(a) Basis of accounting and preparation of financial statements
 
 The accounts have been prepared to comply in all material aspects with
 applicable accounting principles in India, the Accounting Standards
 (AS) notified in the Companies (Accounting Standards) Rules 2006 and
 relevant provisions of the Companies Act, 1956 (the Act). The financial
 statements have been prepared in the format prescribed by the Revised
 Schedule VI to the Act.
 
 (b) Use of estimates
 
 The preparation of financial statements in conformity with generally
 accepted accounting principles requires estimates and assumptions to be
 made that affect the reported amounts of assets and liabilities and
 disclosure of contingent liabilities on the date of the financial
 statements and the reported amounts of revenues and expenses during the
 reporting year. Differences between actual results and estimates are
 recognised in the periods in which the results are known /materialise.
 
 (c) Fixed Assets
 
 Fixed assets are stated at their historical cost of acquisition or
 construction, less accumulated depreciation/ amortization and
 impairment loss. Cost includes all costs incurred to bring the assets
 to their working condition and location (Also refer note 24.9) and Site
 Restoration cost obligations where outflow of resources is considered
 probable.
 
 Assets retired from active use and held for disposal are stated at
 lower of net book value or net realisable value.
 
 Expenditure related to and incurred during the construction period of
 switches and cell sites are capitalised as part of the construction
 cost and allocated to the relevant fixed assets.
 
 Capital inventory comprises of switching equipment, field unit cards,
 and capital stores that are carried under Capital Work-ln-Progress till
 such time as they are issued for new installation or replacement.
 
 The Company capitalises software and related implementation costs as
 intangible assets, where it is reasonably estimated that the software
 has an enduring useful life.
 
 License fees paid by the Company for acquiring licenses to operate
 telecommunication / internet telephony services are capitalised as
 intangible assets.
 
 Indefeasable Rights to Use (''IRU'') bandwidth capacities by the
 Company are capitalised as intangible assets.
 
 Assets acquired pursuant to an agreement for exchange of similar assets
 are recorded at the net book value of the assets given up, with an
 adjustment for any balancing receipt or payment of cash or any other
 form of consideration.
 
 d) Depreciation
 
 i) Fixed assets are depreciated on a straight line basis, based on the
 following estimates of their useful economic lives:
 
 Depreciation rates derived from the above are not less than the rates
 prescribed in Schedule XIV to the Companies Act, 1956.
 
 ii) Leasehold land and premises are amortised uniformly over the period
 of lease.
 
 iii) License fees is amortized uniformly over the original license
 period of 20 years / extended period as permitted by DoT, as
 applicable, from the date of commencement of operations. Since the
 Company has intention of being in business for a period well beyond 10
 years and the telecommunication business cannot be carried on without
 the Telecom license, the useful life of the asset will exceed the
 rebuttable presumption of 10 years under AS 26 on Intangible
 Assets (Refer note 24.12).
 
 iv) Indefeasible Right to Use (''IRU'') bandwidth capacities by the
 Company are amortised over a period of fifteen years based on
 management estimate of useful life of the assets or period of the
 agreement whichever is lower.
 
 v) Depreciation on additions and deletions to assets during the year is
 charged to revenue pro rata to the period of their use.
 
 vi) The Company provides for obsolescence of its slow moving capital
 inventory by way of depreciation, at the rate of 33.33% p.a. of cost.
 
 e) Foreign Currency transactions
 
 i.  Transactions in foreign currency are recorded at the original rates
 of exchange in force at the time transactions are effected.
 
 ii.  Foreign currency denominated assets and liabilities are reported
 as follows:
 
 a) Monetary items are translated into rupees at the exchange rates
 prevailing at the balance sheet date. Non-Monetary items such as fixed
 assets are carried at their historical rupee values.
 
 b) Gains/losses arising on settlement of foreign currency transactions
 or restatement of foreign currency denominated assets and liabilities
 (monetary items) are recognised in the statement of profit and loss,
 except for long term assets/liabilities which pertain to acquisition of
 fixed assets which are adjusted in the cost of fixed assets (Refer note
 24.9).
 
 iii. In case of forward exchange covers, the premium or discount
 arising at the inception of the contract is amortised as expense or
 income over the life of the contract.
 
 iv.  Pursuant to the announcement on accounting for derivatives issued
 by the Institute of Chartered Accountants of India (ICAI), the Company
 in accordance with the principle of prudence as enunciated in
 Accounting Standard 1 on ''Disclosure of Accounting Policies''
 provides for losses in respect of all outstanding derivative contracts
 at the Balance Sheet date by marking them to market. Any gains arising
 on such mark to market are not recognized as income. (Refer note 24.10
 (ii)).
 
 f) Employee benefits
 
 Retirement benefit costs are expensed to revenue as incurred.
 
