1.1 Basis of preparation of Financial Statements
 
 The financial statements have been prepared to comply in all material
 respects with the notified accounting standards by Companies
 (Accounting Standards) Rules, 2006 (''as amended''), and the relevant
 provisions of the Companies Act, 1956. The preparation of financial
 statements is in conformity with the Generally Accepted Accounting
 Principals. The financial statements have been prepared under the
 historical cost convention on an accrual basis of accounting. The
 accounting policies have been consistently applied by the Company and
 are consistent with those used in the previous year. The significant
 accounting policies are as follows:
 
 2.2 Fixed Assets
 
 Fixed assets are stated at cost (net of cenvat credit if availed) less
 impairment loss, if any, and accumulated depreciation. The Company
 capitalises direct costs including taxes (excluding cenvat), duty,
 freight and incidental expenses directly attributable to the
 acquisition and installation of fixed assets. Capital work-in-progress
 is stated at cost.
 
 Telephone instruments having useful life lying with deactivated
 customers for more than 90 days since disconnection are written off.
 
 2.3 Inventory
 
 Inventory is valued at cost or net realisable value which ever is low.
 Cost for the purchase is calculated on FIFO basis.
 
 2.4 Depreciation
 
 Depreciation is provided pro-rata to the period of use (except for
 Telephone Instruments, being ready for use are depreciated from the
 beginning of the month, following the month of purchase), on the
 straight line method based on the estimated useful life of the assets,
 as follows:
 
 (i) Depreciation rates derived from the above are not less than the
 rates prescribed under Schedule XIV of the Companies Act, 1956.
 
 (ii) During the year ended March 31, 2009 the Company has decreased the
 average life of Batteries considered part of Network equipments from
 9.67 years to 5 years.  Resultant impact is not material, hence not
 disclosed.
 
 (iii) Depreciation on the amount capitalized on up-gradation of the
 existing assets is provided over the balance life of the original
 asset.
 
 (iv) Depreciation on the amount capitalised till March 31, 2007 on
 account of foreign exchange fluctuations is provided over the balance
 life of the original asset (refer Note 2.13, below)
 
 2.5 Borrowing Costs
 
 Borrowing costs that are attributable to the acquisition and
 construction of a qualifying asset are capitalised as a part of the
 cost of the asset. Other borrowing costs are recognised as an expense
 in the year in which they are incurred.
 
 2.6 Impairment
 
 The carrying amounts of assets are reviewed at each balance sheet date
 if there is any indication of impairment based on internal/external
 factors. An impairment loss is recognised wherever the carrying amount
 of an asset exceeds its recoverable amount.  The recoverable amount is
 the greater of the assets net selling price and value in use. In
 assessing value in use, the estimated future cash flows are discounted
 to their present value at the weighted average cost of capital. After
 impairment, depreciation is provided on the revised carrying amount of
 the assets over its remaining useful life.
 
 A previously recognised impairment loss is increased or reversed
 depending on changes in circumstances.  However the carrying value
 after reversal is not increased beyond the carrying value that would
 have prevailed by charging usual depreciation if there was no
 impairment.
 
 2.7 Intangibles
 
 All expenditure on intangible items are expensed as incurred unless it
 qualifies as an intangible asset as defined in Accounting Standard 26.
 The carrying value of intangible assets is assessed for recoverability
 by reference to the estimated future discounted net cash flows that are
 expected to be generated by the asset.  Where this assessment indicates
 a deficit, the assets are written down to the market value or fair
 value as computed above.
 
 For accounting policy related to Licence Entry Fees, refer Note 2.8(1),
 below.
 
 2.8 Licence Fees
 
 (i) Licence Entry Fee
 
 The Licence Entry Fee [See Note 1 (b)] has been recognised as an
 intangible asset and is amortised equally over the remainder of the
 licence period from the date of commencement of commercial operations
 [Refer Note 1 (a)]. Licence entry fees includes interest on funding of
 licence entry fees, foreign exchange fluctuations on the loan taken
 upto the date of commencement of commercial operations.
 
 The carrying value of license entry fees are assessed for
 recoverability by reference to the estimated future discounted net cash
 flows that are expected to be generated by the asset. Where this
 assessment indicates a deficit, the assets are written down to the
 market value or fair value as computed above.
 
