o) Provisions, contingent liabilities and contingent assets

A provision is recognised when the Company has a present legal or constructive obligation
as a result of a past event and it is probable that an outflow of economic resources will be
required from the Company and amounts can be estimated reliably. Timing or amount of
the outflow may still be uncertain.

Provisions are measured at the estimated expenditure required to settle the present obligation,
based on the most reliable evidence available at the reporting date, including the risks and
uncertainties associated with the present obligation. Where there are a number of similar
obligations, the likelihood that an outflow will be required in settlement is determined by
considering the class of obligations as a whole. Provisions are discounted to their present
values, where the time value of money is material.

In those cases where the possible outflow of economic resources as a result of present
obligations is considered improbable or remote, no liability is recognized or disclosure is
made.

Contingent liabilities are disclosed in case of present obligation arising from past events,
when it is not probable that an outflow of resources will be required to settle the obligation
or the amount cannot be estimated reliably.

Contingent assets are not recognised. However, when inflow of economic benefit is probable,
related asset is disclosed.

p) Government grants

Government grants are recognised if it is sufficiently certain that the assistance will be
granted and the conditions attached to assistance are satisfied. Where the grant relates to
specified asset, it is recognised as deferred income, and amortized over the expected useful
life of the asset. Other grants are recognised in the statement of profit and loss concurrent to
the expenses to which such grants relate/ are intended to cover.

Where the Company receives non-monetary grants, the asset and the grant are recorded
gross at fair amounts and released to the statement of profit and loss over the expected
useful life and pattern of consumption of the benefit of the underlying asset.

q) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, together with
other short-term, highly liquid investments (original maturity less than 3 months) that are
readily convertible into known amounts of cash and which are subject to an insignificant
risk of changes in value.

r) Statement of Cash flow

Statement of cash flow is being prepare in accordance with the requirements of Indian
Accounting Standard (Ind AS) 7 "Statement of Cash Flows". Cash flows from operating
activities is reported using the indirect method whereby profit or loss is adjusted for the
effects of transactions of a non-cash nature, any deferrals or accruals of past or future
operating cash receipts or payments, and items of income or expense associated with
investing or financing cash flows.

s) Adjustment pertaining to earlier years

Income from services and other income pertaining to prior years is not disclosed as prior
period item for each individual transaction not exceeding ' 1.00 lakh and similarly items
of expenditure for each individual transaction not exceeding ' 1.00 lakh are considered as
expenditure of current year.

In respect of other items of income (including operating income and other income) and
expenditure relating to prior periods, the net effect of which on retained earning does not
exceed 1% of turnover is treated as income/expenditure of current year.

t) Equity, reserves and dividend payments

Share capital represents the nominal value of shares that have been issued. Share premium
includes any premiums received on issue of share capital. Any transaction costs associated
with issuing of shares are deducted from share premium account, net of any related income
tax benefits.

Other components of equity include the following:

• Re-measurement of defined benefit liability - comprises the actuarial gain or loss from
changes in demographic and financial assumptions and return on plan assets

• Reserve for contingencies

• Promoter's contribution - fair value of waiver of guarantee fee on debentures (NCD)

• General reserve

• Other transactions recorded directly in other comprehensive income.

Retained earnings include all current and prior period retained profits. All transactions
with owners of the parent are recorded separately within equity. Dividend distributions
payable to equity shareholders are included in other liabilities when the dividends have
been approved in a general meeting prior to the reporting date.

Standards issued but not yet effective:

The Ministry of Corporate Affairs ("MCA") notifies new standards or amendment to
the existing standards under Companies (Indian Accounting Standards) Rules as issued
from time to time. For the year ended March 31, 2025, MCA has notified Ind AS - 117
Insurance contracts and amendments to Ind AS 116 - Leases, relating to sale and leaseback
transactions, applicable to the Company w.e.f. April 1, 2024. The Company has reviewed
the new pronouncements based on its evaluation has determined that it does not have any
significant impact in its financial statements.

(i) Contractual obligations

Refer note 51 for disclosure of contractual commitments for the acquisition of intangible
assets.

(ii) Amortisation for the year has been included in line item 'Depreciation and amortisation
expense' in statement of profit and loss.

(iii) There was no expenditure incurred on research and development during the current and
comparative year.

(iv) The life of 3G Spectrum Licence will be expired on 07.08.2028.

Notes:

(a) Investments in subsidiaries, associates and joint venture are stated at cost as per Ind AS 27 'Separate Financial Statements’.

(b) As per article 12.19 (b) of Shareholders' agreement together with para 27 of the amendatory agreement (together referred to as
'amended agreement') entered into between MTNL, TCIL, TCL and NVPL (Nepal), together referred to as 'Investors' pursuant to
their investment in United Telecom Limited ('UTL'), in case NVPL (the local partner in Nepal) decides to sell its stake to any third
party, it requires prior consent of other Investors. Further, at any such point of time or otherwise also, as per exit clause in the
agreement, any of the other Investors (India partners) other than NVPL can exit the arrangement after 2 years from the amended
agreement by issuing 3 months' notice.

Pursuant to this exit clause, the Company had issued notice to UTL on 30 January, 2018 for making an exit. The notice
were valid up to 30 April 2018 and subsequent to 30 April 2018, the local partner had sought time extension of another
3 months i.e. till 30 July, 2018 for giving effect to the exit requested by the Company. However M/S NVPL vide its
letter dated 31 March 2021, has sent a draft SPA and requested MTNL & other associates to submit response in respect of
the draft Share Purchase Agreement ('SPA') for acquisition of shares held by Indian Investors at face value of Nepalese
Rupees 100 per share and also CFO of UTL reminded on email on 17-6-21 to return agreed SPA. MTNL and other partners
submitted their consent to the SPA in September 2021. In view of inordinate delay in closing the issue all the Indian
partners met in May, 2023 and decided to explore legal option from local counsel of Nepal for enforcing the exit option.
There is no further progress for giving effect to the exit clause from M/s NVPL. The net worth of the company is already negative
and there is no cash flow to support the investment and the company has not been involved in revenue generating activities since
long period and even has not paid duties and taxes for the past years. The repatriation of funds seems to be impossible unless
clearance of dues of local government. Accordingly, the investment of Rs. 35.85 Crore was tested for impairment in line with Ind
AS 28 and impaired to nil value. However, the efforts to recover the investment proceeds as per exit clause will continue, as is
being done, and the same shall be accounted for in the year of receipt, in the event of successful recovery.

