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GTL Infrastructure Ltd.

BSE: 532775 Sector: Telecom
NSE: GTLINFRA ISIN Code: INE221H01019
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VOLUME 897431
52-Week high 8.60
52-Week low 2.07
P/E
Mkt Cap.(Rs cr) 2,778
Buy Price 6.75
Buy Qty 250.00
Sell Price 0.00
Sell Qty 0.00
OPEN 6.57
CLOSE 6.55
VOLUME 897431
52-Week high 8.60
52-Week low 2.07
P/E
Mkt Cap.(Rs cr) 2,778
Buy Price 6.75
Buy Qty 250.00
Sell Price 0.00
Sell Qty 0.00

GTL Infrastructure Ltd. (GTLINFRA) - Director Report

Company director report

To

The Members

Your Directors are pleased to present their Thirteenth Annual Report together with theAudited Financial Statements for the year ended March 312016.

1. STATE OF COMPANY'S AFFAIRS Financial Highlights

Particulars 2015-16 2014-15
Total Revenue 631.45 623.10
Profit / (Loss) before Depreciation / Amortization Finance Costs & Tax 223.76 220.46
Depreciation / Impairment & Amortization Expenses 250.67 255.99
Profit / (Loss) before Finance Costs & Tax (26.91) (35.53)
Finance Costs 413.88 392.60
Profit / (Loss) before Exceptional Items & Tax (440.79) (428.13)
Exceptional Items (Net) 106.55 86.58
Profit / (Loss) before Tax (547.34) (514.71)
Tax Expenses - -
Net Profit / (Loss) (547.34) (514.71)

Figures regrouped / reclassified wherever necessary to make them comparable.

Results of Operations

During the financial year total revenue of the Company was ' 631.45 Crore against '623.10 Crore for the previous financial year. Operating Profit (before Depreciation /Amortization Finance Costs & Tax) stood at ' 223.76 Crore in comparison to previousfinancial year's Operating Profit (before Depreciation / Amortization Finance Costs &Tax) of ' 220.46 Crore. Net Loss for the said financial year recorded at ' 547.34 Croreagainst Net Loss of ' 514.71 Crore for the previous financial year.

2. COMPANY PERFORMANCE POST CORPORATE DEBT RESTRUCTURING (CDR)

Following are highlights of the performance of the Company together with ChennaiNetwork Infrastructure Limited (CNIL) an Associate and erstwhile subsidiary of theCompany over a period of 5 years since implementation of CDR package in the year 2011:

• Increase in revenue by 1.6 times

• Increase in normalised EBITDA level by 1.5 times

• Tenancy share maintained at 7-8% among telecom tower companies

• Payment of' 3168.74 Crore to secured and unsecured lenders without any newborrowings

• Issuance of equity shares of' 2909.41 Crore to CDR lenders

• Payment of' 1139.14 Crore to the Government towards various taxes includingVAT Service Tax etc.

• Cash Flows administered and monitored through the Trust and Retention Account(TRA)

• Compliance with terms and conditions of CDR packages inter-alia infusionof promoters' contribution monthly concurrent audits creation of security in favour ofsecured lenders

• Re-negotiation of Master Service Agreements / Contracts with various TelecomOperators to enable the Company to streamline its cash flow improved revenue andreduction in delays in collection cycle

• Improvement of uptime of its tower to reduce SLA penalties

• Cost rationalization measures undertaken to reduce costs related to power andfuel maintenance and tower security which resulted in improvement in operationsefficiency and overall cash position thereby fetching better margins.

The Company could achieve such performance despite adverse developments in TelecomSector which were beyond the management control since implementation of CDR packages.Some of these developments are enumerated below :

a. Cancellation of 122 2G licenses upheld by the Hon'ble Supreme Court

In a landmark judgement the Hon'ble Supreme Court upheld cancellation of 122 2Gtelecom licenses in February 2012 of various telecom operators including Uninor VideoconEtisalat IDEA and Tata. This resulted in an estimated loss of around 6000+ tenancies(existing and future opportunities) to the Company / CNIL.

