1.  Background
 
 (a) Nature of business and ownership
 
 Quadrant Televentures Limited (Formerly known as HFCL Infotel Limited)
 (''the Company'' or ''QTL''), Unified Access Services Licensee for Punjab
 Circle (including Chandigarh and Panchkula), is providing complete
 telecommunication services, which includes voice telephony, both
 wireline and fixed wireless, CDMA and GSM based mobiles, internet
 services, broadband data services and a wide range of value added
 service viz., centrex, leased lines, VPNs, voice mail, video
 conferencing etc. The services were commercially launched in October
 2000 and as on March 31, 2011, the Company has an active subscriber
 base of over 1,764,129.
 
 The Company was incorporated on August 2, 1946 with the name of The
 Investment Trust of India Limited (ITI) which was subsequently changed
 to HFCL Infotel Limited on May 12, 2003. This was done pursuant to a
 Scheme of amalgamation (the Scheme), approved by the Hon'' able High
 Court of the State of Punjab and Haryana and the State of Tamil Nadu on
 March 6, 2003 and March 20, 2003, respectively, whereby the erstwhile
 HFCL Infotel Limited (name earlier allotted to the transferor Company)
 (''erstwhile HFCL Infotel'') was merged with the Company with effect from
 September 1, 2002. As per the Scheme envisaged, the Company''s then
 existing business of hire purchase, leasing and securities trading was
 transferred by way of slump sales to its wholly owned subsidiary, Rajam
 Finance & Investments Company (India) Limited (''Rajam Finance'') with
 effect from September 1, 2002.  Rajam Finance was renamed as The
 Investment Trust of India Limited with effect from June 17, 2003 and it
 ceased to be the subsidiary of the Company with effect from September
 30, 2003, due to allotment of fresh equity by Rajam Finance to other
 investors.
 
 The Company, during the year ended March 31, 2004, surrendered its
 license granted by Reserve Bank of India (''RBI'') to carry out NBFC
 business. RBI confirmed the cancellation of the NBFC license as per
 their letter dated May 24, 2004.
 
 On September 24, 2010 the name of Company was changed to Quadrant
 Televentures Limited.
 
 Infotel Tower Infrastructure Private Limited (TTIPL'') is a Subsidiary
 Company. During the year the Company has acquired beneficial interest
 in the remaining 20 equity shares which were earlier held by the
 subscribers to the Memorandum of Association; declaration of beneficial
 Interest in the said shares has been duly filed with the Registrar of
 Companies.  Consequently, the company now holds 100% of the issued
 equity share capital in the subsidiary company.  The principal business
 of the Company is building, establishing, setting-up, accruing,
 developing, advising on, managing, providing, operating and/ or
 maintaining, facilitating conduct of, fully or partially infrastructure
 facilities and services thereof for all kinds of value added services
 including Broadband Towers for telecom operations/services, payment
 gateway services and international gateway services.
 
 (b) License Fees
 
 The Company obtained licence for Basic Telephony Service for the Punjab
 circle (including Chandigarh and Panchkula) by way of amalgamation of
 the erstwhile HFCL Infotel with the Company. Erstwhile HFCL Infotel had
 obtained this licence under fixed license fee regime under National
 Telecom Policy (''NTP'') 1994, valid for a period of 20 years from the
 effective date, and subsequently migrated from the fixed license fee
 regime to revenue sharing regime upon implementation of NTP 1999.
 Further to the Telecom Regulatory Authority of India''s (''TRAI'')
 recommendations of October 27, 2003 and the Department of
 Telecommunications (''DoT'') guidelines on Unified Access (Basic &
 Cellular) Services Licence (''UASL'') dated November 11, 2003, the
 Company migrated its licence to the UASL regime with effect from
 November 14, 2003. A fresh License Agreement was signed on May 31,2004.
 Pursuant to this migration, the Company became additionally entitled to
 provide full mobility services. HFCL Infotel also entered into a
 Licence Agreement dated June 28, 2000, and amendments thereto, with DoT
 to establish maintain and operate internet service in Punjab circle
 (including Chandigarh and Panchkula).
 
 Fixed license fees of Rs. 1,775,852,329 paid under the old license fee
 regime from inception till July 31,1999, were considered as the License
 Entry Fees of the Punjab circle (including Chandigarh and Panchkula) as
 part of the migration package to NTP 1999.
 
 With effect from August 1, 1999, the Company is required to pay revenue
 share license fees as a fraction of Adjusted Gross Revenue (''AGR''), The
 revenue share fraction was set at 10% of AGR with effect from August 1,
 1999 and was reduced to 8% of AGR with effect from April 1, 2004. In
 addition, spectrum charges calculated at 3 per cent of the AGR earned
 through the wireless technology is payable under the license agreement.
 Income from internet services is excluded from the service revenue for
 the purpose of the calculation of AGR.
 
 During the year ended March 31, 2008, the Company has deposited the
 entry fee of Rs. 1,517,500,000 with The Department of Telecommunication
 (''DOT'') for the use of GSM Technology in addition to CDMA technology
 being used under the existing Unified Access Services Licence (''UASL'')
 for the Punjab Service Area. The UASL has since been amended to
 incorporate the license for use of GSM technology on January 15, 2008
 vide DOT''s letter number F.No. 10-15/2004/ BS.II/HITL/ Punjab/17 dated
 January 15, 2008. The Company has launched its GSM services on March
 29, 2010 in Punjab Circle.
 
