(Rs. in thousands)
 1.  The Company has opted for the period of current financial year as
 six months from 1st October, 2010 to 31st March 2011.  During the
 previous year, Registrar of Companies, Punjab, Himachal Pradesh and
 Chandigarh (ROC) vide its order dated 4th May, 2010 had granted the
 permission to the Company to prepare the annual accounts for a period
 of eighteen months ending 30th September, 2010.
 
                                                  As at         As at
                                             31.03.2011    30.09.2010
 
 2.  Contingent Liabilities not 
 provided for in respect of :
 
 (a) Unexpired Letters of Credit 
 (margin money paid Rs. 20,511; 
 Previous year                                  15,702         24,348
 Rs. 44,745)
 
 (b) Guarantees given by banks 
 on behalf of the Company 
 (margin money kept                           4,78,992       4,15,295
 by way of fixed deposits Rs. 168,812; 
 Previous year Rs. 104,422)
 
 (c) Counter Guarantees given by the 
 Company to the financial 
 institutions/banks                          13,74,331*     19,15,672*
 for providing guarantees on behalf of 
 companies promoted by the Company.
 (margin money kept by the banks by 
 way of fixed deposits Rs. Nil ; 
 Previous year Rs. Nil)
 
 * This excludes Company’s counter guarantees of Rs. 567,000 in respect of
 guarantees provided by the banks and institutions on behalf of HFCL
 Bezeq Telecom Ltd. for bid bonds to Department of Telecommunications
 (DoT) towards tender for operation of basic telephone services as the
 guarantees have already expired and the Hon’ble Delhi High Court vide
 its order dated 19.09.97 granted permanent injunction restraining the
 DoT from invoking the said guarantees. The appeal fled by DoT against
 this also stands dismissed. The DoT has fled application for
 restoration of appeal before the Double Bench of the Hon’ble High Court
 of Delhi which has been allowed and matter is now pending for decision.
 
 * The Company has received necessary approval from the Central
 Government for the re-appointment and payment of remuneration to
 Wholetime Directors for the Financial year 2007-08, 2008-09 and part
 financial year of 2009-10 for Rs. 27,464.  The Central Government has not
 given its approval for remuneration paid to Managing Director for the
 period from 1st October, 2010 to 31st March, 2011. However, since the
 financial year 2007-08, the Company has so far paid Rs. 52,772 as
 remuneration to Wholetime Directors. As the approval of Central
 Government received is of lesser amount than the actual remuneration
 paid for the aforesaid period, the excess amount of Rs. 25,308 paid
 continues to be shown as recoverable. The Company is in the process of
 making representation to the Central Government for seeking their
 approval for the entire amount of remuneration paid to them.  The
 Company also fled necessary application with the Central Government
 seeking their approval for re-appointment and payment of remuneration
 to Wholetime Director for financial year 2009-10 and onwards which is
 under their consideration.
 
 3. Interest charges on loans is net of Interest income from loans and
 advances amounting to Rs. 122,333 (Previous year Rs. 145,483).
 
 4. a Debt of the Company were earlier restructured under Corporate Debt
 Restructuring (CDR) mechanism in April 2004 which was subsequently
 modified in June 2005 with cut-off date as 1st April, 2005. Because of
 liquidity problems and due to inadequate working capital funds, the
 Company had again approached its lenders viz. Banks and Financial
 Institutions for Rework of earlier sanctioned restructuring package.
 CDR Empowered Group at its meeting held on 9th February, 2011 has
 approved the Rework package of the company with the cut off date as 1st
 January 2011 and communicated its sanction vide their letter No. BY
 CDR(JCP)/No 8643/2010-11 dated 29.03.2011. The Rework package includes
 interalia reduction in the existing payable rate of interest,
 reschedulement and longer period for repayment of loans, conversion of
 overdue interest into funded interest term loan (FITL), conversion of
 Zero Coupon Premium Bonds (ZCPB’s), part of their premium and part of
 working capital loans into Equity, conversion of part of working
 capital loan into working capital Term Loan (WCTL), waiver of unpaid
 dividend on preference shares, waiver of penal interest etc. The said
 CDR package also stipulates conditions to be complied with by the
 Company and arrangement of additional infusion of funds from promoters.
 
 b The Company has complied with most of the conditions as stipulated in
 CDR Rework package. Accordingly, the impact of CDR Scheme as above has
 been incorporated in these financial statements as below:
 
 i) Interest to banks and financial institutions w.e.f. cut off date has
 been accounted for at the rates specified in the said package.
 
