General Meeting held on September 30, 2014 since not offered himself for re-appointment.

During the year, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company.

THE DETAILS OF KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVE RESIGNED DURING THE YEAR

a. Changes in Key Managerial Personnel during the period 1st April, 2014 to 31st March, 2015

- Pursuant to the provisions of Section 196, 197 and 203 read with Schedule V of the Companies Act, 2013, Mr. Kapil Bhalla was re-appointed as Manager of the Company for a further period of three years w.e.f. January 31, 2015 to January 30, 2018 on such terms and conditions as approved by the Shareholders of the Company at the Annual General Meeting of the Company held on September 30, 2014.

- Mr. Suniljit Singh, Chief Financial Officer of the Company had resigned and ceased to be Chief Financial Officer of the Company w.e.f. 14th November, 2014.

- Mr. Ashu Ratan Khare was appointed as Chief Financial Officer of the Company in place of Mr. Suniljit Singh w.e.f. 14th November, 2014.

b. Changes in Key Managerial Personnel during the period 1st April, 2015 till the date of signing of Board's Report

- Mr. Ashu Ratan Khare had resigned and ceased to be Chief Financial Officer of the Company w.e.f. 15th April, 2015.

- Mr. Munish Bansal was appointed as Chief Financial Officer of the Company in place of Mr. Ashu Ratan Khare w.e.f. 30th April, 2015.

- Mr. Kapil Bhalla, Company Secretary and Manager u/s 2(53) of the Company had resigned and ceased to be Company Secretary and Manager w.e.f. 23rd June, 2015.

- Mr. Amit Verma was appointed as Company Secretary of the Company in place of Mr. Kapil Bhalla w.e.f. 1st July, 2015.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declarations from all Independent Directors of the Company confirming that they meet with the criteria of independence, as prescribed under section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The Independent Directors have also confirmed that they have complied with the company's code of conduct.

AUDITORS

Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Rules framed thereunder, the Company had, on 30th September, 2014, appointed M/s Khandelwal Jain & Co., Chartered Accountants (Firm Registration No.105049W), as Statutory Auditors of the Company for a period of 5 years from the conclusion of the Sixty Seventh (67th) Annual General Meeting of the Company upto the conclusion of Seventy Second (72nd) Annual General Meeting of the Company.

As per the provisions of Rule 3(7) of the Companies (Audit and Auditors) Rules, 2014, such appointment made by the company shall be subject to ratification in every Annual General Meeting upto the end of the tenure of appointment of the auditors.

M/s. Khandelwal Jain & Co., Chartered Accountants, Mumbai have confirmed their eligibility in terms of the provisions of Section 141 of the Companies Act, 2013 and Rule 4 of Companies (Audit and Auditors) Rules, 2014.

The Board recommends the ratification of the appointment of M/s. Khandelwal Jain & Co., Chartered Accountants, Mumbai from the conclusion of this meeting i.e. 68th Annual General Meeting until the conclusion of 72nd Annual General Meeting (subject to ratification by the Members at every subsequent meeting) on such remuneration as shall be fixed by the Board of Directors of the Company.

COST AUDITOR

The Central Government had directed vide its order no.52/26/CAB- 2010 dated 6th November, 2012 to conduct a Cost Audit in respect of the specified products viz., Telecommunication Industry.

The Board of Directors of the Company has accorded its approval for the appointment of M/s Sanjay Gupta & Associates, Cost Accountants, New Delhi as Cost Auditors for the Financial Year 2015-16, as the Cost Auditor of the Company, to conduct audit of the Cost Accounting Records maintained by the Company for the financial year commencing on 1st April, 2015 and ending on 31st March, 2016, subject to the approval of the Central Government.

In accordance with the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Audit & Auditors) Rules, 2014, the remuneration payable to the Cost Auditor has to be ratified by the members of the Company. Accordingly, consent of the Members is sought by way of an Ordinary Resolution for ratification of the remuneration amounting to Rs. 1,00,000/- (Rupees One Lac Only) plus applicable service tax and out of pocket expenses payable to the Cost Auditors for financial year commencing on 1st April, 2015.

In compliance with the provisions of the Companies (Cost Audit Report) Rules, 2011 and General Circular No. 15/2011 issued by Government of India, Ministry of Corporate Affairs, Cost Audit Branch, we hereby submit that, the Company has fled the Cost Audit Report for the financial year ended on 31st March, 2014 on 30th September, 2014. As regards, to the financial year ended on 31st March, 2015, the due date for fling the Cost Audit Report is 27th September, 2015 and the Company shall file the same on or before due date.

In terms of Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014, the Company has appointed M/s Sanjay Gupta & Associates, Cost Accountants, New Delhi as Cost Auditors for the Financial Year 2015-16.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Dinesh Bhandhari (CP No.:10300, FCS: 5887), Practicing Company Secretary to undertake the secretarial audit of the company. The Practicing Company Secretary has submitted the report on the Secretarial Audit conducted by him which is annexed to this Board Report as Annexure-4. In connection with the auditor's observation in the report, it is clarified that the non-fling of Form CHG-1 in relation to creation of charge on assets of the Company is mere accidental omission due to inadvertence. The Company is in process of fling of Form CHG-1 with ROC.

INTERNAL AUDITORS

M/s Ernst and Young performs the duties of internal auditors of the Company and their report is reviewed by the Audit Committee from time to time.

CASH FLOW STATEMENT

As per the requirements of Clause 32 of the Listing Agreement with the Stock Exchange, the Cash Flow Statement as prepared in accordance with the Accounting Standard on Cash Flow Statement (AS 3) issued by the Institute of Chartered Accountants of India, is given along with the Balance Sheet and Statement of Profit and Loss.

AUDIT COMMITTEE

In compliance with the provisions of Section 177 of the Companies Act 2013 and Clause 49 of the Listing Agreement, the Company has constituted an Audit Committee. The composition, scope and powers of the Audit Committee together with details of meetings held during the year under review, forms part of the Corporate Governance Report.

The recommendations of the Audit Committee are accepted by the Board.

RISK MANAGEMENT POLICY

The Company has a robust Risk Management policy to identify, evaluate business risks and opportunities. This policy seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company's competitive advantage. The policy defines the risk management approach across the organization at various levels including documentation and reporting. The Company has identified various risks and also has mitigation plans for each risk identified.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the provisions of Section 205A and 205C of the Companies Act, 1956, the Company has transferred an amount of Rs.10,86,059/- which was credited by the Oriental Bank of Commerce, Mumbai towards unpaid / unclaimed deposits / interest credited by the Bank on matured deposits into the Escrow Account to the Investor Education and Protection Fund ("IEPF") established by the Central Government. Members are requested to note that upon transfer, no claims shall lie against the Company or the IEPF in respect of any amounts which remained unclaimed/unpaid for a period of seven years from the dates they first became due for payment and no payment shall be made in respect of any such claims.

As of March 31, 2015, there was no Unclaimed Dividend due for transfer to the Investor Education and Protection Fund (IEPF) of the Central Government, after the expiry of seven years.

SUBSIDIARY COMPANIES

As on March 31, 2015, the Company has a wholly owned subsidiary, namely, Infotel Tower Infrastructure Private Limited, which carries on the business of manpower outsourcing and trading activities related to telecommunication operations.

Quadrant Telenet Services Private Limited was incorporated as Subsidiary of the Company on March 30, 2015 to undertake the business of Telecommunications, Internet Services, Telecom Infrastructures and other related telecom services.

Videocon Mobile & Infra Private Limited (formerly Connect Teleinfra Private Limited) was incorporated as Subsidiary Company of Infotel Tower Infrastructure Private Limited on March 27, 2015 to undertake the business of Telecommunications, Internet Services, Telecom Infrastructures and other related telecom services. Hence, Videocon Mobile & Infra Private Limited becomes step down subsidiary company of the Company.

After the Balance Sheet date on May 30, 2015, the Company disinvested its stake in its wholly owned subsidiary, namely, Infotel Tower Infrastructure Private Limited. Accordingly, M/s Infotel Tower Infrastructure Private Limited is ceased to be a subsidiary company of the Company w.e.f. May 30, 2015, consequently, M/s Videocon Mobile & Infra Private Limited also ceased to be a step down subsidiary company of the Company.

As on the date of signing of this Report, the Company is having only one subsidiary, namely, Quadrant Telenet Services Private Limited.

Pursuant to the provision of Section 129(3) of the Companies Act, 2013, a statement containing salient features of the financial statements of the Company's subsidiaries in Form AOC-1 is attached as Annexure-2 to the financial statement of the Company.

Pursuant to the provisions of Section 136 of the Companies Act, 2013, the financial statements of the Company, Consolidated financial statements alongwith relevant documents and separate audited accounts in respect of subsidiaries, are available on the website of the Company.

Annual accounts of the subsidiary company, along with related information are available for inspection at the Company's registered Office and the registered Office of the respective subsidiary company. Copies of the annual accounts of the subsidiary company will also be made available to the shareholders - upon request.

JOINT VENTURES/ASSOCIATE COMPANIES

As of March 31, 2015, there are no Joint Ventures / Associate Companies of the Company.

CONSOLIDATED FINANCIAL STATEMENTS

In compliance with Clause 32 of the Listing Agreement, the consolidated financial statement prepared in accordance with the Accounting Standard AS-21 read with Accounting Standard AS- 23 on Accounting for Investments in Associates, your Directors have pleasure in presenting the Consolidated Financial Statements together with Auditors Report thereon forms part of the Annual Report.

AUDITORS' REPORT

The Statutory Auditors of the Company, M/s Khandelwal Jain & Co., Chartered Accountants, have submitted the Auditors' Report which has observation on Standalone and Consolidated Financial Statements for the period ended March 31, 2015.

MANAGEMENT'S EXPLANATION TO THE AUDITORS' OBSERVATIONS: -

A) Auditors' Observation in the Standalone Auditor's Report & Annexure to the Auditor's Report

1. Point No.5 of the Auditor's Report which summarises the basis of Emphasis of Matter "We draw attention to Note No.28 to the Financial Statements, the Company has incurred a net loss of Rs.2,398,930,498/- during the year, the accumulated losses as at March 31, 2015 amounted to Rs.16,290,302,925/- resulting in erosion of its net worth and has net current liabilities of Rs.11,325,415,028/- as at March 31, 2015. These factors raise a doubt that the Company will not be able to continue as a going concern. The management is confident of generating cash flows from business operations through increasing subscribers base and with the support of significant shareholders to fund its operating and capital fund requirements. Accordingly, these statements have been prepared on a going concern basis. Our opinion is not qualified in respect of this matter."

