IOL Netcom

The Directors present with pleasure the Twenty Third Annual Report and
 Audited Statement of Accounts of the Company for the year ended 31st
 March, 2008.
 
 FINANCIAL RESULTS
 
                                                     (Amount in Rupees)
 Particulars                                  For the year ended
                                      31st March, 2008 31st March, 2007
 
 Total Income                            23,36,84,292      17,39,40,597
 Total Expenditure                       38,64,23,693      18,42,47,601
 Profit / (Loss) before interest 
 and depreciation                       (15,27,39,401)     (1,03,07,004)
 Less: Interest                             88,71,863         19,83,167
 Depreciation                             8,21,59,962       1,79,20,557
 Profit / (Loss) before prior period    (24,37,71,226)     (3,02,10,728)
 expenses
 Less : Prior period Expenses               15,41,297
 Profit / (Loss) before Tax             (24,53,12,522)     (3,02,10,728)
 Less : Fringe Benefit Tax                  15,33,460         12,24,730
 Deferred Tax                                   -             (1,39,011)
 Profit/(Loss) After Tax                (24,68,45,982)     (3,15,74,469)
 Balance brought forward                 (8,19,08,097)     (5,03,33,628)
 Balance carried to Balance Sheet       (32,19,66,058)     (8,19,08,097)
 
 Transfer to Reserves
 
 In view of the loss incurred by the Company for the year ended March
 31, 2008 no amount is proposed to be transferred to the Reserves.
 
 Dividend
 
 In view of the loss incurred during the year, your Directors do not
 recommend any dividend.
 
 Capital Expenditure
 
 Your Company has made substantial investments towards IPTV
 infrastructure and acquiring equipment and software for its further
 expansion and development. The Company has invested Rs. 61,90,81,991/-
 towards fixed assets, Intangible Assets and capital work in progress
 during the year 2007-08.
 
 SIGNIFICANT CORPORATE DEVELOPMENTS
 
 1.  Change of Name of Company: Your Company changed its name from IOL
 Broadband Ltd. to IOL Netcom Ltd. after obtaining your approval in the
 last Annual General Meeting. The name of the Company now adequately
 reflects the broad spectrum of services provided by your Company like
 Broadband Internet, Internet Protocol Television (IPTV), Video on
 Demand (VOD), Interactive Learning, E-Services and solutions,
 E-commerce, Voice over Internet Protocol (VOIP) etc.
 
 2.  Merger: Pursuant to the orders of the Honble High Court of Bombay
 dated November 23, 2007 and the Honble High Court of Karnataka dated
 December 20, 2007, Exatt Technologies Pvt. Ltd. (Exatt), a company
 providing Broadband services through optical fibre technology was
 amalgamated with your Company and accordingly 25,00,000 fully paid-up
 Equity shares of Rs.10/- each of your Company were issued and allotted
 to the erstwhile shareholders of Exatt in the ratio of 25 shares of
 your Company for every share of Exatt. The Court convened meeting of
 shareholders was held on August 31, 2007 and the process of
 amalgamation was completed in the first quarter of 2008. The details of
 the Court convened meeting have been given in the Corporate Governance
 Report which forms part of this Annual Report.
 
 3.  Services: As a part of the e-learning initiative your Company has
 signed an exclusive Broadband Access Deal with ABAN Informatics Pvt.
 Ltd., a Chennai based Company which is part of the multi million dollar
 ABAN group. Your Company deploys cutting edge technology and
 revolutionized e-learning technology by leveraging its broadband last
 mile connectivity enjoyed pan India. Government of India has also
 promised full support and encouragement to the e-learning initiatives
 in tune with the announcement of the Ministry of Human Resources and
 Development to promote online education all over India. Besides, your
 Company has also partnered with other leading e-learning content
 providers like IL& FS ETS Educational initiatives, W3 varsity - Centre
 of excellence in Project Management a REP of PMI- USA for the most
 sought after online programs in Project Management.
 
 Your Company also won the tender to acquire and operate on an outright
 basis the already existing fiber optic network of over 30 kms.
 including state of the art NOC (Network Operating Center) of the large
 NOFRA area - popularly known as Navy Nagar in the southern most tip of
 Mumbai. The NOFRA area comprises of thousands of residential apartments
 and bungalows of Navy, Army and Air Force personnel and also houses the
 Tata Institute of Fundamental Research (TIFR) complex.
 
 Your Company will be providing world class broadband and value added
 services, a host of other WIFI and other high tech services to the
 armed forces- showcasing the latest technologies available with your
 Company like IPTV, Video Conferencing, Surveillance, WIMAX etc.
 