(c) The physical share certificates of the subsidiary companies, namely Millennium Telecom Limited, Mahanagar Telephone
Mauritius Limited and 30,68,200 shares of United Telecom Limited (Associate Company) are not traceable. Efforts are being
made to trace the share certificates.

(i) Trade receivables have been pledged as security for liabilities, for details refer note 54.

(ii) No trade or other receivable are due from director or other officers of the Company either
severally or jointly with any other person. Further, no trade or other receivables are due
from firms or private companies respectively in which any director is partner, director or a
member.

(iii) Trade receivables are secured to the extent of security deposits received from customers,
with contractual amounts as at 31 March 2025 of Rs.90.08 crores (31 March 2024 - Rs. 88.86
crores) and related amortised cost as at 31 March 2025 of Rs. 40.33 crores (31 March 2024 -
Rs. 40.14 crores).

(iv) Dues from the Operators being on account of revenue sharing agreements are not treated
as debtors and consequently are not taken into account for making provision for doubtful
debts.

(v) The carrying values of trade receivables are considered to be a reasonable approximation of
fair values.

As of March 31, 2025, eight properties, two in Mumbai unit and six in Delhi unit, have been
classified as Non-Current Assets held for sale. The carrying values of these properties are Rs.
8.69 Crores (fair values Rs. 416.49 Crores). By virtue of Union Cabinet approval vide OM dated
02.08.2022 for the monetization of land and buildings, management is actively engaged in the
process of monetisation of eligible assets. The generated proceeds will be directed towards
BSNL/MTNL to address debt, capital expenditures (CAPEX), and other financial obligations. The
aim of these monetization endeavors is to strengthen MTNL's fiscal health, encompassing debt
servicing, funding of capital expenditures, and provision for various financial needs to bolster the
company's financial position.

In Mumbai unit, the tender to sell the scrapped assets (switches, BTS batteries etc.) having net
the carrying value of Rs. 1.68 Crore is under process for auction at the year March 31, 2025 and
favourable resolution is expected. Therefore, such assets continue to classify as held for sale.

The Debentures as mentioned above are Government of India guaranteed, unsecured, listed,
7.51% Redeemable Non Convertible Debentures (in the form of Bonds) having tenure/maturity
period of 10 years with redemption date being 06th March 2034. The coupon payment frequency
is semi annual interest payment. There was no instalment due as on the reporting date.

*Debentures-Series 8C

The Debentures as mentioned above are Government of India guaranteed, unsecured, listed, 7.80%
Redeemable Non Convertible Debentures (in the form of Bonds) having tenure/maturity period
of 10 years with redemption date being 07th November 2033. The coupon payment frequency is
semi annual interest payment. There was no instalment due as on the reporting date.

*Debentures-Series 8B

The Debentures as mentioned above are Government of India guaranteed, unsecured, listed,
7.61% Redeemable Non Convertible Debentures (in the form of Bonds) having tenure/maturity
period of 10 years with redemption date being 24th August 2033. The coupon payment frequency
is semi annual interest payment. There was no instalment due as on the reporting date.

*Debentures-Series 8A

The Debentures as mentioned above are Government of India guaranteed, unsecured, listed,
7.59% Redeemable Non Convertible Debentures (in the form of Bonds) having tenure/maturity
period of 10 years with redemption date being 20th July 2033. The coupon payment frequency is
semi annual interest payment. There was no instalment due as on the reporting date.

*Debentures-Series 7E

The Debentures as mentioned above are Government of India guaranteed, unsecured, listed,
7.75% Redeemable Non Convertible Debentures (in the form of Bonds) having tenure/maturity
period of 10 years with redemption date being 24th March 2033. The coupon payment frequency
is semi annual interest payment. There was no instalment due as on the reporting date.

*Debentures-Series 7D

The Debentures as mentioned above are Government of India guaranteed, unsecured, listed, 7.80%
Redeemable Non Convertible Debentures (in the form of Bonds) having tenure/maturity period
of 10 years with redemption date being 24th February 2033. The coupon payment frequency is
semi annual interest payment. There was no instalment due as on the reporting date.

*Debentures-Series 7C

The Debentures as mentioned above are Government of India guaranteed, unsecured, listed, 7.78%
Redeemable Non Convertible Debentures (in the form of Bonds) having tenure/maturity period
of 10 years with redemption date being 10th February 2033. The coupon payment frequency is
semi annual interest payment. There was no instalment due as on the reporting date.

The Debentures as mentioned above are Government of India guaranteed, unsecured, listed, 7.87%
Redeemable Non Convertible Debentures (in the form of Bonds) having tenure/maturity period
of 10 years with redemption date being 01st December 2032. The coupon payment frequency is
semi annual interest payment. There was no instalment due as on the reporting date.

*Debentures-Series 7A

The Debentures as mentioned above are Government of India guaranteed, unsecured, listed, 8.00%
Redeemable Non Convertible Debentures (in the form of Bonds) having tenure/maturity period
of 10 years with redemption date being 15th November 2032. The coupon payment frequency is
semi annual interest payment. There was no instalment due as on the reporting date.

*Debentures-Series 6

The Debentures as mentioned above are Government of India guaranteed, unsecured, listed, 6.85
% Redeemable Non Convertible Debentures (in the form of Bonds) having tenure/maturity period
of 10 years with redemption date being 20th December 2030. The coupon payment frequency is
semi annual interest payment. There was no instalment due as on the reporting date.