2. Point No. VIII of the Annexure to Auditor's Report "The accumulated losses of the Company are more than fifty percent of its net worth at the end of the financial year. The Company has incurred cash loss during the financial year and also in the immediately preceding financial year.

Management's Explanations to the Auditor's Observations 1 and 2

The accumulated losses of the Company as at March 31, 2015 are more than fifty percent of its networth as at that date. The losses are due to declining market of the fixed line business and high operating costs. The management is confident of generating cash flows from business operations through increasing subscribers' base and other value added services and reducing losses gradually. Further with the support of significant shareholders to fund its operating and capital expenditure. Management is confident of meeting its funds requirement.

B) Auditors' Observation in the Consolidated Auditor's Report & Annexure to the Auditor's Report

5(a) In case of Holding Company we draw attention to Note No. 29(a) to the financial statements, the Company has incurred a net loss of Rs. 2,398,930,498/- during the year, the accumulated losses as at March 31, 2015 amounted to Rs. 16,290,302,925/- resulting in, the erosion of its net worth and has net current liabilities of Rs. 11,325,415,028/- as at March 31, 2015. These factors raise a doubt that the Company will not be able to continue as a going concern. The management is confident of generating cash flows from business operations through increasing subscribers' base and with the support of significant shareholders to fund its operating and capital fund requirements. Accordingly, these statements have been prepared on a going concern basis. Our opinion is not qualified in respect of this matter.

5(b) In case of subsidiary Company ITIPL, We draw attention to Note 29(b) to the financial statements. The Company has incurred a loss of Rs. 7,693,049 during the year (accumulated loss of Rs. 33,132,939) resulting into erosion of its net worth as at March 31, 2015. These factors raise a doubt that the Company will not be able to continue as a going concern. The management is confident of generating cash flows and meeting its capital fund requirement. Accordingly, these statements have been prepared on a going concern basis. Our opinion is not qualified in respect of this matter.

Management's Explanations to the Auditor's Observations 5(a) and 5(b)

In Consolidated terms, the company has incurred net loss of Rs. 2,406,623,553/- during the year and the accumulated losses as at March 31, 2015, amounted to Rs. 16,323,522,120/- resulting in, the erosion of its netwoth and has net current liabilities of Rs. 11,355,217,330/- as at March 31,2015.

The accumulated losses of the Company as at March 31, 2015, in consolidated terms are more than fifty percent of its networth as at that date. The losses are due to declining market of the fixed line business and high operating costs. The management is confident of generating cash flows from business operations through increasing subscribers' base and other value added services and reducing losses gradually. Further with the support of significant shareholders to fund its operating and capital expenditure, Management is confident of meeting funds requirement.

PREVENTION OF SEXUAL HARASSMENT POLICY

The Company has in place a Prevention of Sexual Harassment policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

POLICY ON PREVENTION OF INSIDER TRADING

Pursuant to SEBI (Prohibition of Insider Trading) Regulations, 2015, the Company has framed a) Code of Internal Procedures and Conduct for Regulating, Monitoring and Reporting of Trading by Insiders and b) Code of Fair Disclosure. The Company's Code, inter alia, prohibits purchase and/or sale of shares of the Company by an insider, while in possession of unpublished price sensitive information in relation to the Company and also during certain prohibited periods.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance. The detail report on Corporate Governance, Management Discussion and Analysis Report as well as Corporate Governance Compliance Certificate are attached pursuant to the requirements of clause 49 of the listing agreement and form part of this Annual Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134 of the Act, the Directors state that:

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

(b) The Directors had selected such accounting policies and applied consistently and have 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 and loss of the Company for that period;

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

(d) The Directors had prepared the annual accounts on a going concern basis;

(e) The Directors had laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and were operating effectively;

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

ACKNOWLEDGEMENTS

Your Directors wish to express their gratitude for the wholehearted support received throughout the year from the Department of Telecommunications, Financial Institutions, Banks, Lenders and the various Central and State Government Departments, Business Associates, Shareholders and Subscribers.

The Directors also extend their appreciation to the employees for their continuing support and unstinting efforts in ensuring an excellent all-round operational performance.

For and on behalf of the Board of Directors

Mitu Mehrotra Goel Vinay Kumar Monga

Director Director

(DIN: 05188846) (DIN: 03029345)

Place: Mohali

Date: August 13, 2015


Mar 31, 2014

Dear Shareholders,

The Directors are pleased to present the 67th (Sixty Seventh) Annual Report on the business and operations of your Company with the Audited Financial Statements for the year ended 31st March, 2014.

SUMMARY OF FINANCIAL RESULTS

The Company''s financial results for the year ended 31st March, 2014 is summarized below:

(Rs. in millions)

Particulars For the year For the year ended ended March 31, 2014 March 31, 2013

I. Revenue from operations 4059.95 3295.65

II. Other Income 29.44 27.78

III. Total Income(I II) 4089.39 3323.43

IV. Expenses

Networks operation Expenditure 3784.12 2189.17

Employee Benefits Expenses 688.30 483.32

Sales & Marketing Expenditure 281.01 166.65

Finance Cost 273.00 280.62

Depreciation and Amortization 1267.80 1218.27

Expenses

Other Expenses 406.76 342.22

Total Expenses 6701.00 4680.26

V. Profit before exceptional and (2611.61) (1356.82)

extraordinary items and tax (III-IV)

VI. Exceptional Item - -

VII. Profit before extraordinary items and (2611.61) (1356.82) tax (V-VI)

VIII. Extraordinary items - -

IX. Profit before tax (VII-VIII) (2611.61) (1356.82)

X. Tax expenses - -

(1) Current Tax

(2) Deferred Tax

XI. Profit (Loss) for the period from (2611.61) 1356.82) continuing operations (IX-X)

XII. Profit/(Loss) from discontinuing - - operations

XIII. Tax expenses of discontinuing - - operations

XIV. Profit/(Loss) from Discontinuing - -

operations (after tax)(XII-XIII)

XV. Profit /(Loss) for the period (XI-XIV) (2611.61) (1356.82)

The Company registered revenue increased by 23% from Rs 3295.65 million in 2012-13 to Rs 4059.95 million in 2013-14. The total expenses during 2013-14 increased to Rs.6701.00 million as against Rs. 4680.26 million in the previous year due to an increase in the interconnect costs and network operation costs.

Consequently, operating loss increased from Rs.1,356.82 million during 2012-13 to Rs. 2611.61 million during the year ended 31.03.2014.

BUSINESS OPERATIONS

Your Company holds Unifi ed Access Services License (UAS License) for providing Telephony Services in the Punjab Telecom Service Area comprising of the state of Punjab, Union Territory of Chandigarh and Panchkula Town of Haryana. The Company is a Category -B (Punjab Circle) ISP

Licensee and offers a broad range of internet related services including Digital Subscriber Lines ("DSL") leased lines and dial-up internet access. The ISP Licence is valid till June 2015 and Company has applied for renewal / issuance of new ISP Licence (Category - A) for expanding its services.

As of March 31, 2014 i.e. at the end of fourth year of operations of GSM Mobile Services – the GSM Subscriber base touched 16,33,655 (Previous Year 13,76,202)

The Portfolio of services provided by the Company includes Data and Internet Connectivity across wireline technology, Fixed Line and Mobile voice services, Managed Services. The company has also launched its post-paid services in the GSM Mobile Segment this year.

The Company provides broadband services through its fi ber optic cable laid across Punjab and the Company has also entered into co-location agreements with other operators in order to expand its network.

As on March 31, 2014, the Fixed Voice (Landline) Subscriber Base touched 2,12,798 (previous year 1,87,944), Broadband DSL subscriber base touched 1,40,600 (previous Year 1,19,879) witnessing a growth of about 16%;the CDMA Mobile Services Segment subscriber base however decreased to 3,069 subscribers (previous year 17,456) as the CDMA Subscribers continued to shift to the GSM Services Segment of the company by using the Mobile Number Portability (MNP) option.

MARKETING INITIATIVES

During the year, various marketing initiatives were taken in order to enhance the brand visibility through various programs such as Young Manch Contest, Connect Super Jodi Contest etc, in order to connect to and reach out to a larger segment of the populace especially the younger segment of society.

CORPORATE DEBT RESTRUCTURING SCHEME (CDR SCHEME)

Restructuring of Liabilities:

The Corporate Debt Restructuring Cell (CDR Cell) had vide its letter no. CDR(JCP) 563/2009-10 dated August 13, 2009 approved a Corporate Debt Restructuring Package (CDR Package) for the company, in order to write off the losses and also to enable the company to service its debts. As of March 31, 2014, the company has duly complied with the terms and conditions as stipulated in the CDR Package except for the ''Reduction of Capital'', the status of which is as under:

Reduction of Share Capital:

As per the CDR Package the Issued, Subscribed and Paid up Equity Share Capital of the Company was to be reduced by 90% i.e. from Rs. 612.26 Crores to Rs. 61.23 Crores by extinguishing/ canceling Rs.9/- per equity share out of each equity share of Rs. 10/- each fully paid up, in order to write- off the accumulated losses of the company.

Pursuant to the approval by BSE vide its letter dated October 23, 2013, the company had fi led the Petition for Reduction of Equity Share Capital with the Hon''ble Bombay High Court. Hon''ble Bombay High Court has vide its Order dated July 4, 2014 granted its approval for the proposed Reduction of Capital. Certifi ed copy of the Order has been fi led with the Registrar of Companies, Mumbai, Maharashtra, for registration. The reduction of capital would become effective from the date of registration of the Court Order by the Registrar of Companies, Mumbai, Maharashtra.

