b. Terms/ rights attached to equity shares:

The Company has only one class of equity shares having par value of C 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company in proportion to the number of equity shares held by the shareholders, after distribution of all preferential amounts.

(i) Securities premium

Securities premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.

(ii) Share based payment reserve

This relates to share options granted by the Company to its employees under its employee share options plan.

(iii) Capital redemption reserve

Capital redemption reserve was created on buy back of shares. A company may issue fully paid up bonus shares to its members out of Capital redemption reserve account.

(iv) Capital reserve

Capital reserve has arisen out of slump purchase of assets. (refer note 43(c))

(v) Merger capital reserve

Merger capital reserve was created on account of merger of the Company with erstwhile Indus Towers Limited. (refer Note 3)

(vi) General reserve

General reserve was created out of Composite Scheme of arrangement with Bharti Airtel Limited. Pursuant to the merger of Joint Venture Company (i.e. erstwhile Indus Towers Limited) with the Company, the investment in Joint Venture Company has been cancelled by debiting the General Reserve to the extent available under the said Scheme (refer Note 3 and 43(a)).

Further, pursuant to the merger of erstwhile Indus Towers Limited with the Company, General reserve of erstwhile Indus Towers Limited was transferred to the Company which was created out on account of Scheme of Arrangement (Indus Scheme) in erstwhile Indus Towers Limited. The General Reserve account shall be treated as free reserve for all intents and purposes. (refer Note 3 and 43(b)).

(vii) Retained earnings

Retained earnings are the profits that the Company has earned till date, less transfer to other reserves (if any), dividends and other distributions paid to shareholders.

b) Defined benefit plan

Gratuity liability is defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each reporting period. The plan is not funded by the Company. Such liability is included in salaries, wages and bonus, refer note 27.

ii. Due to its defined benefit plans, the Company is exposed to the following significant risks:

Changes in bond yields - A decrease in bond yields will increase defined benefit plan liability.

Salary risk - The present value of the defined benefit plans liability is calculated by reference to the future salaries of the plan participants. As such, an increase in the salary of the plan participants will increase the defined benefit plan's liability.

For contractual employees, discount rate is 7.18% (March 31,2023: 7.36%), expected rate of increase in compensation levels is 6% (March 31, 2023: 6%) & expected average remaining working lives of employees is 23.49 (March 31, 2023: 23.42) years.

Demographic assumption

Assumptions regarding future mortality are based on published statistics and mortality tables (IALM (2012-14) for the year ended March 31, 2024:

Retirement age: The employees of the Company are assumed to retire at the age of 58 years.

Rates of leaving service at specimen ages as at March 31, 2024 are as shown below:

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

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

vii. Estimated amounts of expense to be recognized within next year is C 218 Mn (March 31, 2023 : C 194 Mn).

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

34 Employee stock/cash settled option plans

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

Pursuant to the board resolution dated July 22, 2008 and the resolution of the shareholders in extraordinary general meeting dated August 28, 2008, the Company instituted the Employee Stock Option Scheme 2008 (the 2008 Scheme). In FY 2013-14 and 2014-15, the Company had announced new performance unit plan (cash settled option plan) for its employees. In FY 2015-16, 2016-17, 2017-18, 2018-19, 2019-20, 2020-21, 2021-22, 2022-23 and 2023-24, the Company has announced Long term incentive plan (LTIP) 2015, Long term incentive plan (LTIP) 2016, Long term incentive plan (LTIP) 2017, Long term incentive plan (LTIP) 2018, Long term incentive plan (LTIP) 201920, Long term incentive plan (LTIP) 2020-21, Long term incentive plan (LTIP) 2021, Long term incentive plan (LTIP) 2022 and Long term incentive plan (LTIP) 2023 respectively for its employees.

(b) Employee stock/cash settled option plans - Issued by the erstwhile Indus Towers Limited Stock Appreciation Rights (SAR) Scheme (SAR Plan 2)

During the year ended March 31, 2013, the Company had announced an Employee Stock Appreciation Right Scheme (the 'Scheme') for eligible employees. As per this plan, the employees would be entitled to receive the difference between the fair value of the share at the date of exercise of SAR and the exercise price. The fair value of the SAR will be determined using Black Scholes Option Pricing Model. The fair value of SAR granted after applying an estimated forfeiture rate is amortised over the vesting period.

(i) Total employees stock/cash options expense recognised for the year ended March 31, 2024 and March 31, 2023 is C 89 Mn and C 77 Mn respectively.