 (c) Project Financing
 
 The Company''s project was initially appraised by Industrial Development
 Bank of India (TDBI'') during the year ended March 31, 2000.
 
 Pursuant to the migration to UASL regime, the consortium of lenders,
 led by IDBI, through the Corporate Debt Restructuring (''CDR'') mechanism
 approved an overall restructuring of the liabilities of the Company and
 thereby revised the peak funding requirements,
 
 Further, the CDR Empowered Group has approved the proposal of the
 Company for expansion of services, change in the scope of the project,
 cost of project and means of finance and restructuring of debt as per
 the letter dated June 24,2005. As per the said proposal, the peak
 funding requirement has been further revised and the principal
 repayment of existing term loan was rescheduled to be repaid between
 May 1, 2008 and April 1, 2016. Moreover, the rate of interest on
 existing term loan, secured OFCDs and working capital shall be 9.3% per
 annum monthly compounding. The secured OFCD were to be converted into
 equity shares at par subject to applicable provisions of SEBI
 guidelines and other relevant Acts during financial year ended March
 31, 2006.
 
 During the year, the Company has incurred losses of Rs. 2,236,667,344
 resulting into accumulated loss of Rs. 13,636,994,938 as at March
 31,2011 which has completely eroded its net worth and has a net current
 liability of Rs. 6,588,544,442. The ability of the Company to continue
 as a going concern is substantially dependent on its ability to
 successfully arrange the remaining funding and achieve financial
 closure to fund its operating and capital funding requirements and to
 substantially increase its subscriber base. The management in view of
 its business plans and support from significant shareholders is
 confident of generating cash flows to fund the operating and capital
 requirements of the Company. Accordingly, these statements have been
 prepared on a going concern basis.
 
 1.  Commitments and contingent liabilities not provided for in respect
 of:
 
 Sr.  Description                               As at           As at
 
 No.                                         March 31,       March 31,
 
                                                 2011            2010
 
 I.  Estimated Value of Contracts
 
     remaining
 
 To be executed on capital                296,671,624    1025,925,638
 account and not provided for
 net of capital advances
 Rs. 2,677,951 (March 31,2010 -
 Rs. 1,214,168)
 
 II.    Contingent Liabilities and
 Commitments
 
 Financial Bank Guarantees                  74,134,394    185,159,908
 (refer Note (a) below)
 
 Performance Bank Guarantees                53,542,500     52,782,810
 (refer Note (a) below)
 
 III.   Open Letters of Credit              14,143,944      3,612,292
 (Margin deposit for above
 Rs. 1,414,394 (March 31, 2010 -
 Rs. 361,229)
 
 IV.   Income-tax matters under             11,837,921     10,997,359
 Appeal
 (refer Note (b) below)
 
 V.    Claims against the Company            5,381,816      6,004,468
 not acknowledged as
 debts - mainly representing
 miscellaneous claims filed
 against the Company, which
 are subject matter of litigation,
 
 VI.   Others (refer to Note (c,d,e,f,     852,854,133    856,657,573
 g and h) below)
 
 Total                                   1,308,566,332  2,141,140,048
 
 (a) Financial bank guarantees as at March 31, 2011 of Rs. 74,134,394
 (March 31, 2010 - Rs. 185,159,908) and performance bank guarantees of
 Rs. 53,542,500 (March 31, 2010 - Rs. 52,782,810) are secured. The
 details of security created are detailed out in Note No. 9 (a) below.
 
 (b) The Company has certain income tax related matters pending with
 Income Tax Appellate Tribunal for the Assessment Year 2001-02
 aggregating to Rs. 11,837,921 (March 31, 2010 - Rs. 10,997,359).
 
 (c) The Wireless Finance Division of Department of Telecommunications
 has claimed an outstanding of Rs. 29,585,211 towards the Spectrum
 Charges dues from year 2001 to year 2005 vide their letter
 1020/48/2005-WFD dated October 7, 2005. The Company has submitted its
 reply to the department on October 25, 2005 confirming the total due of
 Rs. 29,472 only and paid the said amount. The Wireless Finance Division
 of Department of Telecommunications has subsequently claimed Rs.
 39,310,176 vide letter number 1020/48/2005-WFD dated September 13,2006
 towards the Spectrum Charges dues from year 2001 to year 2006. The
 Company has submitted a detailed reply on October 31, 2006. During the
 year ended March 31,2008, out of the above demand, the Company has
 deposited Rs.  1,801,241 under protest towards the interest due till
 August 31, 2006.  Wireless Finance Division of Department of
 Telecommunications has updated their claim to Rs. 70,604,092 towards
 Spectrum Charges dues from January 1, 2000 to September 30, 2008 vide
 letter number 1020/29/WR/07-08 dated October 24, 2008. The Company has
 once again made a written representation vide its letter dated December
 8, 2008 and August 12, 2009. Subsequently DOT has revised their demand
 to Rs.  70,528,239 vide Letter No.  1020/48/WFD/2005-06/ Dated
 September 6, 2010 to which the Company has made representations vide
 letter dated September 23, 2010, February 3, 2011 and March 17, 2011.
 The reply of which has not been received. Based on the legal opinion,
 the Company is confident that no liability would accrue regarding the
 same in future.
 