SHARE CAPIAL

During the year ended March 31, 2014, there was no change in issued, subscribed and paid up equity share capital of the company which stood at Rs. 6,12,26,02,680/- comprising of 61,22,60,268 equity shares of Rs.10/- each, fully paid up. However, as detailed above in the paragraph pertaining to ''Corporate Debt Restructuring Scheme'', the company had fi led a Petition for Reduction of Capital and the Hon''ble Bombay High Court has vide its Order dated July 4, 2014 granted its approval for the Reduction of paid up Equity Share Capital. The reduction would become effective from the date of registration of the said Order by the Registrar of Companies, Mumbai, Maharashtra.

LISTING

The equity shares of your Compnay are listed on BSE Limited.

DIVIDEND

As on March, 31, 2014, the Company had accumulated losses. Your Directors, therefore, have not recommended any dividend for the fi nancial year 2013-14.

TRANSFER TO RESERVES

During the year under review, no amount has been transferred to reserves.

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

The Company,being in the telecommunications sector is not involved in carrying on any manufacturing activity; accordingly, the information required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, as amended,relating to Conservation of Energy are not applicable.

However, the following information would give adequate idea of the continuous efforts made by the Company in this regard:

(i) Energy Conservation:

(a) Electricity is used for the working of the Company''s telephone exchanges and other network infrastructure equipment. The Company regularly reviews power consumption patterns across its network and implements requisite changes in the network or processes in order to optimize power consumption and thereby achieve cost savings.

(b) Reduction in the running of the Diesel Generator (DG) Sets during power cuts it its various tower sites.

(ii) Technology Absorption: The Company has not imported any technology. The Company has not yet established separate Research & Development facilities.

(iii) Foreign Exchange Earnings and Outgo: During the year, there were no foreign exchange earnings; the total foreign exchange outgo was to the tune of Rs. 32.70 millions, which was on account of fi nance charges and travel expenses.

DIRECTORS

As of March 31, 2014, there was no change in the Directors of the Company. However, IDBI Bank Ltd has w.e.f. April 21, 2014 nominated Mr. Rajeev Kumar as its Nominee Director on the Board in place of Mr. Viney Kumar. Your directors welcome Mr. Rajeev Kumar on his appointment and place on record their sincere appreciation for the contribution made by Mr. Viney Kumar during his tenure as Director.

Pursuant to the provisions of section 152 of the Companies Act, 2013 and in terms of the Articles of Association of the Company, Mr. Rahul Amarnath Sethi and Mr. Yatinder Vir Singh, Directors of the Company, are liable to retire by rotation at the ensuing Annual General Meeting and being eligible Mr. Rahul Amarnath Sethi has offered himself for appointment as Director.

The Company has received due notice under Section 160 of the Companies Act, 2013 proposing the candidature of Ms. Mitu Mehrotra Goel for appointment as director liable to retire by rotation, in place of Mr. Yatinder Vir Singh. On the recommendation of the Nomination and Remuneration Committee, your Directors recommend the appointment of Ms. Mitu Mehrotra Goel in place of Mr. Yatinder Vir Singh.

In terms of the provisions of Section 160, the Company has received requisite notice(s) in writing from members proposing the names of Mr. Rahul Amarnath Sethi and Mr. Babu Mohanlal Panchal, for being appointed as Independent Directors to hold Office for a term of five consecutive years from the date of 67th Annual General Meeting, in terms of the provisions of Section 149 and other applicable provisions of the Companies Act, 2013.

The Company has received declarations from Mr. Rahul Amarnath Sethi and Mr. Babu Mohanlal Panchal confi rming that they meet the criteria of Independence as prescribed under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

On the recommendation of the Nomination and Remuneration Committee, your Directors recommend the appointment of Mr. Rahul Amarnath Sethi and Mr. Babu Mohanlal Panchal as Independent Directors on the Board for a term of five consecutive years from the date of the ensuing 67th Annual General Meeting and they shall not be liable to retire by rotation.

Annexure giving the brief profi le of each of the directors proposed to be appointed, giving their details and specifying their expertise in the specifi c functional areas as well as the public companies in which they hold Directorship(s) and/ or Committee membership(s), is annexed to the Notice and forms part thereof.

AUDITORS

M/s. Khandelwal Jain & Co., Chartered Accountants (Firm Registration No. 105049W) were appointed as the Statutory Auditors of the Company in the last Annual General Meeting and hold Office upto the conclusion of the forthcoming Annual General Meeting.

In terms of the provisions of Section 139 of the newly enacted Companies Act, 2013, a listed company can appoint or re- appoint an audit fi rm as auditor for a maximum of two terms of five consecutive years, each. Further, in terms of Rule 6 of Companies (Audit and Auditors) Rules 2014, the term for which the Auditors have already acted as Auditors (prior to the commencement of the Companies Act, 2013) shall also be taken into account for calculating the maximum period of ten consecutive years. Since M/s Khandelwal Jain & Co. have been the Auditors of the Company for a period of only four years (since their appointment in 2010) they are eligible to be appointed for a further 6 years;

M/s Khandelwal Jain & Co., have confi rmed their willingness and eligibility for re-appointment as statutory auditors under Section 141 of the Companies Act, 2013 (Act). The Audit Committee has recommended their re-appointment as Auditors for a further term of 5 consecutive years.

Your directors therefore recommend the re-appointment of M/s Khandelwal Jain & Co., Chartered Accountants, as the Auditors of the Company for a further term of 5 consecutive years i.e. from the conclusion of the 67th Annual General Meeting until the conclusion of the 72nd Annual General Meeting, subject to ratifi cation by the members in every annual general meeting, as required under section 139 of the Act.

Your directors therefore recommend the approval of the proposed resolution for appointment of M/s Khandelwal Jain & Co., Chartered Accountants, as Auditors for a period of five years.

COST AUDITOR

In compliance with the Cost Audit directions issued by the Ministry of Corporate Affairs (Cost Audit Branch) vide notifi cation no. Cost Audit No. F.No. 52/26/CAB-2010 dated May 2, 2011 and November 6, 2012; the Company has appointed M/s Sanjay Gupta & Associates, Cost Accountants New Delhi, as the Cost Auditor for the financial year 2014- 15; in accordance with the Companies Act, 2013 the Cost Auditor''s remuneration is to be ratifi ed in the Annual General Meeting. Your directors therefore recommend the approval of the Cost Auditor''s remuneration as proposed in the Notice of the Annual General Meeting. The Cost Audit report for the Financial Year ended March 31, 2013 was duly fi led on September 27, 2013. The cost audit report for the financial year ended March 31, 2014 will be fi led on or before the due date.

PARTICULARS OF EMPLOYEES

During the financial year 2013-14, there was no employee who was drawing remuneration in excess of the monetary ceiling in accordance with the revised provisions of Section 217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975.

CASH FLOW STATEMENT

The Cash Flow Statement for the financial year ended March 31, 2014, in conformity with the provisions of clause 32 of the Listing Agreement, is annexed hereto.

AUDIT COMMITTEE

In compliance with the provisions of Section 177 of the Companies Act 2013 and Clause 49 of the Listing Agreement, the Company has constituted an Audit Committee. The composition, scope and powers of the Audit Committee together with details of meetings held during the year under review, forms part of the Corporate Governance Report.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

As of March 31, 2014, there was no Unclaimed Dividend due for transfer to the Investor Education and Protection Fund (IEPF) of the Central Government, after the expiry of seven years.

SUBSIDIARY

As on March 31, 2014, the Company has a wholly owned subsidiary, namely, Infotel Tower Infrastructure Private Limited, which carries on the business of manpower outsourcing and trading activities related to telecommunication operations. Information on the Subsidiary in terms of the provisions of Section 212 of the Companies Act, 1956 is annexed and forms part of this Report as Annexure-I.

Pursuant to the General Circular No. 2/2011 dated February 8, 2011 issued by the Ministry of Corporate Affairs, Government of India, the Board of Directors have consented for not attaching the balance sheet, statement of profit & loss and other documents as set out in section 212(1) of the Companies Act, 1956 in respect of the subsidiary company for the year ended March 31, 2014.

Annual accounts of the subsidiary company, along with related information are available for inspection at the Company''s registered Office and the registered Office of the subsidiary company. Copies of the annual accounts of the subsidiary company will also be made available to the shareholders - upon request.

The statement pursuant to the above referred circular has been annexed as part of the Notes to Consolidated Accounts of the Company.

CONSOLIDATED FINANCIAL STATEMENTS

In compliance with Clause 32 of the Listing Agreement, the consolidated financial statement prepared in accordance with the Accounting Standard AS-21 read with Accounting Standard AS-23 on Accounting for Investments in Associates, your Directors have pleasure in presenting the Consolidated Financial Statements together with Auditors Report thereon forms part of the Annual Report.

FIXED DEPOSITS

The Company has not accepted / renewed any deposits from the public under section 58A of the Companies Act, 1956 during the year.

AUDITORS'' REPORT

The Statutory Auditors of the Company, M/s Khandelwal Jain & Co., Chartered Accountants, have submitted the Auditors'' Report which have certain qualifi cations on Standalone and Consolidated Financial Statements for the period ended March 31, 2014.

MANAGEMENT''S EXPLANATION TO THE AUDITORS'' OBSERVATIONS:

Auditors'' Observation

1. Point no. 4 of the Auditors Report which summarises the basis of qualifi ed opinion "As mentioned in Note 27(8)(a) to the Financial Statements, based on Company`s request, Corporate Debt Restructuring (CDR) cell vide their letter dated August 13, 2009 (CDR letter) has revised the terms of CDR scheme with effect from April 1, 2009. The Company has accounted for the impact of revised CDR scheme as approved by CDR Cell after complying with most of the terms and conditions stipulated therein, however compliance of the some of them is still in process. These financial statements do not include any adjustment which may arise due to inability of the management to fulfi ll the remaining conditions precedent."

Management''s Explanation

Except for the Reduction of Capital, the Company had given effect to all the terms and conditions of the revised Corporate Debt Restructuring (CDR) Scheme. As of March 31, 2014, Compliance of the condition with regard to reduction of Issued, Subscribed and Paid-up Equity Share Capital of the Company was under process. The Company had fi led the petition for Reduction of Paid up Equity Capital and the same has been approved by the Hon''ble Bombay High Court vide its Order dated July 4, 2014. Certifi ed Copy of the Order has been fi led with the Registrar of Companies, Mumbai, Maharashtra and the reduction would become effective from the date of registration of the said Order by the Registrar of Companies. Impact of reduction of capital would be refl ected in the financials thereafter.