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

The loan has been given to ESOP trust time to time for purchase the Equity Shares of the Company from open market as permitted by SEBI (Share Based Employee Benefits) Regulations, 2014.

During the year ended March 31, 2024, the Trust has acquired 711,000 shares at a price of C 182.56 per share and 419,639 equity shares of exercise price of C 10 each have been transferred to employees upon exercise of stock options. As of March 31, 2024, the Trust holds 967,683 shares (of Face Value of C 10 each) (March 31, 2023 - 676,322 shares) of the Company.

36 Leases

The Company has given sites on operating lease to telecom operators. As per the agreements with the operators the escalation rates range from 0% to 2.5% per annum. The service charges recognised as income during the year for non cancellable arrangements relating to provision for passive infrastructure sites as per the agreements is C 177,314 Mn and C 174,317 Mn for the year ended March 31, 2024 and March 31, 2023 respectively.

Total payments made to micro, small and medium enterprises amounts to C 35,335 Mn (C 20,896 Mn for the year ended March 31, 2023) out of which C 1,467 Mn (C 445 Mn for the year ended March 31, 2023) has been paid beyond the appointed date; which is primarily due to delays in receipt of invoices and inadequate documentation in certain cases.

Dues to micro and small enterprises have been determined to the extent such parties have been identified on the basis of information collected by management. This has been relied upon by the auditors.

*Also include outstanding dues of medium enterprises.

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

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

The show cause notices (SCN) including intimation prior to SCN relating to direct and indirect taxes have neither been acknowledged as claims nor considered as contingent liability and hence, not disclosed. However, the Company has considered SCNs received on a matter where demand has already been confirmed under contingent liability.

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

The Company discloses voluntarily for the material cases (for which demands have been received) that are assessed as remote as part of PPR analysis and are included in the above amount.

i) Stamp duty

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

ii) Entry tax

The Hon'ble Supreme Court, in November 2016, with the nine-member bench, upheld the constitutional validity i.e. the states are empowered to design the legislation w.r.t. levy of Entry Tax.

However, the Court directed the matter to respective High Courts on the issue whether or not the respective State Entry tax Acts are discriminatory in nature.

Basis directions from Supreme Court, fresh writ petitions were filed before High Courts of several States on the ground of discrimination. The Hon'ble High Court of Allahabad in the case of Indian Oil Corporation Ltd., upheld the constitutional validity of the Uttar Pradesh Entry Tax Act followed by Hon'ble High Court of Bombay in the case of Hindustan National Glass & Industries Ltd. Recently, the Hon'ble High Court of Bombay (Goa Bench) in the case of the Company followed the judgment of High Court Allahabad & Bombay and upheld the constitutional validity of Goa Entry Tax Act.

The Company has accordingly reassessed the merits of the ongoing matters and created a provision of C 1,379 Mn for entry tax liability and capitalized the same in the property, plant and equipment. Corresponding impact of depreciation amounting to C 1,270 Mn has been charged in the statement of profit and loss. Further, the Company has also taken an interest provision of C 499 Mn due to short payment made under protest. The Company will continue to pursue legal action in all these states.

The Company has opted for Amnesty schemes in certain states for settlement of outstanding demand.

iii) Sales tax/VAT/GST

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

iv) Municipal taxes

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

v) Service tax

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

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

In another issue department has raised demand alleging difference in turnover in 26AS vs ST 3 against which company had filed appeal before CESTAT, pending for hearing.

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

vi) Income tax matters

This pertains to tax demands mainly on account of disallowance of depreciation on passive infrastructure assets ("PIA”) transfer under merger scheme, provision for expenditure, Depreciation on Provisional capitalization, short credit of taxes deducted etc.

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

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

viii) One of the Distribution Company ("DISCOM”) revised the electricity tariff from Industrial to Commercial (I2C) tariff for the mobile towers vide its tariff order dated 03.11.2016 and same was challenged before Appellate Tribunal for Electricity (APTEL) by the Industry including the Company. The Appellate tribunal decided in favor of Appellants including the Company in February 2020.

The said order has been challenged by the DISCOM before the Hon'ble Supreme Court and in October 2020, the Hon'ble Supreme Court passed an order directing parties that there shall be stay of the recovery in meantime. Further, effective April 1, 2020, the DISCOM came out with Multi Year Tariff (MYT) by which industrial tariff has been made applicable to mobile towers. The Company believes that the outcome of the case will be favorable and the likelihood of outflow of resources is remote. Further, in case of unfavorable decision, which is not likely, the Company has obtained necessary undertakings from the customers for payment/reimbursement of differential cost.”