 (ii) Revenue Sharing Fee
 
 Revenue Sharing Fee, currently computed at the prescribed rate of
 Adjusted Gross Revenue (''AGR'') is expensed in the Profit and Loss
 Account in the year in which the related income from providing unified
 access services is recognised.
 
 An additional revenue share towards spectrum charges is computed at the
 prescribed rate of the service revenue earned from the customers who
 are provided services through the CDMA, GSM and technology.  This is
 expensed in the Profit and Loss Account in the year in which the
 related income is recognised.
 
 Z) Investments
 
 Investments that are readily realisable and intended to be held for not
 more than a year are classified as current investments. All other
 investments are classified as long-term investments. Long term
 investments are stated at cost. However, provision for diminution in
 value is made to recognise a decline other than temporary in the value
 of the investments.  Current investments are carried at lower of cost
 and fair value and determined on an individual investment basis.
 
 2.10 Provisions
 
 A provision is recognised when an enterprise has a present obligation
 as a result of past event; it is probable that an outflow of resources
 will be required to settle the obligation, in respect of which a
 reliable estimate can be made. Provisions are not discounted to its
 present value and are determined based on best estimate required to
 settle the obligation at the balance sheet date. These are reviewed at
 each balance sheet date and adjusted to reflect the current best
 estimates.
 
 2.11 Revenue Recognition
 
 Revenue from unified access services are recognised on services
 rendered and is net of rebates, discounts and service tax. Unbilled
 revenues resulting from unified access services provided from the
 billing cycle date to the end of each month are estimated and recorded.
 Revenues from unified access services rendered through prepaid cards
 are recognised based on actual usage by the customers. Billings made
 but not expected to be collected, if any, are estimated by the
 management and not recognised as revenues in accordance with Accounting
 Standard on Revenue Recognition (''AS 9'').
 
 Revenue on account of internet services and revenue from infrastructure
 services are recognised as services are rendered, in accordance with
 the terms of the related contracts.
 
 2.12 Interconnection Usage Revenue and Charges
 
 The TRAI issued Interconnection Usage Charges Regulation 2003 (TUC
 regime'') effective May 1, 2003 and subsequently amended the same twice
 with effect from February 1, 2004 and February 1, 2005.  Under the IUC
 regime, with the objective of sharing of call revenues across different
 operators involved in origination, transit and termination of every
 call, the Company pays interconnection charges (prescribed as Rs. per
 minute of call time) for all outgoing calls originating in its network
 to other operators, depending on the termination point of the call i.e.
 mobile, fixed line, and distance i.e. local, national long distance and
 international long distance. The Company receives certain
 interconnection charges from other operators for all calls terminating
 in its network.
 
 Accordingly, interconnect revenue are recognised on those calls
 originating in another telecom operator network and terminating in the
 Company''s network.  Interconnect cost is recognised as charges incurred
 on termination of calls originating from the Company''s network and
 terminating on the network of other telecom operators. The interconnect
 revenue and costs are recognised in the financial statement on a gross
 basis and included in service revenue and network operation
 expenditure, respectively.
 
 2.13 Foreign Currency Transactions
 
 Initial Recognition
 
 Foreign currency transactions are recorded in the reporting currency,
 by applying to the foreign currency amount the exchange rate between
 the reporting currency and the foreign currency at the date of the
 transaction.
 
 Conversion
 
 Foreign currency monetary items are reported using the closing rate.
 Non-monetary items which are carried in terms of historical cost
 denominated in a foreign currency are reported using the exchange rate
 at the date of the transaction; and non-monetary items which are
 carried at fair value or other similar valuation denominated in a
 foreign currency are reported using the exchange rates that existed
 when the values were determined.
 
 Exchange Differences
 
 Exchange differences arising on the settlement or on reporting
 Company''s monetary items at rates different from those at which they
 were initially recorded during.  the year, or reported in previous
 financial statements, are recognised as income or as expenses in the
 year.
 
 2.14 Employee Benefits
 
 Effective April 1, 2007, the Company has adopted the Revised Accounting
 Standard -15 ''Employee Benefits''.  The relevant policies are:
 
 Short Term Employee Benefits
 
 Short term employee benefits are recognised in the period during which
 the services have been rendered.
 
 Long Term Employee Benefits
 
 Provident Fund and employees'' state insurance schemes
 
 All employees of the Company are entitled to receive benefits under the
 Provident Fund, which is a defined contribution plan. Both the employee
 and the employer make monthly contributions to the plan at a
 predetermined rate (presently 12%) of the employees'' basic salary.
 These contributions are made to the fund administered and managed by
 the Government of India. In addition, some employees of the Company are
 covered under the employees'' state insurance schemes, which are also
 defined contribution schemes recognised and administered by the
 Government of India.
 
