1.15 Provisions including Asset Retirement Obligation (ARO) and Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a
result of past events and it is probable that there will be an outflow of resources. Provisions are determined by discounting
expected future cash flows at the pre tax rate that reflects current market assumptions of time value of money and
risk specific to the liability. A disclosure for a contingent liability is made when there is a possible obligation or a present
obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present
obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made. Asset
Retirement Obligation (ARO) relates to removal of electronics equipments when they will be retired from its active use.
Provision is recognised based on the best estimate, of the management, of the eventual costs (net of recovery), using
discounted cash flow, that relates to such obligation and is adjusted to the cost of such assets. Estimated future costs
of decommissioning are reviewed annually and adjusted as appropriate. Changes in the estimated future costs or in the
discount rate applied are added to or deducted from the cost of the asset. Contingent Assets are neither recognised nor
disclosed in the financial statements of the Company.
1.16 Earning per Share
In determining Earnings per Share, the Company considers net profit after tax and includes post tax effect of any exceptional
item. Number of shares used in computing basic earnings per share is the weighted average number of the shares, excluding
the shares owned by the Trust, outstanding during the period. Dilutive earning per share is computed and disclosed after
adjusting effect of all dilutive potential equity shares, if any except when result will be anti - dilutive. Dilutive potential
equity Shares are deemed converted as at the beginning of the period, unless issued at a later date.
1.17 Employee Stock Option Scheme
In respect of stock options granted pursuant to the Company's Employee Stock Option Scheme, fair value of the options is
treated as discount and accounted as employee compensation cost over the vesting period. Employee compensation cost
recognised earlier on grant of options is reversed in the period when the options are surrendered by any employee or lapsed
as per the terms of the scheme.
1.1 8 Treasury Equity
The Company has created an Employee Stock Option Scheme Trust (ESOS Trust) for providing share-based payment
to its employees. The Company uses ESOS Trust as a vehicle for distributing shares to employees under the employee
remuneration schemes. The ESOS Trust buys shares of the Company from the market, for giving shares to employees. The
Company treats ESOS Trust as its extension and shares held by ESOS Trust are treated as Treasury Equity.
Own equity instruments that are reacquired (Treasury Equity) are recognised at cost and deducted from equity. No gain
or loss is recognised in Statement of Profit or Loss, on purchase, sale, issue or cancellation of the Company's own equity
instruments. Any difference between carrying amount and consideration, if reissued, is recognised in equity.
1.19 Measurement of Fair value of financial instruments
The Company's accounting policies and disclosures require measurement of fair values for the financial instruments. The
Company has an established control framework with respect to measurement of fair values. The management regularly
reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or
pricing services, is used to measure fair values, then the management assesses evidence obtained from third parties to
support the conclusion that such valuations meet the requirements of Ind AS, including level in the fair value hierarchy in
which such valuations should be classified.
When measuring the fair value of a financial asset or a financial liability, the Company uses observable market data as far as
possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation
techniques as follows.
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included in 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 the asset or liability that are not based on observable market data (unobservable inputs).
If inputs used to measure fair value of an asset or a liability fall into different levels of fair value hierarchy, then fair value
measurement is categorised in its entirety in the same level of fair value hierarchy as the lowest level input that is significant
to the entire measurement. The Company recognises transfers between levels of fair value hierarchy at the end of the
reporting period during which the change has occurred (Note 2.37.1) for information on detailed disclosures pertaining to
the measurement of fair values.
1.20 Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity. Financial instruments also include derivative contracts such as foreign exchange forward
contracts.
Financial Assets
(i) Initial recognition and measurement
AH financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value
through Statement of Profit and Loss, transaction costs that are attributable to the acquisition of the financial asset.
However, trade receivables that do not contain a significant financing component are measured at transaction price
(ii) Subsequent measurement :
Subsequent measurement of debt instruments depends on the Company's business model for managing the asset and
the cash flow characteristics of the asset. There are three measurement categories into which the Company classifies
its debt instruments:
Financial Assets measured at amortised cost:
"A 'debt instrument' is measured at the amortised cost if both the following conditions are met:
a) Asset is held within a business model whose objective is to hold assets for collecting contractual cash flows.
b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal
and interest (SPPI) on the principal amount outstanding. After initial measurement, such financial assets are
subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is
calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral
part of the EIR. EIR amortisation is included in finance income in the Statement of Profit and Loss. Losses arising
from impairment are recognised in the Statement of Profit and Loss. This category generally applies to trade and
other receivables.
Financial Assets measured at fair value through other comprehensive income (FVTOCI):
A 'debt instrument' is classified as at the FVTOCI if both of the following criteria are met:
a) The objective of the business model is achieved both by collecting contractual cash flows and selling the financial
assets.
b) The contractual cash flows of the assets represent SPPI: Debt instruments included within the FVTOCI category
are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the
other comprehensive income (OCI). However, the Company recognizes interest income, impairment losses &
reversals and foreign exchange gain or loss in the Statement of Profit and Loss. On derecognition of the asset,
cumulative gain or loss previously recognised in Other Comprehensive Income is reclassified from the equity
to Statement of Profit and Loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest
income using the EIR method.
Financial Assets measured at fair value through profit or loss (FVTPL):
Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified
as at FVTPL. In addition, the Company may elect to designate a debt instrument, which otherwise meets amortized
cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a
measurement or recognition inconsistency (referred to as 'accounting mismatch').
Equity investments:
"All equity investments in scope of Ind-AS 109, "Financial Instruments" are measured at fair value. Equity instruments
which are held for trading are classified as at FVTPL. For all other equity instruments, the company decides to classify
the same either as at FVOCI or FVTPL. The Company makes such election on an instrument-by-instrument basis.
The classification is made on initial recognition which is irrevocable. If the company decides to classify an equity
instrument as at FVOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the
Other Comprehensive Income. There is no recycling of the amounts from Other Comprehensive Income to profit
and loss, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity.
Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the
Statement of Profit and Loss.
(iii) Derecognition of Financial Assets
A financial asset is primarily derecognised when: a) Rights to receive cash flows from the asset have expired, or b)
The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the
received cash flows in full without material delay to a third party under a 'pass-through' arrangement and either(a) the
Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred
nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
(iv) Impairment of Financial Assets
The Company assesses on a forward looking basis the Expected Credit Losses (ECL) associated with its assets carried
at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in
the credit risk. In case of significant increase in credit risk, life time ECL is used; otherwise twelve month ECL is used.
As a practical expedient, the Company uses a provision matrix to determine impairment loss allowance on portfolio
of its trade receivables, as permitted by Ind AS 109. Provision matrix is based on its historically observed default rates
over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date,
the historical observed default rates are updated and changes in the forward-looking estimates are analysed.
Financial Liabilities
(i) Initial recognition and measurement
All financial liabilities are recognised initially at fair value, in the case of loans, borrowings and payables, net of
directly attributable transaction costs. Financial liabilities include trade and other payables, loans and borrowings
including bank overdrafts and derivative financial instruments.
(ii) Subsequent measurement
The measurement of financial liabilities depends on their classification, as described herein: Financial
liabilities at fair value through Statement of Profit or Loss: Financial liabilities at fair value through Profit or Loss
include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value
through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of
repurchasing in the near term. This category also includes derivative financial instruments entered into by the
Company that are not designated as hedging instruments in hedge relationships as defined by Ind AS 109. Gains
or losses on liabilities held for trading are recognised in the Statement of Profit and Loss.
Financial Liabilities measured at Amortised Cost: After initial recognition, interest-bearing loans and borrowings
are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in Statement
of Profit and Loss when the liabilities are derecognised as well as through the EIR amortisation process. Amortised
cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an
integral part of the EIR. The EIR amortisation is included as finance costs in the Statement of Profit and Loss.
Derecognition of Financial Liabilities: A financial liability is derecognised when the obligation under the liability
is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability are substantially modified, such an
exchange or modification is treated as the derecognition of the original liability and the recognition of a new
liability. The difference in the respective carrying amounts is recognised in the Statement of Profit and Loss.
1.21 Use of Estimates
The preparation and presentation of Financial Statements requires estimates and assumptions to be made that affect the
reported amount of assets and liabilities and disclosure of contingent liabilities on the date of the Financial Statements
and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and
estimates is recognised in the period in which the results are known/ materialised. Estimates and underlying assets are
reviewed on periodical basis. Revisions to accounting estimates are recognised prospectively.
The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the
actual results. The management also needs to exercise judgment in applying the accounting policies. This note provides an
overview of the areas that involved a higher degree of judgment or complexity, and of items which are more likely to be
materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed
information about each of these estimates and judgments is included in relevant notes together with information about the
basis of calculation for each affected line item in the financial statements.
Critical estimates and judgments
The Company has 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 areas involving critical estimates or judgments pertaining to useful life of property, plant and equipment including
intangible asset (Note 2.01 and Note 2.02), current tax expense and tax payable, recognition of deferred tax assets for
carried forward tax losses (Note 2.30), fair value of unlisted securities (Note 2.07), impairment of trade receivables and
other financial assets (Note 2.08, Note 2.04, Note 2.12 and Note 2.31), assets held for sale (Note 2.14), liabilities held
for sale (Note 2.14) and measurement of defined benefit obligation (Note 2.42). Estimates and judgments are continually
evaluated. They are based on historical experience and other factors, including expectations of future events that may have
a financial impact on the Company and that are believed to be reasonable under the circumstances.
(i) Useful life of Property, Plant and Equipment including intangible asset: Residual values, useful lives and methods of
depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if
appropriate.
(ii) Taxes: The Company provides for tax considering the applicable tax regulations and based on probable estimates.
Management periodically evaluates positions taken in the tax returns giving due considerations to tax laws and
establishes provisions in the event if required as a result of differing interpretation or due to retrospective amendments,
if any.
The recognition of deferred tax assets is based on availability of sufficient taxable profits in the Company against which
such assets can be utilized.
(iii) Fair value measurement and valuation process: The Company measured financial assets and liabilities, if any, at fair
value for financial reporting purposes.
(iv) Trade receivables and Other Financial Assets: 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 and historical experience. Further, a large number of minor receivables are grouped
into homogeneous groups and assessed for impairment collectively. Individual trade receivables are written off when
management deems them not to be collectable.
(v) Defined benefit plans (gratuity benefits): The Company's obligation on account of gratuity and compensated absences
is determined based on actuarial valuations. An actuarial valuation involves making various assumptions that may differ
from actual developments in the future. These include determination of the discount rate, future salary increases and
mortality rates. Due to the complexities involved in the valuation and its long-term nature, these liabilities are highly
sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
The parameter subject to frequent changes is the discount rate. In determining the appropriate discount rate, the
management considers the interest rates of government bonds in currencies consistent with the currencies of the
post-employment benefit obligation.