b. Suspension of Right of First Refusal (RoFR) by Aircel Group

In financial year 2010 as part of the acquisition terms Aircel Group had committed20000 additional tenancies to the Company / CNIL. However due to sluggish telecomenvironment slower than anticipated 3G growth government enquiries in the 2G scam andits negative impact on financials Aircel Group had to curtail its expansion plans andalso close down operations in non-viable telecom circles. Resultantly Aircel Groupsuspended its RoFR commitment in July 2013 resulting into an estimated loss of around15000+ tenancies.

c. Slower 3G & BWA growth

Telecom Operators reportedly spent around ' 1.20 Lakh Crore towards license fees for 3Gand BWA in the year 2010 in anticipation of huge data growth over the next 5 years. It wasestimated then that Operators would also have to spend considerable additional amounttowards network/capex to rollout 3G/BWA services. Consequently Tower companies includingthe Company and CNIL also expected huge tenancy growth from 3G/BWA. However Operatorshave not been able to achieve the estimated growth during last 4-5 years thereby impactingtenancy demand for Towercos. This has resulted into an estimated loss of around 4700+tenancies for the Company / CNIL.

d. Freeze on substantial expansion by Telecom Operators

Anxiety and negative sentiments of this sector due to financial stress contentious taxclaims and investigations related to previous spectrum allocations etc. resulted intofreeze of substantial capital outlays towards this sector.

e. Lack of Capex for modernization and replacement

Due to constraints on cash flows the Company was not in a position to infuseadditional capex for modernization and replacement of its tower assets. This impacted theprojected business opportunities for the Company resulting into an estimated loss ofaround 3500+ tenancies.

But for these adverse telecom sector developments the Company (including CNIL) wouldhave dosed the year with estimated 70000+ tenancies as against 45197 tenancies as at 31stMarch 2016.

Working Capital Challenges

Whilst on one hand the above referred external factors were putting a burden on cashflows of the Company on the other hand high spend on diesel to power the towers unpaiddues from Telecom Operators resulted in accumulation of customer receivables of ' 124.15Crore (as on March 312016) thereby blocking the Company's working capital.

The cumulative effect of these challenges has resulted in some delays in servicing debtobligations of its secured and unsecured lenders.

Mitigation Measures

To address these challenges the Company proactively undertook several short term andlong term mitigation measures including following :

a. Merger of CNIL with the Company

In the year 2010 the lenders among other things had stipulated merger as a conditionunder financing documents of the Company and CNIL. Accordingly the Scheme of Arrangementfor Merger of CNIL with the Company was approved by the Hon'ble High Court of Bombay inthe year 2011 and was pending before the Hon'ble High Court of Madras. Meanwhile inDecember 2011 the Company and CNIL respectively had to restructure their debts throughCDR mechanism under which also the merger of CNIL with the Company was envisaged.However as the financials and capital structure of both the companies have undergonesubstantial changes the merger scheme needs to be modified with the consent of allstakeholders inter-alia CDR lenders.

Merger of CNIL will create a Pan-India presence for the Company and also offeropportunity for strategic tie-ups with Telecom Operators. Merger will not only bringoperational synergies and cost efficiencies but also simplification of governanceobligations besides other benefits of scale. It will also provide robust cash flows.Further it would be an important step towards restoring and improving the value of theCompany and thereby its stakeholders.

Accordingly the Company is in continuous discussion with the CDR lenders for takingforward the merger proposal.

b. Reduction of Rate of Interest

The Reserve Bank of India (RBI) has directed banks to implement the Marginal Cost ofLending Rate (MCLR) effective from April 12016. Simultaneously RBI has taken varioussteps to ease liquidity condition of the Banking System so that MCLR is lower than thenormal base rate of the lenders. Following the rate cut by RBI Banks have reduced theirbase rates over the past year. In accordance with the terms of CDR documents which providefor interest rate reset annually the Company is in discussion with CDR lenders forreduction in interest rate. This if accepted by the CDR lenders can reduce the annualinterest cost of the Company by ' 70-75 Crore.

c. Monetization Proposal

The Company continues to take proactive steps towards reducing its debt. In accordancewith the terms of the CDR documents and as per the Shareholder approval for monetization /sale of core / non-core assets the Company is in discussion with CDR lenders to monetizeits assets. Subject to approval of CDR / other lenders the monies so realized shall beutilized to discharge Company's liabilities towards its secured and unsecured lenders.

The Company is awaiting approval from lenders for implementation of all theseinitiatives and is hopeful of receiving the same.