*Debentures-Series 5

The Debentures as mentioned above are Government of India guaranteed, unsecured, listed,
7.05 % Redeemable Non Convertible Debentures (in the form of Bonds) having tenure/maturity
period of 10 years with redemption date being 11th October 2030. The coupon payment frequency
is semi annual interest payment. There was no instalment due as on the reporting date.

(ix) Government of India approved the financial support to the Company in the year 2014 and
on surrender of Broadband Wireless Access (BWA) Spectrum by MTNL, upfront charges
paid by the Company in the year 2011 for such spectrum amounting to Rs. 4,533.97 crores
were agreed to be funded by way of issuance of debentures by the Company on behalf of
Government of India (GOI) and for which GOI provided sovereign guarantee with attendant
condition for repayment of principal on maturity as well as the interest payments through
DOT. Accordingly, the Company does not have any liability towards repayment of principal
and interest on the bonds issued and has been offset against the amount recoverable from
DoT of equivalent amount. Out of Rs. 4,533.97 crores, Non Convertible Debentures of Rs.
3,668.97 crores were redeemed during the current financial year and Rs. 865 Crores were
redeemed previous year.

45 Fair value disclosures

i) Fair values hierarchy

Financial assets and financial liabilities measured at fair value in the statement of financial
position are divided into three Levels of a fair value hierarchy. The three levels are defined
based on the observability of significant inputs to the measurement, as follows:

Level 1: quoted prices (unadjusted) in active markets for financial instruments.

Level 2: The fair value of financial instruments that are not traded in an active market is
determined using valuation techniques which maximise the use of observable market data
rely as little as possible on entity specific estimates.

Level 3: If one or more of the significant inputs is not based on observable market data, the
instrument is included in level 3.

A) Credit risk

Credit risk is the risk that a counterparty fails to discharge an obligation to the company. The
company is exposed to this risk for various financial instruments, for example by granting
loans and receivables to customers, placing deposits, etc. The company's maximum exposure
to credit risk is limited to the carrying amount of following types of financial assets.

- cash and cash equivalents,

- trade receivables,

- loans & receivables carried at amortised cost, and

- deposits with banks and financial institutions.

a) Credit risk management

The Company assesses and manages credit risk based on internal credit rating system,
continuously monitoring defaults of customers and other counterparties, identified either
individually or by the company, and incorporates this information into its credit risk
controls. Internal credit rating is performed for each class of financial instruments with
different characteristics. The Company assigns the following credit ratings to each class of
financial assets based on the assumptions, inputs and factors specific to the class of financial
assets.

Trade receivables

Credit risk related to trade receivables are mitigated by taking bank guarantees from
customers where credit risk is high. The Company closely monitors the credit-worthiness of
the debtors through internal systems that are configured to define credit limits of customers,
thereby, limiting the credit risk to pre-calculated amounts. The Group assesses increase in
credit risk on an ongoing basis for amounts receivable that become past due and default is
considered to have occurred when amounts receivable become past due in each business
segment as follows:

(i) Cellular: Six months past due

(ii) Basic & other services: Three years past due
Other financial assets measured at amortised cost

Other financial assets measured at amortized cost includes loans and advances to employees,
security deposits and others. Credit risk related to these other financial assets is managed
by monitoring the recoverability of such amounts continuously, while at the same time
internal control system in place ensure the amounts are within defined limits.

b) Expected credit losses

The Company provides for expected credit losses based on the following:

Trade receivables

(i) 'The company recognizes lifetime expected credit losses on trade receivables using a
simplified approach, wherein Company has defined percentage of provision by 'analysing
historical trend of default relevant to each business segment based on the criteria defined
above. And such provision percentage determined have been 'considered to recognise life
time expected credit losses on trade receivables (other than those where default criteria are

Other financial assets measured at amortised cost

Company provides for expected credit losses on loans and advances other than trade
receivables by assessing individual financial instruments for expectation of any credit losses.
Since this category includes loans and receivables of varied natures and purpose, there is
no trend that the company can draws to apply consistently to entire population For such
financial assets, the Company's policy is to provides for 12 month expected credit losses
upon initial recognition and provides for lifetime expected credit losses upon significant
increase in credit risk. The Company does not have any expected loss based impairment
recognised on such assets considering their low credit risk nature, though incurred loss
provisions are disclosed under each sub-category of such financial assets.

B) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable
securities and the availability of funding through an adequate amount of committed credit
facilities to meet obligations when due. Due to the nature of the business, the Company
maintains flexibility in funding by maintaining availability under committed facilities.

Management monitors rolling forecasts of the Company's liquidity position and cash and
cash equivalents on the basis of expected cash flows. The Company takes into account the
liquidity of the market in which the entity operates. In addition, the Company's liquidity
management policy involves projecting cash flows in major currencies and considering
the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios
against internal and external regulatory requirements and maintaining debt financing plans.

C) ’Market Risk

a) Foreign currency risk

The Company is exposed to foreign exchange risk arising from foreign currency
transactions, primarily with respect to the US Dollar and Euro. Foreign exchange risk arises
from recognised assets and liabilities denominated in a currency that is not the functional
currency of any of the Company entities. Considering the low volume of foreign currency
transactions, the Company's exposure to foreign currency risk is limited and the Company
hence does not use any derivative instruments to manage its exposure. Also, the Company
does not use forward contracts and swaps for speculative purposes.

b) Interest rate risk
i) Liabilities

The Company's policy is to minimise interest rate cash flow risk exposures on long-term
financing. At 31 March 2025 and 31 March 2024, the Company is exposed to changes in
interest rates through bank borrowings at variable interest rates. The Company's investments
in fixed deposits carry fixed interest rates.

ii) Assets

The Company's fixed deposits are carried at amortised cost and are fixed rate deposits.
They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither
the carrying amount nor the future cash flows will fluctuate because of a change in market
interest rates.

c) Price risk

'The Company does not have any significant investments in equity instruments which create
an exposure to price risk.

