12. Provision for Current and Deferred Tax:
a. Current Tax: Provision is made for income
tax, under the tax payable method, based
on the liability as computed after taking
credit for allowances, exemptions, and MAT
credit entitlement for the year. Adjustments
in books are made only after the completion
of the assessment. In case of matters under
appeal, due to disallowances or otherwise, full
provision is made when the Company accepts
the said liabilities.
Current income tax relating to items recognised
outside profit or loss is recognised outside profit
or loss (either in other comprehensive income
or in equity). Current tax items are recognised
in correlation to the underlying transaction
either in OCI or directly in equity. Management
periodically evaluates positions taken in the
tax returns with respect to situations in which
applicable tax regulations are subject to
interpretation and establishes provisions where
appropriate. The Company offsets current tax
assets and current tax liabilities and presents
the same on net basis, if and only if it has a
legally enforceable right to set off current tax
assets and current tax liabilities.
b. Deferred tax: Deferred tax is recognised on
differences between the carrying amounts
of assets and liabilities in the balance sheet
and the corresponding tax bases used in the
computation of taxable profit and thereafter
a deferred tax asset or deferred tax liability is
recorded for temporary differences, namely the
differences that originate in one accounting
period and reverse in another. Deferred tax
is measured based on the tax rates and tax
laws enacted or substantively enacted at the
Balance Sheet date. Deferred tax asset is
recognized only to the extent that it is probable
that taxable profit will be available against
which the deductible temporary differences,
and the carry forward of unused tax credits
and unused tax losses can be utilized. Carrying
value of deferred tax asset is adjusted for its
appropriateness at each balance sheet date.
Deferred tax relating to items recognised
outside profit or loss is recognised outside
profit or loss (either in other comprehensive
income or in equity). Deferred tax items are
recognised in correlation to the underlying
transaction either in OCI or directly in equity.
The Company offsets the deferred tax assets
and deferred tax liabilities and presents the
same on net basis, if the deferred tax assets
and deferred tax liabilities relate to income
taxes levied by the same tax authority.
13. Segment Reporting:
The Company is engaged only in business of
providing “Network Services” and as such there are
no separate reportable segments.
14. Provisions, Contingent Liabilities and Contingent
Assets:
Provisions are recognised when the Company has
a present obligation (legal or constructive) as a
result of a past event. It is probable that an outflow
of resources embodying economic benefits will
be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation.
If the effect of the time value of money is material,
provisions are discounted using equivalent period
government securities interest rate. Unwinding of
the discount is recognised in the statement of profit
and loss as a finance cost. Provisions are reviewed
at each balance sheet date and are adjusted to
reflect the current best estimate.
Contingent liabilities are disclosed when there is
a possible obligation arising from past events, the
existence of which will be confirmed only by the
occurrence or non-occurrence of one or more
uncertain future events not wholly within the control
of the Company or a present obligation that arises
from past events where it is either not probable that
an outflow of resources will be required to settle or
a reliable estimate of the amount cannot be made.
Information on contingent liability is disclosed in the
Notes to the Financial Statements.
Contingent assets are not recognised. However,
when the realisation of income is virtually certain,
then the related asset is no longer a contingent
asset, but it is recognised as an asset.
15. Borrowing Cost:
a. Borrowing costs, less any income on the
temporary investment out of those borrowings,
that are directly attributable to acquisition of
an asset that necessarily takes a substantial
period of time to get ready for its intended
use are capitalized as a part of the cost of that
asset.
Borrowing costs consist of interest and other
costs that an entity incurs in connection
with the borrowing of funds. Interest income
earned on the temporary investment of
specific borrowings pending their expenditure
on qualifying assets is deducted from the
borrowing costs eligible for capitalisation.
Borrowing cost also includes exchange
differences to the extent regarded as an
adjustment to the borrowing costs.
b. Other borrowing costs are recognized as
expense in the period in which they are
incurred.
16. Leases:
Company as a lessee:
The Company has adopted Ind AS 116 on leases
beginning April 1, 2019, using the modified
retrospective approach.
The Company's lease asset classes primarily consist
of leases for buildings. The Company assesses
whether a contract is or contains a lease, at inception
of a contract. A contract is, or contains, a lease if the
contract conveys the right to control the use of an
identified asset for a period of time in exchange for
consideration. To assess whether a contract conveys
the right to control the use of an identified asset, the
Company assesses whether:
(i) the contract involves the use of an identified
asset
(ii) the Company has substantially utilized all of
the economic benefits from use of the asset
through the period of the lease and
(iii) the Company has the right to direct the use of
the asset.