Going Concern

The Company has incurred cash losses and its net worth has been fully eroded as onMarch 312016. Further the Company's current liabilities exceed its current assets as atMarch 312016. However the Company continued to prepare its Financial Statements on goingconcern basis for the reasons stated in the Note No. 32 to the Notes to FinancialStatements.

3. RECENT DEVELOPMENTS AT MACRO AND MICRO ECONOMIC LEVEL Key Indicators:

The number of wireless subscribers in India increased from 960.89 million at the end ofMarch 2015 to 1026.66 million at the end of February 2016. The urban subscriptionincreased from 555.71 million at the end of March 2015 to 587.55 million at the end ofFebruary 2016 and the rural subscription increased from 414.18 million to 439.11 millionduring the same period. The monthly growth rates of urban and rural subscription were0.79% and 0.94% respectively during the month of February 2016.

The overall wireless Tele-density in India increased from 77.27 at the end of March2015 to 80.91 at the end of February 2016. The share of urban subscribers and ruralsubscribers at the end of February 2016 was 57.23% and 42.77% respectively. [Source:Telecom Regulatory Authority of India (TRAI) Press Releases.]

Growth Drivers:

a) Launch of 4G / LTE networks: Using 4G / LTE technology Operators can provide highspeed data services to subscribers. With internet penetration the growth of data servicesis expected to ride on easy availability of smartphones in India. The launch of thesenetworks is expected to give further fillip to requirements of telecom towers.

b) Quality of Service and network improvement: Competitive telecom tariff alone is nota strategic advantage to telecom operators. Pricing along with better network quality willbe a key driver for operators to retain and acquire new subscribers. The quality ofcustomer experience becomes all the more important with the growth of data services. Withexpanded subscriber base and limited spectrum availability operators are left with littleoption but to bring down the number of subscriber per BTS by creating a denser cellularnetwork. This will drive demand for sharing of towers in urban areas. New entrants likeRJio are also expected to push the tower industry growth.

c) New Customer Segments:

New customer segments such as Government and infrastructure are expected to emerge inthe near future. The Digital India initiative aims to transform India into a digitallyempowered society and knowledge economy. It aims to connect entire India digitally in thespan of 3-4 years. This will present opportunities for the telecom tower companies.

d) Growing Rural Subscriber Base:

Increasing subscriber base and tele-density especially in rural areas will drive thenew site development and additional tenancies for existing towers. The Company hassubstantial presence in rural geography.

4. DIVIDEND

Since your Company has posted losses and is currently under CDR your Directors expresstheir inability to recommend any dividend on the paid up Equity Share Capital of theCompany for the financial year ended March 312016.

5. SHARE CAPITAL

a. The movement of Equity Shares due to allotment of shares is as under:

Particulars No. of Equity Shares
Equity Shares as on April 12015 2325147780
Add: Allotments of Equity Shares to FCCB Holders upon conversion of FCCBs 11241013
Equity Shares as on April 262016 2336388793

The Company has only one class of equity shares and it has not issued equity shareswith differential rights or sweat equity shares. Also the Company has cancelled all itsoutstanding Employee Stock Option Schemes (ESOS) in financial year 2012-13. Thus thedetails required to be furnished for equity shares with differential rights and / or sweatequity shares and / or ESOSs as required under the Companies (Share Capital andDebentures) Rules 2014 are not furnished.

b. Foreign Currency Convertible Bonds (FCCBs)

Particulars No. of Series A FCCBs (of US$ 1000 each) No. of Series B FCCBs (of US$ 1000 each) Total No. of FCCBs (of US$ 1000 each) No. of Equity Shares upon conversion
FCCBs allotted 111740 207546 319286 -
Converted / cancelled till date 64772 14013 78785 427101944
Balance as on April 262016 46968 193533 240501

-

If all the balance 240501 FCCBs are converted into equity shares of the Company thetotal share capital would go up by 1304766024 new equity shares of the Company.

c. Consideration to CNIL shareholders under Scheme of Arrangement

As discussed in earlier paragraph the Company is in continuous discussion with CDRlenders to take forward the merger proposal between the Company and CNIL. Accordinglyonce the modified Scheme of Arrangement between the Company and CNIL is approved by thelenders members and the Hon'ble High Courts of Bombay and Madras the Company's financialstatements will be re-casted / re-stated with effect from the Appointed Date as may beapproved. The Company would also be required to issue its equity shares to the members ofCNIL towards consideration of merger of CNIL with the Company in the ratio as may beapproved by the Hon'ble High Courts of Bombay and Madras.