 Your Company has received a Letter of Intent (LOI) from Power Grid
 Corporation Ltd. (PGICL) - a Govt, of India Undertaking, to provide
 last mile connectivity to over 6000 members of the National Stock
 Exchange of India (NSE) in the cities of Mumbai, Delhi, Kolkata,
 Chennai and Ahmedabad.
 
 The last mile connectivity to the members of NSE will be provided by
 the Company on its own and alliance partners Metro Ethernet Networks.
 
 The above mentioned contract will add approximately Rs.50 Crores
 annually to the Companys top line in addition to significant
 collection and FMS revenues from large broking houses across the
 country.
 
 Your Company also announced plans to create a pan India, ultra modern
 secure NGN networks for mission critical applications enabling it to
 execute similar projects for other organizations.
 
 Share warrants
 
 During the year, 8,00,000 Equity share warrants issued to Rose Pink
 Trading Pvt. Ltd. on 18/04/2006 were converted into fully paid up
 Equity shares of the Company on 11/06/2007.
 
 During the period ended March 31, 2008, the Company, after obtaining
 your approval, issued the following Equity share warrants:
 
 Particulars                                  No. of      Face Value
                                             warrants     per warrant
                                                         (in Rs.)
 
 R.K.G. Tele Communications Pvt. Ltd        1,15,000         10
 Sinewave Properties Pvt. Ltd.              2,22,500         10
 Prominent Sales Pvt. Ltd.                  4,25,500         10
 Vandan Consultancy Pvt. Ltd.               3,15,000         10
 New Era Technobuild Pvt. Ltd               3,24,500         10
 Virtual Metachem (India) Pvt. Ltd.         2,32,000         10
 Virag Credit & Holdings Pvt. Ltd.          3,65,500         10
                                           20,00,000
 
 Amount received            Date of
 as on March 31,           allotment
 2008 (in Rs.)
 
    66,24,000             23/01/2008
  1,28,16,000             23/01/2008
  2,45,08,800             23/01/2008
  1,81,44,000             23/01/2008
  1,86,91,200             29/01/2008
  1,33,63,200             30/01/2008
  2,10,52,800             31/01/2008
 11,52,00,000
 
 MATERIAL EVENTS AFTER MARCH 31, 2008
 
 Conversion of Equity warrants
 
 7,00,000 Equity Warrants which were allotted to Maula Trading Company
 Pvt. Ltd. on 26/12/2006, at a premium of Rs.85/- per warrant were
 converted into 7,00,000 fully paid up Equity shares of face value of
 Rs.10/- each on 11/04/2008.
 
 MAJOR AGREEMENTS ENTERED INTO BY THE COMPANY
 
 Your Company signed a VOIP service provider agreement with MTNL and has
 thus taken a bold step in introducing VOIP services, as done by other
 telecom companies, and enhanced its Average Revenue per User (ARPU).
 This agreement will allow your Company to interconnect with millions of
 MTNL subscribers with local/STD/ISD calls, at low rates. Your Company
 expects a capacity of 1 billion minutes in next 2 years time and
 expecting huge increase in VOIP and Broadband connections in the near
 future. Videophone services are available to all Broadband subscribers
 along with VOIP and tele conferencing services. By this agreement your
 Company is now able to offer bundled voice-video-data triple play
 services in addition to IPTV services.
 
 Your Company has entered into CDMA Franchisee Agreement with Mahanagar
 Telephone Nigam Limited (MTNL) as a lead consortium partner to provide
 CDMA Mobile services, in Indias two largest cities Mumbai and Delhi
 which have the highest tele density and growth and plans to introduce
 its IOL mobile brand within 90 days.
 
 Your Company will also introduce a host of unique Value Added Services
 (VAS) enhancing the multiplay user experience. The combined Average
 revenue per user (ARPU) is expected to be over Rs.4507- per month with
 a targeted base of over 1 million in the next few months.  The revenue
 from this service is expected to contribute significantly to the top
 line of the Company.
 
 The initiation of Companys CDMA mobile services will now allow the
 Company to offer multiplay services comprising of Mobile, Data Card,
 Desktop CDMA phone, PCO, IPTV, Broadband and VOIP.
 
 With the above mentioned capabilities, your Company joins elite group
 of select few large telecom companies in India capable of offering
 multiplay services all over India
 
 INFORMATION & EXPLANATION TO RESERVATIONS/QUALIFICATIONS IN THE
 AUDITORS REPORT
 
 * Company has initiated appropriate legal action against the defaulting
 parties. In the opinion of the management, major amount is expected to
 be realised in the financial year 2008-09.
 