 Contributions to the Provident and Superannuation Funds are made in
 accordance with the rules of the Funds.
 
 The Company participates in a group gratuity cum life assurance scheme
 administered by the Life Insurance Corporation (LIC). Provision for the
 year in respect of gratuity is made on the basis of actuarial valuation
 as at the end of the year.
 
 Leave encashment is provided for on the basis of actuarial valuation as
 at the end of the year.
 
 g) Revenue recognition
 
 Revenue from telecommunication services is recognised as the service is
 performed on the basis of actual usage of the Company''s network in
 accordance with contractual obligations and is recorded net of service
 tax. The amount charged to subscribers for specialised features which
 entitle them to access the network of the Company and where all other
 services and products are paid for separately, are recognised as and
 when such features are activated.
 
 Unbilled revenues resulting from unified access services provided from
 the last billing cycle date to the end of each period are estimated and
 recorded. Revenues from Unified Access Services rendered through
 prepaid cards are recognized based on usage by the customers during the
 year and over the validity period in case of upfront collection.
 
 Revenue is recognised when it is earned and no significant uncertainty
 exists as to its ultimate realisation or collection.
 
 h) Government Grants
 
 Subsidies granted by Government for providing telecom services in rural
 areas are recognized as income in accordance with the relevant terms
 and conditions of the scheme/agreement with DoT.
 
 i) Borrowing costs
 
 Borrowing costs attributable to the acquisition of a qualifying asset,
 as defined in AS 16 on Borrowing Costs, are capitalised as part
 of the cost of acquisition. Other borrowing costs are expensed as
 incurred.
 
 j) Earnings per share
 
 The Company reports basic and diluted earnings per share in accordance
 with AS 20 on Earnings Per Share. Basic earning per share is
 computed by dividing the net profit or loss for the year by the
 weighted average number of Equity shares outstanding during the year.
 Diluted earnings per share is computed by dividing the net profit or
 loss for the year by the weighted average number of Equity shares
 outstanding during the year as adjusted for the effects of all dilutive
 potential equity shares, except where the results are anti-dilutive.
 
 k) Operating Leases
 
 Assets taken on lease under which all significant risks and rewards of
 ownership are effectively retained by the lessor are classified as
 operating leases. Lease payments under operating leases are recognized
 as expenses as incurred in accordance with the respective lease
 agreements.
 
 I) Cash Flow Statement
 
 The Cash Flow statement is prepared by the indirect method set out in
 AS 3 on Cash Flow Statements and presents Cash flows by
 operating, investing and financing activities of the Company.
 
 m) Finance and Treasury charges
 
 Net finance and treasury charges are disclosed in the financial
 statements. Interest and other income earned from treasury operations
 are reduced from the costs of treasury operations.
 
 n) Inventories
 
 Inventories are valued at lower of cost and net realizable value. Cost
 of Inventories comprises of all cost of purchases and other costs
 incurred in bringing the inventories to their present location and
 condition. Cost of traded goods is determined on weighted average
 basis.
 
 o) Income Tax
 
 Current Income tax is measured at the amount expected to be paid to the
 tax authorities in accordance with Indian Income Tax Act, 1961.
 
 Deferred income tax reflect the current year timing differences between
 taxable income and accounting income for the period and reversal of
 timing differences of earlier years/period. Deferred tax assets are
 recognised only to the extent that there is reasonable certainty that
 sufficient future income will be available except that deferred tax
 assets in case there are unabsorbed depreciation and losses, are
 recognised if there is virtual certainty that sufficient future taxable
 income will be available to realise the same.
 
 p) Impairment of assets
 
 An asset is considered as impaired in accordance with AS 28 on
 Impairment of Assets when at the balance sheet date there are
 indications of impairment and the carrying amount of the asset, or
 where applicable the cash generating unit to which the asset belongs,
 exceeds its recoverable amount (i.e. the higher of the asset''s net
 selling price and value in use). In assessing the value in use, the
 estimated future cash flows expected from the continuing use of the
 asset and from its ultimate disposal are discounted to their present
 values using a pre- determined discount rate. The carrying amount is
 reduced to the recoverable amount and the reduction is recognized as an
 impairment loss in the Statement of profit and loss.
 
 q) Investments
 
 Current investments are carried at lower of cost and fair value. Long
 term investments are carried at cost. Provision is made to recognise a
 decline other than temporary in the carrying amount of long term
 investments.
 
 r) Contingent Liabilities
 
 Contingent Liabilities as defined in AS 29 on Provision, Contingent
 Liabilities and Contingent Assets are disclosed by way of notes to
 accounts. Provision is made if it becomes probable that an outflow of
 future economic benefits will be required for an item previously dealt
 with as a contingent liability.