6. FIXED DEPOSITS

During the year under review the Company has not accepted any public deposits underchapter V of the Companies Act 2013 from Public or from its Members.

7. MATERIAL CHANGES AND COMMITMENTS

Save and except as discussed in this Annual Report no material changes have occurredand no commitments were given by the Company thereby affecting its financial positionbetween the end of the financial year to which these financial statements relate and thedate of this report.

8. PROMOTER GROUP

The Company is a part of Global Group of Companies promoted by GTL Limited. TheMembers may note that the Promoter Group comprises of Global Holding Corporation PrivateLimited and such other persons as defined under Securities Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 ("the ListingRegulations"). As on March 312016 the promoter group shareholding in the Company is26.91%.

9. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(3)(c) of the Companies Act 2013 the Boardof Directors to the best of their knowledge and ability in respect of financial yearended March 312016 confirm that:

i. in the preparation of the annual accounts the applicable accounting standards hadbeen followed and there were no material departures;

ii. they had selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the loss ofthe Company for that period;

iii. they had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

iv. they had prepared the annual accounts on a going concern basis;

v. they had laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and were operating effectively; and

vi. they had devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

10. DIRECTORS & KEY MANAGERIAL PERSONNEL

Mr. Manoj G. Tirodkar Director of the Company retires by rotation at the ensuingAnnual General Meeting ("AGM") and being eligible offers himself forre-appointment. The background of the Director proposed for re-appointment is given in theCorporate Governance Report which forms part of this Report.

The Independent Directors of the Company have furnished a declaration to the effectthat they meet the criteria of independence as provided in Section 149(6) of the CompaniesAct 2013.

Mr. Milind K. Naik - Whole-time Director Mr. Laxmikant Y. Desai - Chief FinancialOfficer and Mr. Nitesh A. Mhatre - Company Secretary are the Key Managerial Personnel ofthe Company and there is no change in the same during the financial year.

11. NUMBER OF MEETINGS OF THE BOARD

The Board of Directors met four (4) times during the financial year the details ofwhich are given in Corporate Governance Report that forms part of this Report.

12. BOARD EVALUATION

The Board of Directors has carried out an annual evaluation of its own performanceBoard committees and individual directors pursuant to the provisions of the Companies Act2013 and Corporate Governance requirements as prescribed by the Listing Regulations.

The performance of the Board and its Committees was evaluated by the Board afterseeking inputs from all the Board/Committee members on the basis of the criteria such ascomposition of the Board / Committee and structure effectiveness of Board / Committeeprocesses providing of information and functioning etc.

The Board and the Nomination and Remuneration Committee ("NRC") reviewed theperformance of the individual directors on the basis of the criteria such as attendance inBoard / Committee meetings contribution of the individual director to the Board andcommittee meetings like preparedness on the issues to be discussed etc.

In a separate meeting of Independent Directors performance of non-independentdirectors performance of Board as a whole and performance of the Chairman was evaluatedtaking into account the views of executive directors and non-executive directors.

13. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS

The Company has put in place appropriate policy on Directors Appointment andremuneration and other matters as provided in Section 178(3) of the Companies Act 2013which is provided in the Policy Dossier that has been uploaded on the Company's websitewww.gtlinfra.com. Further salient features of the Company's Policy on Directors'remuneration have been disclosed in the Corporate Governance Report which forms part ofthis Report.

14. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

The information required under Section 197(12) of the Companies Act 2013 read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is given below:

i. The ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the financial year:

Particulars Ratio to median remuneration
Executive Directors
Mr. Milind K. Naik 11.02
Non-executive Directors* (sitting fees only)
Mr. Manoj G. Tirodkar N.A.
Mr. N. Balasubramanian N.A.
Dr. Anand P. Patkar N.A.
Mr. Charudatta K. Naik N.A.
Mr. Vinod B. Agarwala N.A.
Mr. Vijay M. Vij N.A.
Mrs. Sonali P Choudhary N.A.