 (d) During the year ended March 31, 2007, Bharat Sanchar Nigam Limited
 (''BSNL'') has raised supplementary bill dated August 10, 2006 for Rs.
 167,614,241 towards Inter- connect Usage Charges (TUC) and Access
 Deficit Charges (''ADC'') for the period November 14, 2004 to August 31,
 2005 on the Company. BSNL further raised invoices to the tune of Rs.
 99,346,533 on similar grounds for the period September 1, 2005 to
 February 28, 2006.These charges are on account of unilateral
 declaration of the Company''s Fixed Wireless and Wire line Phone
 services as Limited Mobility Services by BSNL. The Company has
 submitted its reply to BSNL on August 23, 2006 asking for the
 calculation/ basis for the additional amount raised towards IUC and ADC
 by BSNL for Rs. 167,614,241. Subsequently, BSNL issued a disconnection
 notice on August 26, 2006 which required the payment of Rs. 208,236,569
 (including Rs. 167,614,241). The Company has submitted details to BSNL
 for payments already made for Rs. 40,622,328. The Company has
 approached Hon''ble TDSAT on the subject matter and a stay order was
 granted on Company''s petition No. 232 of 2006 against the disconnection
 notice on September 21, 2006. BSNL Jalandhar Office subsequently raised
 a supplementary bill dated March 20, 2007 for Rs. 5,206,780, to which
 the Company has submitted its reply on March 23, 2007 intimating that
 the matter being sub-judice and pending decision by the Hon''ble TDSAT,
 no coercive action be taken against the Company. The hearing on the
 matter has been completed and the Hon''ble TDSAT has pronounced the
 judgment on May 21, 2010 in Company''s favour and has directed that BSNL
 and the Company should exchange relevant information and reconcile tl*
 differences. In the absence of information from BSNL, the Company is
 not in a position to determine the liability with respect to this
 matter. The Company, based on expert legal opinion, believes that there
 would be no financial liability against such bills and accordingly, has
 not recorded any liability towards the IUC and ADC supplementary bills
 during the year ended March 31, 2011.
 
 (e) The Company is in receipt of Show Cause Notice dated June 4, 2007
 from. Department of Telecommunications (''DoT'') for non fulfilment of
 first year''s roll-out obligations of Unified Access Service License
 (''UASL'') Agreement for Punjab Service Area, where in the licensee as
 per the terms of the license agreement was required to ensure that at
 least 10% of the District Headquarter/Towns are covered in the first
 year of the date of migration to UASL which commences from the date of
 Test Certificate issued by Telecom Engineering Centre (''TEC''). As
 stated by DoT in the Show Cause Notice issued, the Company has violated
 the conditions of UASL and accordingly Liquidated Damages of Rs.
 70,000,000 has been imposed and DoT has also sought explanation within
 21 days as to why they should not take action against the Company under
 the UASL Agreement to which the Company has replied on September 27,
 2007 that the Company has not violated the conditions of UASL and based
 on expert legal advice, the Company believes that there would be no
 financial liability against such claims of DoT and accordingly, has not
 recorded any liability towards the Liquidated Damages during year ended
 March 31, 2011.
 
 (f) The Company is in receipt of a demand of Rs. 433,158,340 from
 Bharat Sanchar Nigam Limited (''BSNL'') on December 20,2008 on account of
 unilateral revision of access charges vide its letter dated April
 28,2001 for the period from June 2001 to May 2003, in contravention of
 the Interconnect Agreement and TRAI Regulations.  The Company,
 Association of Unified Service Providers of India ''AUSPF (erstwhile
 Association of Basic Telephone Operators ''ABTO) and other Basic Service
 Operators contested aforesaid revision in the rates of access charges
 before Telecom Dispute Settlement Appellate Tribunal (''TDSAT''). TDSAT
 vide its reasoned and detailed judgement dated April 27, 2005 allowed
 the refund claims and struck down the unilateral revision in the rates
 of access charges by BSNL and held that Telecom Regulatory Authority of
 India (''TRAI'') is the final authority for fixing of access charges and
 access charges would be payable as rates prescribed by the TRAI and as
 per the Interconnect agreements. BSNL preferred an appeal in Hon''ble
 Supreme Court against the order of TDSAT and an interim stay was
 granted on October 19> 2006 Therefore aggrieved by such unilateral
 action on the part of BSNL by raising aforesaid demand and disturbing
 the status-quo, applications were moved by the Company, AUSPI and other
 Operators in the Hon''ble Supreme Court vide C.ANo. 5834-5836 of 2005
 that was listed for hearing on February 9, 2009 and Hon''ble Supreme
 Court passed an order clarifying its previous order of October 19, 2006
 and stayed the refunds claim against the BSNL there by upholding the
 TDSAT order dated April 27, 2005 whereby BSNL is refrained from raising
 the access charges demand. The Company based on the legal opinion
 believes that there would be no financial liability against this demand
 and has accordingly not recorded any liability towards access charges
 during the year ended March 31, 2011.
 
 (g) The Company is in receipt of demand of Rs. 7,000,000 from
 Department of Telecommunications (''DoT''), Licensing Group (Access
 Services) vide their letter dated October 21,2009 for issuance of SIM
 cards on fake ID in Punjab Service Area, where in the Licensee was
 required to ensure adequate verification of each and every customer
 before enrolling him as a subscriber.  The Company has replied to DoT
 vide letter dated November 14, 2009 that the levy of penalty imposed by
 DoT was based on verification done by an agency other than the DOT -
 TERM Cells and the exercise was carried out suo moto and in complete
 disregard of the established procedures and guidelines laid by DoT.
 Accordingly the Company has requested DoT to have this validation done
 by the DOT - TERM Cell. The Company believes that there would be no
 financial liability against this demand and has accordingly not
 recorded any liability towards penalty during the year ended March 31,
 2011.
 