 ii) The Cumulative Redeemable Preference Shares (CRPS) aggregating to Rs.
 805,000 shall be redeemed at the rate of 25% and 75% of the face value
 in the financial years ending 31st March 2018 and 31st March, 2019,
 respectively and will carry the coupon rate of 6.50% from new cut off
 date i.e. 1st January 2011. However, dividend accrued on notional
 basis, as same has not been declared and fallen due for payment, and
 penal interest thereon, till the cut-off date, shall be waived.  (Also
 refer Note no. 9 (c ) below)
 
 iii) Zero Coupon Premium Bonds (ZCPBs) amounting to Rs. 1,950,700 shall
 be converted into equity shares of face value of Rs. 1/-each at a price
 to be arrived at as per SEBI guidelines. Accordingly Equity shares
 equal to Rs. 1,950,700 divided by such arrived at price shall be allotted
 to the holders of ZCPBs after necessary compliance & formalities. Out
 of the total premium of Rs. 1,189,781 accrued on these ZCPBs till cut off
 date, a sum of Rs. 314,400 shall also converted into equity share of face
 value of Rs. 1/- each at a price to be arrived at as per SEBI guidelines.
 According Equity shares equal to Rs. 314,400 divided by such arrived at
 price shall be allotted to the holders of ZCPBs after necessary
 compliance & formalities and balance amount of premium of Rs. 875,381 has
 been waived. The amount of premium waived which was earlier adjusted
 from security premium account in earlier years has now been reversed.
 
 iv) Secured and unsecured working capital loans from banks amounting to
 Rs. 240,545 have been converted into working capital term loans (WCTL)
 which together with existing WCTL of Rs. 76,406 have been reschedule so
 as to be repaid in 84 monthly installments, commencing from 30th April
 2012 and ending 31st March 2019.
 
 v) Secured working capital loans from banks amounting to Rs. 170,142
 shall be converted in to equity shares of face value of Rs. 1/- each at a
 price to be arrived at as per SEBI guidelines. Accordingly equity
 shares equal to Rs. 170,142 divided by such arrived at price shall be
 allotted to the respective lenders after necessary compliance &
 formalities.
 
 vi) The outstanding principal amount of secured loan amounting to Rs.
 1,024,584 from financial institutions and banks have been rescheduled so
 as to be repaid in 84 monthly installments commencing from 30th April,
 2012 and ending 31st March 2019 on flat interest rate of 10% p.a. from
 cut off date.
 
 vii) Funded Interest Term Loans (FITL) amounting to Rs. 647,346 have been
 settled at 25% on one time settlement basis. One time settled amount of
 Rs. 161,836 is payable by 30th September 2011. The balance 75% of FITL
 i.e. Rs. 485,509 has been waived off and shown under the head other
 income as waiver of loans & writes back of liability.
 
 viii) Interest accrued and due on simple interest basis amounting to Rs.
 506,500 up to the cut off date on the term loans have been converted
 into Funded Interest Term Loan (FITL) and is to be repaid in three
 equal installments on 31st December 2016, 31st December 2017 and 31st
 December 2018 and shall not carry any interest. Balance amount of
 outstanding interest as on cut off date, comprising of liquidated
 damages etc. amounting to Rs. 83,294 has been waived and shown under the
 head other income as waiver of loans & writes back of liability.
 
 ix) Interest accrued and due on simple interest basis amounting to Rs.
 287,200 up to the cut off date on working capital loans have been
 converted into Funded Interest Term Loan (FITL) and is to be repaid in
 three equal installments on 31st December 2016, 31st December 2017 and
 31st December 2018 and shall not carry any interest. Balance amount of
 outstanding interest as on cut off date, comprising of liquidated
 damages etc. amounting to Rs. 63,928 has been waived and shown under the
 head other income as waiver of loans & writes back of liability.
 
 x) The Company has to create securities as stipulated by the CDR
 Empowered Group.
 
 xi) One of the working capital lender having total outstanding of Rs.
 157,226 as at 31.03.2011 has not agreed to the restructuring granted by
 CDR empowered group. However, the Company is in discussion with the
 lender for fresh proposal which is under consideration.
 
 c Some of the Cumulative Redeemable Preference Share (CRPS)
 shareholders have disputed the modified terms of redemption and rate of
 dividend as per CDR package on the ground that they have not agreed to
 any of the restructuring granted by CDR empowered group and hence
 original terms and conditions of 12% CRPS continues to be in force and
 accordingly are insisting for redemption and dividend as per the
 original terms of the issue of CRPS. One of the preference shareholder
 has earlier fled case against the company for recovery. The Company is
 in the advance stage of negotiation with these CRPS holders to accord
 their approval to reworked package approved under CDR system in view of
 the present financial position of the Company.
 
 d The company is in process of reconciliation of balances with the
 lenders i.e. financial institutions and banks. Adjustments, if any, on
 account of interest/ principal will be made when the same are confirmed
 by them.
 
 e The Company had settled the dues of certain lender/suppliers on One
 Time Settlement (OTS) basis and made the final payment of settled amount
 during the current period. The gain arising out of such OTS has been
 accounted for during the current period under the head other income as
 waiver of loan, interest thereon and write backs. The provision for
 premium on Zero Coupon Premium Bond issued to lender amounting to Rs.
 641,349 which was adjusted from security premium account in earlier
 years has been now reversed.
 
 f Pursuant to the rework of CDR package, some of the loans amounting to
 Rs. 2,435,242, are to be converted into Equity shares of the Company at a
 price to be arrived at as per SEBI guidelines, after complying with
 necessary formalities in this regard. Pending completion of such
 formalities the amount of Rs. 2,435,242 has been kept as  Loans pending
 conversion into Equity and shown under the head Loan Funds.
 