At the date of commencement of the lease, the
Company recognises a right-of-use asset (“ROU”)
and a corresponding lease liability for all lease
arrangements in which it is a lessee, except for
leases with a term of twelve months or less (short—
term leases) and leases of low value assets. For
these short-term and leases of low value assets,
the Company recognises the lease payments as an
operating expense on a straight-line basis over the
term of the lease.
The right-of-use assets are initially recognised at
cost, which comprises the initial amount of the lease
liability adjusted for any lease payments made at or
prior to the commencement date of the lease plus
any initial direct costs less any lease incentives.
They are subsequently measured at cost less the
accumulated depreciation thereon and impairment
losses, if any. Right-of-use assets are depreciated
from the commencement date on a straight-line
basis over the shorter of the lease term and useful
life of the underlying asset.
The lease liability is initially measured at the present
value of the future lease payments. The lease
payments are discounted using the interest rate
implicit in the lease or, if not readily determinable,
using the incremental borrowing rates. The lease
liability is subsequently remeasured by increasing
the carrying amount to reflect interest on the lease
liability, reducing the carrying amount to reflect the
lease payments made.
A lease liability is remeasured upon the occurrence
of certain events such as a change in the lease term
or a change in an index or rate used to determine
lease payments. The remeasurement normally also
adjusts the leased assets.
Lease liability and ROU asset have been separately
presented in the Balance Sheet and lease payments
have been classified as financing cash flows.
Company as a lessor:
Leases for which the Company is a lessor is
classified as a finance or operating lease. Whenever
the terms of the lease transfer substantially all the
risks and rewards of ownership to the lessee, the
contract is classified as a finance lease. All other
leases are classified as operating leases.
For operating leases, rental income is recognized on
a straight line basis over the term of the relevant
lease.
17. Convertible preference shares:
Convertible preference shares are separated into
liability and equity components based on the terms
of the contract.
On issuance of the convertible preference shares,
the fair value of the liability component is determined
using a market rate for an equivalent non¬
convertible instrument. This amount is classified
as a financial liability measured at amortised cost
(net of transaction costs) until it is extinguished on
conversion or redemption.
The remainder of the proceeds is allocated to the
conversion option that is recognised and included
in equity since conversion option meets Ind AS 32
criteria for fixed to fixed classification. Transaction
costs are deducted from equity, net of associated
income tax. The carrying amount of the conversion
option is not remeasured in subsequent years.
Transaction costs are apportioned between the
liability and equity components of the convertible
preference shares based on the allocation of
proceeds to the liability and equity components
when the instruments are initially recognised.
18. Cash and Cash equivalents:
Cash and cash equivalents comprise cash at bank
and in hand, cheques in hand and deposits with
banks having maturity period less than three months
from the date of acquisition, which are subject to an
insignificant risk of changes in value
For the purpose of statement of cash flows, cash and
cash equivalents consist of cash and short-term
deposits as defined above net of outstanding bank
overdrafts as they are considered an integral part of
the Company's cash Management policy.
19. Earnings per share:
The earnings considered in ascertaining the
Company's Earnings Per Share (EPS) is the net
profit/ (loss) after tax. The number of shares used
in computing basic EPS is the weighted average
number of shares outstanding during the period/
year. The diluted EPS is calculated on the same
basis as basic EPS, after adjusting for the effects of
potential dilutive equity shares unless the effect of
the potential dilutive equity shares is anti-dilutive.
20. Non-current assets held for sale / discontinued
operations / Liabilities directly associated with
assets classified as held for sale:
The Company classifies non-current assets as
held for sale/ discontinued operations if their
carrying amounts are recovered principally through
a sale rather than through continuing use. Actions
required to complete the sale should indicate that
it is unlikely that significant changes to the sale
will be made or that the decision to sell will be
withdrawn. Management must be committed to
the sale expected within one year from the date of
classification.
For these purposes, sale transactions include
exchanges of non-current assets for other non¬
current assets when the exchange has commercial
substance. The criteria for held for sale classification
is regarded met only when the assets are available
for immediate sale in its present condition, subject
only to terms that are usual and customary for sales
of such assets, its sale is highly probable; and it will
genuinely be sold, not abandoned. The Company
treats sale of the asset to be highly probable when:
• The appropriate level of Management is
committed to a plan to sell the asset,
• An active programme to locate a buyer and
complete the plan has been initiated (if
applicable),
• The asset is being actively marketed for sale
at a price that is reasonable in relation to its
current fair value,
• The sale is expected to qualify for recognition
as a completed sale within one year from the
date of classification, and
• Actions required to complete the plan indicate
that it is unlikely that significant changes to
the plan will be made or that the plan will be
withdrawn.
