Idea Cellular - Annual Report - 2007-2008

IDEA CELLULAR LIMITED

ANNUAL REPORT 2007-2008

DIRECTORS' REPORT

Dear Shareholders,

The Directors are pleased to present their Thirteenth Annual Report together with the Audited Accounts of your Company for the financial year ended March 31, 2008.

Financial results

Financial highlights of the consolidated Statement of Operations of your Company for the year 2007-08 are as under:

(Rs. in Million)Particulars 2007-08 2006-07

Income from Services 67,200 43,664Other Income 174 209Total Revenue 67,374 43,873Operating Expenses 44,682 29,011EBITDA 22,692 14,862Depreciation and Amortisation 8,768 6,718EBIT 13,924 8,144Interest and Financing charges 2,776 3,051EBT 11,148 5,092Taxes 725 70Net Profit after Tax 10,423 5,022Balance brought forward fromprevious year (24,502) (17,088)Accumulated Losses acquired onamalgamation of subsidiaries &Leave provisions for earlier years dueto revised AS-15 - (12,437)Cumulative Losses (14,079) (24,502)

Overview

During the year ended March 31, 2008, consolidated revenue grew by 54% to Rs. 67,374 million from Rs. 43,873 million for the year ended March 31, 2007. Your Company registered a net profit of Rs. 10,423 million against a net profit of Rs. 5,022 million in 2006-07.

Dividend

As your Company is yet to recoup the accumulated losses, your Directors have not recommended any payment of dividend for the year.

Review of Consolidated Operations

Your Company recorded an increase of 71% in its subscriber base from 14.01 million as of March 31, 2007 to 24.00 million as of March 31, 2008. Your Company has increased its market share from 8.6% in 2006-07 to 9.4% in 2007-08 on a national basis. The total Minutes of Usage increased from 46 billion minutes in 2006-07 to 86 billion minutes in 2007-08, showing an increase of 86%. Your Company has expanded its network from 4432 cities and towns at the end of FY 2006-07 to 13308 cities and towns at the end of FY 2007-08.

Capital Expenditure

Your Company continues its aggressive pursuit of network expansion along with an improved quality experience to the customers. Your Company has incurred a capex of Rs. 54,994 million and had cash outflows of Rs. 55,726 million during FY 2008.

Employee Stock Option Scheme

Shareholders of the Company had approved the Employee Stock Option Scheme - 2006 ('ESOS - 2006') by way of postal ballot in the month of November 2007. Further, the ESOS Compensation Committee granted 19,931,000 options to the eligible employees of the Company on December 31, 2007. Each option is convertible into one Equity Share of the Company upon vesting. These options will vest in 4 equal annual instalments after one year of the grant and shall be exercisable within a period of 5 years from the date of the vesting.

Details of the options issued under ESOS - 2006, as also the disclosures in compliance with Clause 12 of Securities and Exchange Board of India (Employees Stock Option Scheme) Guidelines 1999, are set out in the Annexure A' to this Report.Human Resources

Your Company continuously invests in fostering people development, identifying and grooming management talent and has the culture of harnessing employees' potential to the maximum.

Significant corporate developments

* In October 2007, your Company entered into a Long Term Financing Arrangement for an additional amount of Rs. 32,000 million with the IDBI led consortium. The facility is mainly for capital expenditure requirement for Company's existing operations and launch of services in Mumbai and Bihar.

* In February 2008, your Company has received the Unified Access Services Licences for the telecom service areas of Punjab, Karnataka, Tamilnadu including Chennai, North East, West Bengal, Kolkatta, Jammu & Kashmir, Orissa and Assam. This makes your Company a Pan India License holder.

* In December 2007, your Company announced the formation of Indus Towers, a joint venture with Bharti and Vodafone to provide passive infrastructure services in India to all operators on a non discretionary basis. Your Company will hold around 16% stake in Indus Towers.

New products and initiatives

Your Company has made extensive progress on the marketing front by introducing various unique and innovative products and services across all service areas of operation. Some of the major initiatives are:

* Your Company has become part of 'Asia Mobility Initiative' (AMI) Alliance - Asia's premier regional international roaming alliance. This alliance, will give IDEA customers an assured and seamless roaming experience along with great value in terms of support for best practices in the global telecom industry and access to products and services across all the represented countries.