 (h) The Company is in receipt of a demand of Rs. 4,157,718 from Bharat
 Sanchar Nigam Limited (''BSNL'') on February 2, 2009 on account of port
 charges for the year 2008-09, passive link charges, duct cost for
 passive link and active link charges. Out the above Rs. 430,131
 pertaining to port charges for the year 2008 - 09 and active link
 charges was paid by the Company vide receipt number 189 dated February
 18,2009. The amount of Rs. 3,727,587 towards the duct cost for passive
 link and passive link charges was not acceptable by the Company as the
 demand raised by BSNL was unilateral and unjust.  The Company filed a
 petition vide petition number 41(C) of 2009 with Telecom Dispute
 Settlement and Appellate Tribunal (''TDSAT'') to which the Company was
 granted a stay order dated March 25,2009 restraining BSNL from
 recovering the dues from the Company. The hearing on the matter has
 been completed on February 11, 2010 and the judgement from Hon''ble
 TDSAT was delivered December 22, 2010 in fSvour of BSNL where in the
 Company was required to make payment amounting to Rs. 5,191,862 to
 BSNL. The said payment has been made in compliance with die order.
 
 3.  Managerial remuneration
 
 The above managerial remuneration does not include provision of
 gratuity of Rs. 56,688 (March 31, 2010 - Rs. 36,607) and leave
 encashment of Rs. 129,613 (March 31, 2010 - Rs. 58,488), as these
 provisions are computed on the basis of an actuarial valuation done for
 the Company and are provided in the financials (Refer Schedule 13).
 
 Value of perquisites and other allowances has been determined in
 accordance with the provision of the Income-tax Act, 1961.
 
 7.  Share Capital
 
 Equity shares
 
 (a) As of date, the entire paid up Equity Share Capital of the company
 comprising of 612,260,268 equity shares of Rs. 10 each, stands listed
 on the Bombay Stock Exchange (BSE) Consequent upon the issuance of
 8,67,43,116 equity shares allotted pursuant to the conversion of
 75,51,178 OFCDs along with interest accrued thereon to the Financial
 Institution/Banks on July 8, 2009, the non-promoter shareholding in the
 Company increased from 38.02% to 46.80%, and the Promoters''
 Shareholding decreased from 61.97% to 53.19%, whereupon the Company
 requested BSE to grant listing of unlisted shares without insisting
 upon the stipulation of the condition for ''Offer for Sale. BSE, vide
 its letter DCS/AMAL/RCG/GEN/1108/2008-09 dated February 13, 2009,
 inter-alia, agreed to exempt the condition imposed on the Company to
 comply with requirement of making an offer for sale in the domestic
 market, subject to compliance of certain procedural requirements
 including ''three years lock- in'' period of 25% of equity shares that
 had been issued pursuant to the merger on June 17, 2003 i.e. 25% of
 432,000,250 shares (108,000,063 equity shares). The Company had - in
 compliance with the conditions stipulated by BSE - placed under lock-in
 108,000,063 equity shares on May 14, 2009 for a period of 3 years
 ending May 15, 2012. The Company has also complied with all other
 necessary requirements pursuant to the letter from BSE dated February
 13, 2009 related to 83,070,088 equity shares issued pursuant to
 corporate debt restructuring scheme. BSE had also agreed to grant
 in-principle approval for allotment of 86,743,116 equity shares to be
 issued to Banks and financial institutions on conversion upon filing of
 necessary listing application, which the Company has filed, vide its
 letter no.  HlTLfS&L/S-Ol/09/472 and 473 dated March 07, 2009.
 Consequently, vide their notice 20090514-12 dated May 14, 2009 hosted
 on it''s website BSE had granted Listing and Trading permission in
 respect of the 432,000,250 equity shares issued pursuant to scheme of
 amalgamation.  BSE had also granted Listing approval in respect of the
 83,070,088 equity shares allotted as aforesaid vide their letter number
 DCS/PREF/DMN/FIP/239/09-10 dated May 25, 2009 and the shares were
 Listed by BSE vide its notice number 20090605-20 dated June 5, 2009
 
 (b) Out of the total paid up equity share capital comprising of
 612,260,268 equity shares of Rs. 10 each, 8,67,43,116 equity shares of
 Rs. 10/- each (allotted on July 08, 2009, after obtaining in principle
 approval from the BSE and MSE. upon the conversion of Optionally Fully
 Convertible Debentures (OFCDs) allotted pursuant to the Corporate Debt
 Restructuring (CDR) Cell) Consequently, the Listing approval in respect
 of these shares was granted by Bombay Stock Exchange (BSE) vide its
 letter number 20090813-08 dated August 13, 2009 w.e.f. August 14, 2009
 and by the Madras Stock Exchange Limited vide its letter No. MSE/LD/
 PSK/738/215/09 dated September 01, 2009 w.e.f September 01, 2009.
 
 Out of the total paid up equity share capital comprising of 612,260,268
 equity shares of M0 each, 326,705,000 equity shares of Rs. 10/- each
 representing 53.3605% of the total Paid-up share capital of the Company
 - which were earlier held by Himachal Futuristic Communications Limited
 - the erstwhile promoter or Holding Company) till April 3, 2010, were
 acquired by M/s. Quadrant Enterprises Private Limited on 3rd April,
 2010 in compliance with the SEBI Exemption Order in pursuance of the
 proposal for settlement/ change of management of the Company approved
 under the Corporate Debt Restructuring Scheme (CDR Scheme) as approved
 by the Corporate Debt Restructuring Cell (CDR Cell) on August 13, 2009.
 