Non-current assets held for sale are measured at the
lower of their carrying amount and the fair value less
costs to sell. Assets and liabilities classified as held for
sale are presented separately in the balance sheet.
Property, plant and equipment and intangible assets
once classified as held for sale to owners are not
depreciated or amortised.
A discontinued operation is a component of an entity
that either has been disposed of, or is classified as
held for sale, and:
• Represents a separate major line of business
or geographical area of operations,
• Is part of a single co-ordinated plan to
dispose of a separate major line of business or
geographical area of operations
Or
• Is a subsidiary acquired exclusively with a view
to resale
Discontinued operations are excluded from the results
of continuing operations and are presented as a single
amount as profit or loss after tax from discontinued
operations in the statement of profit and loss.
3.1 Deemed cost of leasehold building includes subscription towards share capital of co-operative societies amounting to
' 2,750/- (Previous Year ' 2,750/-)
3.2 For lien and charge on the above assets refer Note 22
3.3 In accordance with the Indian Accounting Standard (Ind AS 36) on “Impairment of Assets” the Management is required to carry
out an exercise of identifying assets that may have been impaired.
However, in the opinion of the Management, the fixed assets of the Company comprise of leasehold building and not cash
generating units as stated in the said accounting standards and there is no impairment of any of the fixed assets.
3.4 Refer Note 51 for net book value of vehicles
18.1 Terms/ rights attached to equity shares with voting rights
The Company has equity shares with face value of ' 10/- per share and the shareholders have all the rights as
available to equity shareholders with voting rights as per the provisions of Companies Act, 2013, read together with the
Memorandum and Articles of Association of the Company.
18.2 Terms, Rights, Preferences and restrictions attached to 0.01% - Non Participating Optionally Convertible
Cumulative Preference Shares (OCPS):
The Company has only one class of preference share, having face value of ' 10/- per share allotted to GTL Infrastructure
Limited (GIL). In terms of the issue, GIL (OCPS holder) had right to convert OCPS into equity shares from the expiry of 6
months from the date of allotment till 18 months of the date of allotment. However, GIL has opted for non-conversion of
OCPS into equity shares.
After the expiry of a period of 6 months from the Allotment Date, the OCPS may at the Option of the Company be
redeemed at any time prior to the expiry of 20 years from the date of the allotment, in part or in full, after providing a
prior written notice of 30 days to GIL. As agreed by the OCPS holder, the original term providing Yield to Maturity of 8%
by way of redemption premium has been repealed by the Board.
The OCPS carry a dividend of 0.01 % per annum, payable on a cumulative basis on the date of conversion / redemption
as the case may be. Any declaration and payment of dividend shall at all times be subject to the availability of Profits and
the terms of the restructuring of the debts under the Corporate Debt Restructure (CDR) Mechanism, unless otherwise
agreed by the CDR Lenders. Further, in the event of inability of the Company to declare / pay dividend due to non¬
availability of Profits / pursuant to the terms of restructuring, the dividend may be waived by GIL. Other than as permitted
under applicable laws, GIL will not have a right to vote at the Company's General Meetings.
In the event of winding-up of the Company, the OCPS holder will be entitled to receive in proportion to the number of
shares held at the time of commencement of winding-up, any of the remaining assets of the Company, if any, after
distribution to all secured creditors and their right to receive monies out of the remaining assets of the Company shall
be reckoned pari-passu with other unsecured creditors, however, in priority to the equity shareholders. The OCPS holder
shall have such rights as per the provisions of Companies Act, 2013, read together with Memorandum and Articles of
Association of the Company.
Capital Redemption Reserve : This Reserve is created under Section 69 of the Companies Act, 2013 by transferring an
amount equal to the nominal value of shares bought back by the Company. This is permitted to be used for issuing fully paid
bonus shares.
Securities Premium Account : Premium collected on issue of securities is accumulated as a part of Securities Premium
Account. Utilisation of such premium is restricted by the Companies Act, 2013.
Debenture Redemption Reserve : Additional Debenture Redemption Reserve is not created as the said requirement has
been dispensed with in terms of the amendment to Companies (Share Capital and Debentures) Rule 2014.
General Reserve : General Reserve forms part of the retained earnings and is permitted to be distributed to shareholders as
dividend.
Balance in Statement of Profit and Loss : This represents profits remaining after all appropriations. This is a free reserve
and can be used for distribution as dividend.