* Your Company has tied up with Southern Biotechnologies Ltd. for provision of bio-diesel for operating IDEA's gensets at all towers in the Andhra Pradesh region. The bio-diesel thus procured will be blended in a ratio of 2:8 with ordinary petro-refinery diesel to yield a 20% bio-diesel blend. Usage of this 20% blended bio-diesel can reduce pollution emissions by up to 40%, making your Company the first telecom operator in the country to adopt this environment friendly fuel.

* Your Company has launched 'Idea Radio', a truly differentiated mobile music service for its customers in collaboration with Geodesic, an innovator in communication, collaboration and entertainment applications on mobile and Internet platforms. For this service, Geodesic has extended its technological expertise to your Company, to develop and support the customized mobile internet radio service that is available to more than 24 million IDEA subscribers.

Subsidiaries

Three new subsidiaries have been formed during FY 2007-08 namely,Idea Cellular Services Limited (ICSL), Idea Cellular Infrastructure Services Limited (ICISL) and Idea Cellular Tower Infrastructure Limited (ICTIL). ICSL and ICISL are wholly owned subsidiaries of Idea Cellular Limited where as ICTIL is wholly owned subsidiary of ICISL.

The main purpose of ICSL is to provide manpower services to Idea Cellular and ICISL & ICTIL are meant for hiving off Idea's passive infrastructure network.

The statement of your Company's interest in the above subsidiaries as at March 31, 2008, prepared in accordance with the provisions of Section 212 (3) of the said Act, is attached to the Balance Sheet.

Fixed deposits

Your Company does not accept or hold any deposits and, as such, no amount of principal or interest on fixed deposits was outstanding on the date of the Balance Sheet.

Corporate Governance

Your Directors reaffirm their continued commitment to good corporate governance practices. Your Company adheres to all major stipulations laid down in this regard, as provided in Clause 49 of the Listing Agreement with the Stock Exchanges which relates to Corporate Governance. A detailed report on Corporate Governance, together with, a certificate from Statutory Auditors forms part of this report. Conservation of Energy, Technology Absorption, Foreign

Exchange Earnings & Outgo

The particulars as required to be disclosed pursuant to Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988, are given in the Annexure forming part of this Report.

Particulars of Employees

The particulars of employees as required under Section 217(2A) of the Companies Act, 1956, and the Companies (Particulars of Employees) Rules, 1975, as amended, forms part of this report. However, in pursuance of Section 219(1)(b)(iv) of the Companies Act, 1956, this report is being sent to all the shareholders of the Company excluding the aforesaid information and the said particulars are made available at the registered office of the Company. The members interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company.

Directors' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confirm that:

a) In the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

b) They have, in the selection of the accounting policies consulted the Statutory Auditors and have applied them consistently, and, made judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

c) They have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records, in accordance, with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) they have prepared the annual accounts on a going concern basis.

Board of Directors

In accordance with the Articles of Association of your Company, Mrs. Rajashree Birla, Mr. M.R. Prasanna and Mr. Arun Thiagarajan retire from office by rotation, and being eligible, offer themselves for re-appointment at the ensuing Annual General Meeting of the Company. Brief resumes of the Directors proposed to be re-appointed as required under Clause 49 of the Listing Agreement are provided in the Notice of the Annual General Meeting forming part of the Annual Report.

Auditors

M/s. Deloitte Haskins and Sells, Chartered Accountants retire as Statutory Auditors of the Company at the conclusion of the ensuing Annual General Meeting. The Statutory Auditors' have confirmed their eligibility and willingness to accept the office on re-appointment.

Auditors' Report

The Board has duly reviewed the Statutory Auditors' report on the accounts. With regard to Note 4 of the Auditors' Report, it is being clarified that the procedural amendment to the license agreements incorporting the name of the Company in place of the erstwhile Idea Mobile Communications Limited, BTA Cellcom Limited and Idea Telecommunications Limited, following the amalgamation, will be received shortly from Department of Telecommunications.

Acknowledgements

Your Directors wish to convey their appreciation to all subscribers, promoters, lenders, trading partners, suppliers and the Government for their invaluable support and look forward to continued support in the future. Your Directors wish to place on record their appreciation to employees at all levels for their hard work, dedication and commitment, which has enabled the Company to march ahead.

