The Director present the 26th Annual Report of your Company together
 with the Statement of Accounts and Auditors'' Report as well as comments
 of Comptroller & Auditor General of India on the Accounts for the
 financial year ended on March 31, 2012.
 
 PERFORMANCE REVIEW OF MTNL FOR THE FY 2011-12
 
 With the liberalization of the telecommunications sector in India the
 number of operators & availability of deliverable technologies on
 telecom front are continuously on the rise.  Consequently, during the
 year 2011-12 MTNL faced stiff competition from other operators.
 Moreover, MTNL is confined only to the cities of Delhi and Mumbai which
 are having more than 150% tele-density and are among the most
 competitive markets in India. These factors have contributed in
 increased pressure on margins (sliding average revenue per user) due to
 falling tariffs and also on customer retention and acquisition.
 
 Further, the payment of exorbitant spectrum charges in excess of
 Rs.11,000 Crore for acquiring 3G and BWA spectrum that too only for Delhi
 & Mumbai has put tremendous strain on the finances of the company. This
 fund requirement was met through short term loans of about Rs.7,563 Crore
 & remaining from its own resources.
 
 Having achieved the telephone on demand situation in both the cities,
 the main thrust in 2011- 12 was on the expansion of existing mobile and
 broadband services in both Delhi and Mumbai to provide high speed
 internet, high quality video and new generation wireless services.
 Plans have been made to expand latest technology like IP-MPLS, FTTH
 based on G-PON, IN Junction and Access network,etc.
 
 MTNL also made considered efforts to maximize revenue by gainful
 utilization of its assets by:
 
 I.  sharing our passive as well as active infrastructure, such as
 towers and core capacity; and
 
 II.  sharing and developing our real estate.
 
 - MTNL has huge assets in the form of land & building and of late has
 been making efforts for renting out the spare space and has also been
 successful to some extent.  With the advancement of technology the
 space occupied by the equipment is shrinking day by day and more and
 more space is getting available. In its constant effort for generation
 of additional revenues, MTNL has rented out the spare space available
 in different offices / exchange buildings across Delhi and Mumbai. In
 addition, MTNL has considerable assets in the form of spare capacity
 available in the installed equipment.  MTNL intends to rent out this
 available spare capacity and generate additional revenue
 .
 
 Action has also been taken to generate fresh demands by providing
 quality services, better customer care & satisfaction, introduction of
 new services / schemes and innovative marketing strategies. MTNL is
 continuously upgrading its exchanges and external plants and during the
 year 2011-12 this effort has been continued vigorously.
 
 Achievements made during 2011-12 are as under:
 
 - In fiscal year 2008, we commissioned a state of art IP/MPLS core
 network in Delhi and Mumbai to provide a converged IP network for all
 services. To take advantage of IP network and to improve the services
 the company worked on the expansion of this network in 2011-12 and
 deployed around 10 Core   70 edge & aggregate routers in Delhi and 10
 Core   67 edge & aggregate routers in Mumbai leading to creation of
 around 50 POPs ( Point of presence) each in Delhi and Mumbai.
 
 - To bring optical fiber near / to subscriber''s premises in order to
 meet the ever increasing bandwidth demand of customers, we are adding
 optical fibre in the access network and are deploying FTTH based on
 GPON. This will enable MTNL to provide access to this latest technology
 to its'' esteemed customers with very high bandwidth. MTNL has already
 commercially launched the data services on FTTH. Voice services on FTTH
 are going to be launched soon.
 
 - DoT has directed all Service Providers to migrate IPv4 to IPv6
 enabled network latest by Dec 2011. IPv6 migration was a challenging
 task as MTNL has many legacy networks and equipments for various Line
 of Business i.e Broadband, Wireless, Leased Circuit etc. Accepting this
 challenge MTNL took proactive steps for the successful implementation
 of the same.
 
 FINANCIAL RESULTS
 
 Sources and application of funds for the year 2011-12 are given below:-
 
                                                 (In Million Rs.)
 
