Notes to Accounts of Hemisphere Properties India Ltd.

Mar 31, 2025

3.7 Provisions and contingent liabilities

3.7.1 General

Provisions are recognised when the Company has a present obligation (legal or constructive) as a
result of a past event, it is probable that an outflow of resources embodying economic benefits
will be required to settle the obligation and a reliable estimate can be made of the amount of the
obligation. When the Company expects some or all of a provision to be reimbursed, the expense
relating to a provision is presented in the statement of profit and loss net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre¬
tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is
used, the increase in the provision due to the passage of time is recognised as a finance cost.

3.7.2 Contingent liabilities

A disclosure for contingent liabilities is made where there is a possible obligation or a present
obligation that may probably not require an outflow of resources. When there is a possible or a
present obligation where the likelihood of outflow of resources is remote, no provision or
disclosure is made.

3.7.3 Onerous Contracts

Provision for onerous contracts i.e. contracts where the expected unavoidable cost of meeting
the obligations under the contract exceed the economic benefits expected to be received under it,
are recognised when it is probable that an outflow of resources embodying economic benefits
will be required to settle a present obligation as a result of an obligating event based on a reliable
estimate of such obligation.

3.8 Borrowing Costs

Borrowing costs directly attributable to the acquisition or construction of those property, plant and
equipment which necessarily takes a substantial period of time to get ready for their intended use are
capitalised. All other borrowing costs are expensed in the period in which they incur in the statement
of profit and loss.

3.9 Revenue Recognition

Revenue from renting/access of land is recognised, when the right to use of the asset have been
transferred to the buyer, recovery of the consideration is probable, the associated costs, if any, with
regard to the use of the asset, can be estimated reliably and the amount of revenue can be measured
reliably.

3.10 Financial instruments - initial recognition, subsequent measurement and impairment

3.10.1 Financial Assets

Financial Assets are measured at amortised cost or fair value through Other Comprehensive
Income or fair value through Profit or Loss, depending on its business model for managing those
financial assets and liabilities and the assets and liabilities contractual cash flow characteristics.
Subsequent measurements of financial assets are dependent on initial categorisation. For
impairment purposes significant financial assets are tested on an individual basis, other financial
assets are assessed collectively in groups that share similar credit risk characteristics.

3.10.1.1 Trade receivables

Trade receivables are recognised initially at fair value and subsequently measured at
amortised cost using the effective interest method, less provision for impairment.

Impairment is made on the expected credit losses, which are the present value of the cash
shortfalls over the expected life of financial assets. The estimated impairment losses are

recognised in a separate provision for impairment and the impairment losses are recognised
in the Statement of Profit and Loss within other expenses.

Subsequent changes in assessment of impairment are recognised in provision for impairment
and the change in impairment losses are recognised in the Statement of Profit and Loss
within other expenses.

For foreign currency trade receivable, impairment is assessed after reinstatement at closing
rates.

Individual receivables which are known to be uncollectible are written off by reducing the
carrying amount of trade receivable and the amount of the loss is recognised in the
Statement of Profit and Loss within other expenses.

Subsequent recoveries of amounts previously written off are credited to other Income.

3.10.1.2 Investment in equity shares

Investment in equity securities are initially measured at fair value and are recognised through
Profit and Loss account.

3.10.2 Financial Liabilities

At initial recognition, all financial liabilities other than fair valued through profit and loss are
recognised initially at fair value less transaction costs that are attributable to the issue of financial
liability. Transaction costs of financial liability carried at fair value through profit or loss is
expensed in profit or loss. However, borrowings, which is likely to be assigned or negotiated are
initially measured at fair value through profit and loss account. Other borrowings are measured at
amortised cost using the effective interest rate method. Amortised cost is calculated by taking
into account any discount or premium on acquisition and fee or costs that are an integral part of
the Effective rate of interest (EIR). The EIR amortisation is included in finance costs in the
Statement of Profit and Loss.

3.10.2.1 Trade and other payables

Trade and other payables are presented as current liabilities unless payment is not due within
12 months after the reporting period. They are recognised initially at their fair value and
subsequently measured at amortised cost using the effective interest method.

3.10.2.2 Redeemable preference shares

The Company’s redeemable preference shares were classified as compound financial
instruments, comprising both a financial liability and an equity component. This
classification is made in accordance with the substance of the contractual terms and the
definitions set out in applicable financial reporting standards.

Upon initial recognition, the fair value of the liability component is determined by
discounting the contractual stream of future cash flows using the market interest rate
applicable to an instrument of similar non-compound instrument. This liability component is
subsequently measured at amortised cost using the effective interest rate method until it is
settled or redeemed.The residual amount, representing the difference between the issue price
of the instrument and the fair value of the liability component at inception, is recognised as
equity. This component is not remeasured subsequent to initial recognition.

Following the conversion, the modified instrument continues to be accounted for as a
financial instrument, with appropriate re-evaluation of its liability components where
applicable, based on the revised terms.

3.11 Impairment

3.11.1 Financial Assets

The Company recognises loss allowances using the expected credit loss (ECL) model for the
financial assets which are not fair valued through Statement of Profit and Loss. Loss allowance
for trade receivables with no significant financing component is measured at an amount equal to
lifetime ECL. For all other financial assets, expected credit losses are measured at an amount
equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial
recognition in which case those are measured at lifetime ECL. The amount of expected credit
losses (or reversal) that is required to adjust the loss allowance at the reporting date to the
amount that is required to be recognised is recognised as an impairment gain or loss in the
Statement of Profit and Loss.

3.11.2 Non-Financial Assets

An asset is considered as impaired when at the date of Balance Sheet there are indications of
impairment and the carrying amount of the asset, or where applicable the cash generating unit to
which the asset belongs exceeds its recoverable amount (i.e. the higher of the net asset selling
price and value in use).The carrying amount is reduced to the recoverable amount and the
reduction is recognized as an impairment loss in the Statement of Profit and Loss. The
impairment loss recognized in the prior accounting period is reversed if there has been a change
in the estimate of recoverable amount. Post impairment, depreciation is provided on the revised
carrying value of the impaired asset over its remaining useful life.

3.12 In accordance with Ind AS 36, an entity is required to test intangible assets with indefinite useful life
for impairment. Goodwill arises from business combinations and is generally determined as the excess
of the fair value of the consideration transferred, plus the fair value of any non-controlling interests in
the acquire, over the fair value of the net assets acquired and liabilities assumed as of the acquisition
date. Goodwill and intangible assets acquired in purchase business combination and determined to
have an indefinite useful life are not amortized, but tested for impairment at least annually or more
frequently if events and circumstances exists that indicate that a goodwill impairment test should be
performed. Intangible assets with definite useful lives are amortized over their estimated useful lives
to their estimated residual values. Goodwill is the only intangible assets with an indefinite life on our
balance sheet.