* Since Non-executive Directors received no remuneration except sitting fees forattending Board / Committee meetings the reguired details are notapplicable.

ii. The percentage increase in remuneration of each director chief financial officercompany secretary in the financial year:

Directors Chief Financial Officer and Company Secretary % increase in remuneration in the financial year
Mr. Manoj G. Tirodkar N.A.
Mr. N. Balasubramanian N.A.
Dr. Anand P. Patkar N.A.
Mr. Charudatta K. Naik N.A.
Mr. Vinod B. Agarwala N.A.
Mr. Vijay M. Vij N.A.
Mrs. Sonali P Choudhary N.A.
Mr. Miiind K. Naik Whole-time Director Refer Note*
Mr. Laxmikant Y. Desai Chief Financial Officer 7.5
Mr. Nitesh A. Mhatre Company Secretary 7.5

* The Company has made necessary _ application to the Central Government for paymentof remuneration not exceeding ' 1.26 Crore p.a. to Mr. Miiind K Naik during his tenure of3 years w.e.f. July 212014 as approved by the Members at AGM held on September 162014.Once the Company receives the approval from the Central Government the Company shallcompensate Mr. Miiind K Naik for his arrears accordingly.

iii. The percentage increase in the median remuneration of employees in the financialyear : 19.92%

iv. The number of permanent employees on the rolls of the Company : 445

v. The explanation on the relationship between average increase in remuneration and theCompany's performance :

On an average employees received an annual increase of 9.52%. In order to ensure thatremuneration reflects the Company's performance the variable performance pay is linked tothe Company's performance apart from an individual performance.

vi. Comparison of the remuneration of Key Managerial Personnel against the performanceof the Company:

Aggregate remuneration of the Key Managerial Personnel (KMP) in financial year 2015-16 (' in Crore) 2.24
Revenue from Operations (' in Crore) 619.34
Remuneration of KMPs (as % of revenue) 0.36
Profit / (Loss) before Tax (PBT) (? in Crore) (547.34)
Remuneration of KMP (as % of PBT) N.A.

vii. Variation in the market capitalization of the Company price earnings ratio as atMarch 31 2016 and March 312015:

Particulars March 312016 March 312015 % change
Market Capitalization (' in Crore)* 490.64 453.40 8.21
Price Earnings Ratio (0.89) (0.87) (2.30)

* based on dosing market price on NSE on the respective year end dates.

viii. Percentage increase over decrease in the market quotations of the shares of theCompany in comparison to the rate at which the Company came out with last public offer:

Particulars March 312016 September 28 2007 (Right Issue) % Change
Market Price (BSE) ' 2.12 ' 10.00 (78.80)
Market Price (NSE) ' 2.10 ' 10.00 (79.00)

ix. Average percentage increase already made in the salaries of employees other thanthe managerial personnel in last financial year and its comparison with the percentageincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:

The average annual increase was around 9.52%.

As approved by the Members in the AGM held on September 16 2014 the Company has madenecessary application to the Central Government for payment of remuneration not exceeding' 1.26 Crore p.a. to its Whole-time Director Mr. Milind K. Naik during his tenure of 3years w.e.f. July 21 2014. The said remuneration is commensurate with theresponsibilities shouldered and industry standards as explained in the explanatorystatement to Notice of AGM held on September 16 2014. Hence comparison can not beprovided.

x. Comparison of each remuneration of the key managerial personnel against theperformance of the Company:

Mr. Milind K. Naik Whole-time Director Mr. Laxmikant Y. Desai Chief Financial Officer Mr. Nitesh A. Mhatre Company Secretary
Remuneration in financial year 16 (' in Crore) 0.50 1.24 0.50
Revenue from Operations (' in Crore) 619.34
Remuneration as % of revenue 0.08 0.20 0.08
Profit / (Loss) before Tax (PBT) (' in Crore) (547.34)
Remuneration (as % of PBT) N.A. N.A. N.A.

xi. The key parameters for any variable component of remuneration availed by theDirectors: None

xii. The ratio of remuneration of the highest paid Director to that of the employeeswho are not Directors but received remuneration in excess of the highest paid Directorduring the year: 1 : 12.42

xiii. Affirmation that the remuneration is as per the remuneration policy of theCompany:

The Company affirms that the remuneration is as per the remuneration policy of theCompany.

15. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The details in respect of internal financial control and their adequacy are included inthe Management Discussion & Analysis (MD&A) Report which forms part of the AnnualReport.

16. AUDIT COMMITTEE

The details pertaining to composition of Audit Committee are included in the CorporateGovernance Report which forms part of this report.

17. AUDITORS AND AUDITORS' REPORT

Pursuant to the provisions of Section 139 of the Companies Act 2013 and rules framedthere under M/s. Chaturvedi & Shah Chartered Accountants Mumbai and M/s. Yeolekar& Associates Chartered Accountants Mumbai were appointed as Joint Auditors at theEleventh (11th) AGM of the Company held on September 16 2014 to hold office fromconclusion of the said meeting till the conclusion of the Fifteenth (15th) AGM to be heldin year 2018 subject to ratification of their appointment at every AGM. The Company hasreceived the necessary certificates from the Joint Auditors pursuant to Sections 139 and141 of the Companies Act 2013 regarding their eligibility for appointment.

The resolution seeking approval of the Members for ratification of the appointment ofM/s. Chaturvedi & Shah Chartered Accountants Mumbai and M/s. Yeolekar &Associates Chartered Accountants Mumbai as Joint Auditors of the Company have beenincorporated in the Notice of the forthcoming AGM of the Company.

As regards the Joint Auditors' comments / observations / emphasis of matters theCompany has furnished required details / explanations in Note nos. 11.3 22.130 31 and32 of Notes to the Financial Statements.

18. SECRETARIAL AUDITORS' REPORT

The Secretarial Auditors' Report does not contain any qualifications reservationsdisclaimers or adverse remarks and the same is given in Annexure A (Form No.MR-3)to this Report.

19. RISKS

A separate section on risks and their management is provided in the MD&A Reportforming part of this Report which covers the development and implementation of riskmanagement framework. The Audit Committee monitors the risk management plan and ensuresits effectiveness. It is important for members and investors to be aware of the risks thatare inherent in the Company's businesses. The major risks faced by the Company have beenoutlined in this section to allow members and prospective investors to take an independentview. We strongly urge Shareowners/ Investors to read and analyze these risks beforeinvesting in the Company.

20. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS

The particulars of loans guarantees and investments have been disclosed in the Notenos. 11 13 & 34 of Notes to the Financial Statements.

21. PARTICULARS OF RELATED PARTY TRANSACTION

All related party transactions entered into during the financial year were on an arms'length basis and were in ordinary course of business. None of the transactions withrelated parties falls under the scope of Section 188(1) of the Companies Act 2013.

The Policy on Related Party Transactions as approved by the Board is uploaded on theCompany's website www.gtlinfra.com. The particulars as required under the Companies Act2013 are furnished in Annexure B (Form No. AOC-2) to this Report.

22. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES

The Company does not have Subsidiary or Joint Venture Company. The Company hasinvestment in Associate Company CNIL through Tower Trust (of which sole beneficiary isthe Company). Both the Company and CNIL have been admitted into CDR. The CDR packageprovides for various financial restraints on the Associate Company CNIL for transferringfunds to the Company. The professional opinion sought by the Company from the eminentchartered accountancy firm states that such restraints faced by CNIL as outlined in theCDR package constitute severe long term restrictions and significantly impairs its abilityto transfer any funds to the Company as envisaged by AS - 23 para 7(b) and accordinglythere being only one Associate Company the Company is not required to prepare theconsolidated financial statements of the Company and its Associates CNIL. In view of theabove said opinion the Company has not prepared Consolidated Financial Statement asstipulated under Section 129(3) of the Companies Act 2013.

Pursuant to provisions of Section 129(3) of the Companies Act 2013 a statementcontaining salient features of the Financial Statements of the Company's Associate CNILare furnished in Annexure C (Form No.AOC-1)to this Report.

23. CORPORATE SOCIAL RESPONSIBILITY

The brief outline of the Corporate Social Responsibility (CSR) Policy of the Companyand other details are furnished in Annexure D of this Report in the formatprescribed in the Companies (Corporate Social Responsibility Policy) Rules 2014. For CSRinitiatives undertaken by Global Foundation please refer to MD&A Report under thecaption "Corporate Social Responsibility". The CSR Policy is available on theCompany's website www.gtlinfra.com.