22.1 Nature of security:
I) Security created in favor of CDR Lenders :
a) A first charge and mortgage on all immovable properties, present and future (Also refer Note 22.2 below);
b) A first charge by way of hypothecation over all movable assets, present and future (Also refer Note 22.2 below);
c) A first charge on the Trust and Retention Account and other reserves and any other bank accounts wherever
maintained, present & future;
d) A first charge, by way of assignment or creation of charge, over:
i. all the rights, titles, interest, benefits, claims and demands whatsoever in the Project Documents duly
acknowledged and consented to by the relevant counter-parties to such Project Documents, all as
amended, varied or supplemented from time to time
ii. all the rights, titles, interest, benefits, claims and demands, whatsoever, in the Clearances
iii. all the rights, titles, interest, benefits, claims and demands, whatsoever, in any letter of credit, guarantee,
performance bond provided by any party to the Project Documents;
iv. all the rights, titles, interest, benefits, claims and demands, whatsoever, in Insurance Contracts /
proceeds under Insurance Contracts;
e) Pledge of all investments of the Company, except investment in Global Rural Netco Ltd (GRNL) which has since
been dissolved (Also refer Note 22.2 below);
f) Mr. Manoj G. Tirodkar, one of the promoters of the Company, has extended a personal guarantee. The
guarantee is limited to an amount of ' 394.28 Crores; and
g) Mr. Manoj G. Tirodkar and Global Holding Corporation Private Limited (GHC), promoters of the Company, have
executed Sponsor Support Agreement to meet any shortfall or expected shortfall in the cash flows towards
the debt servicing obligations of the Company. As far as Mr. Manoj Tirodkar is concerned any liability arising
from this Sponsor Support Agreement along with any other Agreement including Personal Guarantee shall be
always capped at ' 394.28 Crores.
The personal guarantee and liability arising from Sponsor Support Agreement to be reduced to the extent of
exposure of lenders, on settlement by the Company. Accordingly, having settled the dues of nine original secured
lenders, the Company has requested the Security Trustee to issue the confirmation / letter in respect of them.
II) Security offered to CDR Lender's pending creation of charge:
a) GHC (Promoter Group), along with its step down subsidiaries have to extend corporate guarantee; and
b) GHC has to pledge its holding in the Company.
III) Prior to the restructuring of the Company's debts under CDR Mechanism, the Company created security on certain
specified tangible assets of the Company in favour of Andhra Bank, Punjab National Bank, Union Bank of India, Vijaya
Bank, IDBI Bank Limited, Bank of Baroda, UCO Bank, Indian Overseas Bank, Indian Bank, Canara Bank and Dena Bank
for their respective credit facilities other than term loans, aggregating in ' 1,572 Crores. In terms of CDR Documents
inter-alia Master Restructuring Agreement, the earlier charges are not satisfied by the Company after creation of new
security as stated in I above on account of non-issuance of NOC for satisfaction of charges by the lenders.
22.2 The lenders have sold 9 out of 10 immovable properties along with movable assets therein and invoked all investments
referred in Note 22.1(e).
22.3 While the petition for insolvency resolution process filed by one of the lenders before National Company Law Tribunal
(“NCLT”) got dismissed vide its order dated November 18, 2022, on appeal by the said lender, the National Company Law
Appellate Tribunal (“NCLAT”), vide its order dated October 25, 2024 has set aside the Order of the NCLT and remanded
the matter back to the NCLT for hearing afresh. The said matter is pending before the NCLT.
22.4 I n the meanwhile, based on the “In-Principle” approval for One Time Settlement (OTS) communicated by the Monitoring
institution and individual sanctions, the Company has funded the Escrow Account maintained for the said purpose and settled
the dues of nine original secured lenders*, besides entering into 'Upside Sharing Agreement' with seven of them (excluding two
in process) for sharing 75% of the net recovery amount of Arbitration Proceedings amongst the lenders in the agreed proportion.
* (apart from one settled earlier)
The Company is now awaiting the outcome of the Arbitration Proceedings and also the OTS sanctions from the rest of
the lenders, while taking appropriate measures for resolution of NCLT and DRT related issues.
In view of this and Notes 22.2 and 22.3, the Company has neither paid nor provided interest on its borrowings during the year.
22.5 Thus, in view of creation of charge twice (prior and post CDR) as stated in Note 22.1.(III) above; indivisible nature
of the securities offered to all the lenders; and the pendency of proceedings before NCLT, DRT, Arbitrators and other
legal forums, the effect of the settlements in respect of part of the borrowing and discharge thereon shall be given
effect to on the settlement of the dues / borrowings and discharges of all the lenders, who have jointly agreed for the
settlement.