The mortality rate is based on publicly available mortality tables in India. Those mortality tables tend to change only
at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected
future inflation rates.
(vi) Non-financial assets are reviewed for impairment, whenever events or changes in circumstances indicate that the
carrying amount of such assets may not be recoverable. If any such indication exists, the recoverable amount of the
asset is estimated in order to determine the extent of the impairment loss, if any.
(vii) Determination of net realisable value for Assets held for Sale and related liabilities.
(viii) Provisions and contingent liabilities are reviewed at each balance sheet date and adjusted to reflect the current best
estimates.
(ix) The Company has provided liability against License & Spectrum Fee dues along with interest and penalty, for the
demands raised by DoT considering Non-Telecom income till FY 2014-15 and for the balance years, for which
demand have not been raised by DoT, the Company has computed estimated liability on Non-Telecom revenue from
FY 2015-16 onwards along with interest and penalty thereof.
1.22 Cash and Cash Equivalents
Cash and cash equivalents in the Balance Sheet comprise of cash on hand, demand deposits with Banks, other short-term,
highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of
cash and which are subject to an insignificant risk of changes in value.
1.23 Recent Accounting Developments
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies
(Indian Accounting Standards) Rules as issued from time to time. MCA has notified Ind AS - 117 Insurance Contracts and
amendments to Ind AS 116 - Leases, relating to sale and leaseback transactions, applicable to the Company w.e.f. April 1,
2024. The Company has reviewed the new pronouncements and based on its evaluation has determined that it does not
have any significant impact in its financial statements.
2.02.01 During the earlier years, the Company had successfully Bid under auction conducted for spectrum by the Department of
Telecommunications (DoT), Government of India (GoI) and won spectrum in 12 service areas as total cost of ' 1,934
crore. The Company has made upfront payment of ' 527 crore under deferred payment option and the balance was
payable in 10 annual installments for Mumbai and Jammu and Kashmir circles and 16 annual installments for other Circles.
The Company has defaulted the payment of Installment of ' 196 crore each, which was due on April 9, 2019, April 9,
2020, April 9, 2021, April 9, 2022, April 9, 2023 and April 9, 2024 with the delay of 2,184 days, 1,818 days, 1,453
days, 1,088 days, 723 days and 357 days respectively and ' 6 crore each, which was due on October 20, 2019, October
20, 2020, October 20, 2021, October 20, 2022, October 20, 2023 and October 20, 2024 with the delay of 1,990
days, 1,624 days, 1,259 days, 894 days, 529 days and 163 days respectively. Further, an installment of ' 22 crore with
respect to Mumbai circle which was due on March 03, 2019, March 3, 2020, March 03, 2021, March 03, 2022, March
03, 2023, March 03, 2024 and March 03,2025 is defaulted by 2,221 days, 1,855 days 1,490 days, 1,125 days, 760
days, 394 days and 29 days respectively as at March 31, 2025. Apart from above, balance installments not due as at
March 31, 2025 is aggregating to ' 1,803 crore including interest @10% per annum. An Installment of ' 196 crore, due
on April 9, 2025 is yet to be paid.
During an earlier year, the Company acquired Spectrum of ' 4,513 crore under Scheme of Demerger along with corresponding
Deferred Payment Liability of ' 2,013 crore. (Refer Note No. 2.33.2). Above was payable in annual installments of ' 281
crore each.
The Company has defaulted the payment of installments of ' 281 crore each, which was due on March 26, 201 9,
March 26, 2020, March 26, 2021, March 26, 2022, March 26, 2023, March 26, 2024 and March 26, 2025 with the
delay of 2,198 days, 1,832 days, 1,467 days, 1,102 days, 737 days, 371 days and 6 days respectively. Apart from the
above, balance installments not due as at March 31, 2025 is aggregating to ' 1,689 crore including interest @ 10 %
per annum.
Department of Telecommunications issued show cause notice to the Company for revocation/ termination of spectrum
due to non-payment of 3rd installment due on March 03, 201 9 for 0.6 MHz Spectrum acquired in 1800 MHz band
in Mumbai, which was stayed by the Hon'ble NCLAT. The said order of stay of NCLAT stood merged with its final order
dated April 30, 201 9 as a result of which RCOM's CIRP got recommenced at NCLT Mumbai and order of Moratorium got
restored. Further, in the matter of One Time Spectrum Charges, TDSATs order dated February 4, 2019 inter alia directing
for the return of Bank Guarantee of ' 2,000 crore, has been stayed by Hon'ble Supreme court on August 19, 2019 in an
appeal filed by Union of India.
Securities Premium
Securities Premium represents the premium charged to the shareholders at the time of issuance of shares. It also includes ' 8,047
crore created pursuant to the Scheme of Amalgamation/ Arrangements of the earlier years. Securities Premium can be utilised based
on the relevant requirements of the Act.
General Reserve I
General Reserve I of ' 5,538 crore (Previous year ' 5,538 crore) represents the unadjusted balance being the excess of assets over
liabilities relatable to the Telecommunications Undertaking transferred and vested into the Company.
General Reserve III
General Reserve III comprises of ' 4,159 crore (Previous year ' 4,159 crore) transferred to General Reserve from Statement of Profit
and Loss.
2.19.1 Debentures, Senior Secured Notes and Term Loans
The Company, on March 2, 2009, allotted 3,000, 1 1.20% Secured Redeemable, Non Convertible Debentures ("NCDs") of the face
value of ' 1,00,00,000 each, aggregating to ' 3,000 crore to be redeemed at the end of 10th year from the date of allotment thereof
i.e. March 1, 2019 and the same remains outstanding as at March 31, 2025. The Company on February 7, 2012, also allotted, 1,500,
11.25% Secured Redeemable Non Convertible Debentures ("NCDs") of the face value of ' 1,00,00,000 each aggregating to ' 1,500
crore redeemable in four annual equal installments starting at the end of 4th year from the date of allotment thereof, the outstanding
against said NCDs is ' 750 crore as on March 31, 2025. The Company had, on May 6, 2015, issued Senior Secured Notes (SCNs) of USD
300 million, face value of USD 100 per bond, bearing 6.5% p.a. interest, with a maturity of 5 1/2 years.
The Company had been sanctioned Rupee Loans of ' 6,015 crore (outstanding as on March 31, 2025 was ' 5,463 crore) (Term
Loan Facility) under consortium banking arrangement on the terms and conditions as set out in common loan agreement.
Outstanding NCDs along with SCNs, Foreign Currency Loans and Rupee Loans of ' 25,424 crore ("the said Secured Loans") have
been secured by first pari passu charge on the whole of the movable plant and machinery including capital work in progress (pertaining
to the movable fixed assets), both present and future including all the rights, title, interests, benefits, claims and demands in respect of
all insurance contracts relating thereto of the Borrower Group*; comprising of the Company and its subsidiary companies namely; RTL,
RITL ( ceased to be a subsidiary w.e.f December 22, 2022 upon implementation of the approved resolution plan, Refer Note 2.39
(a)) and RCIL, ("the Borrower Group*"), in favour of the Security Trustee for the benefit of the NCD/ SCN Holders and the lenders of
the said Secured Loans. The said loans also include ' 3,583 crore which are guaranteed by a Director. Apart from above Rupee Loan
also includes ' 398 crore which is secured by first pari passu charge on Spectrum, acquired during the earlier year under the scheme
of demerger, (Refer Note 2.33.2) is pending to be executed. Outstanding Rupee Loan of ' 487 crore availed by the Company and
' 485 crore availed by RITL are secured by second pari passu charge on the movable plant and machinery and capital work in progress
of the Borrower Group* and is guaranteed by a director of the Company. During the previous year, the said loan was guaranteed by
tower receivables, pledge of equity shares of Globalcom IDC Limited ('GIDC'), ceased to be a subsidiary w.e.f December 1 2, 2022,
held by RWSL (Refer Note 2.32). Further, Outstanding Rupee Loans of ' 1,872 crore is secured by second charge over movable
Fixed Assets of the Borrower Group*, out of which, charge is pending to be created for ' 1,072 crore. The Company, for the benefit
of the Lenders of SCNs of ' 1,955 crore, Foreign Currency Loans of ' 11,191 crore, 11.25% NCDs aggregating to ' 750 crore and
Rupee Loans of ' 7,403 crore has, apart from the above, also assigned 20 Telecom Licenses for services under Unified Access Services
(UAS), National Long Distance (NLD) and International Long Distance (ILD) (collectively referred as "Telecom Licenses") by execution
of the Tripartite Agreements with DoT and the Security Trustee acting on behalf of the Lenders. Further, assignment of the Telecom
Licences of the Company for rupee loans from banks of ' 1,000 crore and from others of ' 740 crore is pending to be executed.
The Company has, for the benefit of the Lenders of SCNs, Foreign Currency Loans and Rupee Loans aggregating to ' 19,102 crore,
apart from the above security, pledged equity shares of RCIL held by the Company and of RTL held by the Company and Reliance
Reality Limited ('RRL') by execution of the Share Pledge Agreement with the Share Pledge Security Trustee. Outstanding Rupee
Loans of ' 5,463 crore is also secured by current assets, movable assets including intangible, both present and future of the Borrower
Group*. During the previous year, the said loan was also secured by pledge of equity shares of RITL held by RCIL and during the year,
the equity shares of RITL have been cancelled consequent to implementation of resolution plan of RITL on December 22, 2022
(Refer Note 2.39 (a)). During the earlier year, charge over the three immovable assets of the Borrower Group* was created. However
charge over balance immovable assets of the Borrower Group* and RGBV security for Rupee Loans of ' 5,463 crore is pending to be
executed. Further, outstanding Foreign Curreny Loan of ' 1,623 crore availed by RITL and ' 1,341 crore availed by RTL is guaranteed
by the Company.
During the earlier year, lenders have invoked guarantees provided by borrower group for outstanding rupee loan of ' 5,950 crore
availed by the Company, ' 611 crore availed by RTL and ' 485 crore availed by RITL.
During the earlier year, the Company created first ranking exclusive charge (pari passu inter se the Lenders) over Designated Account with
future rights, title and interest therein, including all of its rights in respect of any amount standing to the credit of the Designated Account
and the debt represented by it, in favour of State Bank of India, the Convenor (for the benefit of the Lenders) as continuing security.
During the earlier year, the Company was, in the process of finalising and implementing its asset monetization and debt resolution
plan, comprising the Company's restructuring of Debt including allotment of shares against debt from lenders.