                                          2011-12            2010-11
 
 Income from Operations                   33732.53          36739.52
 Expenditure (excluding Interest &
 prior period Adjustments)                67200.21          63154.64
 
 Operating Profit /(Loss)                (33467.68)        (26415.12)
 
 Other Income                              2511.64           3180.44
 
 Interest                                  9491.62           4514.76
 
 Profit/(Loss) before Tax                (40447.66)        (27749.44)
 
 Tax Provision for the Year                   0.00            285.38
 
 Prior Period Adjustments                   650.18            (15.67)
 
 Net Profit / (Loss) for the Year        (41097.84)        (28019.16)
 
 Appropriation
 
 Interim/Proposed Final dividend              0.00              0.00
 
 Dividend Tax                                 0.00              0.00
 
 Transfer to/(from):
 
 a) Contingency Reserve                    (189.85)         (2387.95)
 
 b) Reserve for R&D                           0.00              0.00
 
 SOURCES AND USES OF FUNDS
 
 Authorised Capital                        8000.00           8000.00
 
 Issued, Subscribed & paid-up Capital      6300.00           6300.00
 
 Reserves & Surplus                       19066.97          60164.81
 
 Secured and Unsecured Loan               96474.93          74556.75
 
 Deferred Tax Liability (Net)                 0.00              0.00
 
 REPRESENTED BY
 Fixed Assets (Net Block)                157601.75         163230.30
 
 Investment                                4919.79           4946.58
 
 Other Assets                             97579.89          94728.10
 
 Other liabilities                       147229.47         133421.58
 
 Capital Work-in-Progress                  8969.95          11538.15
 
 Note: Previous year’s figures have been re-grouped/re-cast wherever
 considered necessary.
 
 DIVIDEND
 
 Since there has been no operating profit during the financial year
 2011-12, the Board of Directors of your company expressed its inability
 to recommend any dividend for the year under report.
 
 SUBSIDIARY AND JOINT VENTURE COMPANIES
 
 Your company has two subsidiary and two Joint Ventures companies
 namely:-
 
 (i) Millennium Telecom Ltd. (MTL)
 
 MTL was formed by MTNL as its wholly owned subsidiary company basically
 for providing internet and other value added services in the year 2000.
 During the year 2007-08 MTL had decided to undertake undersea cable
 laying project to have own undersea cable from India to Middle East
 with ultimate aim to extend upto USA. As per the directions of the DOT,
 BSNL was taken as 50% Joint Venture partner in the said project.
 However, during 2010-11 the Board had observed that, the cost of laying
 cable was very high while the bandwidth prices had gone down.
 Accordingly, the Board decided not to undertake the said project. Later
 in the year 2011, the Board decided to undertake new activities
 alongwith BSNL but in 2012, BSNL has withdrawn itself from the Joint
 Venture stating that since the Sub-marine cable project has been
 discontinued, there is no need to continue with the Joint Venture.
 Thus, as of now, MTL is a wholly owned subsidiary of MTNL. The Board of
 MTL has now decided to enter into new lines of business which could be
 telecom related as well as other areas. Some of the new lines of
 business could be Infrastructure sharing, Data Centre Outsourcing
 application including Web Hosting, Cloude Computing, Providing Turn Key
 Solution in response to various tenders in Central Government/State
 Governments/PSUs Banks/Private Corporates, etc. or directly on GFR
 basis, Marketing and Selling of digital signatures of MTNL, taking
 franchisee/distributorship of MTNL Mobile Products and SIM Cards of
 other operators. The Management is working on the above line of
 business and is hopeful to generate revenue in the years to come.
 
 (ii) Mahanagar Telephone (Mauritius) Ltd. (MTML)
 
 MTML is a 100% subsidiary of MTNL. The company is having license for
 mobile services, international long distance services and internet
 services. During the year 2011-12, MTML has installed 100K GSM network
 with EDGE to meet the increasing demands as the existing CDMA capacity
 is already fully utilized in Nov - 2011. The current customer base is
 106,402 in CDMA and 18,056 customers in GSM. As per the planning, the
 company has launched High Speed Data services all over the country
 through EVDO Network.
 