22.6 Details of Interest accrued and due on borrowings comprises of:
a) Overdue Interest of' 502.79 Crores relating to the period March 2014 to March 2017 on amounts due to holders
of Rated Redeemable Unsecured Rupee Non-convertible Debentures;
b) Overdue Interest of ' 221.51 crores relating to the period for December 12, 2011 to March 31,2017 on External
Commercial Borrowings; the variation in the interest accrued amount as at 31 March, 2025 is on account of
exchange fluctuation;
c) Overdue Interest of ' 727.80 Crores relating to the period June 2014 to March 2017 on Secured Term Loan;
d) Overdue interest of ' 22.64 Crores relating to the period June 2014 to March 2017 on Secured Funded Interest
Term Loan;
e) Overdue interest of ' 23.00 Crores relating to the period September 2014 to March 2017 on Cash Credit facility;
f) Overdue interest of ' 20.27 Crores relating to the period November 2014 to March 2017 on dues towards BG Invocation.
22.7 Pursuant to the One Time Settlement (OTS) approved by some of the CDR lenders of the Company, the balance of
' 162.85 crores in the Escrow Account maintained by the lenders has been adjusted against the outstanding dues to
CDR lenders, as disclosed under Note 22 of the Financial Statements.
The preparation of the Company's financial statements requires Management to make judgements, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and liabilities and the accompanying disclosures, and the
disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require
a material adjustment to the carrying amount of assets or liabilities affected in future periods.
Judgements
In the process of applying the Company's accounting policies, Management has made the following judgements, which have
the most significant effect on the amounts recognised in the financial statements:
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have
a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial
year, are described below. The Company based its assumptions and estimates on parameters available when the financial
statements were prepared. Existing circumstances and assumptions about future developments, however, may change due
to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the
assumptions when they occur. The Management believes that the judgements and estimates used in preparation of financial
statement are prudent and reasonable.
Taxes
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available
against which the losses can be utilised. Significant Management judgement is required to determine the amount of deferred
tax assets that can be recognised, based upon the likely timing and the level of future taxable profits.
Defined benefit plans (gratuity benefits)
The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial
valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future.
These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities
involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these
assumptions. All assumptions are reviewed at each reporting date.
Fair value measurement of financial instruments
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on
quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs
to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is
required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility.
Changes in assumptions about these factors could affect the reported fair value of financial instruments. See Note 41 for
further disclosures.
Allowances for credit loss on Trade Receivable, Advance to supplier and other receivable
The Provision for allowances for credit loss for Trade Receivable, Advances to supplier and other receivables are based on
assumptions about the risk of defaults and expected credit loss. The Company uses judgement in making these assumptions
and selecting the inputs to the calculation of provision for allowance based on the past history, existing market conditions as
well as forward looking estimates at the end of each reporting period.
Provisions for impairment loss on Investment
Provisions for impairment loss on Investment is based on evaluation of financial position of investee companies to meet their
obligations for honouring their commitments towards the investment held by the Company.
The Company makes contribution towards provident fund and superannuation fund which are in the nature of defined
contribution post employee benefit plan. Under the plan, the Company is required to contribute a specified percentage of
payroll cost to fund the benefits. The above amounts are recognised as an expense in the statement of Profit and Loss in
Note 31 under the head “Contribution to Provident and other funds”.
b) Defined Benefit Plan
The employee's Gratuity Fund Scheme, which is defined benefit plan, is managed by a Trust maintained with Life
Insurance Corporation of India (LIC). The present value of obligation is determined based on actuarial valuation using
Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee
benefit entitlement and measures each unit separately to build up the final obligation. The obligation for compensated
absences is recognized in same manner as gratuity.
Based on actuarial valuation obtained as at the Balance Sheet date the following table sets out the details of Defined
Benefit obligation.
A. Leases
1. The Company has adopted Ind AS 116 on leases beginning April 1,2019, using the modified retrospective approach. The
standard has been applied to the lease contracts as at April 1,2019.
2. The Company has recognized the lease liability at present value of the lease payments discounted at relevant incremental
borrowing rate. The right to use asset has been measured at the same value as that of the lease liability during inception.
As of 31 March, 2025 the right-of-use asset is ' 11.00 Crores (' 26.89 Crores) as against the corresponding lease
liability of ' 10.77 Crores (' 27.00 Crores).
3. In the Statement of Profit and Loss for the current year, lease expenses which were recognised as other expenses in
previous periods is now recognised as depreciation expense for the right-of-use asset and finance cost for interest
accrued on lease liability. The adoption of this standard did not have any significant impact on the profit for the year
and earnings per share. The weighted average incremental borrowing rate of 11% has been applied to lease liabilities
recognised in the balance sheet at the date of initial application.