Auditors'' Observation

2. The accumulated loss of the Company as at March 31, 2014, is more than fi fty percent of its net worth as at that date. The Company has incurred cash loss during the period. In the immediately preceding fi nancial year also, the company had incurred cash loss.

Management''s Explanation

The accumulated losses of the Company as at March 31, 2014 are more than fi fty percent of its net worth as at that date. The management acknowledges the erosion of net worth as stated by the Auditors. The cash loss in the current year and cash profit in the previous year are matters of fact fl owing from the audited financial statements. The losses are due to declining market of the fi xed line business and high operating cost. The management is confi dent of generating cash fl ows from business operations through increasing subscribers base and other value added services.

CORPORATE GOVERNANCE

The Company is committed to maintaining the highest standards of Corporate Governance.

The detail report on Corporate Governance, Management Discussion and Analysis Report as well as Corporate Governance Compliance certificate are attached pursuant to the requirements of clause 49 of the listing agreement and form part of this Annual Report.

HUMAN RESOURCE (HR) DEVELOPMENT

Human Resource Development is considered to be vital in any organisation for the effective implementation of its business plans. Constant endeavors'' are being made by the Company through various HR policies and processes aimed for professional growth and opportunities and recognitions of the employees in order to effectively motivate the employees at all levels in the drive for growth and expansion of the business. Regular innovative programs for learning and development are also drawn up constantly in order to create an encouraging and conducive work environment for empowering the employees at all levels and maintaining a well structured reward and recognition mechanism. The

Company encourages its employees to strengthen their entrepreneurial skills in order to enhance the Organization''s productivity and creativity.

The Company has constituted a Grievance Redressal Committee (GRC) under the provisions of Section 4 of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The committee meets regularly to discuss if any complaint of sexual harassment have been lodged. However no instance of sexual harassment was observed during the period under review.

DIRECTORS'' RESPONSIBILITY STATEMENT

In terms of provisions of Section 217 (2AA) of the Companies Act, 1956, your Directors confi rm as under: -

(i) that in the preparation of the annual accounts for the financial year ended 31st March, 2014, the applicable accounting standards have been followed along with proper explanations for any material departures;

(ii) that the Directors have selected appropriate accounting policies and applied them consistently, made changes wherever required, disclosed the same in the financial statements wherever applicable and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2014 and of the loss incurred by the Company for the said period;

(iii) that proper and suffi cient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities and

(iv) that the Directors have prepared the accounts for the financial year ended 31st March, 2014 on a ''going concern'' basis.

ACKNOWLEDGEMENTS

Your Directors wish to express their gratitude for the wholehearted support received throughout the year from the Department of Telecommunications, Financial Institutions, Banks, Lenders and the various Central and State Government Departments, Business Associates, Shareholders and Subscribers.

Your Directors take this opportunity to put on record their sincere appreciation for the contribution made by the employees at all levels.

For and on behalf of the Board of Directors

Yatinder Vir Singh Rahul Sethi Director Director

Place : Mohali Date : August 9, 2014


Mar 31, 2013

To the Members of QUADRANT TELEVENTURES LIMITED

The Directors have pleasure in presenting the 66th (Sixty Sixth) Annual Report on the business and operations of the Company together with the Audited Financial Statements for the year ended 31st March, 2013 .

SUMMARY OF FINANCIAL RESULTS

The summarized Financial Results for the. year ended 31st March, 2013 are as under:

(Rs. in Millions)

Particulars For the year For the year ended ended March 31, March 31, 2013 2012

I. Revenue from operations 3358.37 2813.02

II. Other Income 27.78 15.89

III. Total Income(I II) 3386.15 2828.91

IV. Expenses

Network operation Expenditure 2189.17 2164.99

Employee Benefits Expenses 483.32 446.22

Sales & Marketing Expenditure 229.37 203.78

Finance Cost 280.62 281.18

Depreciation and Amortisation 1218.27 1201.71

Expenses

Other Expenses 342.22 322.63

4742.97 4620.51

V. Profit (Loss) before exceptional (1356.82) (1791.60) and extraordinary items and tax (III-IV)

VI. Exceptional Item - -

VII. Profit (Loss) before extraordinary (1356.82) (1791.60) items and tax (V-VT)

VIII. Extraordinary items - -

IX. Profit (Loss) before tax (VII-VIII) (1356.82) (1791.60)

X. Tax expenses (1) Current Tax - - (2) Deferred Tax - -

XI. Profit (Loss) for the period from (1356.82) (1791.60) continuing operations (IX-X)

XII. Profit/ (Loss) from - - discontinuing operations

XIII.Tax expenses of discontinuing - - operations

XIV. Profit/(Loss) from Discontinuing - - operations (after tax)(XII-XIII)

XV. Profit /(Loss) for the period (1356.82) (1791.60) (XI XIV)

PERFORMANCE

Your Company holds Unified Access Services License (UAS License) for providing Telephony Services in the Punjab

Telecom Service Area comprising of state of Punjab, Union Territory of Chandigarh and Panchkula Town of Haryana. Currently, the Company is providing GSM Mobile Services, Fixed Voice (Landline) services, DSL (Internet) services, Leased Line services and CDMA Mobile Services in the Punjab Telecom Service Area.

As of March 31,2013 i.e. at the end of third year of operations of GSM Mobile Services - the GSM Subscriber base touched 13,76,202 (Previous Year 13,21,225).

As on March 31, 2013, the Fixed Voice (Landline) Subscriber Base 1,87,944 (previous year 2,00,044 ), Broadband DSL subscriber base touched 1,19,879 (previous Year 1,15,538) witnessing a growth of about 4% and the CDMA Mobile Services Segment customer base stood at 17,456 subscribers (previous year 27,768) as CDMA Subscribers have opted to shift to the GSM Services Segment by using Mobile Number Portability (MNP) option.

The revenue from joperations increased by 19.38% from Rs.2,813.02 million in 2011-12 to Rs. 3,358.37 million in 2012-13. The total expenses during 2012-13 increased to Rs. 4,742.97 million as against Rs. 4,620.51 million in the previous year.

Loss during the year reduced from Rs. 1,791.60 million during 2011-12 to Rs. 1,356.82 million during the year 2012-13.

DIVIDEND

As on 31.03.2013, the Company had accumulated losses. Your Directors, therefore, have not recommended any dividend for the financial year 2012-13.''

TRANSFER TO RESERVES

During the year under review, no amount has been transferred to reserves.

CORPORATE DEBT RESTRUCTURING SCHEME (CDR SCHEME)

Restructuring of Liabilities:

(i) Issuance of Non Convertible Debentures

In accordance with the Corporate Debt Restructuring Scheme (CDR Scheme) approved by the Corporate Debt Restructuring Cell (CDR Cell) vide letter No. CDR (JCP) 563/2009-10 dated August 13, 2009 and the consequent approval of the shareholders, the Company has issued 31,969,088 Secured Non Convertible Debentures of Rs.100/- (Rupees One Hundred only) each, fully paid up, aggregating Rs. 319,69,08,800 to the Financial Institutions/Bank on January 21, 2013 by way of conversion of 50% of the outstanding debt.

(ii) Reduction of Share Capital:

In accordance With the terms and conditions of the Corporate Debt Restructuring Package (CDR Package) and consequent to the approval of the shareholders accorded at an Extra Ordinary General Meeting held on 18th July, 2012, the Company sought the approval from the Bombay Stock Exchange (BSE) for the proposed reduction of issued, subscribed and Paid up equity share capital of the Company by 90% i.e. from Rs. 612.26 Crores to Rs. 61.22 Crores by extinguishing/ cancelling Rs.9/- per equity share out of each equity share of Rs. 10/- each fully paid up (i.e. each equity share of Rs. 10/- each, fully paid up, would stand reduced to Rs. 1/- per share, fully paid up) in order to write off the accumulated losses to that extent as per the CDR Scheme. BSE, vide its letter dated January 14, 2013 issued its "No objection" under clause 24(f) of Listing Agreement for the proposed Scheme of Reduction allowing the Company '' to file the Petition with the Hon''ble High Court at Mumbai; however, before the Petition could be filed, the Securities & Exchange Board of India (SEBI) came out with a Circular No. CIR/CFD/DIL/5/2013 dated 4th February, 2013 revising the norms for restructuring/ reduction of share capital by Listed Companies viz. requiring the "designated Stock Exchange" to also seek- clearance from SEBI before giving clearance for any scheme of restructuring/ reduction and also seeking shareholders approval by way of Postal Ballot;

Accordingly, the Company again approached BSE for seeking clarification as to whether fresh approval would be required from shareholders for effecting Reduction of capital; pending clarifications from BSE, SEBI issued a further clarification vide No. CIR/CFD/DIL/8/2013 dated May 21, 2013 clarifying that shareholders'' approval by way of Postal Ballot would be required only in those'' cases where fresh equity was proposed to be allotted to the Promoters resulting in a change in the shareholding pattern.

Pursuant to the aforesaid clarification, the Company has now submitted fresh application to BSE (Designated Stock Exchange); the apprdval/ clearance from BSE is awaited where after the Company would be proceeding to file the" petition with the Hon''ble High Court, Mumbai .for seeking confirmatory orders for the reduction of equity share capital.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORBTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The Company, being a telecom service provider, does not carry on any manufacturing activity; accordingly, the information required under Section 217(l)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, as amended, relating to Conservation of Energy are not applicable. Nevertheless, the Company regularly take steps to conserve energy. During the year under review, the Company has not spent any amount on Research and Development and Technology Absorption.

During the year, there were no foreign exchange earnings; the total foreign exchange outgo was to the tune of Rs. 60.11 millions, which was on account of finance charges and travel expenses.

SHARE CAPITAL

During the year, there has been no change in the issued, subscribed and paid up equity share capital of the company which stood at Rs. 6,122,602,680 consisting of 612,260,268 equity shares of Rs.10/- each, fully paid up, as at March 31, 2013.