29. The balances of Trade Receivables, Trade Payables, Non-Current Borrowings, Current Borrowings, Other Financial
Liabilities, Other Current Liabilities, and Other Financial Assets shown in financial statements are subject to
confirmation and reconciliation

30. (a) The Company had received funds of Rs. 130,00,00,000/- (Rupees One Hundred and Thirty Crores) from
Government of India, in previous financial year(s) against which the Company allotted 13 crore Non-Cumulative
Redeemable Preference shares of 0.01% @ Rs. 10 each to the promoter i.e President of India, acting through
Ministry of Housing & Urban Affairs on 12.11.2021 and 17.05.2021 after taking due approvals from Competent
Authorities.

Subsequently, in FY 2023-24, the Competent Authority sanctioned a variation in the terms of these preference
shares, reclassifying them from Non-Cumulative to Cumulative Redeemable Preference Shares. This alteration was
duly approved by the Company''s Board of Directors on February 7, 2024, and ratified by the Shareholders on
March 31, 2024.

The said financial instruments have been accounted for by the Company in accordance with IND AS 109.

(b) Further, the terms of issue of the said Preference Shares regarding the redemption value at the end of 20 years is
varied with the approval of Competent Authority.

31. During the year, the Company procured Land Security and Maintenance Services from various CPWD divisions
across Delhi, Kolkata, Pune, Chattarpur and Chennai. The expenses in connection with Land Security and
Maintenance and renovation of buildings are recognized on provision basis supported by Utilization certificates
issued by the respective CPWD’s.

CPWD has informed the Company that, there is no mechanism under CPWD (a GOI undertaking) to raise any GST
invoice. Consequently, Company book these expenses on the basis of Form 65 and Utilization certificates issued by
the CPWD’s. Moreover, as confirmed by CPWD, the statutory compliance with respect to above said expenses is
done by CPWD and there is nothing related to client regarding GST.

As per Ind AS 40, land parcels were classified as Investment Property and valuation has been done on cost model.
As per clause 3.2 of Scheme of Arrangement and Reconstruction, upon the scheme becoming effective, all the assets
and liabilities pertaining to the surplus land stand transferred to and vested in the Transferee Company (HPIL) at
their respective book values as appearing in the books of Transferor Company. Therefore, the value of the land has
been taken as the book value of the land in the audited balance sheet of Tata Communications Limited for the FY
2019-20 and onwards. The Company holds land parcels comprises of 739.69 acres at different locations i.e. Pune-524
acres, Halisahar (Kolkata)-35.19 acres, Chennai-53.04 acres, Chattarpur (Delhi)-58 acres, Greater Kailash (Delhi)-
69.46 acres.

As per Ind-AS 40 and Ind-AS 113, the fair value of Investment property was carried out by the IBBI registered
Valuer during F.Y. 2023-24. No fair valuation has been carried out in the current financial year, as there have been
no significant changes in the condition, usage, or circumstances of the property, and there is an absence of an active
market for comparable properties. Accordingly, the same valuation is considered for FY 2024-25.

34. Contingent Liabilities not provided for:

a. Differential Liability towards Stamp Duty to be paid for the Conveyance of Title Deeds

The Stamp duty of ? 65100.00 lakhs on transfer of title deed was calculated on the circle rates prevailing
during financial year 2016-17. However, the Circles rates/stamp duty rates may vary at the time of actual
payment of stamp duty from circle rates prevailing in financial year 2016-17 and amount of stamp
duty/registration charges payable might differ from Rs 65100.00 lakhs. During FY 2020-21, the stamp duty
amounting of ? 65100.00 lakhs was treated as liability on the basis of budget approved by the Ministry of
Housing and Affairs.

Out of the above provision of Rs. 65,100 lacs, Stamp Duty of Rs. 774.30 lacs has been paid during the
Previous financial year 2022-23, for the Conveyance Deed registration of the Chennai land Parcel. Further,
Development Fees @ 1% of Rs 309.10 lacs has been booked payable for the Kolkatta Land Parcel,
Halisahar Municipal Corporation and paid in May 2024.

Any liability over and above the amount of Rs. 65100 lacs which may arise in future is contingent in nature.

b. There are 27 cases of litigation, claims and disputes pertaining to the land parcels known as on 31.03.2025
which are pending under various forums. These litigations, claims and disputes, where earlier Tata
Communications Limited was a party, subsequent to approval of the Scheme and transfer of land, have
now been transferred and belong to Hemisphere Properties India Limited. The Company is in the process
of contesting all such litigations, claims and disputes. The financial implications associated with all such
litigations, if any, is undeterminable as of March 31, 2025.

(Details as per Annexure I attached).

c. Non Determination of Property tax/Urban Land Tax Liability for the Chennai Land Parcel

The demand for Property tax has not been raised by the Revenue Authorities of Chennai, for the Land
parcels of 53.04 acres in Chennai since the date of transfer of ownership to the Company till March 31,
2025.

d. Difference Property Tax Liability for the Greater Kailash, New Delhi Land Parcel due to payment
of Property tax on Self-Assessment Basis

The Company is paying property tax on self-assessment basis, for the land parcels at Greater Kailash, New
Delhi. In FY 2022-23,2021-22 and 2019-20, the Company has calculated property tax by using
multiplication factor @0.5 and rate of tax @ 15% where as in FY 2020-21, multiplication factor @0.3 and
rate of tax @15% was used to calculate the property tax. But, the additional property tax demand may be
raised by Revenue Authority by using multiplication factor @0.3 for FY 2019-20 and 0.5 for FY 2020-21
and rate of tax may be used @ 20% for FY 2019-20, 2020-21, 2021-22 and 2022-23. In addition, there may
be certain additional liabilities, which may arise for previous financial years as well, for the said Land Parcel.

e. Fines imposed by NSE and BSE

During the current financial year, the NSE and BSE (the stock exchanges) have imposed fines for Rs.
235.64 Lakhs on the Company for Non-Compliance of appointment number of Independent Directors.
The Company has made an application to NSE and BSE for waiver of such penalties, since the
appointment of Independent Directors is subject to the approval of Competent Authority. In view of the
above, no provision for fines have been made during the year.

