Repayment of term loans and Non-convertible debentures

(i) Loan outstanding Rs. 583 Mn

As per the repayment schedule in the facility sanction letter, the Company has to repay loans amounting to Rs. 7,000 Mn availed from bank in 12 equated quarterly instalments which have commenced from August 2020.

(ii) Loan outstanding Rs. 2,969 Mn

As per the repayment schedule in the facility sanction letter, the Company has to repay loans amounting to Rs. 17,000 Mn availed from bank in 12 equated quarterly instalments which have commenced from December 2020.

(iii) Loan outstanding Rs. 1,000 Mn

As per the repayment schedule in the facility sanction letter, the Company has to repay loans amounting to Rs. 3,000 Mn availed from bank in 12 equated quarterly instalments which will commence from April 2021.

(iv) Loan outstanding Rs. 4,166 Mn

As per the repayment schedule in the facility sanction letter, the Company has to repay loans amounting to Rs. 10,000 Mn availed from bank in 12 equated quarterly instalments which will commence from September 2021.

(v) Loan outstanding Rs. 4,375 Mn

As per the repayment schedule in the facility sanction letter, the Company has to repay loans amounting to Rs. 7,500 Mn availed from bank in 12 equated quarterly instalments which will commence from January 2022.

(vi) Loan outstanding Rs. 6,667 Mn

As per the repayment schedule in the facility sanction letter, the Company has to repay loans amounting to Rs. 10,000 Mn availed from bank in 12 equated quarterly instalments which will commence from June 2022.

(vii) Loan outstanding Rs. 5,000 Mn

As per the repayment schedule in the facility sanction letter, the Company has to repay loans amounting to Rs. 5,000 Mn availed from bank in 12 equated quarterly instalments which will commence from May 2023.

Weighted average effective cost of debt as at March 31,2023 is 8.05% per annum (March 31,2022 : 5.60% per annum) on term loans from banks.

For all the above loans, the Company may voluntarily prepay all or any portion of the disbursed loans based on certain specified clauses and subject to the conditions laid out in the loan agreement.

The borrowings were used for the purpose for which they were taken from the banks and financial institutions.

(viii) Non-convertible debentures

The Company has issued 15,000 rated, listed, unsecured, redeemable non-convertible debentures (Series I - 7,500, Series II - 3,750 and Series III - 3,750) of face value of Rs. 10,00,000 each in three series (Series I - Rs. 7,500 Mn, Series II - Rs. 3,750 Mn and Series III - Rs. 3,750 Mn) aggregating upto Rs. 15,000 Mn on private placement basis at a fixed Coupon rate of 8.20% per annum payable annually and payable on the maturity along with principal. The series I, II and III will be due for maturity on December 07, 2024, June 07, 2025 and December 07, 2025 respectively.

v. The discount rate is based on the average yield on government bonds at the reporting date with a term that matches that of the liabilities.

vi. The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

vii. Estimated amounts of expense to be recognized within next year is Rs. 194 Mn (March 31, 2022 : Rs. 210 Mn).

The above sensitivity analysis is based on a change in an assumption by a percentage while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. While calculating the sensitivity of the defined benefit obligation to significant actuarial assumption, same method i.e. Projected Unit Credit method has been applied as when calculating the gratuity liability recognized within the balance sheet.

34 Employee stock/cash settled option plans

(a) Employee stock/cash settled option plans - issued by the Company

Pursuant to the board resolution dated July 22, 2008 and the resolution of the shareholders in extraordinary general meeting dated August 28, 2008, the Company instituted the Employee Stock Option Scheme 2008 (the 2008 Scheme). In FY 2013-14 and 2014-15, the Company had announced new performance unit plan (cash settled option plan) for its employees. In FY 2015-16, 2016-17, 2017-18, 2018-19, 2019-20, 2020-21, 2021-22 and 2022-23, the Company has announced Long term incentive plan (LTIP) 2015 for its employees.

(i) Total employees stock/cash options expense recognised for the year ended March 31,2023 and March 31,2022 is Rs. 77 Mn and Rs. 108 Mn respectively.