47 Capital management

The Company' s capital management objectives are

- to ensure the Company's ability to continue as a going concern

- to provide an adequate return to shareholders

'The Company monitors capital on the basis of the carrying amount of equity less cash and
cash equivalents as presented on the face of balance sheet.

Management assesses the Company's capital requirements in order to maintain an efficient
overall financing structure while avoiding excessive leverage. This takes into account the
subordination levels of the Company's various classes of debt. The Company manages the
capital structure and makes adjustments to it in the light of changes in economic conditions
and the risk characteristics of the underlying assets. In order to maintain or adjust the capital
structure, the Company may adjust the amount of dividends paid to shareholders, return
capital to shareholders, issue new shares, or sell assets to reduce debt.

The Company provides for gratuity for employees in India as per the Payment of Gratuity
Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for
gratuity. The amount of gratuity payable on retirement/termination is the employees last
drawn basic salary per month computed proportionately for 15 days salary multiplied for
the number of years of service.

The above sensitivity analysis are based on a change in an assumption while holding all
other assumptions constant. In practice, this is unlikely to occur and changes in some of
the assumptions may be correlated. When calculating the sensitivity of the defined benefit
obligation to significant actuarial assumptions the same method (present value of the
defined benefit obligation calculated with the projected unit credit method at the end of the

B Compensated absences

The leave obligations cover the Company's liability for sick and earned leaves. The Company
does not have an unconditional right to defer settlement for the obligation shown as current
provision balance above. However based on past experience, the Company does not expect
all employees to take the full amount of accrued leave or require payment within the next
12 months, therefore based on the independent actuarial report, only a certain amount of
provision has been presented as current and remaining as non-current. Amount of Rs. 37.65
crores (previous year: Rs. 32.02 crores) has been recognised in the statement of profit and
loss.

C Defined contribution plans

Contributions are made to the Government Provident Fund and Family Pension Fund which
cover all regular employees eligible under applicable Acts. Both the eligible employees and
the Company make pre-determined contributions to the Provident Fund. The contributions
are normally based upon a proportion of the employee's salary.

D Gratuity and compensated absences is payable to the employees on death or resignation or
on retirement at the attainment of superannuation age. To provide for these eventualities,
the Actuary has used IALM (2012-14) Ultimate table for mortality in service and IALM
(2012-14) table for mortality in retirement.

E Mortality in service is assumed on the basis of IALM (2012-14) Ultimate table for mortality
in service and IALM (2012-14) table.

F The Company has taken an Insurance Policy for medical benefits in respect of its retired and
working employees. The Insurance Policy is fully funded by the Company.

B In respect of incomplete contracts where the expenditure already incurred has exceeded
the contract value, the additional expenditure required to complete the same cannot be
quantified.

52. Ind AS 116 Leases

The Company has leases for office building, warehouses and related fcilities and cars.
With the exception of short-term leases and leases of low-value underlying assets, each
lease is reflected on the balance sheet as a right-of-use asset and a lease liability. Variable
lease payments which do not depend on an index or a rate are excluded from the initial
measurement of the lease liability and right of use assets. The Company classifies its right-
of-use assets in a consistent manner to its property, plant and equipment.

Each lease generally imposes a restriction that, unless there is a contractual right for the
Company to sublease the asset to another party, the right-of-use asset can only be used
by the Company. Some leases contain an option to extend the lease for a further term. The
Company is prohibited from selling or pledging the underlying leased assets as security. For
leases over office buildings and other premises the Company must keep those properties
in a good state of repair and return the properties in their original condition at the end of
the lease. Further, the Company is required to pay maintenance fees in accordance with the
lease contracts.

(a) Lease payments not included in measurement of lease liability

The expense relating to payments not included in the measurement of the lease liability is
as follows:

The Company is in the process of seeking confirmation from its vendors regarding their
status under the Micro, Small and Medium Exterprises Development Act, 2006. The above
disclosure has been determined to the extent such parties have been identified on the basis
of information available with the Company.

56.A The Company is covered under Section 135 of the Companies Act, 2013 and accordingly
constituted a Corporate Social Responsibility Committee of the Board. However, as the
Company did not have average net profits based on the immediately preceding three
financial years, the Company is not required to spend amounts towards Corporate Social
Responsibility in terms of the 2013 Act.

56. B During the year the Company has made expenditure in foreign currency equivalent to Rs.

0.34 crores (previous year Rs.0.32 crores). Whereas earnings in foreign currency are Rs. 1.30
crores (previous year Rs. 0.12 crores).

57. Revenue from contracts with customers

(i) Disaggregation of revenue:

The Company earns revenue from multiple sources within the telecommunications sector,
including but not limited to 'Basic & Other Services' and 'Cellular' services. In accordance
with the requirements of Ind AS 115 - Revenue from Contracts with Customers, revenue
is disaggregated based on the nature of services and customer categories to reflect how the
nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic
factors.

Further, revenue is also disaggregated based on the geographical location of operations,
primarily comprising Mumbai and Delhi telecom circles.

(ii) Contract Balances

The Company classifies the right to consideration in exchange for deliverables as either a
receivable or as unbilled revenue.

Trade receivable and unbilled revenues are presented net of impairment in the Balance
Sheet.

Notes:

A Since the change in ratio is less than 25%, no explanation is required to be furnished.

B The variation is because the revenue from operation has declined significantly due to
disconnections and the working capital employeed has increased considering the lower
cash inflows.

C The variation is because the revenue from operation has declined significantly due to
disconnections, resultant increase in losses and increase in borrwings & interest cost.

D Due to delay in payment to trade payable and reduction in expenditure related to trade
payables.

E As the principal activities of the company are in the nature of services, so Inventory Turnover

ratio is not relevant.

60. Certain Lands and Buildings capitalized in the books are pending registration/legal vesting
in the name of the company and the landed properties acquired from DOT have not been
transferred in the name of the company and in the case of leasehold lands. Stamp Duty
on the lands and buildings acquired from DOT is payable by DOT as per sale deed and in
respect of properties acquired after 01 April 1986, the documentation shall be contemplated
at the time of sale or disposal as and when effected. In certain cases of freehold and leasehold
land, the company is having title deeds which are in the name of the Company but the value
of which are not lying in books of accounts.