“Upon the Scheme becoming effective, the Transferee Company shall account for the Scheme and its effects
in its books of account with effect from the Appointed date as under:

i. The Transferee Company shall record the assets and liabilities of the splitting up and reconstruction
by way of transfer of Surplus land vested in it in accordance with this Scheme, as per the book values
attributable to such assets and liabilities.

ii. The shortfall, if any, on the difference of the aggregate value of the liabilities of the splitting up and
reconstruction by way of transfer of Surplus land taken over pursuant to this Scheme as detailed in
clause 3 shall be recorded as ‘goodwill’ in the books of Transferee Company.”

Thus, in accordance with above extracts of Scheme of Arrangement and Reconstruction, Goodwill of Rs.
28194.15 lacs was recorded in financial statements from FY 2019-20 and onwards till March 31, 2025.

Accordingly, the said accounting in not in violation of Ind AS 103, since the transfer of Surplus Land d oesn’t
constitute a Business (as defined in Ind AS 103), and the applicability of Ind AS 103 is overridden by virtue of
accounting of Goodwill in accordance with the Order of Demerger.

38. The title deeds of the immovable properties of Investment Property for 4 land parcels, are not executed in the name
of the Company as of March 31, 2025. Only the Conveyance Deed in respect of Chennai Land parcel is executed in
the name of the Company.

These land parcels were transferred to the Company from Tata Communications Limited as per the Scheme of
Arrangement and Reconstruction dated August 5, 2019. The details are as follows:

*The mutation of the Chattarpur Land Parcel has been successfully recorded in the name of Hemisphere Properties
India Limited (the Company) within the registers of both the Land and Development Office and the Municipal
Corporation of Delhi. However, the requisite stamp duty for this transfer remains unpaid due to ambiguities
concerning the terms of its remittance.

** The mutation of the Pune land parcel has been successfully recorded in the Gramm records. However, the
transfer of the name in the Municipal records is still pending except for Bopkhel land parcel. Furthermore, the
Competent Authorities have not yet raised the stamp duty payable on this transfer.

***In respect of the Kolkata land parcel, the Mutation of Land has been transferred under Halisahar Municipal
Corporation records as per mutation certificate on 17.05.2024. Furthermore, the Competent Authorities have not
yet raised the stamp duty payable on this transfer

39. Additional Information

a. No proceedings have been initiated or pending against the Company for holding any benami property
under the Benami Transactions (Prohibitions) Act, 1988 (45 of 1988) and the rules made there under, as at
March 31, 2025 and March 31, 2024.

b. The Company is not a declared willful defaulter by any bank or financial Institution or other lender, in
accordance with the guidelines on willful defaulters issued by the Reserve Bank of India, during the year
ended March 31,2025 and March 31, 2024.

c. There was no delay in the registration or satisfaction of any charges with Registrar of Companies during
the year ended March 31, 2025 and March 31, 2024.

d. The Company has not traded or invested in Crypto currency or Virtual Currency during the year ended
March 31,2025 and March 31, 2024.

e. There are no undisclosed incomes that has been surrendered or disclosed as income during the year in the
tax assessments under the Income Tax Act, 1961.

f. The Company has not granted any loans or advances to promoters, directors, KMP’s and the related
parties that are repayable on demand or without specifying any terms or period of repayment

g. The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including
foreign entities (Intermediaries) with the understanding that the Intermediary shall: (a) directly or indirectly
lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
company (ultimate beneficiaries) or (b) provide any guarantee, security or the like to or on behalf of the
ultimate beneficiary.

h. Previous year figures are regrouped and rearranged wherever necessary.

40. Notes 1 to 39 form an integral part of the accounts and have been authenticated.

As per our Report of even date attached

For Aggarwal & Rampal For and on behalf of Board of Directors of

Chartered Accountants Hemisphere Properties India Limited

FRN No. 003072N

Sd/- sd/- sd/-

Aditya Aggarwal D Thara Rajeev Kumar Das

Partner Chairperson & Managing Director Director

M. No. 515644 DIN: 01911714 DIN: 07730466

Sd/ sd/-

Bhavesh Singla Lubna

Chief Financial Officer Company Secretary

Place : New Delhi M.No. 551844 M.No. A53597

Date : 28^th May 2025
UDIN: 25515644BMLKPQ8125

---

Mar 31, 2024

3.6 Provisions and contingent liabilities

3.6.1 General

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Company expects some or all of a provision to be reimbursed, the expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

3.6.2 Contingent liabilities

A disclosure for contingent liabilities is made where there is a possible obligation or a present obligation that may probably not require an outflow of resources. When there is a possible or a present obligation where the likelihood of outflow of resources is remote, no provision or disclosure is made.

3.6.3 Onerous Contracts

Provision for onerous contracts i.e. contracts where the expected unavoidable cost of meeting the obligations under the contract exceed the economic benefits expected to be received under it, are recognised when it is probable that an outflow of resources embodying economic benefits will be required to settle a present obligation as a result of an obligating event based on a reliable estimate of such obligation.

3.7 Borrowing Costs

Borrowing costs directly attributable to the acquisition or construction of those property, plant and equipment which necessarily takes a substantial period of time to get ready for their intended use are capitalised. All other borrowing costs are expensed in the period in which they incur in the statement of profit and loss.

3.8 Revenue Recognition

Revenue from renting/access of land is recognised, when the right to use of the asset have been transferred to the buyer, recovery of the consideration is probable, the associated costs, f any, with regard to the use of the asset, can be estimated reliably and the amount of revenue can be measured reliably.

3.9 Financial instruments - initial recognition, subsequent measurement and impairment

3.9.1 Financial Assets

Financial Assets are measured at amortised cost or fair value through Other Comprehensive Income or fair value through Profit or Loss, depending on its business model for managing those financial assets and liabilities and the assets and liabilities contractual cash flow characteristics.

Subsequent measurements of financial assets are dependent on initial categorisation. For impairment purposes significant financial assets are tested on an individual basis, other financial assets are assessed collectively in groups that share similar credit risk characteristics.

3.9.1.1 Trade receivables

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

Impairment is made on the expected credit losses, which are the present value of the cash shortfalls over the expected life of financial assets. The estimated impairment losses are recognised in a separate provision for impairment and the impairment losses are recognised in the Statement of Profit and Loss within other expenses.

Subsequent changes in assessment of impairment are recognised in provision for impairment and the change in impairment losses are recognised in the Statement of Profit and Loss within other expenses.

For foreign currency trade receivable, impairment is assessed after reinstatement at closing rates.

Individual receivables which are known to be uncollectible are written off by reducing the carrying amount of trade receivable and the amount of the loss is recognised in the Statement of Profit and Loss within other expenses.

Subsequent recoveries of amounts previously written off are credited to other Income.

3.9.1.2 Investment in equity shares

Investment in equity securities are initially measured at fair value and are recognised through Profit and Loss account.