Foreign currency Loans have been stated at the exchange rate of March 31, 2018.
The Company has not taken any loan during the year.
* RITL has ceased to be a subsidiary of the Company w.e.f. December 22, 2022 upon implementation of the approved resolution plan.
Revenue for the period from sale of services as disclosed above pertains to revenue from contracts with customers over a period
of time. The Company has not given any volume discounts, service level credits, etc during the year. There is no disaggregation of
Revenue as it pertains to service revenue of India Operations.
The Company has applied the practical expedient in Ind AS 115. Accordingly, the Company has not disclosed the aggregate
transaction price allocated to pending performance obligations which are subject to variability due to several factors such as
terminations, changes in scope of contracts, periodic revalidations of the estimates, economic factors (changes in currency rates,
tax laws etc). No consideration from contracts with customers is excluded from the amount mentioned above.
The Company classifies the right to consideration in exchange for deliverables as either a receivable or as unbilled revenue if
revenues is accrued. Receivable and unbilled revenue are a right to consideration that is unconditional upon passage of time.
Receivable is presented net of impairment in the Balance Sheet. Unbilled revenue as at April 1, 2024 was ' 6 crore and it was
billed during the year. Unbilled Revenue as at March 31, 2025 is ' 6 crore.
Invoicing in excess of earnings are classified as unearned revenue. Unearned Revenue as at April 1, 2024 was '113 crore and out
of which ' 3 crore was recorded as revenue during the year. Unearned Revenue as at March 31, 2025 is ' 115 crore and out of
which ' 13 crore shall be accounted as revenue within one year, ' 27 crore between next two to five years and balance ' 75 crore
after five years respectively.
Note: 2.31
Going Concern
Pursuant to an application filed by Ericsson India Pvt. Ltd before the National Company Law Tribunal, Mumbai Bench ("NCLT") in
terms of Section 9 of the Insolvency and Bankruptcy Code, 2016 read with the rules and regulations framed there under ("Code"),
the NCLT had admitted the application and ordered the commencement of corporate insolvency resolution process ("CIRP") of
Reliance Communications Limited ("Corporate Debtor", "the Company" or "RCOM") vide its order dated May 15, 2018. The NCLT
had appointed Mr. Pardeep Kumar Sethi as the interim resolution professional ("IRP") for the Corporate Debtor vide its order dated
May 18, 2018. The Hon'ble National Company Law Appellate Tribunal ("NCLAT") by an order dated May 30, 2018 had stayed the
order passed by the Hon'ble NCLT for initiating the CIRP of the Corporate Debtor and allowed the management of the Corporate
Debtor to function. In accordance with the order of the Hon'ble NCLAT, Mr. Pardeep Kumar Sethi handed over the control and
management of the Corporate Debtor back to the erstwhile management of the Corporate Debtor on May 30, 2018. Subsequently,
by order dated April 30, 2019, the Hon'ble NCLAT allowed stay on CIRP to be vacated. On the basis of the orders of the Hon'ble
NCLAT, Mr. Pardeep Kumar Sethi, wrote to the management of the Corporate Debtor on May 02, 2019 requesting the charge,
operations and management of the Corporate Debtor to be handed over back to IRP. Therefore, Mr. Pardeep Kumar Sethi had in
his capacity as IRP taken control and custody of the management and operations of the Corporate Debtor from May 02, 2019.
Subsequently, the committee of creditors ("CoC") of the Corporate Debtor pursuant to its meeting held on May 30, 201 9 resolved,
with requisite voting share, to replace the existing interim resolution professional, i.e. Mr. Pardeep Kumar Sethi with Mr. Anish Niranjan
Nanavaty as the resolution professional for the Corporate Debtor in accordance with Section 22(2) of the Code. Subsequently, upon
application by the CoC in terms of Section 22(3) of the Code, the NCLT appointed Mr. Anish Niranjan Nanavaty as the resolution
professional for the Corporate Debtor ("RP") vide its order dated June 21, 2019, which was published on June 28, 2019 on the
website of the NCLT. Accordingly, the IRP handed over the matters pertaining to the affairs of the Corporate Debtor to the RP as on
June 28, 2019 who assumed the powers of the board of directors of the Corporate Debtor and the responsibility of conducting the
CIRP of the Corporate Debtor.
Further, pursuant to the meeting of the CoC of the Corporate Debtor dated March 2, 2020, a resolution plan, submitted by a
resolution applicant in respect of the Corporate Debtor, has been approved by the CoC. The application under Section 31 of the Code
filed by the RP for approval of resolution plan was heard on October 5, 2023, where the NCLT indicated that since the issues inter
alia pertaining to spectrum has remained pending before Hon'ble Supreme Court of India for a while now, it would adjourn the plan
approval IA sine die with liberty to the applicant/ RP to mention the same.
An application (IA No. 383 of 2023) has been filed by a resolution applicant before NCLT for substitution of resolution applicant in the
resolution plan submitted in respect of RCOM. On September 7, 2023, the matter was heard at length by the NCLT, and application
has been allowed vide order dated December 12, 2023.
A similar application (IA No. 749 of 2023) has been filed in Reliance Telecom Limited ("RTL") as well, wherein NCLT vide order August
22, 2023 had directed the resolution professional of RTL to place on record necessary declaration(s) in relation to compliance with
the provisions of Section 29A, after getting the confirmation of CoC of RTL in relation thereto. However, the status of the said IA was
inadvertently reflecting as disposed creating difficulties in filing of the compliance affidavit. The RP had been attempting to liaison with
the registry in this regard and also mentioned the matter multiple times to seek correction in its status. On December 19, 2024, the
NCLT was pleased to direct the matter to be listed on January 21, 2025 for filing of the affidavit and passing of necessary orders by
the NCLT. On January 21, 2025, in view of the submissions, the Bench was pleased to reserve the matter for orders. By order dated
January 21, 2025, NCLT has dismissed the IA filed by UV Asset Reconstruction Company Limited ("UVARCL"). An appeal bearing
Company Appeal (AT) (Insolvency) No. 422 of 2025 has been filed by UVARCL before NCLAT. The same was listed on April 16, 2025
where the Bench passed directions to the Respondents to file their reply and posted the matter on July 09, 2025. The Bench also
remarked that UVARCL was free to approach the Bench for appropriate directions in the event that a liquidation application was filed
in the meanwhile. On May 14, 2025, the counsel appearing on behalf of UVARCL gave a brief background to the matter. The counsel
appearing on behalf of the CoC indicated that they had no objection if the substitution was allowed and sought time to file a reply.
The Hon'ble Court directed the CoC to file its reply in two weeks and granted two weeks thereafter for rejoinder. The matter is now
listed on July 09, 2025. Further, pursuant to the discussions with the CoC members, the RP has filed an application before Hon'ble
NCLT seeking necessary clarifications/ appropriate directions on the way ahead in the CIRP of RTL.
During the quarter ended June 30, 201 9, the CIRP in respect of the Corporate Debtor and its subsidiaries; Reliance Telecom Limited
(RTL) and Reliance Infratel Limited (RITL ceased to be a subsidiary w.e.f December 22, 2022) was re-commenced, and interim
resolution professionals had been appointed in respect of the aforesaid companies. Subsequently, appointment of Mr. Anish Niranjan
Nanavaty as the Resolution Professional (RP) of the Corporate Debtor and its subsidiaries was confirmed by the NCLT vide its order
dated June 21, 2019 which was published on June 28, 2019 on the NCLT's website.
Further, during the year ended March 31, 2020, Reliance Communications Infrastructure Limited (RCIL), a wholly owned subsidiary
of the Corporate Debtor, had also been admitted by NCLT for resolution process under the Code and Mr. Anish Niranjan Nanavaty was
appointed as the Resolution Professional of RCIL vide its order dated September 25, 2019. In the meeting held on August 05, 2021,
the CoC with requisite majority approved the resolution plan submitted by Reliance Projects & Property Management Services Limited
in respect of RCIL, and in accordance with the Sec 30(6) of the Insolvency and Bankruptcy Code, 2016, on August 31, 2021, the
plan was submitted to Hon'ble NCLT for its due consideration and approval. The plan approval application was heard on October 17,
2023, and has been allowed by the Hon'ble NCLT Mumbai vide its order dated December 19, 2023, thereby approving the resolution
plan submitted in respect of RCIL under Section 31 of the Code. The resolution plan of RCIL is currently under implementation and
RCIL is under the management of the monitoring committee constituted in terms of the provisions of its resolution plan.
Pursuant to strategic transformation programme, as a part of asset monetization and resolution plan of the Corporate Debtor,
the Corporate Debtor and its subsidiary companies; RTL and RITL (ceased to be a subsidiary w.e.f December 22, 2022), with the
permission of and on the basis of suggestions of the lenders, had entered into master agreement dated December 28, 201 7 with
Reliance Jio Infocomm Limited (RJio) for monetization of certain specified assets, including Wireless Spectrum, Towers, Optical Fibre
and Media Convergence Nodes (MCNs). The relevant Reliance entities and RJIO have entered into separate transfer agreements for
the sale of the aforesaid assets. Vide a termination agreement dated March 18, 2019, the asset transfer agreements were terminated
by mutual consent on account of various factors and developments as recorded in the termination agreement, excluding the escrow
agreement and certain provisions of the master agreement from the ambit of the termination.
On completion of the corporate insolvency resolution process, the Corporate Debtor will carry out a comprehensive review of all the
assets including investments, balances lying in Goods and Service Tax, liabilities and accordingly provide for impairment of assets and
write back of liabilities, if any.
The Corporate Debtor had filed applications with the DoT for migration of various telecom licenses [Universal Access Service License
(UASL), National Long Distance (NLD) and International Long Distance (ILD) licenses] to the Unified License regime (UL) on
October 25, 2020 (17 of which were supposed to expire on July 1 9, 2021). On June 1 5, 2021, the DoT has issued a letter to the
Corporate Debtor requiring payments of various categories of certain amounts such as 10% of the AGR dues, deferred spectrum
installments falling due within the CIRP period, etc. against the telecom licenses, stating such dues to be in the nature of "current
dues" and prescribing such payment as a pre-condition to the consideration/processing of the migration applications ("DoT Letter").
On June 25, 2021, the Corporate Debtor has issued a letter to DoT clarifying that the various categories of dues stipulated by the DoT
are not in the nature of the "current dues" and are to be resolved within the framework of the Code (being dues that pertain to the
period prior to May 7, 2019) and/ or are not payable at present, and requesting that making payments against the said dues should
not be mandated as a pre-condition for further processing of the migration applications filed by the Corporate Debtor.