 (c) On March 31, 2004, the Company obtained the approval from the
 shareholders for de-listing the shares listed in the Calcutta Stock
 Exchange Association Limited (''CSE'') and complied with all the
 necessary requirements for delisting and submitted its application in
 CSE. Despite repeated reminders, the Company has not yet received CSE''s
 approval in this regard.
 
 (d) Pursuant to the Company''s application in this regard, for Voluntary
 Delisting pursuant to the provisions of regulation 6(a) and 7(1) of the
 Securities and Exchange Board of India (Delisting of Equity Shares)
 Regulation, 2009, the Madras Stock Exchange (MSE), MSE has vide its
 letter dated March 15, 2011, accepted and accorded its consent to the
 Voluntary Delisting of the company''s shares vide its letter No.
 MSE/LD/PSK/731/109/11 dated March 15,2011 accepting the Voluntary
 delisting of the company''s equity shares from the MSE.
 
 8.  Secured Loans
 
 (a) As per the CDR Scheme approved on March 10, 2004 and subsequently
 approved on June 4, 2005, the Lenders have signed Master Restructuring
 Agreement (''MRA'') for restructuring of their Debts and Security
 Trusteeship Agreement, whereby the Lenders have entered into an
 agreement and appointed IDBI Trusteeship Services Limited (herein after
 referred as ITSL) as their custodian of security. On November 11,
 2005, the charges were registered in favour of the ITSL for Rupee Term
 Loans, for providing Specific Credit Facility, for Working Capital
 Assistance and Zero % Secured OFCDs. The same are secured by first pari
 passu charge on immovable properties of the Company situated at
 Kandivali (East), Mumbai and properties situated at Mohali & Jalandhar
 under equitable mortgage, first pari passu charge of hypothecation of
 movable properties of the Company including movable plant & machinery,
 machinery spares, tools & accessories and other movables including book
 debts by way of hypothecation, both present and future. Further, the
 same are also secured by assignment of all rights, title, benefits,
 claims and interest in, under the project documents, insurance
 policies, all statutory, government and regulatory approvals,
 permissions, exemptions and waivers on pari passu basis. Subsequently,
 pursuant to the reworked restructuring scheme approved under CDR
 mechanism on June 24,2005, the Company has entered.  into amendatory
 Master Restructuring Agreement and amendatory Security Trusteeship
 Agreement (''STA'') on March 9, 2006, whereby Centurion Bank of Punjab
 has also joined as one of the lenders and has agreed to appoint ITSL as
 their custodian for security and signed the STA in line with other
 lenders in consortium.
 
 On the request of the Company, Corporate Debt Restructuring Cell
 (''CDR'') vide their letter No. CDR (JCP) No. 138 / 2009-10 (''CDR
 Letter'') dated May 20, 2009 has approved the interim revised
 restructuring package. The revised restructuring package inter alia
 includes funding of interest from July 1, 2008 to October 31, 2009 on
 simple interest basis. Funded Interest on Term Loan (''FITL'') would not
 carry any interest and the FITL shall be repaid in 16 equal monthly
 installments commencing from December 1, 2009, and has rescheduled the
 principle installments from August 1, 2008 to November 1, 2009 so as to
 be repayable from December 1, 2009 to March 1, 2011.  Corporate Debt
 Restructuring (''CDR'') cell vide their letter no CDR (JCP) No.
 563/2009-10 dated August 13, 2009 has approved a new restructuring
 package, which includes the induction of strategic investor/ change of
 management and settlement proposal for Term Lenders. All the term
 lenders have given their acceptance to the new restructuring package.
 The CDR has been made effective from April 1, 2009 and accordingly an
 amount of Rs. 373,097,077 towards FITL from July 1, 2008 to March 31,
 2009 has been considered as term loan. In accordance with the new
 restructuring package an amount of Rs. 256,829,422 has been considered
 as Interest for the year ended March 31, 2010, and reversed the
 provision for interest of Rs.1,025,846,205, the differential between
 interest paid and interest accrued on yield basis as per old CDR
 scheme.
 
 During the year the Company has allotted 15,984,543, 2% Cumulative
 Redeemable Preference Shares of Rs. 100 each aggregating to Rs.
 1,598,454,300 on November 9, 2010, to Financial Institution/Banks in
 conversion of 25% of their outstanding loans as on April 01, 2009 in
 terms of new CDR Scheme in compliance with the New CDR Scheme the
 company has repaid on July 06, 2010 and July 07, 2010 an amount of Rs.
 1,598,454,522 being 25% of their outstanding loans as on April 01, 2009
 in terms of New CDR Scheme and the Company is required to allot secured
 Non-Convertible Debenture (''NCD'') of an amount aggregating to Rs.
 3,196,909,043 equivalent to 50% of their outstanding loans as on April
 01, 2009, which shall be issued and the terms of the Revised CDR Scheme
 shall be implemented on the completion of such approvals and conditions
 precedent.
 
 (b) The above mentioned security has been further extended to the
 amount of loans, working capital assistance, specific facility and
 OFCDs together with the interest, compound interest, additional
 interest, default interest, costs, charges, expenses and any other
 monies payable by the Company in relation thereto and in terms with MRA
 and ST A entered into between the lenders and ITSL.
 