 The company is managed by CEO, CTO, CFO and 10 more officers all on
 deputation from the parent company. Other operations are managed
 through outsourcing.
 
 MTML has achieved a turn-over of INR 494 Million during this fiscal
 year 2011-12 compared to the last fiscal year turn-over of INR 499
 Million, through these telecom services due to reduction of tariff due
 with IUC rate reduction. However, MTML has earned increased net profit
 of INR 55 Million (before tax) in this fiscal year compared to last
 fiscal year''s net profit (before tax) of INR 43 Million.(increase of
 27%) due to strict control over expenditure.
 
 During this year 2011-12, in addition to its own technical building
 MTML has started the construction of its administrative building with 7
 floors at an estimated cost of INR 170M and the same is expected to be
 completed in this fiscal year.
 
 All the expenses of the company are paid by its own internal resources
 and also met the CAPEX made for the procurement of the equipments.
 
 (iii) United Telecommunications Ltd. (UTL)
 
 The joint venture was incorporated in the year 2001 under the Companies
 Act of Nepal.
 
 UTL has a total customer base of more than 7,21, 333 in numbers and the
 PCOs are 1,005.
 
 UTLs engineering team follows the O & M procedures scrupulously thereby
 ensuring fault free network round the clock. The Management closely
 monitors the overall performance of the network. The quality of
 services, parameters, subscriber complaints, fault rates, BTS wise
 traffic and ILD traffic are continuously kept under watch.
 
 The company is sustaining its entire operations from internal revenue
 generation only. Monthly OPEX including the interest payments, IUC
 charges, repayment of term loan etc are fully met from its internal
 accruals.
 
 During the period ending 31st March 2012 (2011-2012), the company has
 reported a net profit of INR 59 million.
 
 (iv) MTNL STPI IT SERVICES LTD (MSITS)
 
 The Joint Venture (JV) MSITS was incorporated on 31/03/2006 under the
 Companies Act, 1956, with authorized Capital of Rs. 50 crores. The main
 objective of the JV Company is to provide data center services,
 messaging services, business application services to the identified
 sectors of economic activity.
 
 In order to implement the above said activities, the JV Company has
 taken space of around 11000 sq.ft Super Built-up areas from
 STPI-Chennai and established the physical infrastructure of Data Centre
 (Tier III) with a server farm area of around 3400 sqft. The total
 investment made in this regard is of Rs. 477 lakhs. MSITS is maintaining
 the Data Center as per Tier III standard with 99.98% uptime on 24 X 7
 scale.
 
 The commercial operation of the data centre has already commenced in
 2009 and the Ministry of External Affairs (MEA) has hosted its Passport
 Seva Project through M/s TCS. Keeping in view of physical security and
 to support other collocation requirements that may arise caging had
 been done in inside the Data Center.
 
 In addition the existing facility at Chennai, it has been proposed to
 setup Green Data Centers in the total area of 8000 sqft and 10000 sqft
 in Hyderabad and New Delhi respectively. Towards this , MSITS has
 appointed the consultant through proper tender procedure. MSITS has
 earned the revenue for the period for the year 2010-11: Rs. 29.65 million
 and for the year 2011-12: Rs. 30.30 million.
 
 MSITS is headed by the CEO and 3 officials have been posted from MTNL
 and 2 officials from STPI - Chennai are supporting the CEO for MSITS
 operations in Chennai.
 
 HUMAN RESOURCE DEVELOPMENT
 
 The Company attaches the highest priority to the quality of
 intellectual capital at its disposal and believes that knowledge and
 skill of its employees are the key to achievements of its corporate
 mission. MTNL has sound recruitment policy and comprehensive training
 system.
 
 During the past one year, your Company has laid greater emphasis on
 Human Resources Development. We have been devoting substantial
 resources on building a skilled workforce that has an innate capability
 to counter threats posed by ever changing business environment and to
 take advantages of opportunities presented to serve ever increasing
 customer base.
 