In light of the urgency of the matter, the RP had filed an application before the NCLT in both RCOM and RTL praying that the DoT
inter alia be restrained from taking any action which may interfere with the continued holding of the telecom spectrum of the
Corporate Debtor. The NCLT had adjourned the matter following which the RP had thereafter filed a writ petition in the Delhi High
Court seeking issuance of an appropriate writ order or direction in the nature of mandamus directing the DoT to migrate the telecom
licenses to UL without the insistence on the payment of the dues set out in DoT Letter. The Delhi High Court, on July 1 9, 2021,
passed an interim order that "till the next date, the respondent is directed to not take any coercive action against the petitioner
for withdrawal of the telecom spectrum granted to the petitioner in respect of 18 service areas, as also to permit the petitioner to
continue providing telecom services in the 18 service areas which are subject matters of the present petition." On July 20, 2021,
the writ petition hearing concluded and order was passed by the Delhi High Court permitting the withdrawal of the writ petition with
direction that the issue on "current dues" should be decided by the NCLT and extending the protection under the July 19, 2021 order
by further 10 days.
In view of the aforesaid, the NCLT was apprised of the order of the Delhi High Court and the NCLT has, as an interim measure,
extended the ad interim protection granted by the Delhi High Court until the next date of hearing. Further, on August 12, 2021, the
NCLT has directed that the interim orders shall continue until the next date of hearing. The issue under consideration by the NCLT
relates to whether the dues being claimed by DoT in its letter of June 15, 2021 for the purposes of processing the license renewal/
migration applications of the Corporate Debtor are in the nature of "current dues" (within the meaning of the Explanation to Section
14(1) of the Code) and therefore, payable during the CIRP period. The application was listed on various occasions before the NCLT;
however effective hearing did not take place due to paucity of time. Matter was listed on August 08, 2023 and the matter was
adjourned on next several dates and the next date of hearing is June 09, 2025.
Simultaneously, a petition has been filed before the Telecom Disputes Settlement and Appellate Tribunal ("TDSAT") bearing T.P No.
31 of 2021 seeking directions for migration of the telecom licenses, in view of the Guidelines for Grant of Unified License dated
March 28, 2016 issued by the DoT, not prescribing pre-condition for any payment to be made prior to the migration of the telecom
licenses. The TDSAT, on September 23, 2021, has directed that "The interim arrangement shall be considered further after receipt
of the order of NCLT. However, till then let the status quo be maintained in terms of initial order of Delhi High Court passed on
July 19. 2021 which has continued thereafter by further order of the High Court followed by orders of NCLT." On March 15, 2022,
the TDSAT granted time for filing rejoinder and continued the interim order dated September 23, 2021. On July 29, 2024 where
the counsels apprised the TDSAT that matter is still pending in NCLT. The matter was last listed on May 2, 2025 and now has been
adjourned to September 26, 2025.
Further, an application for Jammu and Kashmir Circle for RCOM was filed with DoT for migration of UASL license to UL license on
April 1 9, 2023, which expired on September 05, 2024. This license was not included in the above petition and accordingly, another
petition bearing T.P. No. 44 of 2024 was filed before the Hon'ble TDSAT seeking similar directions for Jammu and Kashmir circle. An
interim order dated September 10, 2024 has been issued in this matter in favour of RCOM directing DoT to not take any coercive
action against RCOM, and continuing RCOM's United Access Service License till the next date of hearing. The matter is now listed on
September 26, 2025.
Similarly, in the case of RTL, in one of the circles where the UASL license was due to expire on September 26, 2021, an application
had been filed with DoT on July 1 6, 2021 for migration of UASL to UL wherein the DoT has sought for payment of certain dues as
"current dues" (being dues that pertain to the period prior to May 7, 2019 and are not payable at present) as a pre-condition for
consideration of the application. The RP has filed an application in the NCLT and a petition before the TDSAT bearing T.P. No. 39
of 2021 in this regard (which matters are heard together with the RCOM license migration matters). On September 23, 2021, the
TDSAT has directed that "Since the matters are similar in nature, in the interest of justice and uniformity the interim order of status
quo as operating in TP No. 31 of 2021 shall operate in this matter also till the next date. It will be in the interest of petitioner to
expedite the proceeding pending before the NCLT and try its best to produce the orders passed by that Tribunal by the next date." On
March 15, 2022, the DoT had been granted 6 weeks' time by TDSAT to file the reply, and rejoinder was to be filed before the next
date of hearing. The TDSAT further directed that the interim order passed by the TDSAT vide order dated September 23, 2021 shall
stand continuing to be operative during the pendency of the petitions. On July 29, 2024 where the counsels apprised the TDSAT that
matter is still pending in NCLT. The matter was last listed on May 2, 2025 and now has been adjourned to September 26, 2025.
Further, Telecom Petition No. 9 and 10 of 2024 were filed on behalf of RCOM against the impugned demand notices for
FY 2015-16 to FY 2023-24 seeking alleged shortfall of license fee paid by RCOM. On May 09, 2024, both the Telecom Petitions
were listed before the TDSAT on which date, TDSAT was pleased to restrain the DoT from encashing the Bank Guarantees ("BGs") of
the Corporate Debtor except to the extent of ' 49 crores, which was the amount under challenge in the Telecom Petitions. Aggrieved
by the order dated May 09, 2024, the Corporate Debtor filed a Writ Petition under Article 227 of the Constitution of India before
the Hon'ble Delhi High Court. Meanwhile BGs to the tune of ' 2 crores were encashed by DoT. On May 14, 2024 the Hon'ble Delhi
High Court had directed the DoT to not encash the remaining BGs which had not been encashed till May 17, 2024. Further, on
May 17, 2024, TDSAT has granted a stay on the encashment of BGs of RCOM by the DoT, until further orders in TDSAT Petitions
and the stay continues till the pendency of the petitions and this matter is next listed on September 02, 2025. Pursuant to the order
dated May 17, 2024, the Petitioner withdrew its Writ Petition before the Delhi High Court.
Additionally, the RP has also filed another telecom petition bearing T.P. No. 34 of 2024 before the TDSAT challenging the vires of (i)
Office Memorandum dated 09.10.2019 and; (ii) Office Memorandum dated 18.10.2022 ("Impugned Office Memorandums") with
respect to adjustment of surplus license fees, issued by the DoT to the extent that they:
(a) Restrict companies undergoing insolvency from claiming surplus adjustment only after Financial Years 2021 -22; and
(b) Permit adjustment of surplus payments only after the assessment has been finalised by the DoT.
On August 21, 2024, DoT sought time to file their counter affidavit in the matter. The RP has been permitted to file a rejoinder to the
counter affidavit. This matter was last listed on May 22, 2025, and now listed on September 02, 2025.
Considering these developments including, in particular, the RP having taken over the management and control of the Corporate
Debtor and its subsidiaries, i.e. RTL and RCIL (with RCIL presently being under the management and control of the monitoring
committee constituted in terms of its resolution plan which was approved by the NCLT on December 1 9, 2023 and the resolution
plan implementation being still pending) ("Group") inter alia with the objective of running them as going concerns, the standalone
financial statements continue to be prepared on going concern basis. Since the Company continues to incur losses, current liabilities
exceed current assets and Company has defaulted in repayment of borrowings, payment of regulatory and statutory dues and pending
renewal of telecom licenses, these events indicate that material uncertainty exists that may cast significant doubt on Company's
ability to continue as a going concern.
Note: 2.32
During the earlier year, the Company received a notice from Axis Trustee Services Limited ("Axis Trustee" / "Security Trustee") on
November 9, 2022 regarding invocation cum sale of pledged shares of Globalcom IDC Limited ("GIDC"). Thereafter, the Company
received a notice of invocation of pledge over such shares from Axis Trustee on December 14, 2022.
As a matter of background, it may be noted that Reliance Webstore Limited ("RWSL", "Parent Company") is a wholly owned subsidiary
of RCOM, holding 100% of equity shares in GIDC. Accordingly, GIDC was a wholly owned step-down subsidiary of RCOM. Vide
facilities agreement dated August 29, 2016, RCOM and RITL had availed a loan facility of ' 565 Crore and ' 635 Crore respectively
from State Bank of India ("Lender"). Vide share pledge agreement dated September 23, 2016, RWSL had pledged 100% of its
shareholding in GIDC comprising 20,99,994 equity shares to Axis Trustee (in its capacity as a security trustee for the Lender) for
above loan facility.
Owing to defaults in the repayment of the facilities availed by RCOM and RITL, Axis Trustee first proceeded to issue a notice for the
invocation cum sale of pledged shares on November 9, 2022, and thereafter, invoked the pledge on December 12, 2022.
Note: 2.33
Schemes of Amalgamation and Arrangement of earlier years
1. Pertaining to earlier years,
The Company, during the earlier years, underwent various restructuring Schemes through Court including restructuring of
ownership structure of telecom business so as to align the interest of the shareholders. Accordingly, pursuant to the Schemes
of Amalgamation and Arrangement ("the Schemes") under Sections 391 to 394 of the Companies Act, 1956 approved by
the Hon'ble High Court of respective Judicature, the Company, during the respective years, recorded all necessary accounting
effects, along with requisite disclosure in the notes to the accounts, in accordance with the provisions of the said Schemes. The
cumulative effects of the Schemes in case of Equity Share Capital of the Company have been disclosed below the respective
Notes to the Accounts. Reserves, pursuant to the said Schemes, include:
(i) ' 8,047 Crore (Previous year ' 8,047 Crore) being Securities Premium Account, which was part of the Securities Premium
of erstwhile Reliance Infocomm Limited (RIC), the transferor Company.
(ii) General Reserve I of ' 5,538 Crore (previous year ' 5,538 crore) representing the unadjusted balance being the excess of
assets over liabilities relatable to Telecommunications Undertaking transferred and vested into the Company.
(iii) General Reserve III comprises of ' 4,159 crore (Previous year ' 4,159 Crore) transferred to General Reserve from Statement
of Profit and Loss.
(iv) Additional depreciation of ' Nil (Previous year ' Nil) arising on fair value of the assets has been adjusted, consistent with
the practice followed in earlier years, to General Reserve as permitted pursuant to the Scheme of Arrangement sanctioned
vide an order dated July 3, 2009 by the Hon'ble High Court and as determined by the Board of Directors.
2 During the earlier year, Pursuant to the Scheme of Demerger ("the Scheme") sanctioned by the Hon'ble High Court of Judicature
at Bombay and at Jaipur, the Company had acquired Wireless undertaking of Sistema Shyam Teleservices Limited (SSTL) with
effect from October 31, 2017. Upon merger of Wireless undertaking of SSTL, ' 1,397 crore being excess of assets over liabilities
taken over has been credited to Capital Reserve. The Company had also allotted 27,65,53,305 nos of Equity Shares of ' 5 each,
on October 31, 2017, to Shareholders of SSTL.