61. Department of Telecommunications (DOT) vide letter No. P-11014/19/2008-PP(Pt.I)
dt. 28/12/2012 has levied One Time Spectrum Charges (OTSC) for the GSM and CDMA
spectrum on MTNL. The charges also include the spectrum given on trial basis to the extent
of 4.4 MHz in 1800 MHz frequency. For the period from 01/07/2008 to 31/12/2012, initial 6.2
MHz spectrum was kept free and for the period from 01/01/2013 onwards, initial 4.4 MHz
spectrum has been kept free. The calculations are further subject to change in accordance with
the changes in the quantum of spectrum held by MTNL and the remaining valid period of
license as per DOT. MTNL has surrendered some of the spectrum allotted on trial basis and
does not require to pay for CDMA spectrum since it holds only 2.5 MHz spectrum in respect
of CDMA. DOT has been apprised of the same and the matter is still under consideration.
Apart from this, the issue of charges for spectrum given on trial basis is also to be decided.
Further MTNL has finally surrendered CDMA spectrum w.e.f. 28 February 2016. DOT has
demanded an amount of Rs. 3,205.71 crores from MTNL on account of OTSC.

Besides, ab-initio, the very policy of levy of one time spectrum charges by DOT
itself has been challenged by private operators and is sub judice as on date whereas
MTNL's case is also to be decided by DOT on the basis of outcome of the court
case and the spectrum surrendered or retained. The finalisation of charges and the
modalities of payment are therefore to be crystallized yet and as on date the position
is totally indeterminable as to the quantum of charges and also the liability if any.
Pending final outcome of the issue which itself is sub judice and non finality of quantum
of charges payable, if at all, to DOT, no provision is made in the books of accounts as the

amount is totally indeterminable. However the contingent liability of Rs. 3,205.71 crores
is shown on the basis of the demand raised by DOT in respect of GSM which is very old
and not insisted till date. As per industry related issue in litigation and TDSAT judgment
there upon the estimated liability could not be more than Rs. 455.15 crore. As there is no
further demand after the demand of Rs. 3,205.71 crores dated 08 January 2013 till now, the
contingent liablity aslo, if the same fructified, can not be more than Rs. 455.15 crore. As such
the same is disclosed accordingly.

62. Certain claims in respect of damaged/lost fixed assets and inventory has been lodged with
Insurance Companies by MTNL but the settlement of the claims is pending. Final adjustment
in respect of difference between amount claimed and assets withdrawn will be made in the
year of settlement of claim.

63. The Company had claimed benefit under section 80IA of the Income Tax Act, 1961 for the
financial year from 1996-97 to 2005-06. The appellate authorities have allowed the claim
to the extent of 75% of the amount claimed. The Company has preferred appeals for the
remaining claim before the Hon'ble High Court of Delhi. The Company has retained
the provision of Rs. 375.96 crores (previous year Rs. 375.96 crores) for this claim for the
assessment years 1998-99, 1999-00 and 2000-2001, however, the demands on this account
amounting to Rs. 243.22 crores (previous year Rs. 243.22 crores) for the assessment years
2001-02 to 2006-07 have been shown as contingent reserve to meet the contingency that may
arise out of disallowances of claim of benefit u/s 80IA of Income Tax Act, 1961.

64. Litigations

a) In the matter of settlement of bonds with Canara Bank and Canfina in earlier year,
the arbitrator, Mr. A. P. Shah published the award on 03.03.2022 against the company
for Rs. 160 crores with simple interest payable @6% P.A. from 21-10-1993 and Rs.0.
93 Crores was awarded as costs. MTNL filed OMP (COMM) No.312 of 2022 before
Hon'ble Delhi High Court to set aside the Award along with an IA No.14319 of 2022
seeking unconditional stay on the operation of said award. Further, Canara Bank and
Canfina also filed applications (Canara Bank's- OMP (ENF) (COMM) NO.147 of 2022
and CANFINA's OMP (ENF) (COMM) NO.155 of 2022) for the enforcement of said
award dated 03.03.2022. The company submitted the title deed of one of the properties
as security before the Hon'ble Delhi High Court in terms of an order dated 10.05.2024.
The next hearing of MTNL's OMP (COMM) No.312 of 2022 along with Canara Bank's
OMP and Canfina OMP is proposed on 23.07.2025. The amount of award along with
interest to be the tune of Rs 463.01 crores therefore has been disclosed as contingent
liability.

b) MTNL entered into contracts with M/s. M & N Publications Limited for printing,
publishing and supply of telephone directories for Delhi and Mumbai unit for a period
of 5 years starting from 1993. After printing and issue of 1993 (main & supplementary)
and 1994 main directory, M/s. M & N Publications Ltd terminated the contract
prematurely on 04 April 1996. MTNL, Mumbai & Delhi invoked Bank Guarantees on
09 April 1996, issued Legal Notice on 22 July 1996 and terminated the contract. Sole
Arbitrator has been appointed by CMD, MTNL. The Sole Arbitrator has since given
his award on 09 April 2013 partly in favour of MTNL, Mumbai and on 31 July 2013
in favour of MTNL, Delhi. The claim and counter claim under arbitration will be
accounted for in the year when the ultimate collection/payment of the same becomes
reasonably certain. M/s. M & N Publications has approached the Bombay & Delhi
High Courts against the arbitration awards and MTNL also approached the Bombay
& Delhi High Courts for balance amount due. The claim of Rs. 68.92 crores on this
account has been shown as contingent liability in Delhi unit.