4. The Company has also elected not to apply the requirements of Ind AS 116 to short term lease and leases for which
the underlying asset is of a low value. The Company incurred ' Nil (' Nil ) for the year ended March 31,2025 towards
expenses relating to short-term leases.
5. The total cash outflow for leases is ' 11.35 Crores (' 2.95 Crores) for the year ended 31st March, 2025 including cash
outflow of short-term leases. Out of this an amount of ' 11.35 Crores (' 2.95 Crores) is pertaining to long term leases
(IndAS 116 requirements) and Nil ( Nil) is pertaining to short term leases. Interest on lease liabilities is ' 0.34 Crores
(' 0.41 Crores) for the year.
6. The Company's leases mainly comprise of buildings premises.
Company as a Lessor:
The Company leases out its properties for which the lease income recognised in the Statement of Profit and Loss ' Nil
(' 1.90 Crores).
B. Commitments
(i) Estimated amount of contracts remaining to be executed on capital account and not provided for:
39. C. 1. Claims against the Company not acknowledged as debts
As on March 31,2025, there were 38 cases against the Company, pending in various Courts and other Dispute
Redressal Forums.
i) 4 cases: The Company has been implicated as proforma defendant i.e., there are no monetary claims against
the Company. In most of these cases, dispute concerns matter like loss of share certificate, title claim,
ownership, transfer of the shares etc. The Company's implication in these matters is with a view to protect the
interest of the lawful owners of the shares. Upon the final orders passed by the Court(s), the Company shall
have to release the shares, which are presently under 'stop transfer', in this regard to the rightful claimants.
There is no direct liability or adverse impact on the business of the Company on account of the said 4 cases.
ii) 9 cases: These cases pertain to Labour Court matter of earlier power business, wherein the employees filed
for reinstatement on termination consequent to termination of Aurangabad Distribution Franchisee Agreement
of the Company. These are being settled with affected employees. The contingent liability in respect of these
9 cases is ' 1.34 Crores.
iii) 6 cases: Out of these 6 cases of earlier power business, disputes in respect of 3 relate to billing, 1 relates
to damages claimed regarding tower maintenance, 1 relates to workmen compensation and 1 relates to
assessment of Local Body Tax on goods, all of which are pending before the appropriate authorities. The
contingent liability in respect of these 6 cases is ' 0.31 Crore.
iv) 5 cases: Out of these 5 cases, dispute in respect of 1 relates to recovery, 1 relates to licence fees, 1 relates to
trademark, 1 relates to bank claim and 1 relates to claim by a shareholder. The contingent liability in respect
of these 5 cases is ' 0.75 Crore.
v) 9 cases: These 9 cases pertain to arbitration matters, out of which in 5 cases, the Company has invoked
arbitration proceedings against MSEDCL in respect of the DF Contract & EPC Contract as explained in the
earlier Annual Report and the contingent liability towards counter claims of MSEDCL is ' 462.90 Crores.
The other 4 matters, are arising out of challenge on the procedural orders by the Arbitrator and are being
contested in the courts by the Company's advocates who have the necessary expertise on the subject. There
is no contingent liability arising out of the four matters.
vi) 1 case: This case relates to a claim made by a bank against the Company based on a letter issued by it in
favour of its erstwhile subsidiary towards their credit facilities. The contingent liability in respect of this is
' 237.28 Crores.
vii) 1 case: One of the lenders has filed insolvency petition before the National Company Law Tribunal, Bombay
Bench (”NCLT”). The NCLT vide its order dated November 18, 2022 dismissed the said petition. Further, upon
filing appeal by the said lender, the National Company Law Appellate Tribunal vide its order dated October
25, 2024, has set aside order of the NCLT and referred the matter back to NCLT for considering afresh. The
contingent liability in respect of this is ' 204.78 Crores
viii) 1 case: The Department of Telecom (DoT) has raised a frivolous demand of ' 1,509.50 Crores based on
Adjusted Gross Revenue for ISP license fee pertaining to the business carried out by the Company well before
the year 2009. The relevant ISP license was surrendered to DoT in 2009 for which DoT had issued a no dues
certificate in November 2010. Accordingly, the Company is contesting this demand before Telecom Disputes
Settlement and Appellate Tribunal (TDSAT), which has granted stay in the matter.
ix) 1 case: IDBI Bank and other CDR lenders have filed a suit against the Company in Debt Recovery Tribunal,
Mumbai, (“DRT”) for ' 4,853.55 crores. As has been stated elsewhere, the Company based on the in-principle
approval communicated by IDBI Bank has settled the dues of nine original secured lenders and the remaining
are in process. Accordingly, the settled lenders have filed/in the process of filing respective consent terms
before the DRT for withdrawal of their respective claims.
x) 1 case: An employee of staffing company has initiated legal proceedings in labour court against the Company.