Note: 2.34
Capital Management
Capital of the Company, for the purpose of capital management, include issued equity capital, and all other equity reserves attributable
to the equity holders of the Company. The Company's objective when managing the capital is to safe guard the Company's ability to
continue as a going concern and the Company is presently under CIRP and there by continue to operate as a Going Concern.
The Company monitors capital using gearing ratio, which is debt divided by total capital plus debt.
Note:
a) DoT has filed an application in NCLT for condonation of delay in filing claim of ' 1,922 crore towards license service
areas (customer application form and electromagnetic field penalties) which was listed on April 17, 2024, where RP
Counsel briefly made submissions and the NCLT enquired if the said claim is reflecting in the books of accounts of the
Corporate Debtor and / or has already been included as part of DOT claims. RP counsel took time to take instructions
in this regard. The NCLT accordingly adjourned the DOT application to May 08, 2024 and thereafter due to paucity of
time to July 03, 2024. The next date of hearing is on July 16,2025. The said claim is included in Other Litigations above,
since the same is subjudice.
b) Includes ' 0.41 crore in respect of a particular case based on the original disputed amount for which the case was
filed by the complainant. The Company has not disclosed / recognized the revised contingent liability of ' 59.75 crore
basis an amended suit served on the Company, which amendment was allowed vide the order of Ld. Court dated
April 19, 2022 during the moratorium period which cannot be entertained or allowed, on account of the moratorium
under Section 14 of the Code. The said amount of contingent Liability of ' 59.75 Crore which was amended in the
suit, and was served upon RCOM is unchanged, same was argued by filing a written argument for and on behalf of
RCOM before the learned Justice Shri. Indalkar, Sr.Division City Civil Court, Belapur. The said matter was adjourned to
July 16, 2024, was transferred to Sr. Division City Civil Court, Balepur Justice Smt. Suryavanshi.
Several applications have been filed by Mr. Mohammad Arif, out of which Exhibit 104,( which was an application) for
action under IPC/193/209 r/w Section 340 of Cr.PC against Mr. Anish Nanavaty and Ms. Sonal Bharade & Ors for
deliberately and knowingly making false claim with an intention to harm the plaintiff. (Arguments on this application
were scheduled on November 04, 2024 before the said court).
There was a Stay on the said application filed before the Belapur court, for and on behalf of RCOM, court heard the
arguments from both the sides and accordingly passed an order for stay date November 30, 2024. The said Order was
passed on Below Exhibit (in view of the continuation of the Order at Exhibit 104), directing both parties to inform
the Belapur Court about cessation of moratorium period or approval or rejection of resolution plan by Hon'ble NCLT,
Mumbai).
Further to above, Mr. Arif has informed Ms. Suryavanshi (Hon'ble Judge of Belapur Court), that he has filed his Appeal
against the Order passed by this Belapur Court, before High Court, Mumbai in Appellate Forum, copy of the summons
and pleadings have not yet been served upon RCOM to their registered office address.
Note: 2.37
2.37.1 Financial Instruments
The fair value of financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current
transaction between the willing parties, other than in a forced or liquidation sale.
The following methods and assumptions were used to estimate the fair values:
Fair value of cash and short-term deposits, trade and other short term receivables, trade payables, other current liabilities, short term
loans from banks and other financial institutions approximate their carrying amounts largely due to the short term maturities of these
instruments.
Financial Instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rate
and individual credit worthiness of the counterparty. Based on this evaluation, allowances are taken to account for the expected losses
of these receivables.
Fair value hierarchy
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices 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 the assets or liabilities that are not based on observable market data (unobservable inputs).
2.37.2 Financial Risk Management Objectives and Policies
Activities of the Company expose it to a variety of financial risks: market risk, credit risk and liquidity risk.
The Company's financial liabilities comprise of borrowings, trade payable and other liabilities to manage its operation and the financial
assets include trade receivables, deposits, cash and bank balances, other receivables etc. arising from its operation.
Corporate Insolvency Resolution Process ("CIR Process") had been initiated in case of the Company and two of its subsidiaries
Pursuant to the order, the management of affairs of the Company and powers of board of directors of the Company and its two
subsidiaries stand vested with the Resolution Professional ("RP") appointed by the NCLT. The framework and the strategies for
effective management will be established post implementation of Resolution Plan. Presently, the financial management activities
are restricted to management of current assets and liabilities of the Company and the day to day cashflow and its associated risks
are as under:
Market risk
The Company also operates internationally and hence, a portion of the business is transacted in several currencies. Consequently,
the Company is exposed to foreign exchange risk to the extent that there is mismatch between the currencies in which its sales
and services, purchases from overseas suppliers and borrowings in various foreign currencies. Market Risk is the risk that changes in
market prices such as foreign exchange rates, interest rates will affect income or value of its holding financial assets/ instruments.
The exchange rate between rupee and foreign currencies has changed substantially in recent years and may fluctuate significantly in
the future.
As a result operations of the Company are adversely affected as rupee appreciates/ depreciates against US Dollar. Since the Company
is under CIR Process, it is not required to meet any loan or interest obligation till the resolution plan is implemented. As the
overall obligation and liabilities shall be determined during CIR Process, foreign curreny loans are stated at exchange rate as at
March 31, 2018.
Sensitivity Analysis
Not relevant till the time resolution plan is finalised.
Interest Rate Risk
Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes
in fair values of fixed interest bearing investments because of fluctuations in the interest rates, in cases where the borrowings are
measured at fair value through profit or loss. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing
investments will fluctuate because of fluctuations in the interest rates. Since the Company is under CIR Process, it could not meet
interest obligation during the year and shall be finalised when resolution plan is implemented.
Exposure to interest rate risk/Sensitivity Analysis
Not relavant till the time resolution plan is finalised.
Derivative financial instruments
The Company does not hold derivative financial instruments
The Company offsets a financial asset and a financial liability when it currently has a legally enforceable right to set off the recognized
amounts and the Company intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Credit risk
Credit risk refers to the risk of default on its obligation by the customer/ counter party resulting in a financial loss. The maximum
exposure to the credit risk at the reporting date is carrying value of respective financial assets.
Trade receivables and unbilled revenue are typically unsecured and are derived from revenue earned from the customers. Credit risk has
always been managed by each business segment through credit approvals, establishing credit limits and continuously monitoring the
credit worthiness of customers to which the Company grants credit terms in the normal course of business. On account of adoption
of Ind AS 109, the Company uses expected credit loss (ECL) model to assess the impairment loss or gain. ECL methodology depends
on whether there is any significant increase in credit risk. In case of significant increase in credit risk, life time ECL is used; otherwise
twelve month ECL is used. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables
and unbilled revenues. The provision matrix takes into account available external and internal credit risk factors such as default risk of
industry, credit default swap quotes, credit ratings from international credit rating agencies and historical experience for the customers.
Credit risk on cash and cash equivalents is limited as the Company generally invests in deposits with banks and financial institutions
with high credit ratings assigned by international and/or domestic credit rating agencies. Investments primarily include investment
in quoted bonds issued by Government and certificates of deposit which are funds deposited at a bank for a specified time period.
Liquidity risk
The Company is under CIR Process. The Company depends upon timely receipt from sales and delay in sales realisation as well as
vendor payments can severely impact the current level of operation. Liquidity crises had led to default in repayment of principal and
interest to lenders. Since the Company is under CIR Process, it is not required to meet any loan or interest obligation till the resolution
plan is implemented.
Liquidity risk is the financial risk that is encountered due to uncertainty resulting in difficulty in meeting its obligations. An entity is
exposed to liquidity risk if markets on which it depends are subject to loss of liquidity for any reason; extraneous or intrinsic to its
business operations, affecting its credit rating or unexpected cash outflows. A position can be hedged against market risk but still
entail liquidity risk. Prudence requires liquidity risk to be managed in addition to market, credit and other risks as it has tendency to
compound other risks. It entails management of asset, liabilities focused on a medium to long-term perspective and future net cash
flows on a day-by-day basis in order to assess liquidity risk.
2.39.1 Relating to Continuing Operations
(a) During the year, as part of a routine compliance check carried out by the Corporate Debtor on December 04, 2024, from the
official website of Accounting and Corporate Regulatory Authority (ACRA), it has come to its attention that the status of Gateway
Net Trading PTE Limited, Singapore (GNTPL), an overseas step-down subsidiary of RCOM, is appearing as struck off under its
profile. Accordingly, loss on de-subsidiarisation including provision of ' 0.47 crore during the year ended March 31, 2025, has
been shown as Exceptional Item in the standalone financial statements.
(b) During the previous year, pursuant to a letter retrieved by the Corporate Debtor on August 17, 2023, as part of a routine
compliance check, from the official website of Netherlands Chamber of Commerce KVK, it has come to its attention that
Reliance Globalcom B.V, The Netherlands. (RGBV), a subsidiary of RCOM, has been de-registered from the Trade Register of the
Netherlands Chamber of Commerce KVK, with effect from June 01, 2023. Loss on desubsidiarisation of ' 991 crore during the
previous year had been shown as an Exceptional Item in the standalone financial statements.
2.39.2 Relating to Discontinued Operations
(a) The Hon'ble Supreme Court of India, vide its order dated October 24, 201 9 had dismissed the petition filed by the telecom
operators and agreed with the interpretation of the Department of Telecommunications (DoT) to the definition of Adjusted Gross
Revenue (AGR) under the license.
On September 01, 2020, the Supreme Court pronounced the judgement in the AGR matter ("SC Judgement"). It has framed
various questions in respect of companies under insolvency and in respect of such questions, the Court has held that the same
should be decided first by the NCLT by a reasoned order within 2 months, and that it has not gone into the merits in this decision.