c) As per directions of the Hon'ble Delhi High Court one UASL operator had paid
to MTNL, Mumbai Rs. 124.93 crores and Rs. 33.99 crores in 2004-05 and 2005-06
respectively against the claim of Rs. 158.92 crores. The Company has recognised the
amount realized as revenue in the respective period. The UASL operator approached
the Hon'ble TDSAT for rate discrepancies. The Hon'ble TDSAT has ordered for refund
of Rs. 96.71 crores. MTNL has filed a Civil Appeal and application for stay of operation
of the order of TDSAT in the Hon'ble Supreme Court of India in which Supreme Court
directed on 08 May 2014 that TDSAT will review the impugned order on seeking of it
by appellant. MTNL filed review application which had been disposed off by Hon'ble
TDSAT vide order dated 27 May 2014 on which MTNL filed CWP no.022764 dated
16 July 2014 in Hon'ble Supreme Court and the same is pending. Meanwhile UASL
operator also filed appeal in Hon'ble Supreme Court. The claim of Rs. 96.71 crores on
this account has been shown as contingent liability.

d) MTNL Mumbai has received claims from M/s. BEST, Electricity supply provider
categorizing MTNL at Commercial tariff instead of Industrial tariff. The claim has
been made with retrospective effect for the period Feb-2007 to May-2009 in respect
of HT connection and Jan-2002 to Apr-2011 in respect of LT connection. MTNL has
represented to BEST for reconsideration which has not been accepted by BEST. Hence
MTNL has approached Hon'ble Mumbai High Court and got a stay on the arrears
claimed by BEST amounting to Rs. 20.82 crores. In the opinion of the management,
there is remote possibility of the case being settled against MTNL.

e) In respect of Mobile Services Delhi, a sum of Rs. 25.78 crores claimed by TCL towards
ILD charges for the period Oct-09 to March-10 has not been paid due to heavy spurt
in ILD traffic towards M/S TCL. On technical analysis it was found that these calls
were made to some dubious and tiny destination. These destinations do not confirm
to international numbering plan of the respective countries and are not approved
destinations as per approved interconnect agreement. Further these calls have not got
physically terminated to the destinations. The observations were shared with M/S TCL.
M/S TCL has also been advised that the balance, which relates to fraudulent calls, is
not payable and accordingly no provision has been made in the books of accounts. The
matter was handed over to the committee for investigation. Subsequently M/S TCL filed
a case in Hon'ble TDSAT for recovery of the amount, decision for which is awaited.
The claim of Rs. 25.78 crores on this account has been shown as contingent liability.

In addition, the Company is subject to legal proceedings and claims, which have arisen
in the ordinary course of business. The Company's management perceives that these
legal actions, when ultimately concluded and determined, will not have any material
impact on the Company's financial statements.

65. Settlements with BSNL:

The amount recoverable from BSNL is Rs. 5,753.90 crores and the amount payable is
Rs.2,188.86 crores. The net recoverable of Rs. 3,565.04 crores is subject to reconciliation and
confirmation.

66. Subscribers' dues and deposits:

Other current liabilities include credits on account of receipts including service tax/GST
from subscribers amounting to Rs. 77.29 crores ( previous year Rs.86.63 crores), which
could not be matched with corresponding debtors or identified as liability, as the case may
be. Appropriate adjustments/ payments shall be made inclusive of service tax/GST, when
these credits are matched or reconciled. Therefore, it could not be adjusted against making
provision for doubtful debts.

67. The amounts of receivables and payables (including NLD / ILD Roaming operators) are
subject to confirmation and reconciliation. The recoverable and payable from operators are
under constant review and regular efforts are being taken for reconciliation and recovery
of old outstanding dues. Dues from the Operators being on account of revenue sharing
agreements are not treated as debtors and consequently are not taken into account for
making provision for doubtful debts.

68. The matching of billing for roaming receivables / payables with the actual traffic intimated
by the MACH is being done. Further the roaming income is booked on the basis of actual
invoices raised by MACH on behalf of MTNL. Similarly the roaming expenditure is booked
on the basis of actual invoices received by MTNL from MACH on behalf of the other
operators. However, regarding collection, the payment is directly received in the bank from
other operators for varying periods.

In MTNL Delhi unit, the collections received from the operators are matched in totality
against the bills. The allocation of collection to individual operator's account is pending in
the absence of detailed information which is being sought. Therefore although the roaming
income and expenditure are booked on actual basis, the roaming debtors are reconciled
in totality in the absence of detailed information and such reconciliation is being done on
regular basis.

70. Settlements with DoT:

a) Amount recoverable from DoT is Rs. 667.31 crores and amount payable is Rs.434.55
crores. The net recoverable of Rs. 232.76 crores is subject to reconciliation and
confirmation. LF/SUC dues payable to DOT Rs. 571.87 crores is shown under statutory
dues. There is no agreement between the MTNL and DoT for interest recoverable/
payable on current account. Accordingly, no provision has been made for interest
payable/receivable on balances during the year.

b) Deposits from applicants and subscribers as on 31 March 1986 were Rs. 81.32 crores
(previous year Rs. 81.32 crores) in Mumbai unit as intimated provisionally by DoT. At
the year end, these deposits amounted to Rs. 103.28 crores (previous year Rs. 103.28
crores), the difference being attributable to connections/refunds granted in respect of
deposits received prior to 31 March 1986. Balance on this account still recoverable from
DoT is Rs. 43.49 crores ( previous year Rs. 55.85 crores).

c) The total provision for Leave encashment is Rs. 260.75 crores up to 31 March 2025
(previous year Rs. 246.87 crores). Out of this, an amount of Rs. 45.49 crores (previous
year Rs. 45.49 crores ) and Rs. 43.37 crores (previous year Rs. 43.37 crores) is recoverable
from DOT in respect of Company C & D and Company B employees respectively for
the period prior to their absorption in MTNL.

d) An amount of Rs.6.52 crores (previous year Rs. 6.52 crores) towards GPF contribution
is recoverable from DOT as on 31 March 2025. The amount pertains to Company C&
D and Company B employees absorbed in MTNL w.e.f. 01 November 1998 and 01
October 2000 respectively.