The same is being contested by the Company. The contingent liability in respect of the said case is ' 0.01 Crore.
Apart from the above cases pending before the courts and other Dispute Redressal Forums, the Company has
not acknowledged the following debts also:
xi) Claim of ' 179.00 Crores from Global Holding Corporation (GHC), towards loss occurred to GHC on account
of invocation by lender of share investment held by GHC in the Company which was offered as pledge for the
credit facility availed by the Company.
xii) One of the lenders has debited amount of ' 34.58 Crores to Current Account which is disputed by the Company.
The contingent liability in respect of i to xiii above is ' 7,484.00 Crores
The Company's principal financial liabilities comprise of loans and borrowings, trade and other payables, and financial
guarantee contracts. The main purpose of these financial liabilities is to manage finance for the Company's operations. The
Company's principal financial assets include investments, trade and other receivables, supplier advance and cash and cash
equivalents that derive directly from its operations.
The Company is exposed to market risk, credit risk and liquidity risk. The Company's senior Management oversees the
managment of these risks. The Company's financial risks are identified, measured and managed in accordance with the
Company's policies and procedures. It is the Company's policy that no trading in derivatives for speculative purposes may be
undertaken. The Audit Committee of the Board and the Board of Directors review and monitor risk Management and mitigation
plans. The financial risks are summarised below:
43.1 Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in
market prices. Market risk comprises of three types of risks viz. interest rate risk, currency risk and other price risk, such
as equity price risk and commodity price risk. Financial instruments affected by market risk include loans, borrowings
and deposits. As the revenues from the Company's network service business is dependent on the sustainability of
telecom sector, Company believes that macro-economic factor, including the growth of Indian economy as well as
political and economic environment, have a significant direct impact on the Company's business, results of operations
and financial position.
43.2 Interest rate risk
I nterest rate risk is the risk that the fair value or future cash flow of financial instrument will fluctuate because of
changes in market interest rates. The significant part of financial instrument which can be considered in case of the
Company as subject to interest rate risk are borrowings. However the Company's present borrowings carry fixed
interest rate and therefore the Company is not exposed to significant interest rate risk.
43.3 Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of
changes in foreign exchange rates. The Company's exposure to the risk of changes in foreign exchange rates
relates primarily to the External Commercial Borrowings and except for the the same, the Company is not exposed
to foreign currency risk as the Company's business operations do not involve any significant transactions in
foreign currency.
Foreign currency sensitivity
The impact on the Company's profit or loss before tax on account of variation in exchange rates can be on account
of fluctuation in USD as the Company's External Commercial Borrowings liability is a USD denominated liability. The
following table demonstrates the sensitivity to a reasonably possible change in USD exchange rates, with all other
variables held constant. 1% increase or decrease in USD rate will have the following impact on the profit or loss
before tax :
43.4 Equity price risk
All the Company's equity investments are in unlisted entities. All these investments are trade and strategic
investments and therefore are not considered to be exposed or susceptible to market risk.
43.5 Commodity price risk
The Company is engaged in business of providing “Network Services” comprising mainly of Operation
Maintenance and Energy-Management (OME) and Other Network Services. In OME the major components of cost
are electricity and fuel. The variation in the prices of electricity and fuel is index based i.e. additionally charged to
customer. With regards to other services the contracts are cost plus margin and therefore commodity price risk
is mitigated.
43.6 Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer
contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily
trade receivables), deposits with banks and other financial assets.
Trade receivables
Customer credit risk is managed subject to the Company's established policy, procedures and controls relating to
customer credit risk Management. Credit quality of a customer is assessed based on individual credit limits and
defined in accordance with customer assessment. Outstanding customer receivables are regularly monitored.
The Company follows a 'simplified approach' {i.e. based on lifetime Expected Credit Loss (ECL)} for recognition
of impairment loss allowance on Trade receivables. For the purpose of measuring lifetime ECL allowance for
trade receivables, the Company estimates irrecoverable amounts based on the ageing of the receivable balances.
Individual trade receivables are written off when Management deems them not to be collectible. The Company
does not hold any collateral as security against these trade receivables. The contractually agreed terms effectively
manage the concentration risk. The details of the same are as under:
Financial Assets and bank deposits
Credit risk from balances with banks is managed by the Company's treasury department in accordance with the
Company's policy. The Company considers factors such as track record, size of the institution, market reputation and
service standards to select the banks with which its balances and deposits are maintained. Generally, the balances are
maintained with the institutions with which the Company has also availed borrowings. Presently, the Company does not
maintain significant cash and deposit balances other than those required for its day to day operations.
