1. The company successfully bid for 11 service areas in the 3G Spectrum
 auction held by the Department of Telecommunications (DoT) during the
 year for a total cost of Rs. 57,685.90 Mn Spectrum in the 2100 MHz band
 has been allotted to the Company for a period of twenty years in the 11
 service areas, viz. Maharashtra, Gujarat, Andhra Pradesh, Kerala,
 Punjab, Haryana, Uttar Pradesh (East),
 
 Uttar Pradesh (West), Madhya Pradesh & Chattisgarh, Himachal Pradesh
 and Jammu & Kashmir.
 
 As of 31st March, 2011, the Company has launched 3G services in select
 towns in the service areas of Gujarat, Himachal Pradesh, Madhya Pradesh
 & Chattisgarh, Haryana, Maharashtra and Uttar Pradesh (West). In the
 service areas of Andhra Pradesh, Kerala and Uttar Pradesh (East), 3G
 services in select towns have been launched in April, 2011.
 
 In the Punjab service area, the Company has not been given clearance
 for commercial use of the allotted spectrum band. The Company had
 approached Hon''ble TDSAT for direction to DoT to allow commercial use
 of the allotted 3G spectrum band. The Hon''ble TDSAT has directed the
 Company to approach it again, if required, upon the final disposal of
 the matters mentioned in point 2 below by the Appellate Bench of
 Hon''ble High Court of Delhi.
 
 2.  The erstwhile Spice Communications Limited (Spice) was amalgamated
 with the Company effective 1st March, 2010 pursuant to sanction of the
 Scheme of Amalgamation by Hon''ble High Court of Gujarat and Hon''ble
 High Court of Delhi. However, upon an application made by DoT on 30th
 March, 2011 for recall of the order dated 5th February, 2010,
 sanctioning the above scheme, the Hon''ble High Court of Delhi while
 pronouncing its judgment on 4th July, 2011, reaffirmed the amalgamation
 of Spice with the Company. However, the said judgment transferred and
 vested unto the DoT, the six licenses granted to erstwhile Spice along
 with the spectrum (including the two operational licenses for Punjab &
 Karnataka service areas), till the time permission of DoT is granted
 for transfer thereof upon an application from the Company to that
 effect.
 
 The Company then filed an appeal, before the Appellate Bench of the
 Hon''ble High Court of Delhi, challenging the above judgment of 4th
 July, 2011. Through interim orders, Appellate Bench has directed DoT to
 :- (i) Accept the License Fee from the Company without prejudice, as
 the Company is continuing to operate the licenses for Punjab &
 Karnataka service areas granted to erstwhile Spice;
 
 (ii) Till the next date of hearing, maintain status quo in relation to
 the aforesaid two operating licenses and no coercive steps in relation
 to any demand pertaining to the four non operating licenses.
 
 Pending the final disposal of the appeal, the consequential financial
 impact, if any, cannot be ascertained.
 
 3.  Secured Loans
 
 a) Foreign Currency and Rupee Loans
 
 Foreign Currency Loans amounting to Rs. 20,776.22 Mn (Previous year Rs.
 14,048.96 Mn) and Rupee Loans amounting to Rs. 56,531.97 Mn (Previous
 year Rs. 42,606.41 Mn) are secured by way of first charge / assignment
 ranking pari-passu interse the lenders, as under:
 
 i. First charge by hypothecation / mortgage on all the movable and
 immovable properties of the Company respectively,
 
 ii. A first priority charge over all intangible assets (excluding
 Telecom Licenses) of the Company,
 
 iii. Assignment of the rights, titles and interest, on deposits,
 investments, bank accounts, book debts, insurance covers, other general
 assets, letters of credit and guarantee or performance bond, provided
 in favour of the Company.
 