 The Company has been conducting various training and development
 activities which apart from reorienting the employees towards the
 greater organizational purpose, are also focusing on eliminating any
 skill gap and technical obsolescence. The managements'' view on training
 is one of development of employee''s overall personality and enabling
 them in becoming a vital productive resource.
 
 TRAINING TARGETS AND ACHIEVEMENTS
 
 The Training Targets and Achievements for the Financial year 2011-12 is
 given below:-
 
 UNIT      Number of     Achievement     Number of Man     Achievement
           Persons 
           Trained                       Days Target
           Target
 
 DELHI      7000            4337          21000               44156
 
 MUMBAI                     6076                              38542
 
 TOTAL      7000           10413          21000               82698
 
 At present MTNL has two state of the art training centres located in
 New Delhi and Mumbai:-
 
 (I) THE INSTITUTE OF TELECOM, TECHNOLOGY & MANAGEMENT (ITTM ) SHADIPUR,
 NEW DELHI
 
 The Institute of Telecom, Technology & Management, ITTM Shadipur, New
 Delhi is a state of the art training centre of MTNL, Delhi engaged in
 imparting induction training and short duration training to its
 officers and employees in the field of Telecom,IT, Computer system and
 Management.
 
 With impressive growth of Telecom sector in India, the requirement of
 telecom trained personnel is growing day by day. Realizing this ever
 growing demand for telecom personnel, ITTM started training engineering
 students also as part of their summer training.Since 2011,ITTM has
 trained more than 900 students of various engineering colleges.
 
 ITTM has the necessary infrastructure, technical and academic
 competence and excellence for providing training in specialized courses
 in the field of GSM, BroadbandTechnology, Switching, Transmission,
 ExternalPlant, IT, Computer System & Management.
 
 (II)CENTRE FOR EXCELLENCE IN TELECOM TECHNOLOGY AND MANAGEMENT (CETTM),
 MUMBAI
 
 The competition in the field of training is increasing tremendously
 with each passing day. Despite of the fierce competition, CETTM has
 successfully shown 65 % increase in revenue during financial year
 2011-12 with clientèle from various sectors like BPO, Banking,
 Fianance, oil, pharma, IT etc. Keeping to its tradition, CETTM has also
 added more than 50 new clients to its already existing long clientèle.
 
 Nine vacation courses (of six days each) for Engineering Collage
 students under CSR were launched during 2011-12 and 570 students were
 trained during Summer and winter vacations.
 
 Under ITEC -SCAAP program, sponsored by MEA, Govt. Of India, CETTM has
 successfully completed twelve courses in Telecom, IT & Management
 streams. A total of 207 Foreign participants from over 45 countries
 were trained.
 
 Apart from the above, CETTM has successfully trained 6076 in-house
 personnel with an achievement of 38902 Trainee Days.
 
 CETTM has also upgraded ISO certification from ''ISO 9001-2000 ''to ''ISO
 9001-2008.''
 
 The efforts and the results, reiterate our commitment to the growth in
 terms of Business, Quality and Customer Satisfaction; and the Customers
 have always rewarded our good work by giving us the repeated business.
 
 INDUSTRIAL RELATIONS
 
 Industrial peace and Industrial harmony is based on healthy Employee
 Relations and like the previous year, Employees Relations remained
 Cordial throughout the year. The Grievances/ Issues raised by the
 Employees/Union/Associations were given due attention and regard. The
 cases/issues brought up them were settled through regular meetings and
 interactions between Management and Unions/Associations and action as
 mutually agreed was taken to settle them.
 
 A further step towards Workers Participation in critical issues
 concerning business endeavors, a meeting was convened to share the
 views of recognized Unions on the various aspects of our business
 endeavors to obtain opinion from them in further improving the same.
 
 EMPLOYEES'' WELFARE
 
 Employees Welfare Schemes like subsidized Canteen, Creches, Housing,
 Medical facilities, Scholarship to wards of employees, Group Insurance,
 dormitories for females working in night shift etc. continued and
 maintained by the Company for its employees. Sports and Cultural
 activities were also given priority during the year.
 
 IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY
 
 The Company continued its efforts to comply with statutory requirements
 in promoting the use of Hindi and has been able to achieve most of the
 annual targets set by the Govt for implementation and promotion of
 Hindi as Official Language in the Company.
 
 IMPLEMENTATION OF RESERVATION POLICY FOR SC/ST/OBC & PH COMMUNITY
 
 Your Company has endeavoured to fulfill all the statutory requirements
 with regard to implementation of reservation policy for candidate
 belonging to SC/ST/OBC communities and as well as Physically Challenged
 candidates.
 
 WORKING CONDITIONS OF WOMEN EMPLOYEES
 
 We are continuously striving towards gender sensitization amongst our
 employees. Special care has been taken in case of woman employees
 working in night shifts. Also to redress the issues of Sexual
 Harassment at workplace Special Cells have been constituted.
 
 The Report of Parliamentary Committee on empowerment of Women and the
 working conditions of women in MTNL is received during the year.
 Special grants have been sanctioned to Women Welfare Committee at
 Delhi/Mumbai.
 
 CORPORATE SOCIAL RESPONSIBILITY
 
 For MTNL , no specific allotment is made under CSR head considering the
 financial results of the company for the year as per the Guidelines
 issued by the Department of Public Enterprises F. No. 15(3)/2007-DPE
 (GM) dt 9th April, 2010.
 
 Some of the activities which have been carried out in MTNL keeping the
 CSR initiative in mind are:-
 
 - Concession/Rebate to senior citizens, handicapped persons, freedom
 fighters, Gallantry Award winners, war widows/disabled persons in Plan
 250 of MTNL landline subscribers.
 
 - Concession to non residential telephone in
 Schools/Universities/Institutions/Homes for aged/orphanages recognized
 by the government.
 
 - For social cause, around SMS blasts on Polio, Income Tax Returns,
 issues related to Human Commission Right, etc. are being carried out.
 
 - Supports education of two orphan children from Udyan Care.
 
 - Organising MTNL''s Perfect Health Mela to access free health
 check-ups.
 
 - Advertisement released in the souvenirs of NGO''s, etc are working for
 physically & mentally challanged persons, women empowerment, etc.
 
 - Sponsorship of fund raiser event of People for Animals.
 
 MANPOWER STATUS
 
 As on 31st March 2012 your Company had a strength of employees as per
 details given below:-
 
 MTNL Employees working strength as on 31.3.2012.
 
 Group                Working        SC         ST
 
  A                    1099          147        51
 
  B                    4839          589        86
 
  C                   24604         3371       463
 
  D                   11047         2542       846
 
 Total                41589         6649      1446
 
 DRM                     22           -         -
 
 Grand Total          41611         6649      1446
 
 VIGILANCE
 
 The Vigilance organization of MTNL is headed by Chief Vigilance
 Officer. He is an officer of the rank of Joint Secretary, Govt. of
 India. Presently Shri Khushi Ram, IRSSE, is the CVO of MTNL. The CVO is
 responsible for complete vigilance administration.
 
 During the year 2011-12, emphasis was laid on preventive vigilance for
 enhancing the awareness of transparency and accountability in working
 by carrying out various field inspections. System improvement advice
 were issued by Vigilance Unit for reconciliation of Sanchaar Hatts
 products, store verification, recording of pre-bid conference minutes,
 optimum electrical load in various buildings, proper maintenance of
 broadband faults, BTS sites etc.
 
 Further, training programmes/seminars on vigilance and disciplinary
 proceedings have been conducted during the period for the employees to
 make the participants understand the conduct rules of MTNL and
 procedure for handling departmental proceedings.
 