24. EXTRACT OF ANNUAL RETURN AS ON MARCH 312016

An extract of Annual Return as on March 312016 is annexed as Annexure E (FormNo. MGT- 9) to this Report.

25. CORPORATE GOVERNANCE AND VIGIL MECHANISM

The Company has complied with Clause 49 of the erstwhile Listing Agreement with theStock Exchanges (till November 30 2015) and continuous to comply with the Regulations 17to 27 and clauses (b) to (i) of sub-regulation (2) of the Regulation 46 of the ListingRegulations. A separate Report on Corporate Governance along with the Certificate of theJoint Auditors M/s. Chaturvedi & Shah Chartered Accountants Mumbai and M/s.Yeolekar & Associates Chartered Accountants Mumbai confirming compliance ofconditions of Corporate Governance as required under Regulation 34(3) of ListingRegulations forms part of this Report.

The Company has formulated and published a Whistle Blower Policy details of which arefurnished in the Corporate Governance section thereby establishing a vigil mechanism fordirectors and employees for reporting genuine concerns if any.

26. MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 read with Schedule V of the Listing Regulations is presented in aseparate section forming part of the Annual Report.

27. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO

a. Conservation of Energy:

The Company has continued its enhanced focus on reduction of diesel consumption attelecom tower sites through several initiatives of energy efficiency and fuel savings.Further trials of various green energy solutions are carried out through pilot deploymentof Solar Photovoltaic panels Deep discharge Quick recharge and Lithium Ion batterieswhich have technological superiority and/or lesser carbon footprint. Through deployment ofadditional battery banks at sites and site electrification works for non-grid dieselgenerator operated sites the Company has about 1650 tower sites which are identified asGreen Sites (each of which consumes diesel less than 35 litre per month).

The various initiatives for conservation of energy in respect of telecom towers takenby the Company are enumerated below:

i) the steps taken or impact on conservation of energy:

a. Installation of Free Cooling / Emergency Free Cooling systems to utilize coolambient temperatures for saving electrical energy consumption of air-conditioning systems

b. Installation of High Efficiency Rectifiers with wide input voltage range SMPS withminimum deration at lower input voltages

c. Upgradation of DC power plants with compatible high efficiency rectifiers

d. Deployment of additional battery banks for increasing backup power and therebyminimizing diesel consumption at sites

e. Fuel optimizer feature of DG controller for optimum utilization of battery backupand air-conditioning system

f. Implemented Stage-wise capacity enhancement with upgradeability as and when siteload increased

g. Aircon efficiency improvement solutions for better heat transfer of refrigerant

h. Deployment of Integrated Power Management Units for AC power line conditioning andAC to DC conversion

i. Remote monitoring of site health parameters through NOC (Network Operations Centre)

j. Facilitating telecom operator tenants to swap their Indoor BTS with Outdoor BTS

ii) the steps taken by the Company for utilizing alternate source of energy:

a. Deployment of Deep discharge and Lithium Ion batteries for faster charging / betterutilization of backup power and thereby reducing diesel consumption

b. Deployment of DC type Diesel Generator of smaller capacity at pilot sites

iii) the capital investment on energy conservation equipment: Not Applicable

b. Technology Absorption:

c. Foreign Exchange Earnings and Outgo:

There were no actual inflow of Foreign Exchange during the financial year and theparticulars regarding actual outflow of Foreign Exchange furnished in Note No. 39 of Notesto the Financial Statements.

28. PARTICULARS OF EMPLOYEES

The statement containing particulars of employees as required under Section 197(12) ofthe Act read Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is provided in a separate annexure forming part of this Report.Further the Report and the Financial Statements are being sent to the Members excludingthe aforesaid annexure. In terms of Section 136 of the Act the said annexure is open forinspection at the Registered Office of the Company. Any Member interested in obtaining acopy of the same may write to the Company Secretary. None of the employees listed in thesaid annexure are related to any Director of the Company.

29. GENERAL

Notes forming parts of the Financial Statements are self - explanatory.

30. ACKNOWLEDGEMENT

Your Directors wish to place on record their appreciation and acknowledge withgratitude the support and cooperation extended by the customers employees vendorsbankers financial institutions investors media and both the Central and StateGovernments and their Agencies and look forward to their continued support.

For and on behalf of the Board of Directors
Mumbai Manoj G. Tirodkar
April 26 2016 Chairman