The Directors have pleasure in presenting the Fourteenth Annual Report
 on the business and operations of the Company, together with the
 Audited Statement of Accounts for the period ended on 31st March, 2009.
 
 FINANCIAL HIGHLIGHTS
 
 (Amount in Rs. mn)
 
 Particulars                      For the period          For the year
                                   1st Jan08 to         1st Jan07 to
                                      1stMar 09         31st Dec07
 
 Service Revenue                       15,805                9,578
 Other Income                              50                  327
 Total Income before sale
 of Passive Infrastructure             15,855                9,905
 Operating Expenditure                 12,893                7,351
 OPERATING PROFIT                       2,962                2,554
 Profit on sale of Passive                221                4,393
 Infrastructure
 
 PROFIT BEFORE INTEREST,                3,183                6,947
 DEPRECIATION AND
 AMORTISATION
 Interest and financing charges (Net)   3,023                1,170
 Depreciation and Amortisation          4,915                1,814
 Impairment in license value                                 4,845
 Amortisation of miscellaneous            596                   80
 expenditure written off
 PROFIT/ (LOSS) BEFORE TAX            (10,196)               3,883
 Prior period expenses/(income)            10                  -
 Taxation (Net)                           (53)                  82
 PROFIT/ (LOSS) AFTER TAX             (10,153)               3,801
 
 CHANGE OF FINANCIAL YEAR
 
 Your Directors wish to apprise you that in order to have consistency in
 the maintenance of books of accounts and tax records, the financial
 year of your Company has been changed from Jan-Dec cycle to
 April-March cycle. Thus, the current financial period of the Company
 had since been extended to fifteen months period that has ended on 31st
 March, 2009.  Hereafter, the Company shall follow a financial year
 cycle of April to March every year. Accordingly, the figures for the
 current
 
 period represent the operations for the extended period of 15 months
 ending 31st March, 2009.
 
 The Revenues from Services and from Income from other sources, for the
 current period were Rs 15,855 mn as against Rs 9,905 mn for the
 previous year ended 31st December, 2007.  The Operating Profit for the
 period ended 31st March, 2009 was Rs 2,962 mn against Rs 2,555 mn for
 the previous year.  During the current period, further 128 telecom
 towers were sold for a consideration of Rs 588 mn, giving rise to
 profit on sale of Passive Infrastructure of Rs 221 mn. During the
 previous financial year, the profit on sale of Passive Infrastructure
 from 747 telecom towers was Rs 4,393 mn. As a result, the Profit before
 Interest, Depreciation & Amortisation, for the current period was Rs
 3,183 mn against Rs 6,947 mn for the previous year.
 
 During the current period, miscellaneous expenditure to the extent not
 written off, amounting to Rs 596 mn was fully charged to the P&L
 Account.
 
 The loss before tax, after providing for impairment in the values of
 the overlapping licenses of Rs 4,845 mn was Rs 10,196 mn for the
 current period. The loss after tax for the current period is Rs 10,152
 mn.
 
 The subscriber base increased to 4.1 mn as on 31st March, 2009 from 3.8
 mn as on 31st December, 2007, registering a growth of 8% during the
 period.
 
 CHANGE OF MANAGEMENT
 
 During the period under review, MCorpGlobal Communications Private
 Limited (MCPL) (the erstwhile promoter of the Company) had entered
 into a Share Purchase agreement with Idea Cellular Limited (Idea), one
 of the present promoter of the Company, inter alia for sale of its
 entire shareholding consisting of 281,489,350 equity shares of the
 Company.
 
 Pursuant to the said agreement, Idea along with persons acting in
 concert, viz., Axiata Group Berhad (formerly known as TM International
 Berhad), TMI Mauritius Ltd., TMI India Ltd. and Green Acre Agro
 Services Private Limited had made an open offer to acquire upto 20%
 equity held by members of the Public in terms of relevant provisions of
 the SEBI Takeover Code.  Post the closure of the Public offer, the
 shareholding of Idea in the Company stands at 41.09%.The shareholding
 of TMI India Ltd. stands at 49%. Green Acres Agro Services Private
 Limited acquired 8.81 % shares under the said public offer.
 