The Company's maximum exposure to credit risk for the components of the Balance Sheet at 31 March 2025 and 31
March 2024 is the carrying amounts as appearing in Note 11, 12 and 14.
43.7 Liquidity risk
Liquidity risk is that the Company will not be able to settle or meet its obligation on time or at reasonable price. Company's
principal sources of liquidity are cash flows generated from its operations.
The Company continues to take various measures such as cost optimisation, improving operating efficiency to increase
Company's operating results, cash flows and negotiation with lenders for settlement of past dues. The Monitoring
Institution, on behalf of all the secured lenders have communicated their 'In-Principle' approval for the OTS proposal,
based on which the Company is settling the dues of the lenders as per their respective sanctions.
The table below summarises the maturity profile of the Company’s financial liabilities based on contractual
undiscounted payments.
For the purpose of the Company's capital Management, capital includes issued equity capital, optionally convertible
preference shares, Securities premium and all other equity reserves attributable to the equity holders of the Company. The
primary objective of the Company's capital Management is to safeguard continuity of the business operations.
Since the net worth is negative, capital gearing ratio is not furnished.
Notes :
45.1 While calculating Debt Service Coverage Ratio and Net Profit Ratio; exceptional items (See Note 35) are not
considered.
45.2 Since the net worth and the net current assets are negative, these ratios are not furnished.
46. ADDITIONAL INFORMATION
Additional regulatory information
a) The Company has not surrendered or disclosed any transaction, previously unrecorded in the books of account, in the
tax assessments under the Income Tax Act, 1961 as income during the year.
b) The Company has not been declared as a Wilful Defaulter (WD) by any of the banks or financial institutions or
any other lender. Further, the proceeding initiated by one of the secured lenders in this regards is stayed by the
appropriate court. The said lender has sanctioned One Time Settlement against which the Company has made the
payment and the process of withdrawing the WD proceedings is underway.
c) To the best of the Company's knowledge and information, the Company does not deal with struck off companies.
d) The Company has registered charges with Registrar of Companies (RoC) wherever applicable.
e) The Company has not borrowed any funds during the year.
f) The Company does not hold any benami property and no proceedings have been initiated or pending against the
Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and
rules made thereunder.
g) The Company does not trade or invest in any crypto currency.
49. GOING CONCERN
The net-worth of the Company has got eroded during the last few years. The Company's current liabilities are higher
than its current assets. While the petition for insolvency resolution process filed by one of the lenders before National
Company Law Tribunal (NCLT) got dismissed vide its order dated November 18, 2022, on appeal by the said lender the
National Company Law Appellate Tribunal (NCLAT) vide its order dated October 25, 2024 has set aside the Order of the
NCLT and remanded the matter back to the NCLT for hearing afresh. The said matter is pending before the NCLT.
In the meanwhile, based on the 'In-Principle' approval for OTS communicated by the Monitoring Institution and individual
sanctions, the Company has settled the dues of nine original secured lenders, besides entering into Upside Sharing
Agreement with seven of them (excluding two in process) for sharing 75% of the net recovery amount of Arbitration
Proceedings, amongst the lenders in the agreed proportion.
The Company is now awaiting the outcome of the Arbitration proceedings and also the OTS sanctions from the rest of
the lenders, while taking appropriate measures for resolution of NCLT and DRT related issues.
Accordingly, the Management is of the view that it would be in a position to revive the Company and continue its
operations. Hence it continues to prepare its financial statements on a going concern basis.
50. DISCLOSURE OF INFORMATION AS REQUIRED BY REGULATION 34(3) OF LISTING OBLIGATIONS AND
DISCLOSURE REQUIREMENTS
Since the Company does not have any subsidiary company, the information is not furnished. (Refer Note 40.1)
52. The previous year figures, wherever necessary, have been regrouped/rearranged/recast to make them comparable with those
of the current year.
53. Figures in brackets relate to the previous year unless otherwise stated.
As per our report of even date For and on behalf of the Board
For M/s. GDA and Associates Sunil S. Valavalkar
Chartered Accountants Whole Time Director
FRN No.135780W (DIN 01799698)
Akshay Maru D. S. Gunasingh Dr. Mahesh Borase
Partner Director Director
M. No. 150213 (DIN 02081210) (DIN 03330328)
Mumbai Milind Bapat Deepak Keluskar
May 07, 2025 Chief Financial Officer Company Secretary
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