DIRECTORS

The Board of Directors comprises of five independent directors viz. Mr. Rahul Sethi, Mr. Babu Mohanlal Panchal, Mr. Viney Kumar (Nominee Director of IDBI Bank), Mr. Yatinder Vir Singh and Mr. Vinay Kumar Monga.

Further, in accordance with the provisions of Section 255 of the Companies Act, 1956 read with Article 104 and 105 of the Articles of Association of the Company, Mr. Vinay Kumar Monga and Mr. Babu Mohanlal Panchal are liable to retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

Your Directors recommend their reappointment at the forthcoming Annual General Meeting.

AUDITORS

The Statutory Auditors, M/s Khandelwal Jain & Co., - Chartered Accountants, New Delhi hold office till the conclusion of the ensuing Annual General Meeting of the Company and have confirmed their willingness and eligibility for re-appointment under section 224(1B) of the Companies Act, 1956. The Board of Directors recommend their re-appointment as Statutory Auditors for the financial year 2013-14.

PARTICULARS OF EMPLOYEES

During the financial year 2012-13, there was no employee who was drawing remuneration in excess of the monetary ceiling in accordance with the revised provisions of Section 217 (2A) of the. Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975.

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility is a continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large. Your Company is dedicated to serve the society at large. Commitment towards health, safety and environment protection are the core values of the Company. Continuous efforts are made to preserve the environment by undertaking various measures such as plantation of trees, encouraging paperless transactions and optimum use of '' natural resources

Your Company shall continue to undertake more activities and initiatives to improve the quality of life and society at large.

LISTING

The equity shares of your Company are listed on BSE Limited.

CASH FLOW STATEMENT

The Cash Flow Statement for the financial year ended March 31,2013, in conformity with the provisions of clause 32 of the Listing Agreement, is annexed hereto.

COST AUDITOR

In compliance with the Cost Audit directions issued by the Ministry of Corporate Affairs (Cost Audit Branch) vide notification no. Cost Audit No. R No. 52/26/CAB - 2010 dated May 2,2011 and circular dated November 6,2012, the Company has appointed M/s Sanjay Gupta & Associates, Cost Accountants New Delhi as the Cost Auditor for the financial year 2013-14. The Cost Audit Report for the Financial year 2012-13 will be submitted on or before the due date.

AUDIT COMMITTEE

In compfiance with the provisions of Section 292A of the Companies Act, 1956 and provisions of Listing Agreement, the Company has constituted an Audit Committee. The composition, scope and powers of the Audit Committee together with details of meetings held during the year under review, forms part of the Corporate Governance Report.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

As of March 31,2013, there was no Unclaimed Dividend due for transfer to the Investor Education and Protection Fund (IEPF) of the Central Government after the expiry of seven years. However, unclaimed fixed deposits have" been duly transferred to IEPf.

SUBSIDIARY

As on March 31, 2013, the Company has one wholly owned subsidiary, namely, Infotel Tower Infrastructure Private Limited which carries on the business of manpower outsourcing and trading activities related to telecommunication operations. Information on the Subsidiary in terms of the provisions of Section 212 of the Companies Act, 1956 is annexed and forms part of this Report as Annexure-I.

Pursuant to the General Circular No. 2/2011 dated February 8,2011 issued by the Ministry of Corporate Affairs, Government of India, the Board of Directors have consented for not attaching the balance sheet, statement of profit & loss and other documents as set out in section 212(1) of the Companies Act, 1956 in respect of the subsidiary company for the year ended March 31,2013.

Annual accounts of the subsidiary company, along with related information are available for inspection at the Company''s registered office and the registered office of the respective subsidiary company. Copies of the annual accounts of the subsidiary company will also be made available to the shareholders upon request.

The statement pursuant to the above referred circular has been annexed as part of the Notes to Consolidated Accounts of the Company.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standard AS-21 pertaining to Consolidated Financial Statement read with Accounting Standard AS-23 on Accounting for Investments in Associates, your Directors have pleasure in presenting the Consolidated Financial Statements, which form part of the Annual Report & Accounts.

FIXED DEPOSITS

The Company has not accepted / renewed any deposits from the public under section 58A of the Companies Act, 1956 during the year. The Company had discontinued the NBFC business in the year 2004 and had not accepted / renewed any deposit(s) thereafter; the entire outstanding amounts of deposits had been transferred to an Escrow Account maintained with Oriental Bank of Commerce. The Company has been making the repayment of the amount of deposits out of the said Escrow Account as per requests received from the depositors from time to time. Certain amounts of deposits which were unclaimed for a period of seven years have been duly transferred to the Investor Education and Protection Fund (IEPF) Account of the Central Government, as and when they became due for transfer, in terms of the provisions of section 205C of the Companies Act, 1956.

AUDITORS'' REPORT

The Statutory Auditors of the Company, M/s Khandelwal Jain & Co., Chartered Accountants, have submitted the Auditors'' Report on the accounts of the Company for the accounting period ended 31st March, 2013, which is self explanatory.

MANAGEMENT''S EXPLANATION TO THE AUDITORS'' OBSERVATIONS:

Auditors'' Observation

As mentioned in Note 27(8)(a) to the Financial Statements, based on Company''s request, Corporate Debt Restructuring (CDR) cell vide their letter dated August 13,2009 (CDR letter) has revised the terms of CDR scheme with effect from April 1, 2009. The Company has accounted for the impact of revised CDR scheme as approved by CDR Cell after complying with most of the terms and conditions stipulated therein, however compliance of the some of them is still in process. These financial statements do not include any adjustment which may arise due to inability of the management to fulfil the remaining conditions precedent.

Management''s Explanation

The Company has given effect to most of the terms and conditions of the revised Corporate Debt Restructuring (CDR) Scheme. Compliance of some of the terms and conditions are under way. The Company is confident of fulfilling the remaining conditions precedent for the complete implementation of the Revised CDR Scheme and would fully implement the remaining. terms of the Revised CDR Scheme on the completion of such approvals and conditions precedent. The Management does not foresee any financial implications on account of the delay in the implementation of the same.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance.

The detailed Corporate Governance Report, Management Discussion and Analysis Report as well as Corporate Governance Compliance Certificate are attached pursuant to the requirements of clause 49 of the listing agreement and forms part of this Annual Report.

HUMAN RESOURCE (HR) DEVELOPMENT

The Company''s HR policies and processes are continuously aimed at intellectual growth and orientation in order to effectively motivate the employees at all levels in the drive for growth and expansion of the Organization''s business. Regular innovative programs for learning and development are drawn up in order to create an encouraging work environment for empowering the employees at all levels and maintaining well structured reward and recognition mechanism. The Company encourages its employees to strengthen their entrepreneurial skills in order to enhance the Organization''s productivity and creativity.

DIRECTORS'' RESPONSIBILITY STATEMENT

In terms of provisions of Section 217 (2AA) of the Companies Act, 1956, your Directors confirm as under: -

(i) that in the preparation of the annual accounts for the financial year ended 31st March, 2013, the applicable accounting standards have been followed along with proper explanations relating to material departures;

(ii) that the Directors have selected appropriate accounting policies and applied them consistently, made changes wherever required, disclosed the same in the financial statements wherever applicable and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2013 and of the loss of the Company for the said period;

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

(iv) that the Directors have prepared the accounts for the financial year ended 31st March, 2013 on a ''going concern'' basis.

ACKNOWLEDGEMENT

Your Directors wish to express their gratitude for the wholehearted support received throughout the year from the Department of Telecommunications, Financial Institutions, Banks, Lenders and the various Central and State Government Departments, Business Associates, Shareholders and Subscribers.

Your Directors take this opportunity to put on record their sincere appreciation for the contribution made by the employees at all levels.,



For and on behalf of the Board of Directors of

QUADRANT TELEVENTURES LIMITED

Babu Mohanlal Panchal Rahul Sethi

Director Director

Place: Mohali

Date: August 10,2013


Mar 31, 2012

To the Members of QUADRANT TELEVENTURES LIMITED

The Directors take pleasure in presenting the 65th (Sixty Fifth) Annual Report of your Company together with the Audited Accounts for financial year ended 31st March, 2012.

SUMMARY OF FINANCIAL RESULTS

The summarized Financial Results for the year ended 31st March, 2012 are as under:

(Rs. in million)

Particulars For the year For the year ended ended March 31, March 31, 2012 2011

I. Revenue from operations 2813.02 2360.51

II. Other Income 15.89 22.87

III. Total Income(I II) 2828.91 2383.38

IV. Expenses

Networks Operation Expenditure 2164.99 1978.56

Employee Benefits Expenses 446.22 453.78

Sales & Marketing Expenditure 203.78 402.31

Finance Cost 281.18 278.67

Depreciation and Amortisation 1201.71 1230.24 Expenses

Other Expenses 322.63 276.48

4620.51 4620.04

V. Profit before exceptional and (1791.60) (2236.67) extraordinary items and tax (III-IV)

VI. Exceptional Item - -

VII. Profit before extraordinary items (1791.60) (2236.67) and tax (V-VI)

VIII. Extraordinary items - -

IX. Profit before tax (VII-VIII) (1791.60) (2236.67)

X. Tax expenses

(1) Current Tax

(2) Deferred Tax

XI. Profit (Loss) for the period from (1791.60) (2236.67) continuing operations (IX-X)

XII. Profit/(Loss) from discontinuing - - operations

XIII.Tax expenses of discontinuing - - operations

XIV. Profit/(Loss) from Discontinuing - - operations (after tax)(XII-XIII)

XV. Profit /(Loss) for the period (1791.60) (2236.67) (XI-XIV)

performance

The Company holds the uASL (unified Access Services License) for providing Telephony Services in the Punjab Telecom Service Area comprising of the state of Punjab, the union territory of Chandigarh and the Panchkula Town of Haryana. Currently, the Company is providing Fixed Voice (Landline) services, DSL (Internet) services, Leased Line services, CDMA Mobile Services and GSM Mobile Services in the Punjab Telecom Circle.

As on March 31, 2012, the Broadband DSL subscriber base touched 1,15,538 (previous Year 1,04,850) witnessing a growth of about 10%, and the Fixed Voice (Landline) Subscriber Base touched 2,00,044 (previous year 1,89,988 ); the CDMA Mobile Services Segment customer base at 27,768 subscribers (previous year 2,41,798 ) since many of the Subscribers have opted to shift to the GSM Services of the Company by using the Mobile Number Portability (MNP) option.

