GTL Ltd

Dear Shareholders,

Last two years saw the telecom sector in India, going through tough times, with several issues plaguing the sector, post the cancellation of 122 2G licenses by the Supreme Court of India. The trouble in the telecom sector also coincided with a decelerating economy, and volatility in the rupee movement, which made the business environment very challenging.

Our business is heavily dependent on the growth and developments envisaged in Telecom and Power sectors. Over the past one year developments in these two sectors, have been far from encouraging thereby having a negative impact on the performance of GTL in FY 2012-13.

Discussed below are some of the major challenges faced:

Telecom Sector

• 2G Scam and resultant cancellation of 122 2G Licenses has led to exit of certain telecom players and also affected the roll out and growth plans of several other telecom operators

• Failed spectrum auctions have led to capacity constraints in expansion and litigations

• Slower growth of 3G and BWA networks have reduced the opportunities for network service providers like GTL

• International investors interest in the telecom sector has diminished, resulting into lower FDI inflows into the sector

• Banks are not keen to increase exposure to Telecom Sector as they already have huge exposure

• Lack of clarity on M&A guidelines is hampering the consolidation in the sector and

• Capex of telecom operators for building new infrastructure is low

Power Sector

• Securing fuel for the power plants has been a major concern among the generating companies

• The ability of the Distribution companies to focus on expansion and improving the infrastructure is constrained with the huge losses due to economic downturn and the subsequent restructuring of the Distribution companies is yet to be completed

• Delayed tariff revisions have caused pressure on margins in the distribution sector, thereby delaying the recovery of investments made in power generation and distribution and

• Weak financials of state managed electricity boards are impacting Power sector

The weakness in global markets and the Indian telecom companies has prevented us from monetizing our investments in tower companies and use the proceeds from the same to reduce our debt.

Even, in the power franchisee business, the input costs of power and operational costs have gone up and these are not being passed on to the end consumer. The situation may improve with the increase in tariffs and legislation to curb losses.

We had informed you about the likely negative scenario last year and as expected it had negative impact, both on our revenue and profitability.

Business Overview & Outlook

The Financial snapshot of the year, is as follows:

On a consolidated basis,

• Revenues of Rs. 2,601.32 Cr. (US$ 478.99 Mn.)

• PBDIT of Rs. 188.82 Cr. (US$ 34.77 Mn.)

• PAT of Rs. (554.77) Cr. (US$ 102.15 Mn.)

• Order visibility as on March 31, 2013 stood at Rs. 2,650.OO Cr. (US$ 487.95 Mn.)

*(US$ 1 = Rs. 54.31 as on March 31, 2013)

Corporate Debt Restructuring (CDR)

The Company has completed the process of restructuring its debts from domestic lenders and is in the process of restructuring its loans in the form of ECB and NCDs.

New Growth Opportunities

Even though our economy is going through a very difficult phase, we believe in the potential of the telecom and power sector, and our capability to address them. We are sure that with the capable management team, the Company will continue to focus on overcoming the challenges and creating new opportunities for growth. We, however, believe that it could take 3 to 4 years for new opportunities to emerge.

Extending Network Deployment Capabilities in Power Sector

Our know how of implementation and maintenance of large telecom networks has been extended to power sector. Power sector represents a huge opportunity in Power Generation, Transmission and Distribution, though it too, has challenges across several areas.

Power Management Business

We are distributing power to Aurangabad Urban Circle (I & II) on behalf of the local distribution company and are responsible for distribution of electricity to both industrial and residential units from the grid. We are increasing the efficiency in distribution of electricity by cutting down Aggregate Technical and Commercial (AT&C) losses.

We believe we can develop similar businesses for additional new regions/ areas in the near future as Government and State Electricity Boards accelerate their efforts to privatise Power Distribution.

We are successfully completing the Automated Meter Reading Infrastructure for our HT customers and have invested in capex to improve the distribution infrastructure. We are also looking at other initiatives like Distribution Automation, modernizing the infrastructure etc. that will further minimize the AT&C losses. We are making efforts to minimize the losses incurred on account of leakage and theft of power.

Increasing Recurring Revenue

Our Power Distribution Franchisee business along with Energy Management business for telecom operators has helped us build a business model that has recurring revenue. We are now focusing on winning similar business that shall add recurring revenues. Out of the current consolidated revenue of Rs. 2,601.32 Cr. the recurring revenue is approximately Rs. 2,125 Cr. and is likely to go up moving forward.

Introduce new services

Globally the telecom sector is likely to witness growth in data services over the next few years. This growth is likely to ride on implementation of LTE networks. GTL has begun offering new services like Remote Network Management, Benchmarking the networks, Network Design in the LTE space etc. to our customers in the advanced markets. As the Network evolves in the other markets, similar services can be offered in other regions over the period of three to four years.

Focus on Cost

Looking at the external environment, the Company has already initiated several measures across admin, procurement, transportation, energy etc. that would bring down the administration and wage costs. The Company will also continuously monitor the cost structures and would take suitable action as and when required.

Monetizing our Investments

Although currently both the capital markets and telecom sector in India are going through a rough phase, we believe we can monetize our investments in telecom tower sector over a period of 3-5 years and to reduce our debt.

People

Restructuring of our business in Indian market required churning of skill set of employees. As a result, our employees and contracted associates reduced from 8,710 to 6,384 as on March 31, 2013.

Our employees continue to contribute to the cost saving efforts by taking a salary cut ranging from 10-20% and have foregone several other benefits. I for myself have been taking a token salary of Rs. 1 per month till current year.

Corporate Social Responsibility

We have focused our attention on areas like imparting education to the underprivileged children and providing employment opportunities to women and physically challenged people. Our employees are helping our progress not only in terms of business but also by its impact on the community by volunteering their free time. Our efforts in Energy Management will also help in reducing the carbon footprint of the telecom industry in the coming years.

Conclusion

The past year had been a very difficult year and our focus is now to stabilize and grow the business. It would be our endeavor to bring in efficiency in telecom networks and power distribution, being environment friendly and creating employment in rural India.

New policy initiatives like the 100% FDI in telecom, rollout of 3G and 4G/ BWA networks should ease out the business environment and return the growth to the telecom and power industries. However, we believe this could take sometime.

For all that our Company has accomplished over the years, we would like to thank all our stakeholders, customers, financial institutions, partners and employees for their unwavering interest and support and look forward for the same in future.