3.9.2 Financial Liabilities

At initial recognition, all financial liabilities other than fair valued through profit and loss are recognised initially at fair value less transaction costs that are attributable to the issue of financial liability. Transaction costs of financial liability carried at fair value through profit or loss is expensed in profit or loss. However, borrowings, which is likely to be assigned or negotiated are initially measured at fair value through profit and loss account. Other borrowings are measured at amortised cost using the effective interest rate method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fee or costs that are an integral part of the Effective rate of interest (EIR). The EIR amortisation is included in finance costs in the Statement of Profit and Loss.

3.9.2.1 Trade and other payables

Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.

3.9.2.2 Redeemable preference shares

The redeemable preference shares issued by the Company is a compound financial instrument and is classified separately as financial liability and equity in accordance with the substance of the contractual arrangement and the definitions of a financial liability and an equity instrument. At the date of issue, fair value of the liability component is estimated using the prevailing market interest rate of a similar non-compound instrument. This amount is recognised as liability on an amortised cost basis using the effective interest rate method until extinguished at the instrument’s maturity date. The difference between the fair value of the liability component at the date of issue and the issue price is recognised as the other equity.

3.10 Impairment

3.10.1 Financial Assets

The Company recognises loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through Statement of Profit and Loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognised is recognised as an impairment gain or loss in the Statement of Profit and Loss.

3.10.2 Non-Financial Assets

An asset is considered as impaired when at the date of Balance Sheet there are indications of impairment and the carrying amount of the asset, or where applicable the cash generating unit to which the asset belongs exceeds its recoverable amount (i.e. the higher of the net asset selling price and value in use).The carrying amount is reduced to the recoverable amount and the reduction is recognized as an impairment loss in the Statement of Profit and Loss. The impairment loss recognized in the prior accounting period is reversed if there has been a change in the estimate of recoverable amount. Post impairment, depreciation is provided on the revised carrying value of the impaired asset over its remaining useful life.

3.11 In accordance with Ind AS 36, an entity is required to test intangible assets with indefinite useful life for impairment. Goodwill arises from business combinations and is generally determined as the excess of the fair value of the consideration transferred, plus the fair value of any non-controlling interests in the acquire, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill and intangible assets acquired in purchase business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually or more frequently if events and circumstances exists that indicate that a goodwill impairment test should be performed. Intangible assets with definite useful lives are amortized over their estimated useful lives to their estimated residual values. Goodwill is the only intangible assets with an indefinite life on our balance sheet.

The Stamp duty of ? 65100.00 lakhs on transfer of title deed was calculated on the circle rates prevailing during financial year 2016-17. However, the Circles rates/stamp duty rates may vary at the time of actual payment of stamp duty from circle rates prevailing in financial year 2016-17 and amount of stamp duty/registration charges payable might differ from Rs 65100.00 lakhs. During FY 2020-21, the stamp duty amounting of ? 65100.00 lakhs was treated as liability on the basis of budget approved by the Ministry of Housing and Affairs.

Out of the above provision of Rs. 65,100 lacs, Stamp Duty of Rs. 774.30 lacs has been paid during the Previous financial year 2022-23, for the Conveyance Deed registration of the Chennai land Parcel. Further, Development Fees @ 1% of Rs 309.10 lacs has been booked payable for the Kolkatta Land Parcel, Halisahar Municipal Corporation and paid in May 2024.

Any liability over and above the amount of Rs. 65100 lacs which may arise in future is contingent in nature.

b. There are 28 cases of litigation, claims and disputes pertaining to the land parcels known as on 31.03.2024 which are pending under various forums. These litigations, claims and disputes, where earlier Tata Communications Limited was a party, subsequent to approval of the Scheme and transfer of land, have now been transferred and belong to Hemisphere Properties India Limited. The Company is in the process of contesting all such litigations, claims and disputes. The financial implications associated with all such litigations, if any, is undeterminable as of March 31, 2024.

(Details as per Annexure I attached).

c. Non Determination of Property tax/Urban Land Tax Liability for the Chennai Land Parcel

The demand for Property tax has not been raised by the Revenue Authorities of Chennai, for the Land parcels of 53.04 acres in Chennai since the date of transfer of ownership to the Company till March 31, 2024.

d. Difference Property Tax Liability for the Greater Kailash, New Delhi Land Parcel due to payment of Property tax on Self-Assessment Basis

The Company is paying property tax on self-assessment basis, for the land parcels at Greater Kailash, New Delhi. In FY 2022-23,2021-22 and 2019-20, the Company has calculated property tax by using multiplication factor @0.5 and rate of tax @ 15% where as in FY 2020-21, multiplication factor @0.3 and rate of tax @15% was used to calculate the property tax. But, the additional property tax demand may be raised by Revenue Authority by using multiplication factor @0.3 for FY 2019-20 and 0.5 for FY 2020-21

and rate of tax may be used @ 20% for FY 2019-20, 2020-21,2021-22 and 2022-23. In addition, there may be certain additional liabilities, which may arise for previous financial years as well, for the said Land Parcel.

e. Penalty Imposed by NSE and BSE

During the current financial year, the NSE and BSE have imposed penalties for Rs. 198.51 Lakhs on the Company for Non-Compliance of appointment number of Independent Directors. The Company has made application to NSE and BSE for waiver of such penalties, since the appointment of Independent Directors is subject to the approval of Competent Authority. In view of the above, no provision for penalties have been made during the year.

Upon the Scheme becoming effective, the Transferee Company shall account for the Scheme and its effects in its books of account with effect from the Appointed date as under:

i. The Transferee Company shall record the assets and liabilities of the splitting up and reconstruction by way of transfer of Surplus land vested in it in accordance with this Scheme, as per the book values attributable to such assets and liabilities.

ii. The shortfall, if any, on the difference of the aggregate value of the liabilities of the splitting up and reconstruction by way of transfer of Surplus land taken over pursuant to this Scheme as detailed in clause 3 shall be recorded as ‘goodwill’ in the books of Transferee Company.”

Thus, in accordance with above extracts of Scheme of Demerger, Goodwill of Rs. 28194.15 lacs were recorded in financial statements from FY 2019-20 and onwards till March 31, 2024.

38. During the current financial year, 2023-24, the Company has made a provision amounting to Rs. 49.65 lakhs, in respect of Receivables from Tata Communication Limited (TCL) for their proportionate share of Property tax arrears paid for the period 2016 till the date of Demerger.