For and on behalf of the Board

Date : April 24, 2008 Kumar Mangalam BirlaPlace: Mumbai Chairman

Particulars pursuant to the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rule 1988 are furnished hereunder:

A. CONSERVATION OF ENERGY :

Not Applicable

B. RESEARCH & DEVELOPMENT (R & D) :

Not Applicable

1. Specific areas in which R & D is carried out by the Company :

Not Applicable

2. Benefits derived as a result of the above R & D :

Not applicable

3. Future Plan of action :

Not Applicable

4. Expenditure on R&D:

a) Capital :

Nil

b) Recurring: Nil

c) Total: Nil

d) Total R & D expenditure as percentage of total turnover:

Nil

TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:

1. Efforts in brief towards technology absorption, adaptation and innovation :

Development of a skilled team of engineers in the area of radio engineering, installation of base station and operation of mobile telecom services.

2. Benefits derived as a result of the above efforts :

Cost of installation of base station reduced due to better network planning and designing. Achieved better coverage and high quality of reception.

3. Particulars of imported technology in the last five years:

a) Technology imported:

Not applicable

b) Year of import:

Not applicable

c) Has the technology been fully absorbed:

Not applicable

If not fully absorbed areas where this has not taken place, reasons thereof and future plans of action

4. Foreign exchange earnings and outgo:

Earnings: Rs. 790.26 million

(Outgo includes CIF value of imports):

Outgo: Rs. 16,342.50 million

For and on behalf of the Board Kumar Mangalam Birla ChairmanDate : April 24, 2008Place: Mumbai

Annexure A to the Directors' Report

Disclosure pursuant to the provisions of the Securities and Exchange Board of India (Employee Stock Option Scheme) Guidelines, 1999

Nature of disclosure Particulars

a) Options granted :

19,931,000

b) The pricing formula :

The exercise price was determined by averaging the daily closing price of the Company's equity shares during 7 days immediately preceding the date of grant and discounting it by 15%. Exercise price : Rs. 112.57 per option

c) Options vested:

NIL

d) Options exercised :

NIL

e) The total number of shares arising as a result of exercise of options:

NIL

f) Options lapsed :

264,000

g) Variation of terms of options:

NIL

h) Money realized by exercise of options :

NIL

i) Total number of options in force:

19,667,000

j) Employee wise details of options granted:

i) Senior managerial personnel Mr. Sanjeev Aga (Managing Director) :

1,712,000

ii) Any other employee who received a grant in any one year of option amounting to 5% or more of options granted during that year:

NIL

iii) Identified employees who were granted option, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant

NIL

k) Diluted Earnings Per Share:

N.A.

l) Difference between the employee compensation cost, computed using the intrinsic value of the stock options and the employee compensation cost that shall have been recognised if the fair value of the options were used:

Rs. 100.93 million

The impact of this difference on profits and on EPS of the company:

The effect of adopting the fair value on the net income and earnings per share for 2007-08 is as presented below:

Particulars Rs. in Million

Net Income 10,443.62Add: Intrinsic value compensation cost 37.59Less: Fair Value Compensation Cost 138.52Adjusted Net Income 10,342.69Earnings Per share (Rs.) Basic DilutedAs reported 3.96 3.96As adjusted 3.96 3.92

m) Weighted-average exercise prices and weighted-average fair values of options whose exercise price is less than the market price of the stock on the grant date:

Weighted average exercise price of option : Rs. 112.57Weighted average fair value of option : Rs. 68.99

n) A description of the method and significant assumptions used during the year to estimate the fair values of options, including the following weighted-average information:

(i) risk-free interest rate (%) : 7.78

(ii) expected life (No. of years):

6 years 6 months

(iii) expected volatility (%) :40.00

(iv) dividend yield (%):

Nil

(v) the price of the underlying share in market at the time of option grant

Rs. 139.10

Management Discussion and Analysis:

Industry growth

The Indian mobility industry continued its fast pace during the Financial Year (FY) 2008 with the growth rate at around 58%. The total mobility subscribers stood at 261 million as of March 31, 2008. The key drivers attributable to this growth remained the reducing cost of handsets along with falling tariffs. With wireless penetration levels still at around 28%, the Indian wireless market offers an attractive growth opportunity. The Company's growth in terms of net subscriber additions has been better than the Industry average and has increased its subscriber base from 14.01 million as of end March 2007 to 24.00 million as of end March 2008, witnessing a growth of around 71%.