 As per CVC instructions, the Vigilance Awareness Week was observed from
 31-10-11 to 05-11-11. During this week, various activities like pledge
 taking, release of booklet containing DO''s and DON''T, vigilance angle,
 quotations on anti-corruption for internal circulation, display of
 posters related to honesty and integrity were carried out. Further, a
 conference of senior officers of MTNL on Vigilance/disciplinary
 matters and its role in MTNL was conducted in Delhi which was
 addressed by Director (HR) and CVO, MTNL.
 
 Monthly vigilance/disciplinary meetings were held regularly at Delhi &
 Mumbai with concerned GM (Vigilance) team to review the status of the
 cases and expedite the same. The review meetings were also held by CVO
 with ED, Delhi on 19.05.11 and 15.12.11, with ED (Mumbai) on 14.07.11
 and with ED (Wireless Services) on 10.06.11. During these meetings, CVO
 emphasized for further improvement in customer services offered by MTNL
 by taking prompt action on customer''s complaint and having
 customer-centric approach at all levels to enhance the credibility and
 brand image of the company in the minds of the customers.
 
 INTEGRITY PACT PROGRAME WITH TRANSPARENCY INTERNATIONAL INDIAMTNL has a
 Memorandum of Understanding (MOU) with Transparency International India
 (TII) for implementing an Integrity Pact Programme focussed on
 enhancing transparency in its business transactions, contracts and
 procurement process.Under MOU, MTNL is committed to implementing the
 Integrity Pact in all its major procurement and work contract
 activities. Three Independent & External Monitors being persons of
 eminence nominated by TII in consultation with Central Vigilence
 Commission (CVC), monitor the activities. The Integrity Pact has
 strengthened the established system and procedures by creating trust
 and has the ful support of CVC.
 
 CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
 
 Being a service providing organization, the relevant rules in this
 regard are not applicable to your Company.
 
 FOREIGN EXCHANGE EARNINGS & EXPENDITURE
 
 Information with regard to foreign exchange earnings and outgo in the
 Financial Year 2011-12 are as follows:-
 
 Activities relating to Export and total Foreign Exchange earned and
 used:-
 
                                         (Rs. In Million)
  
 Earned :                                   57.90
 
 Expenditure in Foreign Currency            36.31
 
 CORPORATE GOVERNANCE
 
 Your company follows the principle of effective corporate governance
 practices. The Company has taken steps to comply with the requirements
 of Clause 49 of the Listing Agreement with the Stock Exchanges. MTNL
 also comply with the Corporate Governance Guidelines enunciated by
 Department of Public Enterprises (DPE), Government of India for Central
 Public Sector Enterprises (PCSEs). A Report on Corporate Governance has
 been appended under separate section titled '' Corporate Governance
 Report '' and the same forms a part of the Annual Report.
 
 COMPLIANCE OF DPE GUIDELINES & POLICIES
 
 The Guidelines & policies issued by the Department of Public
 Enterprises (DPE) from time to time are being complied with and
 implemented with the approval of the Board of Directors/ Competent
 Authority.
 
 COMPLIANCE CERTIFICATE
 
 A certificate from the Practicing Company Secretary regarding
 compliance of conditions of Corporate Governance as stipulated under
 Clause 49 of the Listing Agreement is attached to this report.
 
 IMPLEMENTATION ON CIRCULAR ISSUED BY MINISTRY OF CORPORATE AFFAIRS ON
 GREEN INITIATIVES IN CORPORATE GOVERNANCE
 
 Your company will send Annual Report for the year 2011-12 by email to
 all the shareholders who are having valid email id account. Further
 your company request shareholders holding shares in electronic mode to
 keep their email addresses updated or provide their email addresses if
 not earlier provided to their DPs.  Members holding shares in physical
 mode are also requested to update their email addresses by writing to
 the Registrar and Transfer Agent of the Company by quoting their folio
 number(s).
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 Pursuant to the provisions of Sec 217(2AA) of the Companies Act, 1956,
 the Directors to the best of their knowledge and belief confirm that:
 
 (i) in the preparation of the annual accounts, the applicable
 accounting standards have been followed along with proper explanation
 relating to material departures;
 
 (ii) they have selected such accounting policies and applied them
 consistently and 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 as at the end of the financial year and of the profit or
 loss of the company for that period;
 
 (iii) they have taken proper and sufficient care for the maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act 1956 and for safeguarding the assets of the company and
 for preventing and detecting fraud and other irregularities;
 
 (iv) they have prepared the annual accounts on a going concern basis.
 