 (c) Vehicle Loans of Rs. 351,802 (March 31,2010 - Rs. 1,341,082) are
 secured by way of exclusive hypothecation charge in favour of bank on
 the specific assets acquired out of the loan proceeds of the Company.
 These loans are repayable in monthly instalments and shall be repaid by
 2012. Vehicle loans repayable within one-year amounts to Rs. 300,060.
 Interest rates on vehicle loans vary from 9.65% per annum to 12.15% per
 annum. The average tenure of loan is 36 months.
 
 9.  Unsecured Loans
 
 (a) On October 16, 2004, the Company issued 1,667,761 zero %
 Non-Convertible Debentures (''NCDs'') of Rs. 100 each in lieu of interest
 accrued on term loans from a financial institution and a bank for the
 period April 1, 2003 to December 31, 2003. The NCDs earlier redeemable
 at par on March 31, 2014, are now redeemable at par on March 31, 2016
 after repayment of the term loans as per revised CDR Scheme effective
 from April 1, 2005.
 
 (b) On February 8, 2005, the Company has entered into a buyer''s credit
 loan agreement with The Export Import Bank of China to facilitate
 payment to one of its equipment supplier for a total amount of Rs.
 544,131,662 (US$ 12,134,961). As on March 31, 2010, the Company has
 utilized Rs. 527,470,587 (US$ 12,061,985) of this facility. The
 facility is secured by Financial Bank guarantee of Rs. 108,825,514 and
 by a Corporate Guarantee of Rs. 544,131,662 given by Himachal
 Futuristic Communications Limited erstwhile Holding Company, on pari
 passu basis with other lenders. During the year the Company on July 21,
 2010 has fully repaid the amount outstanding towards the Buyer''s Credit
 Loan.
 
 (c) The Company under the terms of the agreement dated May 1, 2007 had
 taken convertible loan to facilitate expansion and development of
 businesses amounting to Rs. 499,499,886 from Infotel Digicomm Private
 Limited. The convertible loan is repayable on demand; Infotel Digicomm
 Private Limited shall have an option to convert the Loan into Equity
 Shares, subject to getting necessary approvals and subject to
 applicable pricing guidelines as per SEBI and other laws and
 regulations. On September 16, 2009 Infotel Digicomm Private Limited
 (TDPL'') has entered into an assignment agreement with Domebell
 Electronics India Private Limited (''DEIPL''), wherein IDPL has assigned
 the above convertible loan of Rs. 499,499,886 to DEIPL. All the terms
 and conditions relating to the convertible loan has remained the same.
 The interest accrues at the end of each quarter. During the year ended
 March 31, 2010 the Company has provided for interest amounting to Rs.
 14,984,997 @ 12% to IDIPL for the three months ended June 30, 2009.
 DEIPL on the basis of the assignment agreement dated September 16, 2009
 has a right on the interest accruing from July 1, 2009 onwards, DEIPL
 have agreed to waive off the interest from July 1, 2009 till March 31,
 2011, therefore no provision for such interest has been made by the
 Company.
 
 (d) The Company under the terms of the agreement dated May 1, 2007 had
 taken buyer''s credit facility to facilitate funding of the telecom
 project amounting to Rs. 410,740,832 from Infotel Business Solutions
 Limited.  The loan carries 12% interest and is repayable on demand.
 Infotel Business Solutions Limited has the option to convert the loan
 including interest accrued into equity shares, subject to applicable
 pricing guidelines as per SEBI and other laws and regulations.  On
 September 16, 2009 Infotel Business Solutions Limited (TBSL'') has
 entered into an assignment agreement with Domebell Electronics India
 Private Limited (''DEIPL''), wherein IBSL has assigned the above buyer''s
 credit facility of Rs. 410,700,000 to DEIPL.  All the terms and
 conditions relating to the buyer''s credit facility has remained the
 same. The interest accrues at the end of each quarter. During the year
 ended March 31, 2010 the Company has provided for interest amounting to
 Rs.  12,322,225 @ 12% to IBSL for the three months ended June 30, 2009
 and accordingly DEIPL on the basis of the assignment agreement dated
 September 16,2009 has a right on the interest accruing from July 1,
 2009 onwards DEIPL has agreed to waive off the interest from July 1,
 2009 till March 31, 2011, therefore no provision for such interest has
 been made by the Company.
 
 (e) The Company during the year has received an unsecured loan on July
 06, 2010 of Rs. 1,598,500,000 @ 8% per annum, the interest accrues at
 the end of each quarter. The lender has agreed to waive off the
 interest from July 06,2010 to March 31, 2011, therefore no provision
 for said interest has been made by the Company.
 
 10.  Fixed Assets and Capital work-in-progress
 
 (a) Capital Work-in-Progress includes Goods in Transit of Rs. 2,299,900
 (March 31,2010 - Rs. 20,106,204).
 
 (b) As on March 31, 2011, telephone instruments aggregating to a net
 book value of Rs. 121,711,778 (March 31, 2010 - Rs. 155,534,655) and
 other assets aggregating to net book value of Rs. 1,105,736,867 (March
 31, 2010 - Rs. 238,604,630) are located at customer premises, other
 parties and at other operator''s sites, respectively.
 