(ii) The Company had decided to issue equity shares on exercise of ESOPs through ESOP trust and with this objective, Indus Towers Employee’s Welfare Trust (formerly Bharti Infratel Employee’s Welfare Trust) [a trust set up for administration of Employee Stock Option Plan (‘ESOP’) of the Company] was formed in FY 2014-15.

The loan has been given to ESOP trust time to time for purchase the Equity Shares of the Company from open market as permitted by SEBI (Share Based Employee Benefits) Regulations, 2014 and the same is being adjusted against the shares issued by the trust to the employees of the company.

During the year ended March 31,2023, Trust has acquired 525,000 shares at a price of Rs. 142.31 per share and 401,647 equity shares of exercise price of Rs. 10 each and 743 equity shares of exercise price of Rs. 109.67 each have been transferred to employees upon exercise of stock options. As of March 31,2023, the Trust holds 676,322 shares (of Face Value of Rs. 10 each) (March 31, 2022 - 553,712 shares) of the Company.

The management of the Company assesses all material claims in the nature of demands against the Company and based on legal advice in certain cases evaluates whether it is probable, possible or remote (PPR).

Further, the management of the Company makes an assessment for uncertain tax positions for direct tax matters and records a provision if it is probable and disclose it as part of contingent liabilities when it is assessed as possible in nature.

The show cause notices (SCN) including intimation prior to SCN relating to direct and indirect taxes have neither been acknowledged as claims nor considered as contingent liability and hence, not disclosed.

Contingent liability amount disclosed above includes interest and penalty only to the extent such amounts are demanded by various tax authorities through demand order.

The Company discloses voluntarily for the material cases that are assessed as remote as part of PPR analysis and are included in the above amount.

i) Stamp duty

The Company had received demand in certain states for stamp duty on execution of Leave and License Agreement of Cell Sites.

ii) Entry tax

Hon’ble Apex Court on November 11, 2016 while upholding the constitutional validity of entry tax levied by few States wherever its applicable, referred all the cases back to regular benches of the Court/s to decide all existing cases on merits while testing inter alia that whether the present levies in each such case/State is discriminatory in nature or not.

Accordingly, all the said cases were listed before the regular bench of Supreme Court wherein after taking up all pending cases on State by State basis court have found that prima facie inter alia discrimination issues still exists and all the listed petitions have been remanded back with direction, to file fresh writ petitions before respective High Courts on the ground of discrimination as well as other directions as laid down in the aforesaid judgment of nine member bench of Hon’ble Supreme Court. The Company has filed fresh writ petition in the state of Orissa, Madhya Pradesh, Chhattisgarh, Rajasthan and Assam and amended the pending petitions in Bihar and Jammu & Kashmir. Pending disposition of each case by the High Courts, the company has decided to maintain ‘Status Quo’ on its position/assessment.

iii) Sales tax/VAT/GST

The claims for Sales tax comprise mainly of the case relating to levy of VAT on right to use in goods & non submission of concessional forms. The demand for GST pertains to disallowance of Input tax credit availed by the Company on passive infrastructure assets other than towers.

iv) Municipal taxes

The Company based on its assessment of the applicability and tenability of certain municipal levies, which is an industry wide phenomenon, does not consider the impact of such levies to be material. Further, in the event these levies are confirmed by the respective government authorities, the Company would recover these amounts from its customers in accordance with the terms of Master Service Agreement.

v) Service tax

The service tax department had issued certain orders for the disallowance of CENVAT credit availed on Inputs, Capital Goods and Input Services under pre- GST regime. The Company has filed writ petition before Hon’ble High Court of Delhi which was decided in favour of the Company vide order dated October 31,2018 wherein it was held that towers are movable in nature and CENVAT credit can be availed on receipt of such goods. Further, Department has filed SLP before Hon’ble Supreme Court against the favourable order of Delhi High Court. The Hon’ble Supreme Court has tagged the SLP with pending matter on similar issue of telecom operators.

On the similar matter, there are contrary judgements by the Hon’ble High Court of Bombay in the case of telecom operators against which, such operators have filed SLP before Hon’ble Supreme Court. These matters are pending before Supreme Court for hearing.

In another issue department has raised demand alleging difference in turnover in 26AS vs ST 3 against which company had filed appeal before CESTAT, pending for hearing. Further, on the similar issue demand has also been confirmed for FY’16 & FY’18 for which the company has filed an appeal against the order.