HPIL has paid Property Tax Arrears (under MCD Samriddhi Scheme) for Chhatarpur Land Parcel, New Delhi, on the mutation of property under MCD records, in previous financial year 2022-23, for Rs. 141.61 Lakhs for the period 2016 to 2023, out of which, the Company has recognized receivable of Rs. 49.65 Lakhs from TCL, being their proportionate share, as per the demerger order from 2016 till date of Demerger, being 05^th August 2019.

However, no recoveries have been made by the management of the Company in respect of this amount, and accordingly, a provision has been created in respect of this amount of Rs. 49.65 lakhs since the recovery is not ascertainable.

39. During the current financial year, 2023-24, the Company has Consolidated all its Short-Term Fixed Deposits, into a Single Flexi Deposit in excess of Rs. 100 crores, in order to Enhance the

As Informed by the Company,

*In respect of the Chattarpur Land Parcel, the Mutation of Land has been transferred from Sarkar Daulat Mardar to Hemisphere Properties India Limited under L&DO records and MCD records. However, the stamp duty on transfer is not yet paid due to non-clear terms for stamp duty payment.

**In respect of the Pune land parcel, the Mutation of Land has been transferred under Gramin records. However, the mutation of name is yet to be transferred in the Municipal records. Further, the stamp duty on transfer is not yet paid.

***In respect of the Kolkata land parcel, the Mutation of Land has been transferred under Halisahar Municipal Corporation records as per mutation certificate on 17.05.2024. Further, the stamp duty on transfer is not yet paid.

41. Previous year figures are regrouped and rearranged wherever necessary.

42. Notes 1 to 41 form an integral part of the accounts and have been authenticated.

As per our Report of even date attached

For Dhruv Aggarwal & Co. LLP For and on behalf of Board of Directors of

Chartered Accountants Hemisphere Properties India Limited

FRN No. N500365/005469N

Sd/- Sd/- Sd/-

Aman Arora D Thara Suvasish Das

Partner Chairperson & Managing Director Director

M. No.550485 DIN: 01911714 DIN:09826037

Sd/- Sd/-

Bhavesh Singla Lubna

Chief Financial Officer Company Secretary &

Compliance Officer

Place : New Delhi M.No. 551844 M.No. A53597

Date : 28^th May 2024

UDIN: 24550485BKIPJN4067

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Mar 31, 2023

On May 17, 2021, the Company has issued non-cumulative redeemable preference shares 1,000 lakhs preference shares @10/- i.e. ? 10,000.00 lakhs for a tenure of 20 years to Government of India (i.e. Promoter) maintained with Ministry of Housing & Urban Affairs on private placement with dividend of 0.01% per annum. Further, on November 12, 2021, the Company issued issued non-cumulative redeemable preference shares 300 lakhs preference shares @10/- i.e. ? 3,000.00 lakhs to Government of India (i.e Promoter) on private placement with dividend of 0.01% per annum. In the event of liquidation, the Preference Shareholders will carry a preferential right over the holder of equity shares for payment of dividend and for payment of capital, in proportion to their shareholding.

B. Liability Component of Compound Financial Instruments

On May 17, 2021, the Company has issued non cumulative redeemable preference shares 1,000 lakhs preference shares @10/- i.e. ? 10,000.00 lakhs for a tenure of 20 years to Government of India (i.e.

Promoter) maintained with Ministry of Housing & Urban Affairs on private placement with dividend of 0.01% per annum.

Further, on November 12, 2021, the Company issued issued non cumulative redeemable preference shares 300 lakhs preference shares @10/- i.e. ? 3,000.00 lakhs to Government of India (i.e Promoter) on private placement with dividend of 0.01% per annum.

The equity portion of these redeemable preference shares, on account of dividend percentage being lower than effective market rate, is recorded in Other equity

The balances shown in financial statements against Trade Receivables, Trade Payables Noncurrent borrowings, current borrowings, other financial liabilities, other current liabilities and other financial assets are subject to confirmation, and reconciliation (if any) arising on such confirmation.

The Company during the year, has procured Land Security and Maintenance Services from various CPWD across Delhi, Kolkata, Pune and Chennai.

The expenses in connection with Land Security and Maintenance, are booked on provision basis by the company on the basis of Utilization certificates issued by the CPWD’s.

The CPWD has informed the Company that, there is no mechanism under CPWD (a GOI undertaking) to raise invoice and the Company shall book expense on the basis of Utilization certificates issued by the CPWD’s/MOU signed between the Company and CPWD.

Moreover, as confirmed by CPWD, the statutory compliance with respect to above said expenses are done by CPWD and there is nothing related to client regarding GST.

Contingent Liabilities not provided for:

a) Claim or suit filed by any person/ department against Company not acknowledged as debts:Nil

b) Differential Liability towards Stamp Duty to be paid for the Conveyance of Title Deeds

The Stamp duty of ? 65100.00 lakhs on transfer of title deed was calculated on the circle rates prevailing during financial year 2016-17. However, the Circles rates/stamp duty rates may vary at the time of actual payment of stamp duty from circle rates prevailing in financial year 2016-17 and amount of stamp duty/registration charges payable might differ from Rs 65100.00 lakhs. During FY 2020-21, the stamp duty amounting of ? 65100.00 lakhs was treated as liability on the basis of budget approved by the Ministry of Housing and Affairs. Out of the above provision of Rs. 65,100 lacs, Stamp Duty of Rs. 774.30 lacs has been paid during the current financial year 2022-23, for the Conveyance Deed registration of the Chennai land Parcel.

c) There are 32 cases of litigation, claims and disputes pertaining to the land parcels known as on 31.03.2023 which are pending under various forums. These litigations, claims and disputes, where earlier Tata Communications Limited was a party, subsequent to approval of the Scheme and transfer of land, have now been transferred and belong to Hemisphere Properties India Limited. The Company is in the process of contesting all such litigations, claims and disputesThe financial implications associated with all such litigations, if any, is undeterminable as of March 31, 2023.(Details as per Annexure I attached)

d) Non Determination of Property tax/Urban Land Tax Liability for the Chennai Land Parcel

The demand for Property tax has not been raised by the Revenue Authorities of Chennai, for the Land parcels of 53.04 acres in Chennai.

e) Difference Property Tax Liability for the Greater Kailash. New Delhi Land Parcel due to payment of Property tax on Self-Assessment Basis

The Company is paying property tax on self-assessment basis, for the land parcels at Greater Kailash, New Delhi. In FY 2021-22 and 2019-20, the Company has calculated property tax by using multiplication factor @0.5 and rate of tax @ 15% where as in FY 2020-21, multiplication factor @0.3 and rate of tax @15% was used to calculate the property tax. But, the additional property tax demand may be raised by Revenue Authority by using multiplication factor @0.3 for FY 2019-20 and 0.5 for FY 2020-21 and rate of tax may be used @ 20% for FY 2019-20, 2020-21 and 2021-22.In addition, there may be certain additional liabilities, which may arise for previous financial years as well, for the said Land Parcel.