 5.  529,601,640 equity share of Rs. 1/- each have been issued & allotted
 as on 10th February, 2011 pursuant to the Arrangement & Amalgamation to
 the shareholders and Optionally Convertible Debenture (OCD) holders of
 erstwhile Sunvision Engineering Company Private Limited (SECPL) this
 amount was shown as ‘Equity Share Suspense Account’ as on 30.09.2010.
 
 6.  Pursuant to the disinvestment by the Government of India, the
 Company had acquired 1,110,000 equity shares of Rs.100/- each of HTL
 Limited representing 74% of its equity capital at total consideration
 of Rs. 550,000 in terms of Shareholders Agreement dated 16.10.2001. The
 above consideration paid by the Company is subject to post closing
 adjustments on account of difference in net worth of HTL Limited as on
 31.03.2001 and as on the date of purchase of shares in terms of Share
 Purchase Agreement dated 16.10.2001.The Company has submitted its claim
 on account of Closing Date Adjustment to the Government in respect of
 such reduction in net assets of HTL Limited which has not been settled
 by the Government. Due to this, the Company has invoked the provisions
 of the Share Purchase Agreement for settlement of dispute by
 Arbitration. The Hon’ble Arbitral Tribunal has since given the award in
 favour of the company on 10th October, 2007 upholding the claim of the
 company on account of the above to the extent of Rs. 550,000 and interest
 from the date of award.
 
 Since the Government of India has gone in appeal against the above
 arbitral award which is yet to be decided by the Hon’ble High Court, no
 adjustment has been made in the accounts in respect of above award
 pending the final outcome.
 
 7.  The Company had made a payment of Rs. 113,375 to certain cumulative
 preference shareholders as per contractual obligations in the earlier
 years. The said amounts paid have been treated as advances to be
 adjusted against future expected liability of dividend on cumulative
 preference shares.
 
 8.  Dividend on 6,500,000 equity shares of AB Corp Ltd. which are
 pledge with OBC (e- GTBL), amounting to Rs. 39,000 has not been received
 by the Company. The same is under reconciliation and shall be accounted
 for after completion of reconciliation.
 
 9.  During the year, the Company has transferred a sum of Rs. 1,432,715
 to Loans & Advances from the carrying amount of its investment in
 Optionally Fully Convertible Debentures (OFCDs), as per the agreed
 terms with respective investee companies, since the Company has not
 exercised its conversion option and said OFCDs had become overdue for
 redemption. An amount of Rs.1,132,715 had already been provided in the
 accounts in earlier years towards diminution in value of these OFCDs.
 
 10.  Profit on sales of Investment (net) includes Rs. 60 being Profit on
 sales of OFCD’s, [Sale proceeds of OFCDs Rs. 60 Less (cost in books Rs.
 2,700,757) less (Provision already made in earlier years for diminution
 in value Rs. 2,700,757) ].
 
 11.  During the period the Company has paid Guarantee
 contract/obligation amounting to Rs. 64,500 towards obligation payments (
 as Corporate guarantor ) to the lenders of promoted companies against
 their over dues.
 
 12.  Sundry debtors include debts outstanding for more than two years
 amounting to Rs.v2,564,056. The Company is in continuous process of
 working out different modalities of recovery for its remaining long
 outstanding debts. Pending outcome of such exercise, an amount of Rs.
 614,203 has been written off during the period, which is in opinion of
 the management is adequate.
 
 13. Pursuant to the Accounting Standard (AS-28) - Impairment of Assets
 issued by ICAI, the Company had appointed an outside agency for
 conducting an exercise of identifying the assets, if any, that may have
 been impaired. Based on the report Impairment loss of Rs. 795,275 has
 been determined on curtained fixed assets as at 31.03.2011 and the same
 has been provided in the accounts.  The Impairment loss has been
 assessed on the basis of projected cash flows of Cash Generating Units
 (CGUs) for the next 3 years discounted at IRR of 8.5%.
 
 14. Balances of some of the sundry debtors, creditors, lenders ,loans
 and advances are subject to confirmations from the respective parties
 and consequential adjustments arising from reconciliation, if any. The
 Management, however is of the view that there will be no material
 adjustments in this regard.
 
 15. The fgures of the current period are not comparable with those of
 previous year as current period is for six months as against period of
 eighteen months for previous year. Previous year’s fgures have been
 regrouped/reclassified wherever necessary and the fgures have been
 rounded off to the nearest rupee.