As of March 31, 2012, the GSM Mobile Services Segment customer base has touched 13,21,225 (Previous year 12,27,493) at the end of second year of operations.

The Revenue from operations of the Company increased by 19 % from Rs.2360.51 million in 2010-11 to Rs.2813.02 million in 2011-12. The Total Expenses changed marginally from Rs. 4620.04 million in 2010-11 to Rs. 4620.49 million in 2011-12.

Consequently the Loss during the year reduced from Rs. 2236.67 million in 2010-11 to Rs. 1791.60 million in 2011-12.

DIVIDEND

As on 31.03.2012, the Company had accumulated losses. Your Directors, therefore, have not recommended any dividend for the financial year 2011-12.

TRANSFER TO RESERVES

During the year under review, no amount has been transferred to reserves.

MATERIAL CHANGES AND COMMITMENTS OCCURRED BETwEEN THE END OF FINANCIAL YEAR AND THE DATE OF REPORT

Restructuring of Liabilities:

In accordance with the terms and conditions of the Corporate Debt Restructuring Package (CDR Package) approved by the Corporate Debt Restructuring Cell (CDR Cell) vide its letter No. CDR (JCP) 563/2009-10 dated August 13, 2009 and the consequent upon the approval of the shareholders the company had:

(i) The Company is currently in the process of completing all documentation with IDBI Bank Ltd. and the Debenture Trustee for the issuance of Secured Non Convertible Debentures of Rs.100/ - (Rupees One Hundred only) each, fully paid up - aggregating Rs. 319.69 Crores - to the Financial Institutions/Banks by way of conversion of 50% of the Outstanding debt.

(ii) Reduction of Share Capital:

In accordance with the terms and conditions of the Corporate Debt Restructuring Package (CDR Package) and the consequent approval by the shareholders accorded in the Extra Ordinary General Meeting held on 18th July, 2012 the Company has already initiated the steps for the reduction in the issued, subscribed and Paid up equity share capital of the Company by 90% i.e. by extinguishing/ canceling Rs.9/ - per equity share out of each equity share of Rs. 10/ - each fully paid up. Also the face value of each share would stand reduced from Rs. 10/ - per share to Rs. 1/ - per share, fully paid up. The Company has already initiated the process for filing the petition with High Court for the issuance of confirmatory orders for reduction of share capital by the Hon'ble High Court.

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

Since the Company does not carry on any manufacturing activity, the provisions of Section 217(1) (e) of the Companies Act, 1956 relating to Conservation of Energy are not applicable. However, the Company is regularly taking steps to conserve energy. During the year under review, the Company has not spent any amount on Research and Development and Technology Absorption.

During the year, there was no foreign exchange earnings, the total foreign exchange outgo was to the tune of Rs. 34.69 million, which was on account of import of material, finance charges and travel expense.

DIRECTORS

During the year, Mr. Rahul Sethi was appointed as an Additional Director on the Board w.e.f.17* March, 2012 and holds office till the date of the ensuing Annual General Meeting of the Company. The Company has received notice in writing from a member in terms of the provisions of section 257 of the Companies Act, 1956 signifying his intention to propose the appointment of Mr. Rahul Sethi as Director of the Company. Your Directors recommend his appointment as Director at the forthcoming Annual General Meeting.

The Board of Directors comprises of five independent directors viz. Mr. Rahul Sethi, Mr. Babu Mohanlal Panchal, Mr. Yatinder Vir Singh, Mr. Viney Kumar (Nominee Director of IDBI Bank) and Mr. Vinay Kumar Monga.

In accordance with the provisions of Section 260 of the Companies Act, 1956 read with Article 104 of the Articles of Association of the Company, Mr. Yatinder Vir Singh retires by rotation at the ensuing Annual General Meeting and, being eligible, offer himself for re-appointment.

Yours Directors recommend his appointment at the forthcoming Annual General Meeting.

MANAGER UNDER SECTION 269 OF THE COMPANIES ACT, 1956

During the year under review, the Board of Directors have re-appointed Mr. Kapil Bhalla as the Manager under section 269 of the Companies Act,1956, for a further period of three years w.e.f. 31.01.2012 - on the terms and conditions approved by the Remuneration Committee. Mr. Kapil Bhalla was earlier appointed as Manager under section 269 of the Companies Act, 1956 for a period of three years from 31.01.2009 to 30.01.2012. Further, the shareholders of the Company have approved the reappointment of Mr. Kapil Bhalla as Manager u/s 269 of the Companies Act, 1956 in the Extra Ordinary General Meeting held on 18th July, 2012. The terms of appointment and remuneration payable to the Manager are within the limits specified under Schedule XIII of the Companies Act, 1956.

AUDITORS

M/s Khandelwal Jain & Co., Chartered Accountants, who are appointed as the Statutory Auditors of the Company in the 64th Annual General Meeting of the Company, hold office until the conclusion of the forthcoming Annual General Meeting. The Auditors had expressed their willingness to act as the Statutory Auditors of the Company; the Company has received the requisite certificate pursuant to section 224(1B) of the Companies Act, 1956 from M/s Khandelwal Jain & Co., regarding their eligibility for re-appointment. Your Directors therefore recommend the appointment of M/s Khandelwal Jain & Co., as the Statutory Auditors at the ensuing Annual General Meeting.

PARTICULARS OF EMPLOYEES

During the financial year 2011-12, no employee was drawing remuneration in excess of the monetary ceiling in accordance with the revised provisions of Section 217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, i.e. Rs. 60.00 Lacs per annum, if employed for full year or Rs.5.00 Lacs per month, if employed for part of the year.

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility is a continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.

Your Company is dedicated to serve the society at large. Commitment towards health, safety and environment protection are the core values of the Company. Your Company is continuously making efforts to preserve the environment by undertaking various measures such as plantation of trees, encouraging paperless transactions, optimum use of natural resources etc.

Your Company shall continue to undertake more activities and initiatives to improve the quality of life and society at large.

LISTING

The equity Shares of your Company are Listed on BSE Limited (Formerly Bombay Stock Exchange Limited).

CASH FLOw STATEMENT

The Cash Flow Statement for the financial year ended 31st March, 2012, in conformity with the provisions of clause 32 of the Listing agreement with the Stock Exchange in India, is annexed hereto.

COST AUDITOR

In compliance with the Cost Audit directions issued by the Ministry of Corporate Affairs (Cost Audit Branch) vide Notification No. Cost Audit No. F. No. 52/26/CAB-2010 dated May 2, 2011, the Company has appointed M/s Sanjay Gupta & Associates, Cost Accountants, New Delhi as the Cost Auditors of the Company for the Financial year 2012-13.

AUDIT COMMITTEE

Pursuant to the provisions of Section 292A of the Companies Act, 1956 and provisions of the Listing Agreement, the Company has constituted an Audit Committee. The composition, scope and powers of the Audit Committee together with details of meetings held during the year under review, forms part of Corporate Governance Report.

TRANSFER TO IEPF

As of March 31st, 2012, there was no payment of unclaimed dividend due for transfer to the Investor Education and Protection Fund (IEPF) account of the Central Government after expiry of seven years.

SUBSIDIARY

As on 31 March 2012 the Company has one Wholly owned Subsidiary namely, Infotel Tower Infrastructure Private Limited, which carries on the business of manpower outsourcing and trading activities related to telecommunication operations. Information on the Subsidiary in terms of the provisions of Section 212 of the Companies Act, 1956 is annexed and forms part of this Report as Annexure I.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standard 'AS-21' pertaining to Consolidated Financial Statement read with Accounting Standard AS-23 on Accounting for Investments in Associates, your Directors have pleasure in presenting the Consolidated Financial Statements, which form part of the Annual Report & Accounts.

FIXED DEPOSITS

The Company has not accepted / renewed any deposits from the public under section 58A of the Companies Act, 1956 during the year. The Company had discontinued the NBFC business in the year 2004 and transferred the entire outstanding amounts to an Escrow Account maintained with Oriental Bank of Commerce. In respect of the request received from depositors from time to time, the Company has been making the payment of the amount of deposits out of the said Escrow Account. Certain amount of deposits which were unclaimed for a period of seven years have been transferred to the Investor Education and Protection Fund (IEPF) in terms of the provisions of section 205C of the Companies Act, 1956 out of said Escrow Account, as and they became due.

AUDITORS' REPORT

The Statutory Auditors of the Company, M/s Khandelwal Jain & Co., Chartered Accountants, have submitted Auditors' Report on the accounts of the Company for the accounting period ended 31st March, 2012 , which is self explanatory.

MANAGEMENT'S EXPLANATION TO THE AUDITORS' OBSERVATIONS:

Auditors Observation

As mentioned in Note 27(8)(a) to the Financial Statements, based on Company's request Corporate Debt Restructuring (CDR) cell vide their letter dated August 13, 2009 (CDR letter) has revised the terms of CDR scheme with effect from April 1, 2009. The Company has accounted for the impact of revised CDR scheme as approved by CDR Cell after complying with the most of the terms and conditions stipulated therein, however compliance of the some of them is still in process. These financial statements do not include any adjustment which may arise due to inability of the management to fulfill the remaining conditions precedent.

Management's Explanation

The Company has given effect to most of the terms and conditions of the revised Corporate Debt Restructuring (CDR) Scheme. Compliance of some of the terms and conditions are under way. The Company is confident of fulfilling the remaining conditions precedent for the complete implementation of the Revised CDR Scheme and would fully implement the remaining terms of the Revised CDR Scheme on the completion of such approvals and conditions precedent. The Management does not foresee any financial implications on account of the delay in the implementation of the same.

CORPORATE GOVERNANCE

Corporate Governance Report, Management Discussion and Analysis Report as well as Corporate Governance Compliance Certificate are attached and form part of this report.

HUMAN RESOURCE (HR) DEVELOPMENT

The Company's HR policies and processes are continuously aimed at intellectual growth and orientation in order to effectively motivate the employees at all levels in the drive for growth and expansion of the Organization's business. Regular innovative programs for learning and development are drawn up in order to create an encouraging work environment for empowering the employees at all levels and maintaining well structured reward and recognition mechanism. The Company encourages its employees to strengthen their innovative skills in order to enhance the Organization's productivity and creativity.