The RP of the Corporate Debtor and Reliance Telecom Limited (RTL) had filed intervention applications before the NCLAT in the
appeal filed by the DoT against the resolution plan approval orders of the Aircel companies (wherein the NCLAT was adjudicating
on the questions framed by the Hon'ble Supreme Court in the SC Judgement). The RP had also filed written legal submissions
in this regard with the NCLAT. The Hon'ble NCLAT has pronounced its judgement dated April 13, 2021 setting out its findings
on the questions framed in the SC Judgement. The RP has filed appeals in respect of the Corporate Debtor and RTL against
the judgement of the NCLAT before the Supreme Court. On August 2, 2021, the appeals were listed when the bench issued
notice in the matter and tagged the same with Civil Appeal No 1810 of 2021 (being the appeal filed by the COC of Aircel
companies) and also allowed the application seeking permission to file the civil appeal. On February 22, 2022, the Supreme
Court granted a period of six weeks to the DoT to file counter affidavit. The matter was listed on May 2, 2022 wherein the SC
directed the matter to be tentatively listed in the third week of July 2022. The matter was mentioned on August 5, 2022, for
early listing for arguments, but the Supreme Court directed the matter to be listed after eight weeks. The matter was thereafter
listed on October 1 1, 2022, on which date, the Supreme Court directed that the matter be listed after six weeks. Further,
the Supreme Court stated that the parties were to file a common compilation post discussion with each other, and file brief
written submissions within a period of six weeks. Thereafter, Justice Nazeer J retired and the matter came up for listing before
a reconstituted bench comprising Justice V. Ramasubramaniam and Justice Pankaj Mittal on February 21, 2023. However, the
matter was not taken up due to paucity of time and was tentatively listed on May 10, 2023. Since the matter was not reflected
in the list for May 10, 2023, it was mentioned by the counsel for RP and the Bench directed listing on July 18, 2023.
The matter was listed on July 18, 2023 before a bench comprising Justice Sanjiv Khanna and Justice Bela M Trivedi, and once again
it was not taken up due to paucity of time. The matter was mentioned on August 4, 2023 for listing on the shortest possible date
and the Bench directed listing on any Tuesday, but no specific date was allotted. The appeals were thereafter listed on September
12, 2023 but could not be heard due to paucity of time. Aircel Monitoring Committee has filed an application seeking sale of
right to use spectrum subject to proceeds being kept in escrow account, which shall be subject to outcome of the Supreme
Court matter. RCOM and RTL RP has also filed applications seeking similar dispensation for RCOM and RTL as well. Further, DoT
was asked to file reply within two weeks to the application filed by Aircel Monitoring Committee (I.A. No. 186218/2023 in Civil
Appeal No. 2263/2021) vide order dated September 18, 2023 and the DoT has accordingly filed its reply on October 9, 2023.
The appeals were mentioned before the Hon'ble Supreme Court, on July 10, 2024 and it was requested that the said appeals
not be deleted from the cause list of August 02, 2024. Hon'ble Justice Khanna took note of the same and directed that the
appeals may not be deleted from cause list dated August 02, 2024. However, on August 02, 2024 all matters listed were
adjourned. Accordingly, the appeals were listed on August 20, 2024 before a bench comprising of comprising of J. Sanjiv
Khanna and J. Sanjay Kumar. When the appeals were called out, the Bench notified the set of appeals to be listed in the week
commencing from September 02, 2024 for further consideration. The Bench also remarked that the matter be listed before a
Bench where one of the judges in the current bench (J. Sanjay Kumar) is not a member.
The appeals were thereafter listed before a bench comprising of Hon'ble Justice Pamidighantam Sri Narasimha and Hon'ble
Justice Sandeep Mehta on September 03, 2024. On September 03, 2024, the bench was pleased to admit the captioned
appeal alongside the connected appeals and list them for final hearing in the week commencing from October 14, 2024.
However, the appeals did not appear in the list in the week commencing from October 14, 2024 and were thereafter listed
on October 23, 2024. On October 23, 2024, the bench heard a background of the matter, and a description of key issues
involved therein. The bench directed that the matter be listed before it in the week commencing from November 04, 2024.
Subsequently, the newly appointed Hon'ble Chief Justice of India passed a notification dated November 1 6, 2024 vide which
it was directed that no regular matters shall be taken up for hearing until further orders. Thus, as per the directions of the Chief
Justice of India, the above appeals along with other regular matters were not being listed for hearing for some time.
Upon the recommencement of the listing of regular matters, a letter of urgency dated January 08, 2025 was filed before
the Registrar, Supreme Court of India seeking urgent listing of the above appeals. On January 10, 2025, counsel for the RP
apprised the Ld. Bench about the urgency in the matters and sought an early listing of the appeals. Accordingly, the matter
was listed for further hearing on January 16, 2025. The appeals did not reach on January 16, 2025 and accordingly the matter
was taken up on January 23, 2025. On January 23, 2025, the appeals could not reach as the Bench rose and clarified that
the appeals will be rolled over to next Thursday. On January 30, 2025, the appeals could not be listed due to paucity of time,
the counsel for RP sought for the appeals to be listed high on board. Accordingly, the Bench stated that they shall consider the
request and appeals may be listed on February 06, 2025. On February 06, 2025, the bench did not preside and accordingly
the matter was not heard. On February 15, 2025, a letter of urgency was filed and consequently the matter was mentioned on
February 17, 2025. The mentioning was allowed and matter was listed on February 20, 2025. However, due to paucity
of time, the matter could not reach and it was rolled over to next week. Subsequently, the matter did not come up on
February 27, 2025, thus the matter was once again orally mentioned the matter seeking urgent listing, to which Hon'ble Bench
remarked that they shall consider the same. The matter was thereafter mentioned again on March 27, 2025, where the Hon'ble
Bench passed an order stating that the matter would be taken up in April 2025. On April 22, 2025, it was enquired from the
Registry of the Hon'ble Supreme Court regarding the listing of the same, to which the Registry responded that since the matters
which had been given a specific date had exceeded the allowed number of matters, the captioned appeal was not listed on
Thursday's list. The matter was mentioned again before the Hon'ble Court and the request was not accommodated. Thereafter,
on May 08, 2025, the appeals were mentioned and early listing was sought, however the request could not be accommodated
as the Hon'ble Court had a large number of matters and stated that the appeals shall be considered post the summer vacation.
Vide the order dated May 08, 2025, the appeals now stand listed on July 24, 2025.
The DoT had during the pendency of the various proceedings simultaneously directed Special Audit in relation to the computation
of License fee, Spectrum fee, applicable interest and penalties thereon, which is under progress for the financial year 2015-16
onwards. In this regard, the Corporate Debtor had provided for estimated liability aggregating to ' 47,949 crore up to the previous
year ended March 31, 2024 and has provided additional charge of ' 7,341 crore during the year ended March 31, 2025 and
shown as exceptional items relating to discontinued operations which may undergo revision based on demands from DoT and/
or any developments in this matter.
Considering various factors including admission of the Corporate Debtor and its subsidiary RTL to resolution process under the
Code and the moratorium applicable under Code, discharge of the aforesaid liability will be dealt with in accordance with the
Code (subject to orders in the relevant judicial proceedings).
(b) Assets held for sale including Wireless Spectrum, Towers, Optical Fibre and Media Convergence Nodes (MCNs) continue to be
classified as held for sale at the value ascertained at the end of March 31, 2018, along with liabilities, for the reasons referred
in Note 2.31 above and disclosed separately as discontinued operations in line with Ind AS 105 "Non-current Assets Held for
Sale and Discontinued Operations".
Note:2.40
Recovery of the Expenses
There is no recovery of expenses during the current year and previous year.
Note:2.41
Corporate Social Responsibility
The Company is not required to spend towards Corporate Social Responsibility (CSR) as per Section 135 of the Companies Act, 2013,
since there is no average profit in the last 3 years calculated as per the provisions of the Act.
Note 2.42
Employee Benefits
Gratuity: In accordance with the applicable Indian laws, the Company provides for the gratuity, a defined benefit retirement plan
(Gratuity Plan) for all employees. The Gratuity Plan provides a lump sum payment to vested employees, at retirement or termination
of employment, an amount based on respective employee's last drawn salary and for the years of employment with the Company.
The gratuity plan is governed by the Payment of Gratuity Act, 1972 (Gratuity Act). The Company is bound to pay the statutory
minimum gratuity as prescribed under Gratuity Act. There are no minimum funding requirements for a gratuity plan in India. The
Company's philosophy is to fund the benefits based on its own liquidity and tax position as well as level of underfunding of the plan
vis-a-vis settlements. The management is responsible for the overall governance of the plan. The management has outsourced the
investment management of the fund to insurance company which in turn manages these funds as per the mandate provided to them
by the trustees and applicable insurance and other regulations.
The Company operates its gratuity and superannuation plans through separate trusts which is administered and managed by the
Trustees. As on March 31, 2025 and March 31, 2024, the contributions towards superannuation plans have been invested in Insurer
Managed Funds.
The plan is in the nature of a defined benefit plan which is sponsored by the Company and hence it underwrites all the risks pertaining
to the plan. In particular, there is a risk for the Company that any significant change in salary growth or demographic experience
or inadequate returns on underlying plan assets can result in an increase in cost of providing these benefits to employees in future.
The defined benefit plan exposes the Company to actuarial risks such as logentivity risks, interest risk and market (Investment) risk.
The following table sets out the status of the Gratuity Plan as required under Ind AS 19 "Employee Benefits".
Note 2.43 Disclosure under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED)
Under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED) which came into force from October 2, 2006,
certain disclosures are required to be made relating to MSME. On the basis of the information and records available with the company,
the following disclosures are made for the amounts due to Micro, Small and Medium Enterprises.
(a) During the earlier year, the Company has given ' 27 crore Loan to RRL. The said loan, duly approved by CoC, carries an
interest rate of 10% and repayable on demand is secured by way of creation of an exclusive mortgage by RRL in favour of/
for the benefit of the Company. Charge is yet to be created with Registrar of Companies (RoC).
(b) During the current year ending March 31, 2025, the Company has granted inter-corporate advances to RTL aggregating to
' 7 crores at an interest rate of 11% and being repayable on demand. In this regard, it may be noted that the CoC of the
Company in its 52nd CoC meeting, had accorded approval to the Company for grant of inter-corporate advances to RTL for
an amount up to INR 9.60 crores at an interest rate of MCLR 2%.
(c) Other than (a) and (b) above, the Company has not charged interest on Loans and Advances to subsidiaries, as the
Company has not provided interest on Borrowings for the year ended March 31, 2025 and for the previous year ended
March 31, 2024 (Refer Note 2.48).
Note 2.45
Employee Stock Option Schemes
The Company was operating Employee Stock Option Plans; ESOS Plan 2008 and ESOS Plan 2009, which covered eligible employees
of the Company and its Subsidiaries. ESOS Plan 2008 was operational till March 31,2017 whereas ESOS Plan 2009 was operational
till January 16, 2019. ESOS Plans were administered through an ESOS Trust. The Vesting of the Options was on the expiry of one
year from the date of Grant as per Plan under the respective ESOS(s). In respect of Options granted, the accounting value of Options
(based on market price of the share on the date of the grant of the Option) was accounted as deferred employee compensation,
which was amortised on a straight line basis over the Vesting Period. Each Option entitles the holder thereof to apply for and be
allotted/ transferred one Equity Share of the Company of ' 5 each upon payment of the Exercise Price during the Exercise Period.