Regulatory Environment

Major regulatory developments for the period are as follows:

Regulation on Domestic leased circuits

In September 2007, TRAI issued a Regulation on Domestic Leased Circuits (DLC), a framework aimed to bring in transparency and to allow provision of DLC/local lead in a non-discriminatory manner. These regulations would benefit both customers and the service providers since it may lead to greater competitiveness in this segment and allow consumers a wider choice of service providers at more reasonable prices. For service providers these regulations open up the possibility of meeting customers' demand for end-to-end leased circuits by obtaining DLC or Local Lead from other service providers if such need arises.

DoT Press Release on review of license terms & conditions

On October 19, 2007, DoT issued a press release accepting TRAI recommendations, specifically on expansion of network using alternative technologies by existing Unified Access Services Licensees i.e. CDMA players eligibility to use GSM to expand and vice versa on payment of license fees. The TRAI proposed subscriber linked criteria for spectrum allocation was also accepted, subject to Telecom Engineering Centre (TEC) committee clearance.

TRAI Directive on VAS consent

On October 30, 2007, TRAI issued a directive that any offer to the customer needs to be presented in such manner so as to ensure that the customer understands the implications of such offer by the service provider before giving his explicit consent for the value added services offered and such explicit consent should be verifiable with reference to records maintained by the service provider.

DoT Press Release on Guidelines for 3G services

In November 2007, DoT issued a press release on guidelines for 3G services specifying that 3G spectrum would be permitted in 2.1GHz spectrum and would be granted through e-auction. Besides one time entry fee, the successful service provider would have to pay an additional recurring spectrum charge of 0.5% of AGR for the first three years after allocation of spectrum post which, this recurring spectrum charge would increase to 1% of AGR. There would be stiff roll-out obligations. Mergers and trading/reselling of spectrum would not be allowed in the initial five year period.

DoT Press Release on Broadband Wireless Access services

In November 2007, DoT issued a press release on guidelines for BWA services specifying that BWA services would be permitted in 2.5 GHz band for UAS licensees & Category A ISPs. 3G spectrum would be permitted in 2.1 GHz spectrum. Each service provider would be permitted 2*10 MHz spectrum in 2.5 GHz band for use in FDD/TDD mode. BWA services would be granted through an e-auction and base price for auction would be 25% of the value derived from 3G e-auction. Besides the one time entry fee, the successful service provider would have to pay an additional recurring spectrum charge of 0.5% of AGR for first three years after allocation of spectrum, post which this recurring spectrum charge would increase to 1% of AGR. There would be stiff roll-out obligations. Mergers and trading/reselling of spectrum would not be allowed in the initial five year period.

DoT Press Releases on Subscriber base criteria for spectrum allotment

On January 9, 2008, DoT had issued a press release through WPC for subscriber base criteria for allotment of GSM/CDMA spectrum which was silent regarding allocation of spectrum beyond 7.2 MHz for GSM and 5 MHz for CDMA players. The criteria given in this press release was revised vide a press release dated January 17, 2008 wherein DoT has issued revised criteria for spectrum allotment upto 15 MHz to GSM players and 7.5 MHz to CDMA players.

DoT Press Release on issue of Letter of Intent

On January 10, 2008, DoT issued a press release for issue of Letter of Intent (Lol) to all the eligible applicants who had applied for UAS Licences upto September 25, 2007. DoT has been implementing a policy of first come first serve basis for grant of UAS Licences under which an initial application which is received first will be processed first and thereafter if found eligible will be granted Lol and then whosoever complies with the condition of Lol first, will be granted UAS Licences.

Guidelines on Active infra sharing

In April 2008, the Department of Telecommunications has formulated guidelines on active infrastructure sharing among the Service Providers and Infrastructure Providers. Sharing will be limited to antenna, feeder cable, Node B, Radio Access Network (RAN) and transmission systems only. Sharing of the allocated spectrum will not be permitted.

