Status of Investor Complaints for the quarter ended March 31, 2009

Complaints Pending at the beginning of the quarter 01

Complaints Received during the quarter 107

Complaints disposed off during the quarter 103

Complaints unresolved at the end of the quarter 05

1. The consolidated financial results include the financial results of the subsidiary viz. 21st Century Infra Tele Ltd.

2. During the year, with effect from April 1, 2008, the Company has decided to recognise the upfront Universal Service Obligation (USO) subsidy granted by Department of Telecommunication over the remaining validity period of the scheme/agreement as against the method of recognising the said revenue over a period of 5 years from the date of receipt from DoT. Accordingly, the Other Operating Income for the quarter and year ended is higher by Rs 448.82 lacs and Rs 1795.26 lacs respectively, and Net Loss for the period is lower by the like amount.

3. During the year, the Company has acquired a wholly owned subsidiary viz 21st Century Infra Tele Ltd (21st Century). Consequent to the Shareholders approval on transfer of Passive Tower Infrastructure Business (´PI Business´), the Company has entered into a Business Transfer Agreement (´BTA´) on September 30, 2008 to transfer the same on a going concern basis to 21st Century. The transfer included transfer of assets (fixed and current), liabilities (specific) related to the PI business for a lump sum consideration of Rs 29330.00 lacs resulting into a profit of Rs 6.63 lacs which has been included in Other Operating Income.

4. Other Income includes liability written back in respect of earlier years of Rs 821.00 lacs for the year ended March 31, 2009 as compared to Rs 1293.00 lacs for the corresponding year ended March 31, 2008.

5. Interest charges are disclosed on net basis. Interest and other income earned from treasury operations are reduced from the costs of treasury operations. Interest charges also include amounts aggregating to Rs 3613.00 lacs (loss) for the year ended March 31, 2009 as compared to Rs 998.00 lacs (gain) for the corresponding year ended March 31, 2008 on account of foreign exchange fluctuations. (Also refer Note 6)

6. The Government by notification dated March 31, 2009 amending AS 11, has permitted the adjustment of foreign exchange gain / loss arising on long term foreign currency borrowings against the carrying value of related fixed assets. In line with the above option, the Company has made the following adjustments in accounts:

i) Foreign exchange gain (net of depreciation) relating to FY 2007-08 adjusted in debit balance of Profit and Loss account of Rs 1876.31 lacs.

ii) Foreign exchange loss relating to FY 2008-09 adjusted against carrying value of fixed assets of Rs. 4945.23 lacs.

iii) The depreciation for the year is higher by Rs. 88.34 lacs.

7. No provision for current income tax has been made in the accounts, since the Company estimates that there will be no taxable profits for the year. Deferred Tax charges credits have not been recognized in view of the tax holiday enjoyed by the Company and on considerations of prudence as set out in Accounting Standard 22 on Accounting for Taxes on Income.

8. During the year ended March 31, 2009, Foreign Currency Convertible Bond(FCCB) holders holding Bonds of the value aggregating to USD 2.00 million exercised their option to convert their holding to equity, thus resulting in an increase in the paid up equity share capital by Rs. 362.68 lacs.

9. Previous year / period figures have been regrouped / reclassified wherever necessary.

10. The company is engaged in the business of providing Telecommunication Services under Unified Access License. In the context of Accounting Standard 17 on Segment Reporting, the standalone results are considered to constitute a single reportable business segment. The income from the activity of providing passive infrastructure services by the subsidiary company is not material in financial terms at consolidated level. Accordingly, disclosures relating to primary business segments under the Accounting Standard on Segment Reporting (AS-17) notified pursuant to Companies (Accounting Standards) Rules 2006 as per Section 211 (3C) of the Companies Act, 1956 are not relevant to the Company.

11. Prior year figures have not been disclosed in the Consolidated Results as the subsidiary was acquired on July 01, 2008.

12. The above financial results have been reviewed by the Audited Committee of the Board of Directors and approved by the Board of Directors of the Company at its meeting held on May 11, 2009.

Dr. Mukund Rajan
Managing Director