 PARTICULARS OF EMPLOYEES
 
 During the year under report, there was no employee who was in receipt
 of remuneration in excess of limits prescribed under the revised
 provisions of Section 217(2A) of the Companies Act, 1956 read with the
 Companies (Particulars of Employees), Rules, 1975.
 
 COMMENTS OF C & AG ON THE ACCOUNTS
 
 Comments of C&AG and Management replies thereto are given as an
 Annexure to the Directors'' Report.
 
 DIRECTORS
 
 During the year under report, the Board of Directors of your Company
 met frequently. At these meetings, the Board held intensive discussions
 on the budget, important financial transactions and various steps to
 face the impending competition from private operators both in Basic
 Telephone Service and Cellular Mobile Telephony and other value added
 services.
 
 Shri A.K. Garg has been appointed as Chairman & Managing Director (CMD)
 of your company vide DoTs letter dated 05/12/2011 and took over the
 charges of CMD from Shri Kuldeep Singh, who was additional having
 charges of CMD w.e.f. 15/01/2010. Smt. Anita Soni and Shri S.P.Pachauri
 continued to be the Director (Tech), Director (Fin) and Director (HR),
 respectively.  Dr. Rajan Saxena, Shri T.S.Narayanasami and Dr. Vijay
 Aggarwal continued to be the Independent Directors of the Company. Shri
 Malay Shrivastava continues to be the Government Director.
 
 During the period under report, the following changes took place in the
 Directorship of Your Company:- 1) Shri A.K. Garg has been appointed as
 CMD of the company w.e.f. 05/12/2011
 
 2) Shri K.S.Bariar has been appointed director of the company
 w.e.f.17/05/2012 in place of Ms. Nirmala Pillai.
 
 3) Shri Sushil Kumar Shingal has been appointed as Independent Director
 on the Board of the Company w.e.f. 10/05/2012.
 
 4) Shri Adit Jain and Shri V.S.Iyer ceased to be Independent Director
 on the Board of the Company w.e.f. 30/07/2012.
 
 AUDITORS
 
 (1) M/s. Bansal Sinha & Co., Chartered Accountants and M/s Arun K.
 Aggarwal & Associate, Chartered Accountants have been appointed as
 Joint Statutory Auditors of your Company by the Comptroller and Auditor
 General of India for the year 2011-12 and the board has already
 ratified their appointment.
 
 (2) M/s R.M.Bansal,Cost Accountant has been appointed as Cost Auditor
 of your company for carrying out audit under section 233B(1) for the
 records maintained under section 209(1)(d) of Companies Act,1956 and as
 notified under Coat Accounting Records (Telecommuncations) Rules,2002
 and also under Cost Audit Rules,2001.
 
 ACKNOWLEDGEMENT
 
 Your Directors take this opportunity to gratefully acknowledge the
 help, guidance and support received from Deptt. of Telecom (DoT) and
 various Ministries of the Government of India. Your Directors are
 especially grateful to its Bankers, all stakeholders and investors
 including, ADR holders, for their continued patronage and confidence
 reposed in the company.
 
 The Directors would like to express their thanks for the sincere hard
 work and dedication of every employee leading to impressive results of
 your company. The Board is confident that with the employees'' continued
 enthusiasm, initiative and dedicated efforts, your company could face
 the new challenges and opportunities arising out of the resultant
 competition from private operators in the Cellular Mobile, Basic
 Telephone and Internet services and other Value Added services.
 
 For and on behalf of the Board of Directors
 
 sd/-
 (A.K. Garg)
 CHAIRMAN AND MANAGING DIRECTOR
 
 PLACE : NEW DELHI
 DATE  : 14 AUGUST, 2012