In a separate proceeding before Directorate General of Central Excise Intelligence, the department had issued order for payment of excise duty on removal of scrap under pre- GST regime against which the Company has filed appeal before CESTAT, pending for hearing. The company has received favourable order from CESTAT, Chandigarh on issue of reversal of CENVAT credit on removal of scrap for FY’14 & FY’15.

vi) Income tax matters

This pertains to tax demands mainly on account of disallowance of depreciation on PIA assets transfer under merger scheme, provision for expenditure, Depreciation on Provisional capitalization, expenditure u/s 14A related to exempt income, short credit of taxes deducted etc.

vii) Other claims mainly include site and vendors related legal disputes

Amount assessed as contingent liability includes interest and penalty as demanded by various authorities and vendors and doesn’t include interest liability that could be claimed by authorities in case of unfavorable orders.

viii) One of the State Electricity Board (‘Board’) revised the electricity tariff and has demanded Industrial to Commercial (I2C) tariff difference in respect of the electricity consumed by the Company for the operation of its towers and same was challenged before Appellate Tribunal by the Industry including the Company. The Appellate tribunal has decided in favor of Appellants including the Company in February 2020. The said order has been challenged by the Board before Hon’ble Supreme Court and in October 2020, the Hon’ble Supreme Court stayed the recovery of refund amount by the Appellant. Further, effective April 1, 2020, the Board has issued a circular where tower sites have been classified under Industrial tariff category. The Company believes that the outcome of the case will be favorable and the likelihood of outflow of resources is remote. Further, in case of unfavorable decision, which is not likely, the Company has obtained necessary undertakings from the customers for payment/reimbursement of differential cost.

The following methods / assumptions were used to estimate the fair values:

i) The carrying value of cash and cash equivalents, other bank balances, trade receivables, short term borrowings, trade payables approximate their fair value mainly due to the short-term maturities of these instruments/being subject to floating rates.

ii) The fair values of financial assets classified as fair value through profit or loss like investment in mutual funds, and government securities is based on net asset values/quoted market price at the reporting date.

iii) The fair value of security deposits included in other financial assets & other financial liabilities and variable and fixed rate long term borrowings is estimated by discounting future cash flows using rates applicable to instruments with similar terms, currency, credit risk and remaining maturities. The fair values of other financial assets and other financial liabilities (other than security deposits) are assessed by the management to be same as their carrying value and is not expected to be significantly different if estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities.

There are no significant unobservable inputs used in the fair value measurement.

38 Fair value hierarchy

All financial instruments for which value is recognized or disclosed are categorized within the fair value hierarchy, described as follows,

based on the lowest level input that is significant to the fair value measurement as a whole;

Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted price included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices)

or indirectly (i.e. derived from prices).

Level 3: Inputs for assets or liabilities that are not based on observable market data (unobservable inputs).

Terms and conditions of transactions with related parties:

The transactions with related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the end of the year are unsecured and settlement occurs in cash and there have been no guarantees provided or received for any related party receivables or payables except in case of one of the related party referred in Note 48.

40 Segment Reporting

The Company was set-up with the object of, inter alia, establishing, operating and maintaining wireless communication towers. This is the only activity performed and is thus also the main source of risks and returns. The Company’s segments as reviewed by the Chief Operating Decision Maker (CODM) does not result into identification of different ways / sources into which they see the performance of the Company. Accordingly, the Company has a single reportable and geographical segment. Hence, the relevant disclosures as per Ind AS 108, “Operating Segments” are not applicable to the Company.

