1 Basis of Preparation of Financial Statements
 
 The Financial Statements are prepared under historical cost convention
 and fair valuation under scheme approved by the High Court, in
 accordance with the generally accepted accounting principles (GAAP) in
 India and provisions of the Companies Act, 1956 read with the Companies
 (Accounting Standards) Rules, 2006 (Accounting Standard Rules) as well
 as applicable pronouncements of the Institute of Chartered Accountants
 of India (the ICAI).
 
 2 Use of Estimates
 
 The preparation and presentation of Financial Statements requires
 estimates and assumptions to be made that affect the reported amount of
 assets and liabilities and disclosure of contingent liabilities on the
 date of the Financial Statements and the reported amount of revenues
 and expenses during the reporting period. Difference between the actual
 results and estimates is recognised in the period in which the results
 are known/ materialised.
 
 3 Fixed Assets
 
 (i) Fixed Assets are stated at cost/ fair value net of Modvat/ Cenvat,
 Value Added Ta x and include amount added on revaluation less
 accumulated depreciation, amortisation and impairment loss, if any.  
 
 (ii) All costs including financing cost of qualifying assets till
 commencement of commercial operations, net charges of foreign exchange
 contracts and adjustments arising up to March 31, 2007 from exchange
 rate variations, relating to borrowings attributable to fixed assets,
 are capitalised.
 
 (iii) Expenses incurred relating to project, prior to commencement of
 commercial operation, are considered as project development expenditure
 and shown under Capital Work-in-Progress.
 
 (iv) Telecom Licenses are stated at fair value less accumulated
 amortisation.
 
 (v) Indefeasible Rights of Connectivity (IRC) are stated at cost less
 accumulated amortisation.
 
 4 Lease
 
 In respect of Operating Leases, lease rentals are expensed on straight
 line basis with reference to lease terms and considerations except for
 lease rentals pertaining to the period up to the date of commencement
 of commercial operations, which are capitalised.
 
 5 Depreciation/ Amortisation
 
 (i) Depreciation on Fixed Assets is provided on Straight Line Method at
 the rates and in the manner prescribed in Schedule XIV to the Companies
 Act, 1956 except in case of the following assets which are depreciated
 as given below.
 
 (a) Telecom Electronic Equipments - 18 years
 
 (b) Furniture, Fixtures and office Equipments - 10 years
 
 (c) Customer Premises Equipments - 3 years
 
 (d) Vehicles - 5 years
 
 (e) Ducts and Cables - 18 years
 
 (ii) Leasehold Land is depreciated over the period of the lease term.
 
 (iii) Intangible assets, namely Telecom Licenses and Brand Licence are
 amortised equally over the period of Licenses. IRC and Software are
 amortised from the date of acquisition or commencement of commercial
 services, whichever is later. The life of amortisation of the
 intangible assets are as follows.
 
 (a) Telecom Licenses - 12.5 to 20 years
 
 (b) Brand License - 10 years
 
 (c) Indefeasible Right of Connectivity - 15, 20 years
 
 (d) Software - 5 years
 
 (iv) Depreciation on additions is calculated pro rata from the
 following month of addition.
 
 6 Impairment of Assets
 
 An asset is treated as impaired when the carrying cost of assets
 exceeds its recoverable value. An impairment loss is charged to the
 profit and Loss Account in the year in which an asset is identifed as
 impaired. The impairment loss recognised in prior accounting period is
 increased/ reversed where there has been change in the estimate of
 recoverable value. The recoverable value is the higher of the assets''
 net selling price and value in use.
 
 7 Investments
 
 Current Investments are carried at lower of cost and market value
 computed Investment wise. Long Term Investments are stated at cost or
 fair value as required under order of the High Court. Provision for
 diminution in the value of long term investments is made only if such a
 decline is other than temporary in the opinion of the management.
 
 8 Inventories of Stores and Spares
 
 Inventories of stores and spares are accounted for at cost, determined
 on weighted average basis or net realisable value, whichever is less.
 
 9 Employee benefits
 
 Short term employee benefits
 
 All employee benefits payable wholly within twelve months of rendering
 the service are classifed as short term employee benefits. These benefits
 include compensated absences such as paid annual leave and sickness
 leave. The undiscounted amount of short term employee benefits expected
 to be paid in exchange for the services rendered by employees are
 recognised as an expense during the period.
 
 Long term employee benefits 
 
 (i) defined contribution plan
 
 The Company''s contribution towards Employees'' Superannuation Plan is
 recognised as an expense during the period in which it accrues.
 
 (ii) defined benefit plans Provident Fund
 
 Provident Fund contributions are made to a Trust administered by the
 Trustees. Interest payable to the Provident Fund members, shall not be
 at a rate lower than the statutory rate. Liability is recognised for
 any shortfall in the income of the fund vis-à-vis liability of the
 interest to the members as per statutory rates.
 
 Gratuity Plan
 
 The Company''s gratuity benefit scheme is a defined benefit plan. The
 Company''s net obligation in respect of the gratuity benefit scheme is
 calculated by estimating the amount of future benefit that employees
 have earned in return for their service in the current and prior
 periods; that benefit is discounted to determine its present value and
 the fair value of any plan assets is deducted.
 
 The present value of the obligation under such defined benefit plan is
 determined based on actuarial valuation using the Projected Unit Credit
 Method.
 
 The obligation is measured at the present value of the estimated future
 cash flows. The discount rates used for determining the present value of
 the obligation under defined benefit plan, are based on the market yields
 on Government Securities as at the Balance Sheet date.
 
