Oct 01, 2009
                                                   to Sep 30, 2010
                          Rupees in million      Rupees in million
 
 1 Estimated amounts of 
 contracts remaining to be
 executed on capital 
 account and not provided for       44                     22
 
 2 Contingent liabilities 
 in respect of disputed 
 demands of:
 
 (a) Income tax authorities        170                    183
 
 (b) Excise and Customs authorities 83                     94
 
 (c) Sales tax matters               9                      9
 
 (d) Bills Discounted               63                      1
 
 Income tax:
 
 The demand is raised mainly on deferral profit due to change in revenue
 recognition policy for Rs.98 million.  This is a timing difference
 liability and appeal is filed before Commissioner of appeals.
 
 Excise :
 
 The amount is reported as contingent liability as an abundant caution
 for the appeal filed by the department with higher authority for
 applicability of custom duty on royalty remittance for Rs.66 million.
 The order from the lower authority is issued in favour of the Company.
 
 3 (b) Approval from the Central Government of India is awaited for the
 amount of Rs.5 million paid/payable to the Managing Director for the
 year ended March 31, 2011 in excess of the limits specified under the
 Companies Act 1956.
 
 4 During the 6 months year ended March 31, 2011, the Company has
 changed its revenue recognition policy consistent with practice
 followed in the industry. Had the Company continued with the earlier
 policy i.e.  income from sale of goods/installation & commissioning was
 recognised on completion of sale/installation and commissioning, the
 Gross Sales/Income from operations would have been lower by Rs.210
 million and Profit after tax would bave been lower by Rs.51 million.
 
 5 Segment Reporting
 
 The Company operates in one business segment i.e., Business
 Communication Solutions and there is only one geographical segment viz.
 India.
 
 6 Related Party Disclosures
 
 (a) Related party disclosures as required by Accounting Standard -18
 (AS-18), Related Party Disclosures issued by the Institute of
 Chartered Accountants of India
 
 Nature of Relationship                Name of Party
 
 Where control exists         Essar Services Holdings Limited -
                              Holding Company
                              (w.e.f. 01.09.2010)
 
                              Essar Capital Finance Private Limited -
                             (upto 19.01.2011)
 
                              Aegis Limited - Subsidiary of Holding 
                              Company -
                              (w.e.f. 20.01.2011)
 
                              Essar Global Limited - Ultimate Holding
                              Company
                              (w.e.f. 01.09.2010)
 
                              Avaya Inc., USA - Ultimate Holding   
                              Company (upto 31.08.2010) through its
                              100% subsidiaries
 
                              1) Sierra Communication International 
                                 LLC (formerly Avaya International,
                                 LLC, USA) (upto 31.08.2010)
 
                              2) Avaya Mauritius Limited(upto 31.08.2010)
  
 Subsidiaries                 GlobalConnect Australia Pty Limited
 
 Fellow Subsidiaries          Essar Steel Limited (w.e.f. 01.09.2010)
 
 (where transactions occurred 
 during the year)             Essar Oil Limited (w.e.f. 01.09.2010)
 
                              Aegis Limited (w.e.f. 01.09.2010)
 
                              Aegis Tech Ltd
 
                              Aegis Tech Singapore Pte. Ltd
 
                              Aegis Communication Group LLC.
 
                              Aegis Aspire Consultancy Services Ltd
 
                              Essar House Ltd
 
                              Essar Infrastructure Services Ltd
 
                              Essar Investment Ltd
 
                              Essar Power Ltd
 
                              Essar Power Gujarat Ltd
 
                              Essar Power MP Ltd
 
                              Essar Projects (India) Ltd
 
                              Essar Technology Park BKC Pvt. Ltd
 
                              Global Vantedge Private Ltd
 
                              Essar Information Technology Ltd
 
                              Equinox Business Parks Pvt. Ltd
 
                              Avaya India Private Limited
                              (upto 31.08.2010)
 
                              Avaya Singapore Pte Ltd 
                              (upto 31.08.2010)
   
                              Avaya International Sales Ltd.,
                              Ireland (upto 31.08.2010)
 
 Key Management Personnel     Mr. Anil Nair (w.e.f. 01.01.2009)
 
                              Mr. S. K. Jha (w.e.f. 01.09.2010)
 
 7 Lease transactions
 
 Operating leases
 
 (i) The Company has taken various residential, office, warehouse
 premises and vehicles under operating lease or leave and licence
 agreements. These range between 11 months to 4 years under leave and
 licence, or longer for other leases and are renewable by mutual consent
 on mutually agreeable terms.
 
 (ii) Lease payments are recognised in the Profit and Loss Account under
 Rent and Lease rentals in Schedule 15.
 
 8 The figures of previous year were audited by a firm of Chartered
 Accountants other than S. R. Batliboi & Associates. Previous year
 figures have been re-grouped and reclassified, wherever necessary, to
 correspond to those of the current period classification.
 
 Since the Company has changed its year end from September end to March
 end, current period Profit and Loss Account is for six months period
 ended March 31, 2011 and is not comparable to previous year figures
 which is for the year ended September 30, 2010.
 
 9 All amounts are Rupees (In million) except otherwise stated
 specifically - 0 denotes amounts less than a million rupees.