42 As per transitional provisions specified in Ind AS 101, “First time Adoption of Indian Accounting Standards”. The Company has continued to apply the accounting prescribed under the scheme with respect to mergers listed below.

a) Scheme accounting - Bharti Airtel Scheme

During the year ended March 31,2008, pursuant to the Scheme of Arrangement with Bharti Airtel Limited (‘BAL Scheme’) under sections 391 to 394 of the Companies Act, 1956, the telecom infrastructure undertaking of Bharti Airtel Limited was transferred to the Company. As per provisions of the Scheme, the Company has created a General reserve equivalent to the amount of fair value of such telecom infrastructure which shall be constituted as free reserve available for all purposes at the discretion of the Company. Pursuant to the Scheme, the depreciation charged by the Company on the excess of the fair values over the original book values of the assets transferred by Bharti Airtel Limited is being off-set against General Reserve. Accordingly, depreciation charges on the excess of fair value over the original book values are charged to General Reserve.

b) Scheme accounting - Indus Scheme

Pursuant to the Scheme of Arrangement (‘Indus Scheme’) under sections 391 to 394 of the Companies Act, 1956, Vodafone Infrastructure Limited (formerly known as Vodafone Essar Infrastructure Limited), Bharti Infratel Ventures Limited and Idea Cellular Tower Infrastructure Limited (collectively referred to as ‘The Transferor Companies’) and erstwhile Indus Towers Limited (referred to as ‘erstwhile Indus’ or ‘The Transferee Company’), jointly filed an application for sanctioning a scheme of arrangement (‘the Scheme’) under Section 391 to 394 of the Companies Act, 1956. The Scheme was sanctioned by the Hon’ble High Court of Delhi vide its order dated April 18, 2013. The Scheme had become operative from June 11,2013 upon filing of certified copy of the order of the Hon’ble High Court with the Registrar of Companies, Delhi with an appointed date of April 1, 2009.

General Reserve arising out of the Scheme

Pursuant to the terms of the Scheme, with effect from the appointed date, the Transferee Company recorded all assets of the Transferor Companies at fair value, all the liabilities and reserves at their book value and issued its equity shares to the shareholders. The excess of net value of assets, liabilities and reserves taken over and the consideration payable, has been transferred to a General Reserve account arising out of the Scheme. Accordingly, the General Reserve of Rs. 73,792 Mn was recognised on account of fair value adjustments as on April 1,2009. Further, the General reserve amounting to Rs. 71,050 Mn was transferred from Bharti Infratel Ventures Limited and Idea Cellular Towers Infrastructure Limited to erstwhile Indus Towers Limited under the Scheme. The resultant total General Reserve recorded in erstwhile Indus Towers Limited amounted to Rs. 144,842 Mn as on April 1,2009.

The General Reserve account of the Transferee Company created pursuant to the Scheme shall be treated as free reserve for all intents and purposes, including, without limitation, as may be decided by the Board of Directors, including for amortisation of any merger related expenses or losses, issuance of bonus shares, off-setting any additional or accelerated depreciation related to the fixed assets transferred to the transferee company pursuant to the Scheme, lease equalization reserve, asset retirement obligations, deferred tax assets or liabilities, as the case may be, any other expenses, impairment, losses or write-offs and any other permitted purposes and shall form part of the net worth of the Transferee company.

Further, pursuant to merger of erstwhile Indus with the Company (refer note 3), such General Reserve amounting to Rs. 73,257 Mn has been recognised in the Company at the carrying value on the effective date of merger i.e. November 19, 2020. As prescribed under the scheme, such general reserve had been utilised for additional or accelerated depreciation related to the fixed assets transferred pursuant to the Scheme. Had the scheme approved by the Hon’ble High Court of Delhi did not prescribe the accounting treatment mentioned above, these amounts would have been recognized in the statement of profit and loss.

The wholly owned subsidiary of the Company erstwhile Bharti Infratel Ventures Limited (‘BIVL’) had acquired certain assets and liabilities from the Company as a going concern on slump sale basis for no consideration as on December 31, 2011. Pursuant to this, BIVL had recognised total assets amounting to Rs. 4,695 Mn, total liabilities of Rs 159 Mn and the resultant difference of Rs 4,536 Mn has been recognised as a Capital Reserve. Further, pursuant to Indus Scheme (refer note 42(b)), and thereafter merger of erstwhile Indus Towers Limited (‘erstwhile Indus’) with the Company (refer note 3) and upon transfer of all the assets, liabilities and reserves of BIVL to erstwhile Indus and from erstwhile Indus to the Company such capital reserve has been recognised at the carrying value in the books of the Company.

(v) Reason for shortfall: The amount has been incurred/spent on the ongoing projects through the eligible partners.

(vi) The CSR amount has been spent on : Education and skill development; Environment sustainability and Swachh Bharat initiatives; Community Empowerment and livelihood; monitoring and administration and Impact assessment.