DIRECTORS' RESPONSIBILITY STATEMENT

In terms of provisions of Section 217 (2AA) of the Companies Act, 1956, your Directors confirm as under: -

(i) that in the preparation of the annual accounts for the financial year ended 31st March, 2012 , the applicable accounting standards have been followed along with proper explanations relating to material departures;

(ii) that the Directors have selected appropriate accounting policies and applied them consistently, made changes wherever required, disclosed the same in the financial statements wherever applicable and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2012 and of the loss of the Company for the said year;

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

(iv) that the Directors have prepared the accounts for the financial year ended 31st March, 2012 on a going concern basis.

ACKNOWLEDGEMENTS

Your Directors wish to express their gratitude for the wholehearted support received throughout the year from the Department of Telecommunications, Financial Institutions, Banks, Lenders, various Central and State Government Departments, Business Associates, Shareholders and Subscribers.

Your Directors also take this opportunity to put on record their sincere appreciation for the contribution made by the employees at all levels.

For and on behalf of the Board of Directors of

QUADRANT TELEVENTURES LIMITED

Babu Mohanlal Panchal Yatinder Vir Singh Director Director

Place : Mohali

Date : August 11, 2012


Mar 31, 2010

The Directors take pleasure in presenting the Sixty Third Annual Report of your Company together with the Audited Accounts for the year ended 31st March, 2010.

SUMMARY OF FINANCIAL RESULTS

The summarized Financial Results for the year ended 31st March, 2010 are as under:

(Rs. in millions)

Particulars For year For year

ended ended

March 31, March 31,

2010 2009

Gross Income -

- Service Revenue 1962.09 2235.71

- Other Income 16.07 13.85

Total 1978.16 2249.56

Total Expenditure 1964.01 2058.44

Operating Profit before Finance 14.15 191.12

Charges, Depreciation, Amortisation and Loss on sold/discarded fixed Assets

Diminution in Value of Investments - 717.67

(Gain) on sale of Fixed Assets (14.30) (337.23)

Loss on sold/discarded Fixed Assets 19.00 155.30

and Capital work in progress

Finance Cost (704.24) 678.29

Foreign Exchange (Gain) / Loss (34.61) 106.76

Depreciation and Amortisation 950.17 991.74

Loss for the year before prior period 201.87 2121.40

Expenditure and Tax

Prior period Expenditure (net) 4.58 20.66

Loss for the year before Tax 206.45 2142.07

Provision for taxation for earlier years

Fringe Benefits tax - 5.23

Loss for the year from ordinary and 206.45 2147.30

extraordinary activities

Loss brought forward from previous 11193.88 9151.02

year

Loss carried to the Balance Sheet 11400.33 11193.88

PERFORMANCE

Following the trend of past few years, fixed line phones market went down in terms of number of customers as well as revenue. The downward trend of falling fixed line revenue has affected your company and therefore, during the year under review, there is a drop in the telecom service revenue by 12% from Rs. 2235.71 million to Rs.1962.09 million primarily because of drop in Fixed Line revenues due

to increased penetration of mobile services. Consequently Operating Profits from telecom services before finance charges, depreciation, and loss on sold / discarded fixed assets is reduced to Rs. 14.15 million compared to the previous years figure of Rs. 191.12 million.

Various expenses optimization initiatives taken by the Company coupled with reduction in direct variable expenses, has led to a reduction of operating expenses by Rs. 94.43 million from Rs. 2058.44 million in FY 2009.

The Broadband DSL subscriber base at 87,354 (previous Year 68,902) witnessed a growth of about 27 %, during the year. In CDMA mobile customer base, there has been a decline of about 13% and the current CDMA customer base is 259,456 (previous year 2,98,740).

As of March 2010, the Company has also launched its GSM Services in the Punjab Service Area.

DIVIDEND

The Company has accumulated losses and your Directors, therefore, are not in a position to recommend any dividend for the financial year 2009-10.

TRANSFER TO RESERVES

During the year under review, no amount has been transferred to reserves.

MATERIAL CHANGES AND COMMITMENTS OCCURRED BETWEEN THE END OF FINANCIAL YEAR AND THE DATE OF REPORT

Restructuring of Liabilities:

The Corporate Debt Restructuring Cell (CDR Cell) vide its letter No. CDR (JCP) 563/2009-10 dated August 13,2009 has approved a restructuring package w.e.f. April 1, 2009 which provided for the restructuring of the term debt and also the induction of a strategic investor / change of management. The various lenders viz. IDBI Bank Limited, Life Insurance Corporation of India, Oriental Bank of Commerce, ING Vysya Bank Limited, State Bank of Patiala, Punjab National Bank and HDFC Bank Limited (collectively referred to as the "Lenders") have confirmed their acceptance of the CDR Scheme.

Change of Management:

In terms of the stipulations of the CDR Cell for induction of a strategic investor / change of management, as sanctioned by the CDR Cell in terms of the CDR Package approved vide letter No.CDJ (JCP) No.563/2009-10 dated August 13, 2009, M/s Quadrant Enterprises Private Limited, has acquired the entire equity stake of Himachal Futuristic Communications Limited (HFCL) comprising of 32,67,05,000 (Thirty Two Crores Sixty Seven Lac and Five Thousand only) equity shares of the Company (Shares) amounting to 53.3605% (approximately fifty three percent) of the issued, subscribed

and paid up equity share capital of the Company, from the erstwhile Promoters, Himachal Futuristic Communications Limited (HFCL). The aforesaid transfer of the said equity shares was effected w.e.f. April 3, 2010.

Further in terms of the stipulations of the CDR Package for a change in the management of the Company, all the erstwhile Directors (except the nominees of Financial Institutions) namely Mr. Mahendra Nahata, Mr. M.P.Shukla, Mr.S.Lakshmanan, Dr. R.M. Kastia and Mr. K.B. Lai have resigned from the Board of Directors w.e.f. April 9, 2010 and Mr. Babu Mohanlal Panchal, Mr. Yatinder Vir Singh and Mr. Vinay Kumar Monga have been appointed as additional Directors on the Board of Directors of the Company w.e.f. April 9, 2010. Further, in order to complete the process of change in the management of the Company, as per the stipulations of the CDR package, the senior management team comprising of Mr. Surendra Lunia, Chief Executive Officer, Mr. Gurdial Singh, Chief Operating Officer, and Mr. Vikash Agarwal, Vice President (Corporate Finance) and Chief Financial Officer of the Company have also resigned from the Company w.e.f. April 09, 2010.

Further, in accordance with the Corporate Debt Restructuring Scheme ("CDR Scheme") dated August 13, 2009 approved by the Corporate Debt Restructuring Cell (CDR Cell), the Company is now in the process of seeking the approval of the shareholders for the issuance of the following Securities to the Lenders, viz. Financial Institution / Banks by way of conversion of the amount outstanding and payable to them:

2% (two percent) Cumulative Redeemable Preference Shares of Rs.100/- (Rupees One Hundred only) each, fully paid up, aggregating Rs. 1,59,84,543 (Rupees One Crore Fifty Nine Lakh Eighty Four Thousand Five Hundred Forty Three only); and

Secured Non Convertible Debentures of Rs.100/-(Rupees One Hundred only) each, fully paid up, aggregating Rs. 3,19,69,088 (Rupees Three Crores Ninteen Lakhs, Sixty Nine Thousand and Eighty Eight only).

During the period under review, the Company has also acquired the beneficial interest in the 20 equity shares at face value of Rs 10 each of its Subsidiary Company - Infotel Tower Infrastructure Private Limited (ITTPL ) w.e.f. April 09, 2010, from the original subscribers to the Memorandum of Association of LTCPL, where upon Infotel Tower Infrastructure Private Limited has now become a wholly owned subsidiary of the Company w.e.f. April 09, 2010.

CHANGE OF REGISTERED OFFICE OF THE COMPANY:

The Company Law Board vide its Order dated August 31, 2009 had accorded its approval for shifting of Registered Office of the Company from the state of Punjab to State of Maharashtra. Consequently, the company filed the requisite documents with the Registrar of Companies, Mumbai. The Certificate confirming the change of Registered office was issued by the ROC Mumbai on December 01, 2009.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORBTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Since the Company does not carry on any manufacturing activity, the provisions of Section 217(l)(e) of the Companies Act, 1956 relating to Conservation of Energy are not applicable. However, the Company is regularly taking steps to conserve energy. During the year under review, the Company has not spent any amount on Research and Development and Technology Absorption.

During the year, there were no foreign exchange earnings; the total foreign exchange outgo was to the tune of Rs. 262.69 million, which was on account of import of material, finance charges and travel expenses.

SHARE CAPITAL

The total issued, subscribed and paid up equity share capital of the company comprises of 612,260,268 equity shares of Rs.10/- each and the whole of Equity Shares are listed on the Bombay Stock Exchange and Madras Stock Exchange.

DIRECTORS

IDBI Bank Limited nominated Mr. Viney Kumar, as its Nominee Director on the Board of the Company w.e.f September 29, 2009 in place of Mr. R.K. Bansal.

In terms of the stipulations of the Corporate Debt Restructuring Cell (CDR Cell) for induction of a strategic investor / change of management, as sanctioned in terms of its CDR Package approved vide letter No. CDJ (JCP) No. 563/2009-10 dated August 13, 2009, Mr. Mahendra Nahata, Mr. M.P.Shukla, Mr.S.Lakshmanan, Dr.R.M.Kastia and Mr. K.B.Lai have resigned as Directors from the Board of Directors of the Company w.e.f. April 9, 2010 and Mr. Babu Mohanlal Panchal, Mr. Yatinder Vir Singh and Mr. Vinay Kumar Monga have been appointed as Additional Directors on the Board w.e.f April 9, 2010 and hold office till the date of the ensuing Annual General Meeting of the Company. The Company has received notices in writing from Members in terms of the provisions of section 257 of the Companies Act, 1956 signifying their intention to propose the appointment of Mr. Babu Mohanlal Panchal, Mr. Yatinder Vir Singh and Mr. Vinay Kumar Monga as Directors of the Company. Your Board of Directors recommend their appointment as Directors.