Note 2.48 Non Provision of Interest and foreign Exchange Variation on Borrowings
Considering various factors including admission of the Corporate Debtor and its subsidiaries; RTL and RCIL to CIRP under the Code,
there are various claims submitted by the operational creditors, the financial creditors, employees and other creditors. The overall
obligations and liabilities including obligation for interest on loans and the principal rupee amount in respect of loans including foreign
currency denominated loans shall be determined during the CIRP and accounting impact, if any, will be given on completion of CIRP
and implementation of the approved resolution plan.
Further, prior to May 15, 2018, the Corporate Debtor and its said subsidiaries were under Strategic Debt Restructuring (SDR) and
asset monetization and debt resolution plan were being worked out. The Corporate Debtor has not provided Interest of ' 4,692 crore
calculated based on basic rate of interest as per terms of loan for the year ended March 31, 2025 and foreign exchange (gain)/loss
aggregating to ' 418 crore for the year ended March 31, 2025. Had the Corporate Debtor provided Interest and foreign exchange
variation, the Loss would have been higher by ' 5,110 crore for the year ended March 31, 2025 and Net Worth of the Corporate
Debtor as on March 31, 2025 and March 31, 2024 would have been lower by ' 37,573 crore and ' 32,463 crore respectively.
Upto the previous years, Interest of ' 28,786 crore and foreign exchange loss (net) aggregating to ' 3,677 crore were not provided.
1. Wherever the ratios are negative, the same is shown as Nil (-)
2. Reduction in Inventory Turnover Ratio in March 31, 2025 compared to previous year is due to reduction in turnover.
3. Increase in Trade receivable in March 31, 2025 compared to previous year is due to higher average trade receivable and
decrease in turnover.
4. Last year Margins include loss on desubsidiarisation including provisions.
Formula used for computation of Ratios:
i Current Ratio = Current Assets less Assets held for Sale/Current Liabilities less Liabilities directly related to Assets held
for Sale
ii. Debt Equity Ratio = Debt/Equity
iii. Debt Service Coverage Ratio (DSCR) = Earnings before depreciation, interest and tax/(Interest Principal
repayment)
iv. Return on Equity = Net profit after tax/Shareholder's fund
v. Inventory Turnover Ratio = Turnover/Average Inventory
vi. Trade Receivable turnover = Average Trade receivables/(Value of Sales and Services/no of days for the year)
vii. Trade Payable turnover = Net credit purchase/Average Trade Payables
viii. Net Capital Turnover Ratios = Turnover/working Capital
ix. Net Profit margin (%) (Continuing operations) = Profit/(Loss)after tax/Value of Sales and Service
x. Return on capital employed = EBIT/Capital employed
xi. Interest Service Coverage Ratio (ISCR) = Earnings before depreciation, interest and tax/ (Interest expense)
xii. Operating margin (%) (Continuing operations) = EBIT - Other Income/Value of Sale and Services
9) Utilisation of Borrowed funds and share premium:
During the year, there is no fresh borrowings and Share premium
10) During the year, the Company has not received as well as given advances (excluding transactions in the normal course of
business) or loans or invested funds or provided any guarantee, security or the like from/ to any other person(s) or entity(ies),
directly or indirectly, including any foreign entity(ies).
11) During the year, the Company has not surrendered or disclosed any income, previously unrecorded in the books of account as
income, in the tax assessments under the Income Tax Act, 1961.
Segment Performance
Disclosure as per Ind AS 108 "Operating Segments" is reported in consolidated financial statements of the Company. Therefore the
same has not been separately disclosed in line with the provisions of Ind AS.
Note 2.52
Note on Disqualification of Directors
During the earlier year, Shri Anil D Ambani, Smt. Manjari Kacker, Smt. Ryna Karani, Smt. Chhaya Virani and Shri Suresh Rangachar,
Directors tendered their resignation as Directors of the Company, however the Committee of Creditors of the Company ("CoC"), in
its meeting held on 20th November, 2019 refused to accept the resignations tendered by above mentioned directors and instructed
the Resolution Professional to convey to the directors to continue with their duties and responsibilities as directors and provide all
cooperation in the Corporate Insolvency Resolution Process, at least until the completion of the corporate insolvency resolution
process of the Company. In light of the above, it was duly communicated to the aforesaid directors of the Company that their
resignations have not been accepted and they were advised to continue to perform their duties and responsibilities as the directors
of the Company and provide all cooperation to Resolution Professional in the corporate insolvency resolution process. Accordingly,
Shri Anil D Ambani, and Shri Suresh Rangachar continues to reflect in the composition of the board of directors and the respective
committees of the Company. Due to above mentioned events, the Company has not received annual disclosures as required under
section 164(2) and Section 184(1) of the Companies Act, 2013 from Shri Anil D Ambani, and Shri Suresh Rangachar, Directors of
the Company.
Independent Directors of the Company, Smt Ryna Karani (DIN: 001 16930), Smt Chhaya Virani (DIN: 06953556), and Smt Manjari
Kacker (DIN: 06945359) (Resigning Directors), resigned via resignation letters dated November 14, 2019, November 15, 2019,
and November 15, 2019, respectively. However, the Committee of Creditors of the Company, at its 11th meeting held on November
20, 201 9, did not accept the resignations of the Resigning Directors. As the tenure of the Resigning Independent Directors ended on
September 17, 2023, the Committee of Creditors of the Company, at its 56th meeting held on February 14, 2025, noted the same.
The effective date of cessation of directorship of these directors is taken as February 14, 2025.
As per legal opinion obtained by the company, none of the Directors were disqualified under section 164(2) of the Companies Act
2013 for default in payment of interest and principal of debentures.
Note 2.53
Lease:
The assets of the Company are held for sale as per Ind AS 105 and accordingly lease agreements are considered to be short term in
nature and Ind AS 116 has not been applied.
Note 2.54
The Corporate Debtor has been served with copies of writ petitions filed by Mr. Punit Garg and certain others, being erst while
directors of the Corporate Debtor and its subsidiaries before the Hon'ble High Court of Delhi, challenging the provisions of the RBI
Master Directions on Frauds- Classification and Reporting by commercial banks and select FIs bearing No. RBI/ DBS/ 2016-17/ 28
DBS. CO. CFMC. BC. No. 1 / 23.04.001 / 2016-17 dated July 1, 2016 ("Circular") and the declaration by certain banks classifying
the loan accounts of the Company, Reliance Infratel Limited ("RITL") and Reliance Telecom Limited ("RTL") being fraudulent in terms
of the Circular. (RITL's implementation of resolution plan has been completed and RITL has ceased to be a subsidiary of the Company
w.e.f December 22, 2022).
On May 12, 2023, the Hon'ble Delhi High Court in light of the judgment dated March 27, 2023 in SBI vs. Rajesh Agarwal [2023
SCC OnLine SC 342] has disposed of the said petitions filed by Mr. Punit Garg, setting aside the actions taken against the petitioners
under the Circular. The Supreme Court has held that since the Circular does not expressly provide an opportunity of hearing to the
borrowers before classifying their account as fraud, audi alteram partem has to be read into the provisions of the directions to save
them from the vice of arbitrariness.
It has further been made clear vide the Delhi High Court order, that if any FIR has been lodged, proceedings proceeded thereto will
remain unaffected by the said order and that it will be open to concerned banks to proceed in accordance with law in light of the
judgement of the Supreme Court.
Further, Mr. Punit Garg has filed another writ petition in Delhi High Court challenging the order of IFCI declaring his account as fraud
under the Circular. The matter was last listed on November 14, 2024, however due to unavailability of the Bench, the matter was
re-notified to April 8, 2025. On April 8, 2025, the matter could not be taken up and now stands renotified to September 15, 2025.
During the earlier years, certain banks had issued show cause notices to the Corporate Debtor, certain subsidiaries and certain directors
seeking reasons as to why the Corporate Debtor and its subsidiaries should not be classified as wilful defaulter. Also, during the earlier
year and in the current year, subsequent to balance sheet date certain banks have served notice seeking explanation as to why the
account of the Corporate Debtor and the subsidiary company RTL and RCIL should not be declared as fraud in terms of applicable RBI
regulations. Further, the subsidiary company RTL had received intimation of order passed by wilful defaulter identification committee
of one of the banks for inclusion of name of RTL and its directors/guarantors etc in credit information companies (CiCs) list of wilful
defaulters and seeking representation against the said order. The Corporate Debtor and its subsidiaries have been responding to said
show cause notices and intimations, from time to time. The Corporate Debtor in its response has highlighted that the proceedings
and the classification of the Corporate Debtor as a wilful defaulter is barred during the prevailing moratorium under section 14 of
the Code and protection is available in terms of section 32A of the Code and asserting that accordingly, no action can be said to lie
against the Corporate Debtor for classification as fraud and requested the banks to withdraw the notices. Further, certain banks had
issued notices seeking personal hearing by the authorized representative of the Corporate Debtor and its subsidiaries in respect of the
aforesaid matter. Hearings were attended to and necessary submissions were made in accordance with the submissions made earlier
in the responses to the show cause notices.
Further, the Corporate Debtor and Reliance Telecom Limited (RTL) has received a letter dated August 7, 2023 from one of the banks,
vide which the bank has indicated, inter alia, that it has received a forensic audit report dated October 15, 2020 of M/s BDO India
LLP wherein certain 'irregularities / anomalies / commissions / omissions' have been pointed out by the forensic auditor. The said
letter and report were accordingly tabled at the meeting of the Directors on August 1 2, 2023. In respect of the same, the bank
has sought the views, inter alia, of the erstwhile management of the Corporate Debtor on the said report. The management had
expressed that management views had not been sought prior to the issuance of the report. Further to receipt of a copy of the filings
made before the Hon'ble Delhi High Court in the aforesaid matter, the Corporate Debtor and RTL had provided information to the
forensic auditor during the period from March 2021 to November 2021 and it is not yet ascertained if the report incorporates and
has considered such information. RP however has maintained that the Corporate Debtor and RTL is undergoing corporate insolvency
resolution process in terms of the Code and the forensic audit report prima facie appears to pertain to the period prior to the corporate
insolvency resolution process, the Corporate Debtor and RTL has already responded to the letter that the proceedings and the
classification of the Corporate Debtor and RTL as a fraud is barred during the prevailing moratorium under Section 14 of the Code and
protection is available in terms of Section 32A of the Code and accordingly, no action should lie against the Corporate Debtor and RTL
for classification as fraud and notice against the Corporate Debtor should be withdrawn and the RP, Corporate Debtor and RTL shall
have a limited responsibility to only share any information sought from it.