 AMALGAMATION WITH IDEA
 
 Your directors wish to inform that your Company, as one of the
 signatories to a Merger Co-operation Agreement, inter alia, between
 Axiata Group Berhad (formerly known as TM International Berhad) and
 Idea, has consented for the amalgamation of the Company with Idea,
 subject to the completion of necessary formalities under the relevant
 provisions of the Companies Act, 1956 and other regulatory
 requirements.
 
 Your Company has since filed an application with the Honble High Court
 of Delhi at New Delhi, for its approval to the said amalgamation of the
 Company with Idea and the same is under process.
 
 Your Directors believe that the amalgamation would achieve economies of
 scale, and other operational synergies which would result in the
 optimization of operation and capital expenditure and lead to increased
 competitive strength, cost reduction and efficiencies, productivity
 gains by pooling the financial, managerial and technical resources,
 personnel capabilities, skill expertise and technologies of both the
 Companies.
 
 It is further advised that as a result of the amalgamation, Idea shall
 issue and allot new equity shares to each shareholder of the Company,
 in the ratio of 49 equity shares in Idea of Rs 10/- each credited as
 fully paid up, for every 100 equity shares of Rs 10/- each fully paid,
 held of such equity shareholder in the Company on a record date to be
 fixed in this respect.
 
 DEMERGER OF UNIFIED ACCESS SERVICES LICENSES (UASLs) IN RESPECT OF
 DELHI, HARYANA, MAHARASHTRA AND ANDHRA PRADESH SERVICE AREAS
 
 As you are aware, Idea has acquired a 41.09% stake in your Company, to
 be followed, subject to approvals, by the amalgamation of your Company
 with Idea. Your Company holds UASLs dated 29lh February, 2008 for the
 service areas of Andhra Pradesh, Maharashtra, Haryana and dated 3*
 March, 2008 for the service area of Delhi. In light of the Idea merger
 developments, your Company sought to de-merge these overlapping
 licenses to a third party for a consideration, which, net of costs,
 would accrue to the shareholders of the Company (other than Idea). The
 Company entered into an agreement to this effect and filed the
 application under Sections 391 to 394 of the Companies Act, 1956, with
 the Delhi High Court.  However, the Company has presently, sought
 deferment from the Court for holding the shareholders and creditors
 meetings, due to the absence of policy clarity. Further action and
 completion of the de-merger process is contingent upon obtaining
 clarity and also upon satisfactory conclusion of other necessary
 conditions.
 
 LISTING ON NATIONAL STOCK EXCHANGE OF INDIA
 
 During the period under review, Equity Shares of the Company were also
 listed at National Stock Exchange of India Limited (NSE) on 16th
 June, 2008, with a view to provide more liquidity for shareholders. The
 Annual Listing Fees for the year 2009- 10 have been paid to Bombay
 Stock Exchange (BSE) and NSE.
 
 USE OF IPO PROCEEDS
 
 The Company has placed the statement containing the uses/ application
 of funds raised through the IPO before the Audit Committee. The
 proceeds of the public issue have been utilized according to the
 objects stated in the offer document and reported on quarterly basis as
 a part of financial results published pursuant to Clause 41 of the
 Listing Agreement.
 
 TERM DEPOSITS
 
 During the period under review, the Company has not accepted any
 Deposits from the public within the meaning of Section 58 A of the
 Companies Act, 1956.
 
 SUBSIDIARY
 
 There has been no operation in Carlos Towers Limited, the subsidiary of
 the Company, during the period under review. A statement under Section
 212 of the Companies Act, 1956, concerning the subsidiary Company is
 attached to this report.
 
 DIRECTORS
 
 During the period under review, Mr. Bhupender Kumar Modi, Mr. Dilip
 Modi, Mr. Hetal Gandhi, Mr. Krishan Lai Chugh, Mr.  D. R. Mehta and Mr.
 Mahesh Prasad, resigned from the Board of Directors.
 
 Mr. Ashish Dwivedi, Mr. M.R. Prasanna, Mr. G.R Gupta and Mr. Baldev Raj
 Gupta were appointed as additional directors of the Company, to hold
 office up to the date of ensuing Annual General Meeting. These
 additional directors are eligible for appointment as directors of the
 Company at the ensuing Annual General Meeting.
 