 Out of the above Loan, Foreign Currency Loan amounting to Rs. 18,349.02
 Mn (Previous year Rs. 11,791.96 Mn) & Rupee Loan amounting to Rs. 40,531.98
 Mn (Previous year Rs. 42,106.41 Mn) additionally have pledge on 60%
 shareholding of Indus Towers Limited held by wholly owned subsidiary.
 Further Foreign Currency Loan amounting to Rs. 8,733.34 Mn (Previous year
 Rs. 8,782.34 Mn) & Rupee Loan amounting to Rs. 40,531.98 Mn (Previous year
 Rs. 42,106.41 Mn) included above, have additional security as first
 priority charge over Telecom Licenses also.
 
 b) Vehicle Loan
 
 Vehicle Loan amounting to Rs. 292.20 Mn (Previous year Rs. 309.05 Mn) is
 secured by hypothecation of Vehicles against which the loans have been
 taken.
 
 4.  Contingent Liabilities
 
 a) Due to the DoT''s alleged contention that the acquisition of
 erstwhile Spice Communications Limited and its subsequent amalgamation
 with the company violates certain license conditions/ guidelines, the
 company has received the following demands / notices:
 
 (i) Demand notices dated 24th February, 2011 and 1st June, 2011 of Rs.
 500 Mn each in respect of UAS licenses for Punjab and Karnataka service
 areas respectively held by erstwhile Spice Communications Limited.
 
 Demand notices dated 1st June, 2011 of Rs. 500 Mn each in respect of CMTS
 licenses of Delhi, Andhra Pradesh, Haryana and Maharashtra service
 areas held by the company.
 
 The above demands were challenged by the Company before the Hon''ble
 TDSAT and stay has been granted.
 
 (ii) Show Cause notices for termination of six UAS licenses issued in
 2008, which have not been rolled out;
 
 i. Dated 24th February, 2011 and dated 1st June, 2011 for violation of
 license conditions in respect of Punjab & Karnataka service areas
 respectively granted to the Company.
 
 ii. Dated 1st June, 2011 for violation of license conditions in respect
 of Delhi, Maharashtra, Haryana and Andhra Pradesh service areas granted
 to erstwhile Spice Communications Limited, which have not been rolled
 out.
 
 iii. Dated 11th May, 2011 for termination due to non fulfillment of
 rollout obligations in respect of UAS license for Karnataka service
 area granted to Company and for Andhra Pradesh service area granted to
 erstwhile Spice Communications Limited.
 
 The Company had challenged the show cause notice dated 24th February,
 2011 above before Hon''ble TDSAT. The same has been disposed off by
 Hon''ble TDSAT, terming it as premature with a liberty to approach the
 Hon''ble TDSAT afresh, in case the company is aggrieved by any final
 orders of DoT in this matter.
 
 (iii) Demands for liquidated damages amounting to Rs. 276.50 Mn for non
 fulfillment of roll out obligations in respect of UAS licenses issued
 in 2008 to the Company for Punjab and Karnataka service areas and to
 the erstwhile Spice Communications Limited for the service areas of
 Maharashtra, Haryana and Andhra Pradesh.
 
 The company has filed appropriate petitions before the Hon''ble TDSAT
 for quashing these demands. Vide interim orders dated 8th June, 2011,
 the Hon''ble TDSAT has directed the Company to deposit 60% of the amount
 within a week for securing interest of both the parties without
 prejudice to their respective rights and contentions, which the Company
 has since complied with.
 
 b) During the financial year 2006-07, the WPC wing of DoT had raised
 demands towards monthly compounded interest and penalty on WPC charges
 for the period upto financial year 2002-03 in respect of the telecom
 service areas of the erstwhile Idea Mobile Communication Limited, BTA
 Cellcom Limited and Spice Communications Limited amounting to Rs. 844.88
 Mn, which were deposited under protest and reflected as advances.
 Following the favourable decision of TDSAT on petition No. 123 of 2008,
 these amounts have been adjusted against spectrum dues as of 31st
 March, 2011.  Subsequently, DoT has filed an appeal in Hon''ble Supreme
 Court.
 
 i.  Income Tax matters:
 
 The appeals which are pending before various Appellate Authorities
 includes mainly the appeals filed by the company against the demands
 raised by various income tax authorities on account of non deduction of
 tax on discount allowed to prepaid distributors, non deduction of tax
 on roaming charges etc.
 