 Based on legal consultants observation, your Company is of the view
 that all stutatory libilities will be settled.
 
 DISCLOSURE OF EMPLOYEE STOCK OPTIONS AS PER SEBI (EMPLOYEE STOCK OPTION
 SCHEME AND EMPLOYEE STOCK PURCHASE SCHEME) GUIDELINES, 1999
 
 As of date, Company has not granted any options under the ESOP Scheme
 2005.
 
 PUBLIC DEPOSITS
 
 Your Company has neither invited nor accepted or renewed any deposits
 from the public during the year under report.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 Pursuant to requirement under Section 217(2AA) of the Companies Act,
 1956 and based on the representations received from the Operating
 Management and on the basis of discussion with Statutory Auditors, the
 Board of Directors hereby confirm;
 
 - in the preparation of the annual accounts for the financial year
 ended 31st March, 2008, the applicable accounting standards have been
 followed along with proper explanation relating to all material
 departures;
 
 - that the Directors had selected such accounting policies and have
 applied them consistently and made judgments and estimates that were
 reasonable and prudent so as to give a true & fair view of the state of
 affairs of the Company at the end of the financial year and of the loss
 of the Company for that period;
 
 - that the Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act, 1956, for safeguarding the assets of
 the Company and for preventing and detecting fraud and other
 irregularities;
 
 - that the Directors have prepared the annual accounts for the
 financial year ended 31st March, 2008, on a going concern basis.
 
 DIRECTORS
 
 In accordance with the provisions of the Companies Act, 1956, and the
 Companys Articles of Association, Mr. Sanjay Jagtap and Mr. M. K.
 Chouhan, Directors of the Company, retire by rotation at the ensuing
 Annual General Meeting and being eligible, offer themselves for
 re-appointment.
 
 The information on the particulars of Directors seeking re-appointment
 as required under Clause 49 of the Listing Agreement executed with the
 Bombay Stock Exchange Limited and the National Stock Exchange of India
 Ltd. has been given in the Report on Corporate Governance.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
 EARNINGS / OUTGO.
 
 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, with respect to this matter is
 appended hereto and forms part of this report.
 
 PERSONNEL
 
 As required by the provisions of Section 217(2A) of the Companies Act,
 1956, read with Companies (Particulars of Employees) Rules 1975. as
 amended from time to time, the name and other particulars of the
 employees is required to be part of this Report. However, as per the
 provision Section 219(1)(b)(iv) of the Companies Act, 1956, the Report
 and Accounts are being sent to all shareholders of the Company
 excluding the aforesaid information. Any shareholder interested in
 obtaining such particulars may write to the Company Secretary at the
 Registered office of the Company.
 
 CORPORATE GOVERNANCE
 
 Your Directors reaffirm their continued commitment to Corporate
 Governance. Your Company adheres to all mandatory requirements as
 stipulated in Clause 49 of the Listing Agreement. A detailed report on
 Corporate Governance together with a certificate confirming compliance
 of conditions of Corporate Governance, pursuant to the requirements of
 Clause 49(VI) of the Listing Agreement, annexed herewith forms part of
 this Annual Report.
 
 MANAGEMENT DISCUSSION AND ANALYSIS REPORT
 
 A detailed Management Discussion and Analysis Report, pursuant to
 Clause 49(IV)(F) of the Listing Agreement, annexed herewith forms part
 of this Annual Report.
 
 AUDITORS
 
 M/s Haribhakti & Co., Chartered Accountants, the Auditors of your
 Company, hold office till the conclusion of the ensuing Annual General
 Meeting and are eligible for re-appointment. The Company has received a
 letter from M/s. Haribhakti & Co., to the effect that their appointment
 as Auditors, if made would be within the limits under Section 224(1-B)
 of the Companies Act, 1956.
 
 APPRECIATION
 
 Your Directors would like to place on record their sincere gratitude to
 the Stakeholders, Department of Telecommunications (DoT), Telecom
 Regulatory Authority of India (TRAI), the Central Government, the State
 Governments, Financial Institutions, Business Associates and Companys
 Bankers for their continued support and faith in the Company. Your
 Directors are also happy to place on record their appreciation for the
 whole-hearted co-operation, commitment and contribution made by all the
 employees in ensuring an excellent all round operational performance
 and look forward to their continued support.
 
                            For and on behalf of the Board of Directors
 
                                            A.S. Oberai
                                       Whole Time Director
 Place : Mumbai
 Date  : 4th September, 2008