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

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

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

iii) The fair value of security deposits included in other financial assets & other financial liabilities and fixed rate long term borrowings is estimated by discounting future cash flows using rates applicable to instruments with similar terms, currency, credit risk and remaining maturities. The fair values of other financial assets and other financial liabilities (other than security deposits) are assessed by the management to be same as their carrying value and is not expected to be significantly different if estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities. The Company enters into derivative financial instruments with financial institutions/banks. Further, foreign exchange forward contracts are valued using valuation techniques, which employs the use of market observable inputs.

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

39 Fair value hierarchy

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

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

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

Level 2: Inputs other than quoted price included within Level 1 that are observable for the asset or liability, either

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

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

The following table presents the financial instruments measured at fair value, by level within the fair value

measurement hierarchy:

Terms and conditions of transactions with related parties:

The transactions with related parties are made on terms equivalent to those that prevail in arm's length transactions. Outstanding balances at the end of the year are unsecured and settlement occurs in cash and there have been no guarantees provided or received for any related party receivables or payables except in case of one of the related party referred in note 49.

41 Segment Reporting

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

General Reserve arising out of the Scheme

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

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

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

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

a) Scheme accounting - Bharti Airtel Scheme

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

b) Scheme accounting - Indus Scheme

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

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

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

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

* The budgeted spent for the year ended March 31, 2024 is C 1,373 Mn increased by C 69 Mn on account of unspent obligation of financial year 2022-23. The budgeted spent for the year ended March 31, 2023 was C 984 Mn increased by C 62 Mn on account of unspent obligation of financial year 2021-22.

The remaining unspent money of C 151 Mn (March 31, 2023 : 69 Mn) has been (was) transferred to a separate bank account as per section 135 (6) of the Companies Act, 2013.

(ii) No political contribution was made for the financial year ended March 31, 2024 (March 31, 2023: Nil).

45 Financial risk management objectives and policies

The Company's principal financial liabilities comprise loans and borrowings, lease liabilities, trade payables, security deposits received, etc. The main purpose of these financial liabilities is to manage finances for the Company's operations. The Company's principal financial assets include investment in mutual funds and Government Securities, trade receivables, unbilled revenue, cash and cash equivalents, security deposits paid, etc.

The Company is exposed to market risk, credit risk and liquidity risk. The Company's senior management oversees the management of these risks. The senior professionals working to manage the financial risks and the appropriate financial risk governance frame work for the Company are accountable to the Board of Directors and Audit & Risk Management Committee. This process provides assurance to the Company's senior management that the Company's financial risk-taking activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with Company's policies and Company's risk appetite. It is the Company's policy that no trading in derivatives for speculative purposes shall be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks which are summarised below:

Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise three types of risk: interest rate risk, foreign currency risk and price risk. Financial instruments affected by market risk include interest bearing investment in mutual funds, Government Securities, fixed deposits and loans and borrowings etc.

The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31, 2024 and March 31, 2023.

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

Interest rate risk

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

Cash flow sensitivity analysis for variable rate instruments

The following table demonstrates the sensitivity to a reasonably possible change in interest rates of long-term debt obligations with floating interest rates. A change of 100 basis points in interest rates for variable rate instruments at the reporting date would have increased/(decreased) profit or loss for the below years by the amounts shown below. With all other variables held constant, the Company's profit before tax is affected through the impact on floating rate borrowings, as follows:

Foreign currency risk

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

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

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

The foreign currency exposures that have not been hedged are C 0.59 Mn (USD 0.007 Mn) included in trade payable as at March 31, 2024 (March 31, 2023 : C 6 Mn (USD 0.07 Mn)).

Price risk

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

45 Financial risk management objectives and policies (Contd..)

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

Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily for trade and other receivables) and from its financing activities, including deposits with banks and financial institutions, and other financial instruments. Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis.

Trade receivables

Customer credit risk is managed in accordance with Company's established policy, procedures and control relating to customer credit risk management. Trade receivables are non-interest bearing and due after 15/21/45 days from the date of invoice. The Company is entitled to demand interest, wherever applicable in case the customer does not pay within the due date. Outstanding customer receivables are regularly monitored. The ageing analysis of trade receivables as of the reporting date is as follows:

Bank balances and cash deposits

Credit risk from balances with banks and financial institutions is managed by Company's treasury in accordance with the approved policy. Investment of surplus funds are made only with approved counterparties who meet the minimum threshold requirements under the counterparty risk assessment process. Based on its on-going assessment of counterparty risk, the Company adjusts its exposure to various counterparties. The Company's maximum exposure to credit risk for the components of the Balance Sheet at March 31, 2024 and March 31, 2023 is the carrying amounts as given in Note 38.

