1. SIGNIFICANT ACCOUNTING POLICIES

i. Basis of Preparation of Financial Statements:

The financial statements of the Company have been brpared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP),including the Accounting Standards notified under the relevant provisions of the Companies Act, 2013 as adopted consistently by the Company. The financial statements have been brpared on going concern basis under the historical cost convention on accrual basis.

ii. Use of Estimate:

The brparation of financial statements in conformity with Indian GAAP requires judgements ,estimates and assumptions to be made that affect the reported amount of assets and liabilities, disclosures of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. The difference between the actual results and estimates are recognised in the year in which the results are known / materialised.

iii. Revenue Recognition:

a. Revenue from Infrastructure / Equipment provisioning is recognised in accordance with the Contract / Agreement entered into. Revenues are recognised when it is earned and no significant uncertainty exists as to its ultimate collection and includes service tax, wherever applicable.

b. Interest income is recognised on a time proportion basis. Dividend is considered when the right to receive is established.

iv. Fixed Assets:

a. Fixed Assets are stated at cost net of eligible Cenvat and VAT less accumulated debrciation, amortisation and impairment loss, if any. All costs attributable to acquisition and/or construction, including borrowing costs upto the date asset is ready to use and exchange difference on Long Term Foreign Currency Monetary Items related to fixed assets are capitalised.

b. The Fixed Assets at the cellular sites, which are ready to use during a particular month are capitalised on the last day of that month.

c. Expenses incurred relating to project, prior to commencement of commercial operation, are considered as br operative expenditure and shown under Capital Work-in-Progress.

v. Debrciation:

a. Debrciation on Fixed Assets is provided to the extent of debrciable amount on Straight Line Method over the useful life of the assets as brscribed in schedule II to the Companies Act, 2013 except in respect of following Fixed Assets where the assessed useful life is different than those brscribed in Schedule II.

ii) The towers have been debrciated on straight line method at the rate of 2.72% per annum based on useful life of 35 years in terms of specific approval received from the Ministry of Corporate Affairs, Government of India vide Order no.45/2/2010-CL-III dated May 26, 2010 issued under Section 205(2)(d) of the Companies Act, 1956. The approval continues to be valid vide letter no.51/9/2014-CL-III dated September 19, 2014 received from Ministry of Corporate Affairs, Government of India.

iii) In respect of Fixed Assets whose actual cost does not exceed Rs. 5,000, debrciation is provided at 100% in the year of addition.

b. The leasehold improvements have been debrciated over the lease period.

c. In respect of additions forming an integral part of existing assets and exchange difference capitalised, debrciation has been provided over residual life of the respective fixed assets.

d. The revised carrying amount of the assets identified as impaired have been debrciated over residual useful life of the respective assets.

vi. Intangible Assets:

Intangible Assets are stated at cost of acquisition less accumulated amortisation. Software which is not an integral part of the related hardware is classified as an Intangible Asset and is amortised over three years.

vii. Impairment of Assets:

The carrying amount of assets is reviewed at each Balance Sheet date, if there is any indication of impairment based on internal/external factors. An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

viii. Investments:

Current Investments are carried at the lower of cost or quoted / fair value computed script wise. Long Term Investments are stated at cost. Provision for diminution in the value of long term investments is made only if such decline is other than temporary.

ix. Assignment of Recoverable:

In case of assignment of recoverables, the amounts are derecognised when all the rights and titles in receivables are assigned. The charges paid on assignment are charged to Statement of Profit & Loss.

x. Inventory of Stores, Spares and Consumables:

Inventory of stores, spares and consumables are accounted for at costs, determined on weighted average basis, or net realisable value, whichever is less.

xi. Foreign Currency Transactions:

a. Transactions in Foreign Currencies are normally recorded at the exchange rate brvailing on the date of the transaction.

b. Monetary items denominated in Foreign Currency at the Balance Sheet date are restated at the exchange rates brvailing at the Balance Sheet date. In case of monetary items which are covered by forward exchange contracts, the difference between the exchange rates brvailing at the Balance Sheet date and rate on the date of the contract is recognised as exchange difference in the Statement of Profit & Loss and the brmium paid on forward contracts has been recognised over the life of the contract.

c. Non monetary Foreign Currency items are carried at cost.

d. Gains or losses on account of exchange difference either on settlement or on translation are recognised in the Statement of Profit and Loss except in respect of Long Term Foreign Currency Monetary Items which, if related to acquisition of debrciable fixed assets, are adjusted to the carrying cost of the debrciable fixed assets and in other cases transferred to Foreign Currency Monetary Item Translation Difference Account and amortised over the balance period of such long term Foreign Currency Monetary items but not beyond March 31, 2020

xii. Employee Benefits:

a. Short-term employee benefits are recognised as an expense at the undiscounted amount in the Statement of Profit & Loss of the year in which the related service is rendered.

b. Post employment and other long term employee benefits are recognised as an expense in the Statement of Profit and Loss for the year in which the employee has rendered services. The expense is recognised at the brsent value of the amount payable determined using actuarial valuation techniques based on projected unit credit method. Actuarial gains and losses in respect of post employment and other long term benefits are charged to the Statement of Profit & Loss.

c. In respect of employee's stock options, the excess of market price on the date of grant over the exercise price is recognised as deferred employee compensation expense amortised over vesting period.

xiii. Borrowing Costs:

Borrowing costs include interest, amortisation of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Borrowing cost attributable to the acquisition or construction of a qualifying asset (net of income earned on temporary deployment of funds) are capitalised as a part of the cost of such assets upto the date when such assets are ready for their intended use. All other borrowing costs are charged to Statement of Profit & Loss.

xiv. Leases:

In respect of operating leases, lease rentals are expensed with reference to the terms of lease and other considerations except for lease rentals pertaining to the period upto the asset is put to use, which are capitalised.

xv. Provision for Current and Deferred Tax:

a. Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act, 1961.

b. Deferred tax resulting from the timing differences between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the Balance Sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is a virtual certainty that the assets will be realised against future taxable profits.

xvi. Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognised when there is a brsent obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the financial statements. Contingent Assets are neither recognised nor disclosed in the financial statements.

xvii. Financial Derivatives Hedging Transactions:

In respect of derivatives contracts, brmium paid, provision for losses on restatement and gains / losses on settlement are recognised in the Statement of Profit and Loss.

xviii. Issue Expenses:

Expenses related to issue of equity and equity related instruments are adjusted against the Securities Premium Reserve Account.

xix. Premium on Redemption of Bonds/Debentures

Premium on redemption of bonds/debentures, net of tax impact, is adjusted against the Securities Premium Reserve Account.

xx. Provision for Doubtful receivables and Loans and Advances:

Provision is made in the accounts for doubtful receivables and loans and advances in cases where the management considers the debts, loans and advances, to be doubtful of recovery.

xxi. Cash & Cash Equivalents

Cash &Cash Equivalents for the purpose of Cash flow Statement comprises Cash at bank and in hand, cheques in hand, funds in transit and demand deposits with banks having maturity of less than 3 months.

Note – 2 During the year 2008-09 the Company had imported OFC (Optical Fiber Cable) on which the Custom department issued Show Cause Notice for the demand of Custom Duty of Rs. 9,294,731. The Company deposited the whole amount under protest and subsequently the Commissioner granted the relief to the Company of Rs. 7,794,792. As against the said order of the Commissioner, the Custom department has filed an appeal with the CESTAT, Mumbai on 11th Oct 2010. The Company feels there will not be any further liability on this account.

Note - 3 Capital Commitments:

Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances) as at March 31, 2015 is Rs. 165,048,290 (Previous year Rs. 1,006,680,790) Cash outflow is expected on execution of such contracts on progressive basis.

Note -4 The Company has entered into a Master Services Agreement (MSA) with respective Telecom Operators for a tenure up to 15 years. Invoices are raised on these operators for provisioning fees and recovery of pass through expenses as part of the said MSA. Retention of amounts by certain operators for the earlier periods was resultant upon different interbrtations of MSA. Subject to confirmation/reconciliation of balances, Provision towards doubtful trade receivables & energy recoverable of Rs. 727,109,570 (Previous year Rs. 255,185,342) has been made during the year ended March 31, 2015 for such receivables on a prudent basis, in respect of which, the Company will continue to pursue for its recovery. The management is of the view that all the outstanding trade receivables & energy recoverables are good for recovery except for which provision has already been made.

Note – 5.The Scheme of arrangement between the Company and Chennai Network Infrastructure Limited (CNIL) under section 391 to 394 of Companies Act, 1956 was approved by the Hon'ble High Court of Judicature of Bombay but is pending for approval before Hon'ble High Court of Judicature of Madras. Consequent upon restructuring due to CDR, the above scheme is being modified, subject to the approval of all competent authorities and stakeholders

Note – 6.During the last few years, the telecom industry has been adversely affected by the general economic slowdown and various other factors such as slower growth of 3G technology; failure of spectrum auctions and inflationary costs of power & fuel. This has resulted into substantial erosion of the Company's net worth and the Company has incurred cash losses. The Company continues to take various measures such as cost optimisation, improving operating efficiency, renegotiation of contracts with customers to improve Company's operating results and cash flows. Further the management believes that new spectrum auction will result in exponential growth in 3G 4G & LTE which are expected to generate incremental cash flows to the Company. Based on the Master Services Agreement executed for passive infrastructure sharing with Reliance Jio, one of the operators with BWA spectrum brparing to launch 4G services Pan India, the Company has already commenced roll outs for it. In view of the above mentioned factors, the Company continued to brpare its Financial Statements on going concern basis.

Note – 7. Segment Reporting:

The Company is brdominantly in the business of providing "Telecom Towers" on shared basis and as such there are no separate reportable segments. The Company's operations are only in India.

Note -8.The brvious year's figures, wherever necessary, have been regrouped, reclassified and rearranged to make them comparable with those of the current year.

As per our report of even date

For and on behalf of the board of Directors

For CHATURVEDI & SHAH

Chartered Accountants

Firm Reg. No. : 101720W

R. KORIA

Partner

Membership No. : 35629

For YEOLEKAR & ASSOCIATES

Chartered Accountants

Firm Reg. No. : 102489W

S. S. YEOLEKAR

Partner

Membership No. : 36398

MANOJ G. TIRODKAR

Chairman DIN: 00298407

VIJAY VIJ

Director DIN: 02245470

MILIND NAIK

Whole-time Director DIN: 00276884

L. Y. DESAI

Chief Financial Officer

NITESH A. MHATRE

Company Secretary Membership No. : A18487

Mumbai

Date : May 6, 2015