 ii.  Sales Tax:
 
 The Sales Tax demands as at 31st March, 2011 mainly relates to the
 demands raised by the VAT/Sales Tax authorities at few states on SIM
 cards, prepaid cards and recharge coupons, airtime revenue etc. on
 which the Company has already paid service tax.
 
 iii.  Service Tax:
 
 The service tax demands as at 31st March, 2011 mainly relates to the
 following matters:
 
 - Interpretation issues arising out of Rule 6(3) of the Cenvat Credit
 Rules, 2004;
 
 - Denial of Cenvat Credit related to Towers & Shelters
 
 - Disallowance of Cenvat Credit on input services viewed as not related
 to output service.
 
 iv.  Entry Tax:
 
 In certain states entry tax is being demanded on receipt of material
 from outside the state. However, the Company has challenged the
 constitutional validity of the levy.
 
 v.  Other claims not acknowledged as debts:
 
 Mainly include matters appealed by BSNL in Hon''ble Supreme Court,
 commitments under EPCG, miscellaneous disputed matters with DoT and
 other consumer court cases.
 
 5.  The Company has a contingent obligation to buy compulsory
 convertible preference shares issued by ABTL, from the holder at the
 original issue price of Rs. 20,982.50 Mn.
 
 6. During the year, under ESOS 2006, 2,524,500 options have been
 granted as ''Tranche IV'' to the eligible employees as on 24th January
 2011. Each option when exercised would be converted into one equity
 share of Rs. 10/- each, fully paid up, of the Company. The options will
 vest in 4 equal annual installments after one year of the grant. The
 maximum period of exercise is 5 years from the date of vesting.
 
 The compensation costs of stock options granted to employees have been
 accounted by the Company using the intrinsic value method.
 
 7.  Segment Reporting 1.  Primary Segment:
 
 The Company operates in two business segments:
 
 a) Mobility Services: providing GSM based mobile and related telephony
 services.
 
 b) Long Distance (LD): providing national and international long
 distance services.
 
 8. Related Party Transactions
 
 As per Accounting Standard - 18 on Related Party Disclosures, related
 parties of the Company are disclosed below:
 
 A.  List of Related Parties: Promoters
 
 Hindalco Industries Limited (Hindalco) Grasim Industries Limited
 (Grasim) Aditya Birla Nuvo Limited (ABNL) Birla TMT Holdings Pvt.
 Limited (Birla TMT)
 
 Subsidiaries
 
 Swinder Singh Satara & Co. Limited (SSS & Co)
 
 Aditya Birla Telecom Limited (ABTL)
 
 Idea Cellular Services Limited (ICSL)
 
 Idea Cellular Infrastructure Services Limited (ICISL)
 
 Idea Cellular Towers Infrastructure Limited (ICTIL)
 
 Idea Mobile Commerce Services Limited (IMCSL) (Formerly known as Carlos
 Towers Limited)
 
 Joint Venture
 
 Indus Towers Limited (ITL)
 
 Spice Communications Limited (SCL) ( Upto February 28th, 2010)
 
 Entities having significant Influence
 
 TMI Mauritius Ltd TMI India Ltd (TMI) Axiata Group Berhad
 
 Key Management Personnel (KMP)
 
 Mr. Sanjeev Aga, MD
 
 Mr. Akshaya Moondra, CFO
 
 9. During the financial year 2007-08, company had entered into a
 composite IT outsourcing agreement wherein fixed assets and services
 related to IT has been supplied by the vendor. Such fixed assets
 received have been accounted for as a finance lease. Correspondingly,
 such assets are recorded at fair value of these assets at the time of
 receipt and depreciated on the stated useful life applicable to similar
 assets of the company.
 
 As at 31st March, 2011, an amount of Rs. 1,195.18 Mn towards the supply
 of fixed assets during the year stands outstanding and will be paid
 during financial year 2011-12.
 
 10. Previous year''s figures have been regrouped / rearranged wherever
 necessary to conform to the current year grouping.  Figures for the
 current year are not comparable with that of the previous year due to
 merger of Spice Communications Limited during the previous year.