Liquidity risk

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

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

49 A large customer of the Company accounts for substantial part of revenue from operations for the quarter and year ended March 31, 2024 and constitutes a significant part of outstanding trade receivables and unbilled revenue as at March 31, 2024,

(a) The said customer in its latest published unaudited financial results for the quarter and nine months ended December 31, 2023, had indicated that its ability to continue as a going concern is dependent on its ability to raise additional funds as required, successful negotiations with lenders and vendors for continued support and generation of cash flow from operations that it needs to settle its liabilities as they fall due, The said customer had also disclosed in the aforesaid results that so far it has met all debt obligations to its lenders / banks and financial institutions along with applicable interest till date, Further, the said customer had disclosed that one of its promoters has confirmed that it would provide financial support to the extent of C 20,000 Mn to the said customer,

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

(c) During the quarter ended June 30, 2022 through the quarter ended September 30, 2022, the said customer had informed the Company that a funding plan was under discussion with its lenders and it had agreed to a payment plan to pay part of the monthly billing till December 2022 and 100% of the amounts billed from January 2023 onwards, which will be adjusted by the Company against the outstanding trade receivables, As regards the dues outstanding as at December 31, 2022, the customer had agreed to pay the dues between January 2023 and July 2023, However, the said customer has not made the committed payments pertaining to the outstanding amount due as at December 31, 2022,

Based on Stock Exchange filings, the said customer (i) concluded its equity fund raise of C 180,000 Mn through the FPO route on April 22, 2024, (ii) at its Board meeting held on April 06, 2024 has, subject to the approval of the shareholders in the Extra-ordinary General Meeting to be held on May 08, 2024, approved the issuance of equity share aggregating to C 20,750 Mn on a preferential basis to one of its promoter group entity, (iii) issued Optionally Convertible Debentures (OCDs) amounting to C 16,000 Mn to one of its vendors in February 2023 of which C 14,400 Mn worth of OCDs were converted into equity shares on March 23, 2024, and (iv) is actively engaged with its lenders for tying-up the debt funding, which will follow the equity fund raise.

The Company is in discussion with the said customer for a revised payment plan pertaining to the outstanding amount due.

(d) As the said customer has been paying an amount largely equivalent to monthly billing since January 2023, hence, the Company continues to recognize revenue from operations relating to the said customer for the services rendered.

The Company carries an allowance for doubtful receivables of C 53,847 Mn as at March 31, 2024 relating to the said customer which covers all overdue outstanding as at March 31, 2024.

(e) Further, as per Ind AS 116 "Leases”, the Company recognises revenue based on straight lining of rentals over the contractual period and creates revenue equalization asset in the books of accounts. During the quarter ended December 31, 2022, the Company had recorded an impairment charge of C 4,928 Mn relating to the revenue equalization assets up to September 30, 2022 for the said customer and presented it as an exceptional item in the statement of profit and loss. Further, the Company had stopped recognizing revenue equalization asset on account of straight lining of lease rentals from October 01, 2022 onwards due to uncertainty of collection in distant future.

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

50 Ministry of Corporate Affairs (MCA) vide its notification number G.S.R. 206(E) dated March 24, 2021 (amended from time to time) in reference to the proviso to Rule 3 (1) of the Companies (Accounts) Amendment Rules, 2021, introduced the requirement of only using such accounting software w.e.f April 01, 2023 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 account along with the date when such changes were made and ensuring that the audit trail cannot be disabled. The Institute of Chartered Accounts of India ("ICAO issued an "Implementation guide on reporting on audit trail under rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (Revised 2024 edition)” in February 2024 relating to feature of recording audit trail.

The Company has identified relevant applications that record financial transactions, along with the primary ERP system (hereafter referred to as the "”IT applications””) to which the aforementioned provision and guidance apply. The Company has adequate general information technology controls (GITCs) over its IT applications and alternate sources including manual controls for financial reporting. The Company is in the process of implementing the audit trail facility on these IT applications to comply with the requirements of the above rule considering the guidance in the "Implementation guide on reporting on audit trail under rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (Revised 2024 edition)” issued by ICAI.

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

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

52 The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.