* The budgeted spent for the year ended March 31,2023 is Rs. 984 Mn increased by Rs. 62 Mn on account of unspent obligation of financial 2021-22. The budgeted spent for the year ended March 31,2022 was Rs. 573 Mn less excess spent of Rs. 155 Mn pertaining to financial year 2020-21.

The remaining unspent money of Rs. 69 Mn (March 31, 2022: 62 Mn) has been (was) transferred to a separate bank account as per section 135 (6) of the Companies Act, 2013.

(ii) No political contribution was made for the financial year ended March 31,2023 (March 31, 2022: Nil). Further, the Company has spent Rs. Nil (March 31,2022: 4 Mn) on Non-CSR projects during the year ended March 31,2023.

44 Financial risk management objectives and policies

The Company’s principal financial liabilities comprise loans and borrowings, lease liabilities, trade payables, security deposits received, etc. The main purpose of these financial liabilities is to manage finances for the Company’s operations. The Company’s principal financial assets include investment in mutual funds and Government Securities, trade receivables, unbilled revenue, cash and cash equivalents, security deposits paid, etc. 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 management of these risks. The senior professionals working to manage the financial risks and the appropriate financial risk governance frame work for the Company are accountable to the Board of Directors and Audit & Risk Management Committee. This process provides assurance to the Company’s senior management that the Company’s financial risk-taking activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with Company’s policies and Company’s risk appetite. The Company has not entered into any derivative transactions. It is the Company’s policy that no trading in derivatives for speculative purposes shall be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks which are summarised below:

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 prices comprise three types of risk: interest rate risk, foreign currency risk and price risk. Financial instruments affected by market risk include interest bearing investment in mutual funds, Government Securities, fixed deposits and loans and borrowings etc.

The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31, 2023 and March 31,2022.

The Company’s exposure to financial risks is to a variety of financial risks, including the effect of changes in foreign currency exchange rates, if any. The Company uses derivative financial instruments such as foreign exchange contracts to manage its exposures and foreign exchange fluctuations, if any.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

The Company has invested in Government securities which will fetch a fixed rate of interest, hence, the income and operating cash flows are substantially independent of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long-term debt obligations with floating interest rates, which are included in interest bearing loans and borrowings in these financial statements. Further, the short-term borrowings of the Company do not have a significant fair value or cash flow interest rate risk due to their short tenure.

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

The Indian Rupee is the Company’s functional currency. As a consequence, the Company’s results are presented in Indian Rupee and exposures are managed against Indian Rupee accordingly. The Company has very limited foreign currency exposure mainly due to incurrence of some expenses. The Company may use foreign exchange option contracts or forward contracts towards operational exposures resulting from changes in foreign currency exchange rates exposure. These foreign exchange contracts, carried at fair value, may have varying maturities depending upon the primary host contract requirement.

The Company manages its foreign currency risk if any, by hedging appropriate percentage of its foreign currency exposure, as per approved established risk management policy.

The foreign currency exposures that have not been hedged are Rs. 6 Mn (USD 0.07 Mn) included in trade payable as at March 31, 2023 (March 31,2021 : Nil* (JPY 0.22 Mn)). The Company has not entered into any derivative arrangements during the year ended March 31,2023.

* Amount is less than 1 Mn Price risk

The Company invests its surplus funds in various Government securities, taxable and tax free quoted debt bonds, liquid & Money Market schemes of mutual funds (liquid investments) and higher duration short term debt funds.

These are susceptible to market price risk, mainly arising from changes in the interest rates or market yields which may impact the return and value of such investments. The Company manages the price risk through diversification from time to time.

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 for trade and other receivables) and from its financing activities, including deposits with banks and financial institutions, and other financial instruments. Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis.

Bank balances and cash deposits

Credit risk from balances with banks and financial institutions is managed by Company’s treasury in accordance with the approved policy. Investment of surplus funds are made only with approved counterparties who meet the minimum threshold requirements under the counterparty risk assessment process. Based on its on-going assessment of counterparty risk, the Company adjusts its exposure to various counterparties. The Company’s maximum exposure to credit risk for the components of the Balance Sheet at March 31,2023 and March 31, 2022 is the carrying amounts as given in Note 37.