f) Penalty Imposed by NSE and BSE

During the year NSE and BSE has imposed penalty for Rs. 90.71 Lakhs on noncompliance of number of Independent Directors. The Company has made application to NSE and BSE for waiver of such penalties. Thus, the provision for penalties not made during the year

As per Ind AS 40, land parcels were reclassified as Investment Property and valuation has been done on cost model. As per clause 3.2 of Scheme of Arrangement and Reconstruction, upon the scheme becoming effective, all the assets and liabilities pertaining to the surplus land stand transferred to and vested in the Transferee Company at their respective book values as appearing in the books of Transferor Company. Therefore, the value of the land has been taken as the book value of the land in the audited balance sheet of Tata Communications Limited for the FY 2019-20 and onwards. The Company holds land parcels comprises of 739.69 acres at different locations i.e Pune-524 acres, Halisahar (Kolkata)-35.19 acres, Chennai-53.04 acres, Chattarpur (Delhi)-58 acres, Greater Kailash (Delhi)-69.46 acres.

As per Ind-AS 113, the fair value of Investment property has been conducted by the IBBI registered valuer, during the current financial year 2022-23.

The fair value of all the land parcels has been assessed at ?1060197.53lakhs.

The Company has received funds of Rs. 130,00,00,000/- (Rupees One Hundred and Thirty Crores) from Government of India against which the Company allotted shares of 10 crore NonCumulative Redeemable Preference shares of 0.01% @ Rs. 10 each to the promoter i.e President of India, acting through Ministry of Housing & Urban Affairs on 12.11.2021 after taking due approvals from Competent Authorities.

The said financial instruments have been accounted for by the Company in accordance with IND AS 109.However, the terms of issue of the said Preference Shares makes no mention regarding the redemption value at the end of 20 years, whether at par of at any value other than par.In the absence of any mention regarding the redemption value of the said instruments, the said financial instruments have been accounted for by the Company, in the accompanying financial statements on the assumption of the Redemption at Par Value, which is uncertain and indefinite in nature.

The above Emphasis of Matter was put across the Board of Directors in their meeting dated 29^th March 2023

The Board took note of the observations of the Statutory Auditors and by way of Board Note 10 dated 29^th March 2023 have stated that the Preference share Capital of Company shall be Redeemable at Par.

As per IndAS 32 and 109, The 0.1% Non — Convertible preference shares, shall be divided between Equity and Debt components based on appropriate discounting factors and future cash flows, accordingly, Equity and Debt components is presented in financial statement for the Financial Year Ended 31^st March 2023,based on estimates.

During the FY 2021-22 and FY 2022-23, since the Company is under Loss, it has not declared/ paid any dividend to the preference shareholders.Thus, the estimated future cashflows to preference shareholder have changedconsequentially.Accordingly,there are changes in Equity and Debt Component to financial instrument in Financial Statements which are incorporated while preparing Financial Statements for the financial year ended March 31, 2023.

“Upon the Scheme becoming effective, the Transferee Company shall account for the Scheme and its effects in its books of account with effect from the Appointed date as under:

i. The Transferee Company shall record the assets and liabilities of the splitting up and reconstruction by way of transfer of Surplus land vested in it in accordance with this Scheme, as per the book values attributable to such assets and liabilities

ii. The shortfall, if any, on the difference of the aggregate value of the liabilities of the splitting up and reconstruction by way of transfer of Surplus land taken over pursuant to this Scheme as detailed in clause 3 shall be recorded as ‘goodwill’ in the books of Transferee Company.”

Thus, in accordance with above extracts of Scheme of Demerger, Goodwill of Rs. 28194.15 lacs were recorded in financial statements from FY 2019-20 and onwards till March 31, 2023.

Accordingly, the said accounting in not in violation of Ind AS 103, since the transfer of Surplus Land doesn’t constitute a Business (as defined in Ind AS 103), and the applicability of Ind AS 103 is overridden by virtue of accounting of Goodwill in accordance with the Order of Demerger.

Previous year figures are regrouped and rearranged wherever necessary.

The Company has updated presentation of Note 18 of FY 21-22 in accordance with Note No 18 and Note 19 of 2022-23, in order to enhance the presentation of financial statements in accordance with Ind As 1.

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Mar 31, 2022

On May 17, 2021, the Company has issued non-cumulative redeemable preference shares 1,000 lakhs preference shares @10/- i.e. ? 10,000.00 lakhs for a tenure of 20 years to Government of India (i.e. Promoter) maintained with Ministry of Housing & Urban Affairs on private placement with dividend of 0.01% per annum. Further, on November 12, 2021, the Company issued non-cumulative redeemable preference shares 300 lakhs preference shares @10/- i.e. ? 3,000.00 lakhs to Government of India (i.e Promoter) on private placement with dividend of 0.01% per annum. In the event of liquidation, the Preference Shareholders will carry a preferential right over the holder of equity shares for payment of dividend and for payment of capital, in proportion to their shareholding.

Liability component of compound financial instruments

On May 17, 2021, the Company has issued non-cumulative redeemable preference shares 1,000 lakhs preference shares @10/- i.e. ? 10,000.00 lakhs for a tenure of 20 years to Government of India (i.e. Promoter) maintained with Ministry of Housing & Urban Affairs on private placement with dividend of 0.01% per annum.

Further, on November 12, 2021, the Company issued non-cumulative redeemable preference shares 300 lakhs preference shares @10/- i.e. ? 3,000.00 lakhs to Government of India (i.e Promoter) on private placement with dividend of 0.01% per annum.