 11.  Investments
 
 During the year ended March 31, 2009 the Company has incorporated a
 Subsidiary Company Infotel Tower Infrastructure Private Limited with an
 Investment of Rs. 99,800. The principal business of the Company is
 building, establishing, setting-up, accruing, developing, advising on,
 managing, providing, operating and/or maintaining, facilitating conduct
 of, fully or partially infrastructure facilities and services thereof
 for all kinds of value added services including broadband towers for
 telecom operations/ services, payment gateway services and
 international gateway services. During the year the Company has
 acquired beneficial interest in the remaining 20 equity shares which
 were earlier held by the subscribers to the Memorandum of Association.
 Consequently, the company now holds 100% of the issued equity share
 capital in the subsidiary company.
 
 12.  License Entry Fees
 
 During the year ended March 31, 2008, the Company has deposited the
 entry fee of Rs. 1,517,500,000 with The Department of Telecommunication
 (''DOT'') for the use of GSM Technology in addition to CDMA technology
 being used under the existing Unified Access Services Licence (''UASL'')
 for the Punjab Service Area. The UASL has since been amended to
 incorporate the license for use of GSM technology on January 15, 2008
 vide DOT''s letter number F.No.10-15/2004/ BS.II/HITL/Punjab/17 dated
 January 15, 2008. The Company has launched its GSM services on March
 29, 2010 in Punjab Circle.
 
 13.  Inventory for Network Maintenance
 
 The Company holds inventory of network maintenance consumables and RUIM
 cards amounting to Rs. 23,088,275 (March 31, 2010 - Rs. 24,064,756).
 The quantity and valuation of inventory is taken as verified, valued
 and certified by the management.
 
 14.  Deferred Taxes
 
 During the year, the Company has incurred losses of Rs. 2,236,667,344
 (accumulated losses of Rs. 13,636,994,938) resulting into a tax loss
 carry forward situation. The Company is eligible for a tax holiday
 under section 80IA of the Income-tax Act, 1961. Though the management
 is confident of generating profits in the future, there is currently no
 convincing evidence of virtual certainty that the Company would reverse
 the tax loss any forwards beyond the tax holiday period. Accordingly,
 the Company has not recognized any deferred tax assets resulting from
 the carry forward tax losses. Further, no deferred tax liabilities on
 account of temporary timing differences have been recognized since they
 are expected to reverse in the tax holiday period.
 
 15.  Current Liabilities and Provisions
 
 a) Sundry Creditors include amount payable to Micro and Small
 Enterprises as at March 31,2011 of Rs. 103,716 (March 31, 2010 - Rs.
 1,980,142). The information as required to be disclosed under the
 Micro, Small and Medium Enterprises Development Act, 2006 has been
 determined to the extent such parties have been identified on the basis
 of information and records available with the Company.
 
 b) During the year ended March 31, 2008, the Company had obtained
 advance of Rs. 1,517,500,000 to fund the entry fee for using GSM
 Technology under the existing Unified Access Services License (UASL)
 for Punjab Service Area. The amount of aforesaid advance is adjustable
 or refundable on such terms and conditions as may be mutually agreed.
 No interest is payable on the said advance.
 
 17.  Operating leases
 
 A.  Company as a Lessee
 
 The Company has entered into various cancelable lease agreements for
 leased premises. Gross rental expenses for the year ended March 31,
 2011 is Rs. 60,588,535 (March 31,2010 - Rs. 58,224,713).
 
 The Company has entered into site sharing agreements with other
 operators for sharing of their infrastructure sites. During the year,
 the Company has incurred Rs. 549,466,428 (March 31, 2010 - Rs.
 267,620,888) towards infrastructure sharing expenses.
 
 The escalation clause includes escalation at various periodic levels
 ranging from 0 to 50%, includes option of renewal from 1 to 99 years
 and there are no restrictions imposed on lease arrangements.
 
 B.  Company as a Lessor
 
 The Company has entered into cancellable site sharing agreements with
 other operators for sharing of its infrastructure sites. During the
 year, the Company has accrued Rs. 4,557,384 (March 31, 2010 - Rs.
 4,437,292) towards site sharing revenue.
 
 The Company has entered into a non-cancellable lease arrangement to
 provide approximately 7,814.27 Fibre pair kilometres of dark fibre on
 indefeasible right of use (IRU) basis for a period of 15 years. The
 gross block, accumulated depreciation and depreciation expense of the
 assets given on IRU basis is not readily determinable and hence not
 disclosed.
 
 In respect of such leases, rental income of Rs. 35,810,133 (March 31,
 2010 - Rs. 33,956,731) has been recognised in the profit and loss
 account for the year ended March 31, 2011.
 
 18.  Segmental Reporting
 
 The primary reporting of the Company has been performed on the basis of
 business segments. The Company has only one business segment, which is
 provision of unified telephony services. Accordingly, the amounts
 appearing in these financial statements relate to this primary business
 segment. Further, the Company provides services only in the State of
 Punjab (including Chandigarh and Panchkula) and, accordingly, no
 disclosures are required under secondary segment reporting.
 