Similar to the letter received on August 7, 2023, Corporate Debtor has also received another letter dated May 7, 2024 from another
bank, where the bank has indicated, that with respect to the loan account of the Corporate Debtor, it has conducted forensic audit
wherein element of fraud is identifiable and before coming to final conclusion basis the forensic audit report dated October 15, 2020,
the bank has sought the Corporate Debtor's representation as to why the Corporate Debtor's account should not be classified as 'fraud' in
terms of the 'Master Directions on Frauds - Classification and Reporting by Commercial Banks and Select FIs' dated July 1, 2016 issued
by Reserve Bank of India. On receipt of the said letter, while the Corporate Debtor has made necessary disclosures to the relevant stock
exchange in accordance with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,
2015, the Corporate Debtor has also issued a response to the letter dated May 7, 2024 maintaining a similar stance (as against the letter
dated August 7, 2023)inter alia citing that the Corporate Debtor is undergoing corporate insolvency resolution process in terms of the
Code and the forensic audit report prima facie appears to pertain to the period prior to the corporate insolvency resolution process and
hence any classification of the loan accounts of the Corporate Debtor as a fraud during its ongoing CIRP is barred during the prevailing
moratorium under Section 14 of the Code and protection is available in terms of Section 32A of the Code and accordingly, no action
should lie against the Corporate Debtor for classification as fraud and notice against the Corporate Debtor should be withdrawn. Currently,
there is no impact of such notices/letter issued from banks, in the standalone financial statements.
Note:2.56
During the previous year, on October 16, 2023, the Hon'ble Supreme Court of India has pronounced a judgement regarding the
treatment of AGR paid to DOT since July 1999, as capital in nature and not revenue expenditure for the purpose of computation
of taxable income in a matter to which the Company is not a party. The Company has applied for renewal of its license as stated
earlier. The terms of renewed license regime are different from those of the licenses dealt with in the aforesaid judgement. Further,
there have been no disallowances in earlier years, by the tax authorities, on the AGR payments claimed by the Company as revenue
expenditure in its tax filings. In the absence of any claim by the tax authorities against the Company and/ or directions or clarifications
from the income tax department in this regard, no adjustments have been made to these standalone financial statements for the
year ended March 31, 2025.
Note:2.57
The annual audited financial statements for the year ended March 31, 2023 have been adopted by the shareholders in the Annual
General Meeting subsequently held on September 28, 2024 with requisite majority.
The Company is engaged in the business of providing infrastructural facilities as per Section 186 (11) read with Schedule VI of the
Act. Accordingly, Section 186 [except of sub-section (1)] of the Act is not applicable to the Company.
Note: 2.59
The Ministry of Corporate Affairs (MCA) has prescribed a new requirement for companies incorporated in India under the proviso to
Rule 3(1) of the Companies (Accounts) Rules, 2014 inserted by the Companies (Accounts) Amendment incorporated in India Rules
2021 requiring companies, which uses accounting software for maintaining its books of accounts. The Companies shall use only
such accounting software, which has a feature of recording audit trail of each and every transaction, creating an edit log of each
change made in the books of accounts along with the date when such changes were made and ensuring that the audit trail cannot
be disabled.
The Company uses the accounting software SAP and other peripheral applications for maintaining books of accounts which has
features of recording audit trail (edit log) facility and the same has been operated throughout the year for all the relevant transactions
recorded in the software, except that the Company has not enabled the feature of recording audit trail (edit log) at the database level
for certain direct changes to SAP application (DDL and DML), ICARE and Interconnect application. Further, where audit trail (edit
log) facility was enabled and operated, the audit trail feature has not been tampered with. Additionally, the audit trail of prior year
has been preserved by the Company as per the statutory requirements for record retention, except for ICARE application log enabled
from January 2024, Single View database log enabled from August 2024 and SAP database (partially) enabled from June 2024.
Note: 2.60
Bonn Investment Inc. ("Bonn"), an US entity and a subsidiary of Reliance Infocomm Inc. ("RII"), USA, a step-down subsidiary of
RCOM, held an apartment at 400 W 12th Street #4EF New York, NY 10014 ("Property"). During the previous year, in August 2023,
the director of Bonn, sold the Property to a third party, without any authorization from or intimation to its shareholders (including
RCOM) for a value of USD 8.34 million. The Resolution Professional noted this transaction in the financial statements of Bonn for
the period ended September 30, 2023 received from the director for consolidation purposes. Further, on April 23, 2024, through
the auditor of Bonn, the Resolution Professional and Company were made aware of an investment agreement between Bonn and
AZCO Realty, UAE. It is observed that vide said investment agreement, Bonn (through its director) agreed to invest USD 25 million
in AZCO Realty ("AZCO") and Bonn has already made investment of USD 8.2 million from the sale proceeds of the Property, which
is reflected as Advance towards other Investment (1st Tranche). As per the terms of agreement, Bonn has agreed to invest remaining
amount before May 26, 2024 with AZCO. The Agreement further states that, if Bonn fails to remit the remaining amount to AZCO
on or before May 26, 2024, the investment agreement shall be automatically nullified and Bonn shall have no rights to claim back
the amount already invested, i.e. USD 8.2 million, which is part of the sale proceeds of the Property. This entire transaction did not
have approval from the shareholders (including RCOM). The Company sent a notice to the director seeking clarification regarding
the same but has not received any credible explanation so far. Accordingly, and in view of the above unauthorized and potentially
fraudulent actions, the Company has removed the said director from the directorship of all US subsidiaries of RCOM including Bonn
on August 21, 2024 and has appointed a new director in her place on the same date (as applicable). The new Director has since
been interacting with the removed director and has asked questions on the transactions directly/through counsel but the response
from removed director remains elusive. Further, Bonn (through the newly appointed director) is in the process of examining the
legal remedies for the actions taken by the said erstwhile director as well as for recovery of the advance against investment given
to AZCO. As the director of Bonn is hopeful about the recovery of the advance against investment given to AZCO, no provision has
been made in financial statements. Furthermore, Bonn (through the newly appointed director) had also commissioned a digital
analysis of the various email correspondence exchanged by the erstwhile director of Bonn, with the erstwhile director / erstwhile
management of the Company, to further investigate the unauthorised and potentially fraudulent sale and investment transaction
undertaken by the erstwhile director of Bonn (including the circumstances / motive behind the same) as well as to ascertain the role
of any other individuals involved in the matter. The final report in this regard has been received and the entire report was examined
by the relevant stakeholders and their advisors, for any further action to be taken pursuant to the findings in the report. In particular,
this report highlighted the involvement of a director of RCOM (powers suspended) in authorizing the sale of the said Property. Basis
the same, RP has issued an email communication dated February 6, 2025 to the said director of RCOM, seeking his response on his
involvement in the above potentially fraudulent transaction. On February 14, 2025, the director vide his email denied the allegations
without providing any further justification. On February 21, 2025, the said director of RCOM vide his email requested copies of all
information and correspondence relied upon by the RP in connection with the email communication dated February 6, 2025 sent
by the RP. The same were provided by the RP via email communication dated March 03, 2025 along with a suitable reply to the
said director of RCOM. The said director of RCOM vide his letter dated April 1, 2025 has tendered his resignation. Meanwhile, the
RP has also made his determination on March 25, 2025 regarding the action of the said director of RCOM amounting to fraudulent
trading under Section 66(1) of the Code. Thereafter, the RP has filed an application under Section 66(1) of the Code on March 26,
2025 before the Hon'ble NCLT seeking appropriate relief against the said director of RCOM. Unaudited financial statements of Bonn
have been prepared on a going concern basis and considered for the purpose of consolidated financial statements. Tax return for the
financial year ended March 31, 2024 has been filed and tax liability of Bonn of USD 546,1 96 has been paid during the year inclusive
of interest and penalties till the date of payment.
During the earlier year, Reliance Communications (Australia) PTY Limited and Reliance Communications (New Zealand) PTE Limited,
both step-down overseas subsidiary companies of the Corporate Debtor, having no operations, have been deregistered w.e.f June 04,
2023 and June 22, 2023 respectively by the authorities in the respective country pursuant to an application by the said companies
in this regard. Accordingly, the corporate debtor has written off its receivable of ' 0.16 Crore the standalone financial statements.
Note: 2.62
Authorisation of Financial Statements
The Directors of the Corporate Debtor have approved the above statements at their meeting held on May 27, 2025 which was
chaired by Mr. Anish Niranjan Nanavaty, Resolution Professional ('RP') of the Corporate Debtor and RP took the same on record basis
recommendation from the directors.
With respect to the standalone financial statements for the year ended March 31, 2025, the RP has signed the same solely for the
purpose of ensuring compliance by the Corporate Debtor with applicable laws, and subject to the following disclaimers:
(i) The RP has furnished and signed the report in good faith and accordingly, no suit, prosecution or other legal proceeding shall lie
against the RP in terms of Section 233 of the Code;
(ii) No statement, fact, information (whether current or historical) or opinion contained herein should be construed as a representation
or warranty, express or implied, of the RP including, his authorized representatives and advisors;
(iii) The RP, in review of the standalone financial statements and while signing these standalone financial statements, has relied upon
the assistance provided by the directors of the Corporate Debtor, and certifications, representations and statements made by
the directors of the Corporate Debtor, in relation to these standalone financial statements. The standalone financial statements
of the Corporate Debtor for the year ended March 31, 2025 have been taken on record by the RP solely on the basis of and
relying on the aforesaid certifications, representations and statements of the aforesaid directors and the erstwhile management
of the Corporate Debtor. For all such information and data, the RP has assumed that such information and data are in conformity
with the Companies Act, 2013 and other applicable laws with respect to the preparation of the standalone financial statements
and that they give true and fair view of the position of the Corporate Debtor as of the dates and period indicated therein.
Accordingly, the RP is not making any representations regarding accuracy, veracity or completeness of the data or information in
the standalone financial statements.
(iv) In terms of the provisions of the Code, the RP is required to undertake a review to determine avoidance transactions. Such review
has been completed and the RP has filed the necessary applications with the adjudicating authority. Certain applications have
been dismissed and pending applications remain subject to the directions of the adjudicating authority.
As per our report of even date For Reliance Communications Limited
For Pathak H.D. & Associates LLP
Chartered Accountants Resolution Professional Anish Niranjan Nanavaty
Firm Reg. No.: 107783W/W100593
Director Grace Thomas
(DIN: 07079566)
Jigar T. Shah Director Priyanka Agarwal
Partner (DIN: 08089006)
Membership No. 161851
Chief Financial Officer Srinivasan Gopalan
Place : Mumbai
Date : May 27, 2025 Company Secretary Rakesh Gupta
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