In view of the aforesaid change in the Board of Directors, none of the Directors is liable to retire by rotation in the ensuing Annual General Meeting, in accordance with the Articles of Association of the Company and the provisions of the Companies Act, 1956,

AUDITORS

M/s Atul Kulshrestha & Co., Chartered Accountants, had resigned as Statutory Auditors of the Company w.e.f.

March 15, 2010. M/s S.R. Batliboi & Associates, Chartered Accountants, hold office till the conclusion of the ensuing Annual General Meeting and have conveyed their inability to offer themselves for reappointment at the forthcoming Annual General Meeting of the Company.

M/s Khandelwai Jain & Co., Chartered Accountants, New Delhi, have offered their appointment as Statutory Auditors. Your Directors recommend the appointment of M/s Khandelwai Jain & Co. as the Statutory Auditors for the Financial Year 2010-2011 at the forthcoming Annual General Meeting to hold office till the conclusion of next Annual General Meeting.

PARTICULARS OF EMPLOYEES

The details of employees drawing remuneration in excess of the monetary ceiling in accordance with the provisions of Section 217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, during the financial year 2009-10, is annexed to this report as Annexure A.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of provisions of Section 217 (2AA) of the Companies Act, 1956, your Directors confirm as under: -

(i) that in the preparation of the annual accounts for the financial year ended 31st Maich, 2010, the applicable accounting standards have been followed along with proper explanations relating to material departures;

(ii) that the Directors have selected appropriate accounting policies and applied them consistently, made changes wherever required, disclosed the same in the financial statements wherever applicable and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2010 and of the lor,s of the Company for the said period;

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

(iv) that the Directors have prepared the accounts for the financial year ended 31st March, 2010 on a going concern basis.

SUBSIDIARY

Infotel Tower Infrastructure Private Limited is a wholly owned subsidiary of the Company, dealing with the object of creating Infrastructure for telecom operations, manpower outsourcing and trading activities related to telecommunication operations.

Information on subsidiary company required under Section 212 of the Companies Act, 1956 is provided in Annexure to this report.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standard AS-21 pertaining to Consolidated Financial Statement read with Accounting Standard AS-23 on Accounting for Investments in Associates, vour Directors have pleasure in presenting the Consolidated Financial Statements, which form part of the Annual Report & Accounts.

FIXED DEPOSITS

The Company has not accepted / renewed any deposits from the public under section 58A of the Companies Act, 1956 during the year. The Company had discontinued the NBFC business in the year 2004 and transferred the outstanding amounts to an Escrow Account maintained with Oriental Bank of Commerce. In respect of the request received from depositors from time to time, the Company has been making the payment of the amount of deposits out of the said Escrow Account. Certain amount of deposits which were unclaimed for a period of seven years have been transferred to Investor Education and Protection Fund (IEPF) under section 205C of the Companies Act, 1956 out of said Escrow Account. The unclaimed amount as at March 31, 2010 was Ks. 1.31 million.

AUDITORS REPORT

The Statutory Auditors of the Company have submitted Auditors Report on the accounts of the Company for the accounting period ended 31st March, 2010, which is self explanatory.

MANAGEMENTS EXPLANATION TO THE AUDITORS OBSERVATIONS:

Auditors Observation

1 Note 9 (a) of Schedule 23 of the financial statements wherein based on Companys request Corporate Debt Restructuring Cell CCDR) vide their letter no CDR (JCP) No 563/2009-10 dated August 13, 2009(CDR letter) has revised the terms of CDR scJieme with effect from April 1, 2009. During the year ended March 31, 2010, based on confirmations from lenders and the ability of the management to fulfill all conditions in the precedent to the implementation of the Revised CDR Scheme, the Company has given effect to the terms of the Revised CDR Scheme (without considering any interest costs based on yield with respect to proposed restructuring of 25 percent loan into Cumulative Redeemable preference Shares) and recognised interest costs for the period from April 1, 2009 based on such Scheme and, accordingly, reversed the provision for interest and interest costs of Rs 1,025,846,205. Tlie Company is confident of fulfilling the remaining conditions precedent for the implementation of the Revised CDR Scheme and would fidly implement the terms of the Revised CDR Scheme on the completion of such approvals and conditions precedent. The

Company has also not made any provision for license fee on such reversal as based on the judgement of Telecom Disputes Settlement & Appellate Tribunal (TDSAT) as it believes that no license fee is leviable. Had the Company followed the old CDR scheme the loss before taxes would have been higher by Rs 724,507,265 before taxes. These financial statements do not include any adjustment which may arise due to inability of the management to complete balance conditions precedent.

Managements Explanation

Corporate Debt Restructuring Cell (CDR) vide their letter no CDR (JCP) No 563 / 2009-10 dated August 13, 2009(CDR letter) has revised the terms of CDR scheme with effect from April 1, 2009. During the year ended March 31, 2010, based on confirmations from lenders and the ability of the management to fulfill all conditions in the precedent to the implementation of the Revised CDR Scheme, the Company has given effect to the terms of the Revised CDR Scheme and recognised interest costs for the period from April 1, 2009 based on such Scheme and, accordingly, reversed the provision for interest and interest costs of Rs 1,025,846,205. The Company is confident of fulfilling the remaining conditions precedent for the implementation of the Revised CDR Scheme and would fully implement the terms of the Revised CDR Scheme on the completion of such approvals and conditions precedent. The Company has also not made any provision for license fee on such reversal as based on the judgment of the Honble Telecom Disputes Settlement & Appellate Tribunal (TDSAT) as it believes that no license fee is leviable.

Auditors Observation

2. Note 16 (b) of Schedule 23 of the financial statements wherein the Company has obtained advance ofRs. 1,517,500,000 from a non shareholder Company/Promoter to fund the entry fee for using alternate technology under existing Unified Access Service License (UASL) for Punjab Service Area during March 31, 2008. The terms and conditions with respect to tenure, interest, rights and obligations etc. are yet to be finalised hence we are unable to comment on the carrying value and thereby its impact on the profit and loss for the year. Our audit report on the financial statements for the year ended March 31, 2009 zvas modified, accordingly;

Managements Explanation

The Company has obtained an advance of Rs. 1,517.50 million from a non-shareholder Company to meet the payment of License fee to DOT for starting GSM services under the Companys Unified Access Service License for Punjab Service Area. The amount of aforsaid advance is adjustable or refundable on such terms and conditions as may be mutuary agreed.

Auditors Observation

3. Undisputed statutory dues including provident fund, investor

education and protection fund, employees state insurance, sales-tax, wealth tax, customs duty, cess and other material statutory dues applicable to it have generally been regularly deposited with the appropriate authorities except there has been delays in many cases in respect of deposit of service tax and withholding tax. The provisions relating to excise duty is not applicable to the Company.

Managements Explanation

There have been occasional delays in deposit of service tax and withholding tax by the Company. The delays were on account of temporary cash flow mismatch and the dues have been paid subsequently along with applicable interest.

Auditors Observation

4. Without considering the matters reported in paragraph 5 of our main audit report, the effects of which are currently not ascertainable the accumulated losses of the Company as at March 31, 2010, are more than fifty percent of its net worth as at that date. The Company, has incurred a cash loss ofRs 74,798,095 and Rs 881,292,798 during the year and immediately preceding financial year before considering interest provision on yield basis of Rs 227,329,338 and Rs 66,602,849 respectively.

Managements Explanation

The accumulated losses of the Company as at March 31, 2010, are more than fifty percent of its net worth as at that date. The management acknowledges the erosion of net worth as stated by the Auditors. The cash loss in the current year and cash profit in the previous year are matters of fact flowing from the audited financial statements. The losses are due to declining market of the fixed line business and the CDMA business. The Company has therefore decided to enter the GSM mobile segment to reverse this trend.

Auditors Observation

5. Based on our audit procedures and as per the information and explanations given by the management, the Company has defaulted in payment of interest due to a financial institution and banks as presented below. Tlte Company has no outstanding dues to debenture liolders. Due to the delays above, the Company Ims paid Rs 192,252 as penal interest to financial institution and banks.

Managements Explanation

There have been delays in interest payments payable to financial institutions and banks due to the tight cash flow situation being faced by the Company. The due dates and the actual dates of payments are tabulated in the annexure audit report at para number xi. The Company is in the process of arranging long term funds to manage this situation and to enter the GSM mobile segment for improving the cash flow situation

6. According to the information and explanations given to us and on an overall examination of the balance sheet and cash flow statement of the Company, we report that at the year end, the Company has used funds amounting to Rs 4,724,502,525 raised on short-term basis (primarily representing loans and Creditors) have been used for long-term investment (primarily representing accumulated losses).

Managements Explanation

The company has used short term funds of Rs 4,724,502,525 for purchase of fixed assets pending mobilization of equity capital and long term debt for funding expansion. Please refer to line item "net cash generated from operating activities (A) and net cash generated from / (used in) financing activities (C)" in the Cash Flow Statement)

CORPORATE GOVERNANCE

Corporate Governance and Management Discussion and Analysis Reports as well as Corporate Governance Compliance Certificate are being presented as Annexure to this report.

HUMAN RESOURCE (HR) DEVELOPMENT

The Companys HR policies and processes are continuously aimed at intellectual growth and orientation in order to effectively motivate the employees at all levels in the drive for growth and expansion of the Organizations business. Regular innovative programmes for learning and development are drawn up in order to create an encouraging work environment for empowering the employees at all levels and maintaining well structured reward and recognition mechanism. The Company encourages its employees to strengthen their entrepreneurial skills in order to enhance the Organizations productivity and creativity.

ACKNOWLEDGEMENTS

Your Directors wish to express their gratitude for the wholehearted support received throughout the year from the Financial Institutions, Banks / Lenders various Central and State Government Departments, Business Associates, Shareholders and Subscribers.

Your Directors take this opportunity to put on record their sincere appreciation for the contribution made by the employees at all levels.

For and on behalf of the Board of Directors

(Babu Mohanlal Panchal) (Yatinder Vir Singh)

Director Director

Place: Mumbai Date:

July 12, 2010

 
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