The equity portion of these redeemable preference shares, on account of dividend percentage being lower than effective market rate, is recorded in Other equity

Contingent Liabilities not provided for:

a) Claim or suit filed by any person/ department against Company not acknowledged as debts: Nil

b) The stamp duty of ? 65100.00 lakhs on transfer of title deed was calculated on the circle rates prevailing during financial year 2016-17. However, the Circles rates/stamp duty rates may vary at the time of actual payment of stamp duty from circle rates prevailing in financial year 2016-17 and amount of stamp duty/registration charges payable might differ from Rs 65100.00 lakhs. During

c) FY 2020-21, the stamp duty amounting of ? 65100.00 lakhs was treated as liability on the basis of budget approved by the Ministry of Housing and Affairs.

d) There are 32 cases of litigation, claims and disputes pertaining to the land parcels known as on 31.03.2022 which are pending under various forums. These litigations, claims and disputes, where earlier Tata Communications Limited was a party, subsequent to approval of the Scheme and transfer of land, have now been transferred and belong to Hemisphere Properties India Limited. However due to Covid-19 restrictions and limited access in the courts, the Company is analysing the financial implication associated with the litigations if any.

e) For the Land parcels of 53.04 acres in Chennai, the demand for Property tax has not been raised by the Revenue Authorities of Chennai, when any demand for property tax arises in future the same shall be paid.

f) Further, for the land parcels at Chattarpur, the Company is paying property tax on self-assessment basis. In FY 2021-22 and 2019-20, the Company has calculated property tax by using multiplication factor @0.5 and rate of tax @ 10% where as in FY 2020-21, multiplication factor @0.3 and rate of tax @10% was used to calculate the property tax. But, the additional property tax demand may be raised by Revenue Authority by using multiplication factor @0.3 for FY 2019-20 and 0.5 for FY 2020-21 and rate of tax may be used @ 20% for FY 2019-20, 2020-21 and 2021-22. Thus a sum of ? 4,15,360/- may be payable on demand raised by Revenue Authority.

g) Furthermore, for the land parcels at Greater Kailash, the Company is paying property tax on self-assessment basis. In FY 2021-22 and 2019-20, the Company has calculated property tax by using multiplication factor @0.5 and rate of tax @ 15% where as in FY 2020-21, multiplication factor @0.3 and rate of tax @15% was used to calculate the property tax. But, the additional property tax demand may be raised by Revenue Authority by using multiplication factor @0.3 for FY 2019-20 and 0.5 for FY 2020-21 and rate of tax may be used @ 20% for FY 2019-20, 2020-21 and 2021-22. Thus a sum of ? 19,84,176/- may be payable on demand raised by Revenue Authority.

The guidelines in respect of Public Procurement Policy for Micro and Small Enterprises issued by the Government of India vide Micro and Small Enterprises (MSEs) Order 2012 has been followed, and in compliance with that, the Company has not received any intimation from vendor regarding status under MSME Act on the date of Balance sheet, i.e. 31.03.2022.

As per Ind AS 40, land parcels were reclassified as Investment Property and valuation has been done on cost model. As per clause 3.2 of Scheme of Arrangement and Reconstruction, upon the scheme becoming effective, all the assets and liabilities pertaining to the surplus land stand transferred to and vested in the Transferee Company at their respective book values as appearing in the books of Transferor Company. Therefore, the value of the land has been taken as the book value of the land in the audited balance sheet of Tata Communications Limited for the FY 2019-20. Company holds land parcels comprises of 739.69 acres at different locations i.e Pune-524 acres, Halisahar (Kolkata)-35.19 acres, Chennai-53.04 acres, Chattarpur (Delhi)-58 acres, Greater Kailash (Delhi)-69.46 acres.

The management has initiated the process of calculation of fair value of land parcels located in Chennai, Pune, Kolkata, Chattarpur and Greater Kailash. The Market Valuation of all the land parcels as on date of consideration and declaration of the financial results by the Board of Directors, has been assessed and valued at ? 10,60,197/- lakhs.

The Company has incurred the expense of ? 1008.97 lakhs for property tax and ? 229.56 lakhs for Security Service charges for the period under review. Out of property tax of ? 1,008.97 lakhs, Revenue Authority at Pune has raised the demand of ? 7,70.76 lakhs for property tax at Dighi (Pune) for the period effective from the date of order of Demerger till 31.03.2022.

The Company has engaged CPWD for taking handing over of all land parcels from Tata Communications Limited and also for care and maintenance of the land parcels. As on 31.03.2022, CPWD is handling care and maintenance of all the land parcels except at Pune and Chattarpur.

The Company has received funds of Rs. 130,00,00,000/- (Rupees One Hundred and Thirty Crores) from Government of India against which the Company allotted shares of 10 crore Non-Cumulative Redeemable Preference shares of 0.01% @ Rs. 10 each to the promoter i.e President of India, acting through Ministry of Housing & Urban Affairs on 12.11.2021 after taking due approvals from Competent Authorities.

The said financial instruments have been accounted for by the Company in accordance with IND AS 109. However, the terms of issue of the said Preference Shares makes no mention regarding the redemption value at the end of 20 years, whether at par of at any value other than par. In the absence of any mention regarding the redemption value of the said instruments, the said financial instruments have been accounted for by the Company, in the

accompanying financial statements on the assumption of the Redemption at Par Value, which is uncertain and indefinite in nature.

Previous year figures are regrouped and rearranged wherever necessary.

There are 32 cases of litigation, claims and disputes pertaining to the surplus land known as on 31.03.2022 which are pending under various forums. These litigations, claims and disputes, where earlier Tata Communications Limited was a party, subsequent to approval of the Scheme and transfer of land, have now been transferred and belong to HPIL (details as per annexure I attached).

Notes 1 to 34 form an integral part of the accounts and have been authenticated.

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Mar 31, 2021

* As per the clause 3.2 of the approved scheme of arrangement and reconstruction, upon the scheme becoming effective, all the assets and liabilities pertaining to the surplus land stand transferred to and vested in the Transferee Company (Hemisphere Properties India Limited) at their respective book values as appearing in the books of Transferor Company (Tata Communications Limited). Therefore, the value of the land has been taken as the book value of the land in the audited balance sheet of Tata Communications Limited for the FY 2019-20.

** Transfer of the land was done only as per the final approval of scheme of arrangement and reconstruction. However, the title deeds are yet to be transferred to the name of the company.

Land parcels is an asset for the company because as per the object clause of Memorandum of Association, the land can be utilize for development, construction, collect and settle revenue, rental, lease charges, development of commercial building, industrial shed, offices, houses, buildings, apartment, structures, hotels or other allied works of every description on any land. The use of land has not been decided by the management during the year ended on 31.03.2021 and any land held for a currently undetermined future use i.e. if any entity has not determined that it will use the land as owner occupied property or for short term sale in the ordinary course of business, the land is regarded as held for capital appreciation. the surplus land has been treated as Investment Property of the company

Retained Earnings represent the undistributed profits of the Company

General reserve represents the statutory reserve, this is in accordance with Indian corporate law wherein a portion of profit is apportioned to General Reserve. Under Companies Act 1956 it was mandatory to transfer amount before a company can declare dividend. however under Companies Act 2013 transfer of any amount to General Reserve is at the discretion of the company.

Securities Premium Reserve represents the amount received in excess of per value of securities (equity share,

preference shares and debentures). Premium on redemption of securities is accounted in security premium available. Where security premium is not available, premium on redemption of securities is accounted in statement of Profit and Loss.