71. As per gazette notification no.GSR 138(E) dated 3rd March 2014 pensionary benefits in
respect of absorbed combined service pension optees are being paid by the Government of
India on BSNL pay scales. Gratuity provision for other than combined service pension optee
employees of MTNL, and Leave Encashment provision for all of the employees of MTNL
has been made on the basis of actuarial valuation.

72. There is no indication of any impairment of assets of the Company, on the basis of the
company as a whole as a CGU under Indian Accounting Standards - 36 "Impairment of
assets” as specified under Section 133 of the Companies Act, 2013.

73. As per the accounting policy, Bonus/ Exgratia is paid based on the productivity linked
parameters and it is to be provided accordingly subject to the profitability of the Company.
In view of losses, no provision for Bonus/ Exgratia has been made during the year.

74. On reconciliation of roaming invoices with BSNL as agreed in the current year an amount
of Rs. 15.30 Cr of revenue is reversed in Delhi unit in Cellular Segment.

75. There is no amount which is required to be transferred to Investor Education and Protection
Fund by the Company.

76. The Company has no foreseeable losses, which requires provision under applicable laws
or accounting standards on long-term contracts and not dealing into derivative contracts at
all.

77. The Bank Reconciliation Statements as at 31 March 2025 include unmatched/unlinked
credits amounting to Rs. 4.25 crore (previous year Rs. 2.03 crore) and unmatched/unlinked
debits Rs. 0.13 crore (previous year Rs. 2.21 crore) respectively. Reconciliation and follow up
with the bank to match/rectify the same is in process.

78. The Company has incurred a loss of Rs. 3323.51 crores during the period under report.
The company has been incurring continuous losses since year 2009-10 (except in FY 2013¬
14) and the net worth has been fully eroded for the year under report. Considering the
continuous losses and negative net worth, the management has made an assessment of
its ability to continue as a going concern. In pursuance DoT letter No. F. No. 30- 04/2019-
PSU Affairs dated 29th October, 2019 and decision of Board of Directors of MTNL through
circular regulation on 04th November 2019, the MTNL Voluntary Retirement Scheme was
introduced with effect from 04th November 2019 under which 14,387 number of MTNL
employees of all grades opted and granted VRS to reduce the legacy staff costs inherited
on account of absorption of employees recruited under government w.e.f. 01.11.1998 and
also on 01.10.2000 and the expenditure of ex-gratia on account of compensation was borne
by the DOT/Government of India through budgetary supports as per approval of cabinet.
The company therefore reduced the staff expenses by more than 75 % which helped the
company to reduce its costs and also thereby losses since 2019-20 onwards. Besides, the
Government approved the monetization of the lands and buildings of the company with
assistance from DIPAM in order the get rid of the huge debt burden on the company. The
monetization of land and buildings of the company is in process.

In addition to this, Government approved providing 4G license to BSNL and an infusion
of fresh capital by the Government in lieu of granting 4G license. As per the deliberations,
the maintenance and running of MTNL wireless network has also been taken over by BSNL
from 01.04.2021 (in the case of Delhi) and from 01.09.2021 (in the case of Mumbai) onwards
to improve the quality of services and also the launching of 4G services of MTNL as and
when BSNL launches which also is likely to stabilize the revenue streams.

Besides as per F.NO.20-28/2022-PR dated 2nd August, 2022, DOT conveyed the decisions of
the Union Cabinet in its meeting held on 27.07.2022 for the raising of Sovereign Guarantee
backed bonds for MTNL with a tenure of 10 years for an amount of Rs. 17,571 crores with
waiver of guarantee fee to repay its high-cost debt and restructure it with new sustainable
loan which has been raised Rs. 10,910 Crs. & Rs 6,661/- during the year 2022-23 & 2023-24
respectively. The company will be able to manage the payment of interest due on Sovereign
Guarantee backed bonds with the support of Government of India in the form of soft loan
of Rs 1151 crore during the year. Also, in view of such unsustainable debts of MTNL, a
committee of Secretaries was constituted by the Govt. to examine matters such as asset
monetization, AGR dues, debt restructuring etc. for further course of action for the merger
of MTNL & BSNL. The government also allocated budgetary support of Rs. 1851 crores for
network up gradation of MTNL by BSNL as a precursor to operational integration. Also,
BSNL has to provide all telecom services in Delhi & Mumbai through leasing of operational
assets or other appropriate models.

Further during the year, pursuant to the service agreement(SLA) entered on 22-11-2024
with BSNL, the entire telecom operations of company in Delhi & Mumbai are being run
by BSNL w.e.f. 01-01-2025. BSNL shall also take care of CAPEX & OPEX for the smooth
running of operation and ensure EBIDTA neutral operation of the company. For the issue of
mounting debts as well as other to be referred to Committee of Secretaries and same are at
present under review and before COS recommend way forward in case of MTNL, the case
for further support to MTNL to manage its working capital is being contemplated. Towards
implementation of the SLA, certain customers in Delhi & Mumbai have been migrated to
BSNL w.e.f. 01.01.2025 and revenue thereof is not being recognised by MTNL. Necessary
guidelines/procedure for execution of the SLA are yet to be framed.

All of the above aspects are considered by the management while preparing the financial
statements and an assessment of its ability to continue as a going concern is made accordingly
as required in SA (570) and Para 25 & 26 of Ind AS 1 "Presentation of Financial Statements'
the company is continuously having support of Govt. in managing its issues.

79. The amount recoverable from Reliance Communication Ltd. is Rs. 79.88 crores and amount
payable to Reliance Infratel Ltd. is Rs. 7.03 crores. The companies are under insolvency
proceedings before Hon'ble NCLT under IBC, 2016. The provision/write-off against the
outstanding dues will be considered on final decision in this matter.

80. The GPF Trust is currently in the process of reconciling and recomputing its liabilities to
determine the provident funds payable to employees. The adjustments, if any, resulting
from this recomputation/reconciliation will be recognized in the financial statements in the
year the reconciliation is finalized.

81. Revenue from operations includes an amount to Rs.7.17 crores booked on provisional basis
due to technical glitch in the billing software in Delhi and Mumbai. The final impact of the
same will be accounted for once the billing is done through the system.