 Actuarial gains and losses are recognised immediately in the profit and
 Loss Account.
 
 (iii) Other Long term employment benefits
 
 Compensated absences which are not expected to occur within twelve
 months after the end of the period in which the employee renders the
 related services are recognised as a liability at the present value of
 the defined benefit obligation at the Balance Sheet date, determined
 based on actuarial valuation using Projected Unit Credit Method. The
 discount rates used for determining the present value of the obligation
 under defined benefit plan, are based on the market yields on Government
 Securities as at the Balance Sheet date.
 
 10 Borrowing Cost
 
 Borrowing costs that are attributable to the acquisition or
 construction of qualifying assets are capitalised as part of the cost
 of such assets upto the commencement of commercial operations. A
 qualifying asset is one that necessarily takes substantial period of
 time to get ready for intended use. Other borrowing costs are
 recognised as expense in the year in which they are incurred.
 
 11 Issue Expenses and Premium on Foreign Currency Convertible Bonds
 (FCCBs)
 
 The premium payable on redemption of Foreign Currency Convertible Bonds
 (FCCBs) is charged to Securities Premium Account over the period of the
 issue. Issue expenses are debited to Securities Premium account at the
 time of the issue.
 
 12 Foreign Currency Transactions
 
 (i) Transactions denominated in foreign currencies are recorded at the
 exchange rates prevailing at the time of the transaction.
 
 (ii) Monetary items denominated in foreign currencies at the year end
 are restated at year end rates. In case of monetary items, which are
 covered by forward exchange contracts, the difference between the
 transaction rate and rate on the date of the contract is recognised as
 exchange difference and the premium paid on forward contracts is
 recognised over the life of the contract.
 
 (iii) Non monetary foreign currency items are carried at cost.
 
 (iv) Any income or expense on account of exchange difference either on
 settlement or on translation is recognised in the profit and Loss
 Account.
 
 (v) Any loss arising out of marking of a class of derivative contracts
 to market price is recognised in the profit and Loss Account.  Income,
 if any, arising out of marking a class of derivative contracts to
 market price is not recognised in the profit and Loss Account.
 
 13 Revenue Recognition
 
 (i) Revenue is recognised as and when the services are provided on the
 basis of actual usage of the Company''s network.  Revenue on upfront
 charges for services with lifetime validity and fixed validity periods
 of one year or more are recognised over the estimated useful life of
 subscribers and specified fixed validity period, as appropriate. The
 estimated useful life is consistent with estimated churn of the
 subscribers.
 
 (ii) Interest income on investment is recognised on time proportion
 basis. Dividend is considered when right to receive is established.
 
 14 Provision for Doubtful Debts and Loans and Advances
 
 Provision is made in the accounts for doubtful debts, loans and
 advances in cases where the management considers the debts, loans and
 advances to be doubtful of recovery.
 
 15 Miscellaneous Expenditure
 
 Miscellaneous Expenditure is charged to the profit and Loss Account as
 and when it is incurred.
 
 16 Taxes on Income and Deferred Tax
 
 Provision for Income Tax is made on the basis of taxable income for the
 year at current rates. Ta x expense comprises of Current Tax and
 Deferred Tax at the applicable enacted or substantively enacted rates.
 Current Ta x represents the amount of Income Ta x payable/ recoverable
 in respect of the taxable income/ loss for the reporting period.
 Deferred Ta x represents the effect of timing difference between
 taxable income and accounting income for the reporting period that
 originate in one period and are capable of reversal in one or more
 subsequent periods. The Deferred Ta x Asset is recognised and carried
 forward only to the extent that there is a reasonable certainty that
 the assets will be realised in future. However, where there is
 unabsorbed depreciation or carried forward loss under taxation laws,
 Deferred Tax Assets are recognised only if there is virtual certainty
 of realisation of assets.
 
 17 Government Grants
 
 Subsidies granted by the Government for providing telecom services in
 rural areas are recognised as Other Operating Income in accordance with
 the relevant terms and conditions of the scheme and agreement.
 
 18 Provisions, Contingent Liabilities and Contingent Assets
 
 Provisions involving substantial degree of estimation in measurement
 are recognised when there is a present obligation as a result of past
 events and it is probable that there will be an outflow of resources. A
 disclosure for a contingent liability is made when there is a possible
 obligation or a present obligation that may, but probably will not,
 require an outflow of resources. When there is a possible obligation or
 a present obligation in respect of which the likelihood of outflow of
 resources is remote, no provision or disclosure is made. Contingent
 assets are neither recognised nor disclosed in the Financial
 Statements.
 
 19 Earning per Share
 
 In determining Earning per Share, the Company considers the net profit
 after tax and includes the post tax effect of any extraordinary /
 exceptional item. The number of shares used in computing Basic Earning
 per Share is the weighted average number of shares outstanding during
 the period. The number of shares used in computing Diluted Earning per
 Share comprises the weighted average shares considered for deriving
 Basic Earnings per Share and also the weighted average number of shares
 that could have been issued on the conversion of all dilutive potential
 Equity Shares unless the results would be anti - dilutive.  Dilutive
 potential Equity Shares are deemed converted as of the begining of the
 period, unless issued at a later date.
 
 20 Employee Stock Option Scheme
 
 In respect of stock options granted pursuant to the Company''s Employee
 Stock Option Scheme, the intrinsic value of the options (excess of
 market price of the share over the exercise price of the option) is
 treated as discount and accounted as employee compensation cost over
 the vesting period. Employees compensation cost recognised earlier on
 grant of options is reversed in the period when the options are
 surrendered by any employee.