Curb Unsolicited Commercial Calls

TRAI on March 17, 2008 vide Amendment to the Telecom Unsolicited Commercial Communications (UCC) Regulations, 2007 decided to make service provider liable to pay for unsolicited commercial communication an amount not exceeding Rs. 5,000/- for the first non-compliance and an amount not exceeding Rs. 20,000/- in case of second or subsequent such non-compliance. Also to discourage the registered telemarketers from sending Unsolicited Commercial Communications, the Telecommunication Tariff Order, 1999 is also being amended simultaneously so as to provide for Rs. 500/- payable as tariff for each such first unsolicited communication and Rs. 1,000/- for every subsequent unsolicited commercial communication.

Phasing Out of ADC

TRAI, on March 27, 2008 vide ninth amendment to the Interconnection Usage Charges (IUC) regulation, which deals, among other things, with the Access Deficit Charge (ADC) payable by private service providers o BSNL, has decided to phase out the ADC. The ADC as it exists today as two parts. The service providers pay 0.75% of their Adjusted Gross Revenue (AGR) and the International Long Distance Service Providers also pay Re. 1 per minute on international incoming calls to BSNL respectively. Through the instant amendment the Authority has decided to phase out ADC as a percentage of AGR from April 1, 2008. Thus, all domestic calls have been made free from the incidence of ADC with effect from April 1, 2008. The component on the international incoming calls stands reduced to a rate of Rs. 0.50 (paise fifty only) for the period from April 1, 2008 to September 30, 2008, subsequent to which this component of ADC would also be phased out. BSNL to get a subsidy of Rs. 2,000 crore per annum from the USO fund for a period of 3 years from April 1, 2008.

Discussion on Financial and Operational Performance

Subscriber Base

As on March 31, 2008, the Company had an aggregate of 24.00 million GSM subscribers representing an increase of 71% compared to the base of 14.01 million as on March 31, 2007. Service and Sales Revenues During the year ended March 31, 2008, service revenues grew by 53.6% to Rs. 67,374 million from Rs. 43,873 million for the year ended March 31, 2007. Value Added Services accounted for about 8.2% of the service revenues for the year, and revenues from National Long Distance services accounted for approximately Rs. 3,537 million, which stood eliminated during the course of inter segment consolidation.

Other Income

Other income decreased by 16.3% from Rs. 209 million for FY 2007 to Rs. 175 million for the FY 2008.

Operating Expenses

During the year ended March 31, 2008, the Company incurred Operating Expenses of Rs. 44,662 million representing 66.3% of service revenues. The chief contributors to the total Operating Expense of 66.3% were, Roaming and Access Charges 16.8%, Subscriber Acquisition and Servicing Expenses 9.6%, Network Operating Expenses 15.5%, Personnel Expenditure 5.1%, License and WPC charges 10.2%, Advertisement & Business Promotion expenditure 4.8% and Administration and Other expenditure 4.3%.

Profit before Interest, Depreciation and Amortisation

For the year ended March 31, 2008, the Company had a Profit before Interest, Depreciation and Amortisation of Rs. 22,713 million; a growth of 52.8% compared to the year ended March 31, 2007. The operating profit margins for 2007-08 and 2006-07 stood at 33.7% & 33.9% respectively.

Depreciation, Amortisation and Finance Charges

During the year ended March 31, 2008, the Company had depreciation & amortisation expenses of Rs. 8,768 million. While the net finance and treasury charges decreased by 9% due to increase in treasury income vis-vis 2006-07, finance charges on borrowings during the year was Rs. 4,592 million against Rs. 3,293 million for the year ended March 31, 2007. This increase is attributable to increased borrowings in lieu of the aggressive capital expenditure by the Company as well as the hardening of the domestic interest rates.

Profits and Taxes

The profit before tax for the year was Rs. 11,169 million, an increase of 119.4%, as compared to the year ended March 31, 2007. The tax charge for the current year is at Rs. 725 million mainly attributable to the Deferred Tax Liability. The net profit for the year ended March 31, 2008 was Rs. 10,444 million resulting in a net profit margin of 15.5%. The cash profit from operations for the year ended March 31, 2008 was Rs. 19,863 million, an increase of 69.1%, as compared to the year ended March 31, 2007.