Liquidity risk

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company’s objective is to, at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company principal sources of liquidity are cash and cash equivalents and the cash flow generated from operations. The Company closely monitors its liquidity position and deploys a robust cash management system.

The Company manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares.

In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the year ended March 31,2023.

47 The Code on Social Security, 2020 (‘code’) relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Ministry of Labour and Employment has released draft rules for the Code on Social Security, 2020 on November 13, 2020, and has invited the suggestions from stakeholders. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

48 A large customer of the Company accounts for substantial part of revenue from operations for the year ended March 31,2023 and constitutes a significant part of outstanding trade receivables and unbilled revenue as at March 31,2023.

(a) The said customer in its latest published unaudited financial results for the quarter and nine months ended December 31, 2022, had indicated that its ability to continue as a going concern is dependent on its ability to raise additional funds as required, successful negotiations with lenders and vendors for continued support and generation of cash flow from operations for settling its liabilities as they fall due. The said customer had also disclosed in the aforesaid results that so far it has met all debt obligations to its lenders / banks and financial institutions along with applicable interest till date.

During the quarter ended March 31,2023, the said customer in its recent filing with Stock Exchanges informed that it has allotted 16,133,184,899 equity shares of face value of Rs. 10/- each at an issue price of Rs. 10/- per equity share aggregating to Rs. 161,331 Mn to the Department of Investment and Public Asset Management, Government of India (acting through President of India) on account of conversion the Net Present Value of the interest amount related to deferment of spectrum auction instalments and AGR dues.

(b) The Company, subject to the terms and conditions agreed between the parties, has a secondary pledge over the remaining shares held by one of the customer’s promoters in the Company and a corporate guarantee provided by said customer’s promoter which could be triggered in certain situations and events in the manner agreed between the parties. However, these securities are not adequate to cover the total outstanding with the said customer.

(c) During the quarter ended June 30, 2022 through the quarter ended September 30, 2022, the said customer had informed the Company that a funding plan was under discussion with its lenders and it had agreed to a payment plan with the Company to pay part of the monthly billing till December 2022 and 100% of the amounts billed from January 2023 onwards, which will be adjusted by the Company against the outstanding trade receivables. As regards, the dues outstanding as at December 31,2022, the customer had agreed to pay the dues between January 2023 and July 2023.

(d) During the last quarter of the financial year, the funding plan of the said customer did not materialize and the said customer indicated challenges in making the committed payments pertaining to the outstanding amount due as at December 31, 2022. However, the said customer has been paying an amount equivalent to monthly billing from January 2023, hence, the Company continues to recognize revenue from operations relating to the said customer for the services rendered.

Further, the Company had assessed the recoverability of amounts receivable from said customer and recorded necessary allowances as at December 31,2022 which covers all the overdue outstanding till December 31,2022. The incremental provision recorded during the quarter ended March 31,2023 was Rs. 434 Mn and the Company carries an allowance for doubtful receivables of Rs. 54,527 Mn as at March 31,2023 relating to the said customer.

(e) Further, as per Ind AS 116 “Leases”, the Company has recognised revenue on the basis of straight lining of rentals over the contractual period and also created revenue equalization asset in the books of accounts. During the year, the Company had recorded an impairment charge relating to the revenue equalization assets of Rs. 4,928 Mn up to September 30, 2022 for the said customer and presented it as an exceptional item in the statement of profit and loss. Further, the revenue amounting to Rs. 1,433 Mn on account of straight lining of lease rentals is not recognized in the revenue from operations due to uncertainty of collection.

(f) It may be noted that the potential loss of the said customer (whose statutory auditors have reported material uncertainty related to going concern in its report on latest published unaudited results) due to its inability to continue as a going concern or the Company’s failure to attract new customers could have an adverse effect on the business, results of operations and financial condition of the Company and amounts receivable (including unbilled revenue) and carrying amount of property, plant and equipment related to the said customer.

49 No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”) with the understanding that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

No funds have been received by the Company from any person(s) or entity(ies), including foreign entities (Funding Parties), with the understanding (whether recorded in writing or otherwise) that the Company shall (i) directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or (ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.