 At the ensuing Annual General Meeting, Mr. Yusof Annuar Yaacob,
 director of the Company, retires by rotation, and being eligible,
 offers himself for re-appointment.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 Pursuant to the requirement under Section 217(2AA) of the Companies
 Act, 1956, with respect to Directors Responsibility Statement, and
 subject to the disclosures in the Annual Accounts, the Board of
 Directors hereby confirm that:
 
 (i) in the preparation of the annual accounts, the applicable
 accounting standards had been followed alongwith proper explanation
 relating to material departures, if any;
 
 (ii) the Directors had 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 financial period ended 31st March,
 2009, and of the profit of the Company for the period ended 31st March,
 2009;
 
 (iii) the Directors had taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of Companies Act, 1956, for safeguarding the assets of the
 Company, and for preventing and detecting fraud and other
 irregularities; and
 
 (iv) the Directors had prepared the Annual Accounts on a going concern
 basis.
 
 AUDITORS
 
 M/s BSR & Co., Chartered Accountants, the Statutory Auditors of the
 Company, retire at the conclusion of the ensuing Annual General
 Meeting. The Directors of the Company, in their meeting held on 17,h
 June, 2009, have recommended appointment of M/s Delloite Haskins and
 Sells, Chartered Accountants, as the Statutory Auditors of the Company
 to hold office from the conclusion of the ensuing Annual General
 Meeting until the conclusion of the next Annual General Meeting.
 
 The Company has received letter from M/s Delloite Haskins and Sells,
 Chartered Accountants, to the effect that their appointment if made,
 would be within the prescribed limits under Section 224 (1B) of the
 Companies Act, 1956 and that they are not disqualified for such
 appointment.
 
 AUDITORS REPORT & NOTES TO ACCOUNTS
 
 The Auditors Report and the Notes to the Accounts are self-
 explanatory. The Information and Explanations on reservations /
 qualifications in the Auditors Report pursuant to Section 217(3) of
 the Companies Act, 1956, are as under:
 
 S.  Reference to Management response
 
 No. Audit Report
 
 1 Paragraph 4 (F).   Note B 15(a) to Schedule 23 is
                          self explanatory.
 
 2 Clause (i) (a) of  Steps are being taken to prepare Annexure to the
                      proper records of assets on a 
                      trial Auditors Report.  basis.
 
 CORPORATE GOVERNANCE & COMPLIANCE CERTIFICATE
 
 A detailed report on Corporate Governance, which forms an integral part
 of the Directors Report, is given in Annexure A.  A certificate
 confirming compliance to the conditions of Corporate Governance from a
 practicing Company Secretary, as stipulated under Clause 49 of the
 Listing Agreement, is annexed to the Corporate Governance Report.
 
 MANAGEMENT DISCUSSION AND ANALYSIS REPORT
 
 As required under Clause 49 of the Listing Agreement entered into with
 the Stock Exchanges, the Management Discussion and Analysis Report is
 given as Annexure B and forms an integral part of the Directors
 Report.
 
 ADDITIONAL INFORMATION
 
 The additional information required under Section 217(1)(e) of the
 Companies Act 1956, read with the Companies (Disclosure of Particulars
 in the Report of the Board of Directors) Rules, 1988 with respect to
 Conservation of Energy, Technology Absorption and Foreign Exchange
 Earnings/Outgo is annexed hereto marked as Annexure C and forms an
 integral part of this report.
 
 PERSONNEL
 
 The Statement of particulars of employees, as per Section 217(2A) of
 the Companies Act, 1956, read with the Companies (Particulars of
 Employees) Rules, 1975, as amended, forms part of this report, and is
 marked as Annexure D.
 
 ACKNOWLEDGEMENT
 
 Your Directors wish to place on record their appreciation of the
 co-operation received from government authorities, the Department of
 Telecommunications (DoT), financial institutions, bankers, customers,
 vendors and shareholders.  Your directors also wish to place on record
 their deep sense of appreciation for the contribution made by the
 employees of the Company for their unstinted efforts in the progress of
 the Company at all levels.
 
 
                                          For and on behalf of the Board 
                                             of Spice Communications Ltd
 
 Place : Mumbai              Ashish Dwivedi          B.R Gupta
 Date : 17th June, 2009      Director                Director