Capital Expenditure

During the year ended March 31, 2008, the Company incurred capital expenditure of Rs. 51,209 million.

Balance Sheet

The carried forward closing debit balance of the Profit and Loss account the net profits earned by the Company during FY 2008. The Gross Tangible Block stood at Rs. 110,120 million and Net Tangible Block including Capital Work in Progress (CWIP) stood at Rs. 88,293 million as at March 31, 2008. Unamortised License Fee was Rs. 17,303 million as at the March 31, 2008. The decrease in net current assets amounting to Rs. 13,694 million is largely due to the decrease in deposits of IPO proceeds along with increase in creditors for Capital Expenditure.

Human Resources

The Company through its participative work environment, skill development activities and values of commitment, integrity, passion, seamlessness and speed ensures a healthy relationship with its employees. During the year, it has also undertaken sharing of value creation by granting employee stock options to eligible employees. The findings of Organisation Health Study (OHS) conducted yearly are analysed, and concern areas suitably addressed. The employee strength grew by 31% during FY 2008 and stood at 6,107 as on March 31, 2008.

Risk Management

The Risk management framework of the Company ensures compliance with the requirements of Clause 49 of the Listing Agreement. The framework establishes risk management across all service areas and functions of the Company and has in place, procedures to inform the Board Members about risk assessment and minimization process. These processes are periodically reviewed to ensure that the management of the Company controls risks through a proper defined framework. The various risks including the risks associated with Economy, Regulations, Competition, Foreign Exchange, Interest rate etc. are monitored and managed in an effective manner.

Internal Control Systems

The Company has appropriate internal control system for business processes, with regards to efficiency of operations, financial reporting, compliance with applicable laws and regulations etc. Clearly defined roles and responsibilities down the line for all managerial positions have been institutionalized. All operating parameters are monitored and controlled. Regular internal audits and checks ensure that responsibilities are executed effectively. The audit committee of the Board of Directors actively reviews the adequacy and effectiveness of internal control system and suggests improvement for strengthening them, from time to time.

Opportunities, Risks, Concerns and Threats

The Indian telecommunication industry is poised to continue its has been acknowledged as the fastest growing and one of the most attractive markets in the world today. Being still an under-penetrated market, the potential is vast. The Company is well poised to exploit this opportunity.

In a growing competitive environment, churn continues to be a threat as well as an opportunity with respect to changes in market share.

The Company operates in an Industry which is highly competitive and faces intense competition from other operators including some of the state-owned enterprises which are controlled by the Government and thus enjoy certain advantages. With the issue of 120 new UAS Licences the Company may face additional competition from new players. Competition from alternative or new mobile technologies cannot be ruled out. However, the Company being an incumbent player in most of the important service areas it operates in, is poised to withstand the additional competition.

The Company requires certain approvals, licenses, registrations and permissions for operating its business. In addition, regulators may impose conditions in relation to the grant of licenses and approvals and any such requirements could have a material adverse effect on Company's business. The Company however is confident that the regulatory changes will ensure a level playing field for all service providers.

The Company's business is dependent on a limited number of vendors to supply critical network and other equipment and services. Besides this, its ability to provide a quality mobile network and expanding the areas of operations is also dependent on the Spectrum allocation. To ensure smooth supply of network equipments, the Company has entered into medium term contracts with equipment providers.

The Company believes that its success is substantially dependent on the expertise and skill of its managerial personnel and places considerable emphasis on development of leadership skills and building employee motivation. As a retention strategy, an Employees' Stock Option Scheme has been implemented by the Company.

Outlook

We believe the mobile telecom sector is poised for continued high growth, and the Company is attractively placed to benefit from this. We aim to strengthen our operations in existing service areas and expand to new service areas. The Company aims to maintain and build upon its strong brand identity and the quality services it provides to its subscribers.

Cautionary Statement

Statements in the management discussion and analysis describing the Company's objectives, projections, estimates, expectations may be 'forward-looking statement' within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed on implied. Important factors that could make a difference to the Company's operations include economic conditions affecting demand/supply and price conditions in the domestic markets in which the Company operates, changes in the Government Regulations, tax laws and other statutes and incidental factors.