 20.  Unclaimed deposits from public
 
 During the year ended March 31, 2004, the Company surrendered its
 licence granted by Reserve Bank of India (''RBI'') to carry out NBFC
 business. Accordingly, the Company foreclosed all the unpaid/unclaimed
 deposits as on September 15, 2003 and the interest accruing thereon as
 on that date, and the same have been transferred to the Escrow Account
 in February 2004. On May 24, 2004, the RBI approved the cancellation of
 the Company''s certificate of NBFC registration and provided certain
 directives to the Company to be complied with, pending completion of
 which, the Company would continue to be governed by the relevant
 provisions of the Reserve Bank of India Act, 1934 and various
 directions/instructions issued by RBI from time to time. [Refer
 Schedule 11 & 14 and Schedule 22, Note 1(a))]. On August 10, 2004, the
 Company has obtained the approval of the shareholders for the removal
 of NBFC related objects from the Memorandum of Association. Further,
 the Company submitted a letter dated July 7, 2004 for compliance and
 RBI vide its letter dated July 30, 2004 gave some concessions from
 compliance and has advised the Company to follow certain instructions
 till the balance in the escrow account is settled. The Registrar of
 Companies, Jalandhar, is yet to register the resolution of the
 shareholders due to delay in filing of the documents, for which the
 Company has moved an application to Central Government for condo nation
 of delay. Ministry of Company Affairs vide letter No. 17/23/2005-CL.V
 dated 07th July, 2005 has granted a condonation for filing of form 23,
 which was submitted to Registrar of Companies, Jalandhar vide letter
 No. HITL/C&L/S-31/05/347 dated July 13, 2005 and the registration
 certificate is yet to be obtained.
 
 21.  Debenture redemption reserve
 
 Pursuant to the CDR scheme on October 16, 2004, the Company has issued
 OFCDs aggregating to Rs. 166,776,100 repayable as on March 31, 2016. As
 per section 117C (1) of the Companies Act, 1956, a debenture redemption
 reserve (''DRR'') is to be created to which adequate amounts are to be
 credited out of the profits of each year until such debentures are
 redeemed.
 
 During the year, the Company has incurred loss of Rs. 2,236,774,666.
 Hence, in accordance with the clarification received from the
 Department of Company Affairs vide circular No. 6/3/2001-CL.V dated
 April 18, 2002, the Company has not created Debenture redemption
 reserve.
 
 22.  Employee Benefits
 
 (a) During the year, the Company has recognized the following amounts
 in the Profit and Loss Account
 
 Defined Benefit Plans
 
 The employee''s gratuity fund scheme managed by Life Insurance
 Corporation of India and ICICI Lombard General Insurance Company
 Limited is a defined benefit plan and the same is 100% funded. The
 present value of obligation is determined based on - actuarial
 valuation 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. The obligation for leave encashment is recognised in the
 same manner as gratuity.
 
 Experience adjustments are Nil and have not been disclosed as required
 under para 120 of Accounting Standard 15 relating to Employee benefits.
 
 The Company expects to contribute Rs. 926,120 towards employers''
 contribution for funded defined benefit plans in 2010-11.
 
 d) The expected rate of return on plan assets was based on the average
 long-term rate of return expected to prevail over the next 15 to 20
 years on the investments made by the LIC. This was based on the
 historical returns suitably adjusted for movements in long-term
 government bond interest rates. The discount rate is based on the
 average yield on government bonds of 20 years,
 
 e) The Company made annual contributions to the LIC of an amount
 advised by the LIC. The Company was not informed by LIC of the
 investments made by the LIC or the break-down of plan assets by
 investment type.
 
 f) The estimates of rate of escalation in salary considered in
 actuarial valuation , taken into account inflation, seniority,
 promotion and other relevant factors .  including demand and supply in
 the employment market. The above information is certified by the
 actuary.
 
 23.  The Company is primarily engaged in the business of providing
 telecommunication services. The production and sale of such services is
 not capable of being expressed in any generic unit. Hence, other
 information pursuant to the provisions of the paragraph 3,4C and 4D of
 Part II Schedule VI of the Companies Act, 1956 are not applicable to
 the Company.
 
 24.  Changeover of Management.
 
 a) Securities Exchange Board of India (''SEBI'') has, vide its Order No.
 WTM/KMA/CFD/233/03/2010 dated March 3,2010, granted an exemption to M/s
 Quadrant Enterprises Private Limited, - (''QEPL''), from the
 applicability of Regulation 10 & 12 of the SEBI (Substantial
 Acquisition of Shares and Takeovers) Regulations, 1997, for acquiring
 32,67,05,000 (Thirty Two Crores Sixty Seven Lac and Five Thousand only)
 equity shares of the Company (''Shares'') amounting to 53.3605%
 (approximately fifty three percent) of the issued, subscribed and paid
 up share capital of the Company, from the Company Himachal Futuristic
 Communications limited (''HFCL''). The Order has been passed pursuant to
 the proposal for change of management sanctioned by the Corporate Debt
 Restructuring Cell in terms of its letter No. CDJ (JCP) No. 563/2009-10
 dated August 13, 2009. The aforesaid shares have been acquired on April
 3,2010.
 
 b) In line with the stipulations of the CDR package as approved by the
 CDR Cell vide its Letter no. BY.  CDR(JCP) No. 563/2009-10 dated August
 13, 2009 stipulating a change in the management of the Company, the
 existing Directors except the nominees of Financial Institutions had
 resigned from the Board and therefore to complete the process of change
 in the management of the Company, as per the stipulations of the CDR
 package, the senior management team comprising of Mr. Surendra Lunia,
 Chief Executive Officer, Mr. G.D. Singh, Chief Operating Officer, and
 Mr. Vikash Agarwal, Vice President (Corporate Finance) and Chief
 Financial Officer have resigned from the Company on April 09,2010.
 
 25. Previous year figures have been regrouped where necessary to
 conform to this year classification.
 
 The Schedule referred to above and the Notes to Financial Statement
 form an integral part of the Balance Sheet.