82. The company has booked the liability towards the Sovereign Guarantee fee of Rs 282.76
Crore payable to Government of India( "GOI" ) in the respective years (i.e.F.Y. 2022-23,
2023-24 & 2024-25) and paid the respective GST thereon under RCM. However, due to
financial distress, the company was not able to make payment to DOT and requested DoT
vide its letter dated 20.09.2024 that the pending liability of Rs 282.76 Crore on account of
Sovereign Guarantee Fees, forthcoming Sovereign Guarantee fee liability in upcoming
years, corresponding penal guarantee fee and GST there on shall be settled through equity
infusion by the GoI. Since, the matter is under consideration of DoT for equity infusion
along with penal Sovereign Guarantee Fee, the amount will be measured and accounting
will be addressed accordingly at the later stage as per the decision of GoI.

83. License fee on the Adjusted Gross Revenue (AGR) was calculated and accounted for on
accrual basis in respect of both revenue and revenue sharing with other operators till F.Y.
2011-12. As per the directions of Supreme Court given earlier in respect of calculation of
License Fees and AGR, the matter was referred back to TDSAT. TDSAT vide its judgment
dated 23.04.2015 set aside the impugned demands of DOT and DOT was directed to rework
the license fee in the light of their findings. However, MTNL is not a party to the dispute
and the AGR is calculated as per License Agreement.

The issue of deduction claimed in AGR upto F.Y. 2011-12 in respect of revenue sharing on
netting basis with BSNL has been taken up with DOT and BSNL while paying License Fees
on actual payment basis from 2012-13 onwards. The impact of Rs. 140.36 crores on this
account upto the year 2011-12 has been included in contingent liability. DOT has assessed
the LF calculated on the basis of AGR of MTNL. The payables towards license fees and
spectrum usage charges have been adjusted with excess pension payouts to Combined
Pensioners Optees recoverable from DOT in respect of which matter is under consideration
and correspondence in going on between the Company and DOT. The License agreement
between Company and DOT does not have any guidance on change in method of calculation
of Adjusted Gross Revenue (AGR) due to migration to Ind-AS from I-GAAP. Provisioning
and payment of liability in respect of license fees and spectrum usage charges payable
to DOT has been done on the basis of Ind-AS based financial statements. The amount of
difference in computation of Adjusted Gross Revenue (AGR) is under consideration of DOT.
Further, DOT has disallowed certain deductions claimed in the AGR e.g. PSTN charges,
IUC payment to other operators etc. The deductions claimed in AGR were disallowed for
want of documents from MTNL. MTNL has submitted the documents and the revision of
assessment of LF is pending at the end of DOT. The provision assessment order of LF from
2006-07 to 2023-24 and SUC from 2011-12 to 2023-24 issued by DOT shows demand of Rs.
5132.24 crores. The assessment is under revision in view of documents submitted by MTNL
to CCA/ DOT. However an amount of Rs. 5132.24 crores is shown as contingent liability.

In respect of this Hon'ble Supreme Court judgement and final order dated 24.10.2019
disposing the AGR matter, it is submitted that MTNL was neither a party to Supreme
Court case nor MTNL violated the AGR definition as per License Agreement. The same
is also pointed out in supreme court judgement dt. 24/10/2019 that MTNL is not party to
the litigation. MTNL is following the same definition of AGR as is given in license fee
agreements. MTNL is calculating the LF/SUC accordingly since the inception of AGR based
LF & SUC. MTNL's accounts are also verified by C&AG and all the LF related entries/
adjustments are verified with AGR statements submitted to CCA. Therefore, the Supreme
Court's judgement on AGR is not applicable for MTNL.

DoT has sent a demand note for additional 1.4 MHz of reserved spectrum in 900 MHz Band
in Mumbai and Delhi LSAs vide No. 1000/1/2023-WF dt. 27-01-2025 for Rs. 1155 crores.
The additional 1.4 MHz spectrum allotted to MTNL is not utilized by MTNL and MTNL is
requesting DoT for withdrawal of demand note no 1000/1/2023-WF dt. 27-01-2025 for Rs.
1155 crores.

Further a demand letter No. 1000/01/2023-WF dt 23/03/2023 for Rs. 4252.83 crore is also
attached with the above demand in respect of spectrum allotment in the 900 MHz and 1800
MHz. The allotment of the captioned 5 MHz spectrum in 900/1800 Mhz band is made as per
the OM No F.No. 20-28/2022-PR dated 02/08/2022. As per OM No F.No. 20-28/2022-PR dated
02/08/2022, the allotment of spectrum was decided to be given with budgetary support as
equity infusion and the cost on pro-rata basis will be settled for spectrum held by MTNL
till date of spectrum allotment to BSNL. However, the spectrum was regularized without
budgetary support to MTNL or charging part demand and MTNL is requesting DoT for
revision of demand note in accordance with OM dt. 02/08/2022. As the regularisation of
2G spectrum as well as demand of Rs 4252.83 crors is not as per OM issued w r t revival of
MTNL /BSNL, the matter is being raised with DOT for withdraw of demand.

In view of above the demands are shown as contingent liability. the list of LF related
contingent liability is shown hereafter.

For and on behalf of the Board of Directors

Sd/- Sd/-

For O P Bagla & Co LLP For S.L.Chhajed & Co. LLP (A. Robert J. Ravi) (Rajiv Kumar)

Chartered Accountants Chartered Accountants Chairman and Managing Director Director (Finance)

FRN No. 00018N/N500091 FRN No. 000709C/C400277 DIN 10095013 DIN 09811051

Sd/- Sd/- Sd/- Sd/-

(CA Nitin Jain) (CA Vijit Baidmutha) (Anirudh Prasad Singh) (Ratan Mani Sumit)

Partner Partner Chief Financial Officer Company Secretary

Membership No. 510841 Membership No. 406044 Membership No. 15193

Place: New Delhi
Date: 28 May 2025