 The Company''s contributions to both these schemes are expensed in the
 Profit and Loss Account. The Company has no further obligations under
 these plans beyond its monthly contributions.
 
 Leave Encashment
 
 The Company has provided for the liability at period end on account of
 unavailed earned leave as per the actuarial valuation as per the
 Projected Unit Credit Method.
 
 Gratuity
 
 The Company pro vides f or gratuity obligations through a defined
 benefit retirement plan (the ''Gratuity Plan'') covering all employees.
 The Gratuity Plan provides a lump sum payment to vested employees at
 retirement or termination of employment based on the respective
 employee salary and years of employment with the Company. The Company
 provides for the Gratuity Plan based on actuarial valuation in
 accordance with * Accounting Standard 15 (revised), Employee Benefits
 The Company makes annual contributions to the LIC for the Gratuity Plan
 in respect of employees.  The present value of obligation under
 gratuity is determined based on actuarial valuation at period end using
 Project Unit Credit Method, which recognizes each period of service as
 giving rise to additional unit of employee benefit entitlement and
 measures each unit separately to build up the final obligation.
 
 a) Short-term compensated absences are provided for on based on
 estimates.
 
 b) Actuarial gains and losses are recognised as and when incurred.
 
 2.15 Income-Tax
 
 Tax expense comprises of current, deferred and fringe benefit tax.
 Current income tax and fringe benefit tax is measured at the amount
 expected to be paid to the tax authorities in accordance with the
 Indian Income Tax Act. Deferred income taxes reflects the impact of
 current year timing differences between taxable income and accounting
 income for the year and reversal of timing differences of earlier
 years.
 
 Deferred tax is measured based on the tax rates and the tax laws
 enacted or substantively enacted at the balance sheet date. Deferred
 tax assets are recognised only to the extent that there is reasonable
 certainty that sufficient future taxable income will be available
 against which such deferred tax assets can be realised. If the Company
 has carry forward of unabsorbed depreciation and tax losses, deferred
 tax assets are recognised only if there is virtual certainty supported
 by convincing evidence that such deferred tax assets can be realised
 against future taxable profits.  Unrecognised deferred tax assets of
 earlier years are re-assessed and recognised to the extent that it has
 
 become reasonably certain or virtually certairi,'' as the case may be,
 that future taxable income will be available against which such
 deferred tax assets can be realised.
 
 2.16 Operating Leases
 
 Where the Company is the lessee
 
 Leases of assets under which the lessor effectively retains all the
 risks and rewards of ownership are classified as operating leases.
 Lease payments under operating leases are recognised as an expense on a
 straight-line basis over the lease term.
 
 Where the Company is the lessor
 
 Assets subject to operating leases are included in fixed assets. Lease
 income is recognised in the Profit and Loss Account on a straight-line
 basis over the lease term. Costs, including depreciation are recognised
 as an expense in the Profit and Loss Account. Initial direct costs such
 as legal costs, brokerage costs, etc.  are recognised immediately in
 the Profit and Loss Account.
 
 2.17 Loss Per Share
 
 Basic loss per share is calculated by dividing the net loss for the
 year attributable to equity shareholders by the weighted average number
 of equity shares outstanding during the year.
 
 For calculating diluted loss per share, the number of shares comprises
 the weighted average shares considered for deriving basic loss per
 share, and also the weighted average number of shares, if any which
 would have been used in the conversion of all dilutive, potential
 equity shares. The number of shares and potentially dilutive equity
 shares are adjusted for the bonus shares and the sub-division of
 shares, if any.
 
 2.18 Segment Reporting
 
 Identification of segments:
 
 The primary reporting of the Company has been performed on the basis of
 business segments. The analysis of geographical segments is based on
 the areas in which the Company''s products are sold or services are
 rendered.
 
 Allocation of common costs:
 
 Common allocable costs are allocated to each segment according to the
 relative contribution of each segment to the total common costs.
 
 Unallocated items:
 
 The Corporate and other segment include general corporate income and
 expense items, which are not allocated to any business segment.
 
 2.19 Cash and Cash Equivalents
 
 Cash and cash equivalents in the Balance Sheet comprise cash in hand
 and at bank.