Pursuant to Clause 5.6 of the scheme , the entire share capital as existing on the appointed date of Rs. 5 lac divided into 50,000 fully paid up equity shares of Rs. 10 each having distinctive numbers from 1 to 50000 be and is hereby cancelled without any further act or deed.

*The company has received fund of Rs. 100,00,00,000/- (Rupees One Hundred crore) from Government of India against which the Company allotted shares of 10 crore Non-Cumulative Redeemable Preference shares of 0.01% @ Rs. 10 each to the promoter i.e President of India acting through Ministry of Housing & Urban Affairs on 17.05.2021 after taking due approvals from Competent Authorities.

The balances shown in financial statements against Non- current borrowings,current borrowings, other financial liabilities, other current liabilities and other financial assets are subject to confirmation.

Auditor''s Remuneration	March 31,2021	March 31, 2020
Statutory Audit fees (in Lakhs)	0.80	0.20
Other Services	0.20

Contingent Liabilities not provided for:

i. Claim or suit filed by any person/ department against Company not acknowledged as debts: Nil

ii. The stamp duty of Rs. 65100.00 lakhs on transfer of title deed was calculated on the circle rates prevailing during financial year 2016-17. However, the Circles rates/stamp duty rates may vary at the time of actual payment of stamp duty from circle rates prevailing in financial year 2016-17 and amount of stamp duty/registration charges payable might differ from Rs 65100.00 lakhs. During FY 2020-21, the stamp duty amounting of Rs. 65100.00 lakhs was treated as liability on the basis of budget approved by the Ministry of Housing and Urban Affairs

The amount of 65100.00 lakhs was treated as liability but the said amount has not been considered as confirmed amount as the the amount may vary at the time of payment of such duty and which is subject to the budget of Government of India to be allocated in Financial year 2021-22. The actual stamp duty may be impacted by the on-going litigation.

Others (RCM on GST for FY 2017-18 was to be paid in cash as per GST Act, however the same was adjusted against credit ledger. Department may raise a demand against the same in future): Rs. 81,000

There are 35 cases of litigation, claims and disputes pertaining to the surplus land known as on 31.03.2021 which are pending under various forums. These litigations, claims and disputes, where earlier Tata Communications Limited was a party, subsequent to approval of the Scheme and transfer of land, have now been transferred and belong to Hemisphere Properties India Limited. However due to Covid-19 restrictions and limited access in the courts, the Company is analysing the financial implication associated with the litigations if any.

For the Land parcels of 53.04 acres in Chennai, the demand for Property tax has not been raised by the Revenue Authorities of Chennai, when any demand for property tax arises in future the same shall be paid.

The guidelines in respect of Public Procurement Policy for Micro and Small Enterprises issued by the Government of India vide Micro

and Small Enterprises (MSEs) Order 2012 has been followed in its true sprit by your Company. During the year, the Company has not received any intimation from vendor regarding status under MSME Act on the date of Balance sheet.

The loan received vide sanction memo dated March 31, 2015 of Department of Telecom, Ministry of Communication & IT, GOI, the terms & conditions of the loan has not been received by Ministry of Finance. The Company has communicated with MoF for fixing terms and condition of said loan. As per the decision of the Board of Directors in their meeting dated January 04, 2016, a provision for simple interest @ 5% p.a. shall be made until the communication of final rate of interest from the Central Government. During FY 2020-21, the Company has received a loan of Rs. 4000.00 lakhs from the Ministry @ 10% which is to repaid in 10 equal annual yearly instalments with interest.

The Company has filed an application for adjudication of Demerger Order approved by Ministry of Corporate Affairs with the concerned Revenue Authorities. The Order has not been reserved by the Revenue Authorities as on 31 March, 2021. The amount of adjudication of stamp duty is unascertained and the same wiil be payable after the order issued by the concerned Authorities.

During the FY 2019-20,the Company has availed the loan from Tata Communications Limited for incurring the expenditure which was to be repaid along with interest till date of payment. During period under review, the Company has squared the loan received from the Tata Communications Limited. As per the mutual agreement decided by both the parties the rate of interest was decided @ 10% p.a on the loan amount till the date of payment.

As per Ind AS 40, Land parcels was reclassified as Investment Property and valuation has been done on cost model. As per clause 3.2 of Scheme of Arrangement and Reconstruction, upon the scheme becoming effective, all the assets and liabilities pertaining to the surplus land stand transferred to and vested in the Transferee Company at their respective book values as appearing in the books of Tranferor Company. Therefore, the value of the land has been taken as the book value of the land in the audited balance sheet of T ata Communications Limited for the FY 201920. Company holds land parcels comprises of 739.69 acres at different locations i.e Pune-524 acres, Halisahar (Kolkata)-35.19 acres, Chennai-53.04 acres, Chattarpur (Delhi)-58 acres, Greater kailash (Delhi)-69.46 acres.

The company has conducted due diligence of land parcels in FY 2016-17 while under the administrative control of DoT (Department of Telecommunications). The carrying value of land parcels was calculated at Rs. 9,55,864.00 lakhs. Due to CoVID-19 restrictions and immense area of land parcels, the fair value of land parcels could not be calculated during the period under review. The management has initiated the process of calculation of fair value of land parcels located in Chennai, Pune, Kolkata, Chattarpur and Greater Kailash. The company has incurred the expense of Rs. 330.48 lakhs for property tax and Rs. 446.50 for Security Service charges for the period effective from date the date of order of Demerger.

During the period under review, the Company has made provision for expense of Rs. 330.48 lakhs for property tax and Rs. 446.50 lakhs for security charges from the period effective from the date of Demerger which was paid by Tata Communications Limited. The amount was under discussion and confirmation on the final amount to be paid to Tata Communications Limited. A meeting was conducted with senior management of Tata Communications Limited on 26.02.2021 for approval and acceptance of the amount of security charges and property tax to be paid to Tata Communications Limited. It was mutually decided by both the management an invoice would be issued for payment of security charges and Property tax. Thus Property tax of Rs. 149.49 lakhs and Rs. 182.81 lakhs as Security charges would be payable to Tata Communications Limited from the period effective from date of order of Demerger till 31 03 9090

Previous years figures are regrouped and rearranged wherever necessary.

There are 35 cases of litigation, claims and disputes pertaining to the surplus land known as on 31.03.2021 which are pending under various forums. These litigations, claims and disputes, where earlier Tata Communications Limited was a party, subsequent to approval of the Scheme and transfer of land, have now been transferred and belong to HPIL (details as per annexure I attached).

Notes 1 to 35 form an integral part of the accounts and have been authenticated.