At the outset, shareholders are requested to read the Management Discussion and Analysis along with other sections of the Annual Report for having a full understanding.
BUSINESS SNAPSHOT
GTL Limited ("GTL"/ "the Company"), is a Network Services Company, offering services and solutions to address the Network Life Cycle requirements of Telecom Operators and Tower Companies. Currently it has GTL Infrastructure Limited ("GIL"), an IP 1 License Category Tower Company as its Customer. Its network services portfolio includes Network Operations and Maintenance; and Energy Management as under:
Network Operations and Maintenance
GTL provides network operations and maintenance services that deliver assured network uptime and availability to its customer. These services include:
Corrective and preventive maintenance of the network
Capex sizing and planning services
Remote monitoring and trouble ticketing
Technical support and process management
Energy Management
Telecom Networks require uninterrupted access to power for seamless operation. Management of Energy (Power and Fuel) plays an important role to ensure reliable network operations at optimum costs.
GTLs Energy Management Solutions provide high availability of power to telecom sites efficiently. They are delivered through -
Technical audit for optimum power consumption
Monitoring utilization of sources of energy and plugging leakage thereof
Driving modernization with energy efficient equipment and
I ntegrating non-traditional or alternate sources of energy with reduced Carbon dioxide (CO2) footprint
For further details on the various steps taken by the Company in implementing and operating various energy conservation measures, members are advised to refer to the write up under the head Conservation of Energy in the Directors Report.
INDUSTRY STRUCTURE AND DEVELOPMENTS Industry Structure
Telecom Industry comprises of Telecom Equipment Suppliers, Telecom Service Providers and Telecom Infrastructure Providers.
i) Telecom Service Providers comprise of:
Telecom Operators / Mobile Service Providers
Broadband Service Providers.
Internet Service Providers
Mobile Virtual Network Operators
Satellite Service Providers
Business Model of Telecom Service Providers
Telecom companies generate revenue via Subscription mobile services, fixed landline, wireless broadband and satellite services. These companies offer a high-speed broadband facility, wireless network and mobile security related services to businesses.
Mobile telecom services revenue includes income earned via mobile data usages such as SMS, mobile data access, mobile phone calls, etc. Mobility segment i.e., wireless and mobile subscription services also contribute to the revenue of telecom companies. These companies charge from big multinationals for premium services such as video conferencing and high-security private networks. Telecom companies also source revenue from other telecom companies by providing them with network connectivity.
Satellite broadband, is a wireless internet connection provided through communication satellites orbiting the Earth. It, being independent of location, can be accessed from anywhere within the range of satellites providing global coverage to its users. Satellite internet is gradually gaining popularity in the world and big internet companies are entering this space to offer faster internet network.
ii) Telecom Infrastructure providers
The Telecom Infrastructure providers can be classified as under:
Towers owned by telecom operators.
Towers owned by government operators.
Towers owned by independent tower companies.
Telecom towers form the backbone of wireless networks and provide last mile connectivity to subscribers. Tower requirements usually depend on Network Coverage (which, in turn, depends upon geographical area, population density and spectrum bands) and Network Capacity i.e. maturity of wireless industry, cellular and data penetration and data usage per subscriber, quantum of spectrum and wireless data technology (whether it is 2G/3G/4G/5G).
Business Model of Telecom Infrastructure Providers
As the number of tenants on a tower increase, tower companies ("TowerCos") are able to generate incremental revenue and EBITDA. The key driver of tower revenue growth is tenancy. Apart from tenancies, TowerCos revenues are also influenced by the pricing charged per tenant. Operating cost components for the tower business are site rentals, repairs and maintenance, security charges, insurance and cost of outsourced resources. As major expense items are fixed in nature, cost for additional tenant is minimal. Hence, the tenancy ramp-up results in a significant percentage of incremental revenues, ROI and cash flow. To gain market penetration and 4G + 5G network expansion at optimal cost, Telcos continued to rent towers from TowerCos, thereby considerably reducing costs while allowing them to focus on their core. Renting towers from TowerCos enabled these Telcos to go to market within a short time.
GTLs Business: As stated above, GTL currently provides Network Services namely Operations and Maintenance; and Energy Management ("OME") to GIL, a telecom infrastructure Company.
Industry Developments
Telecom Industry Scenario
Revenue and Subscriber Base
> Revenue
The telecom sectors revenue for FY 2024-25 (Adjusted Gross Revenue or AGR) stood at 3,03,025 Crores, recording a 12.02% year-on-year increase over 2,70,504 Crores in FY 2023-24, as per the latest TRAI Performance Indicators Report. This growth was driven by steady increases in subscriber base, 4G/5G data usage, and average revenue per user (ARPU). (Source: telecomtalk.info - June 9,2025, Outlook Business - June 20,2025)
> Subscriber Base (as of March 31,2025):
- Total telecom subscribers: ~1,200.80 million s Wireless subscribers: ~1,163.76 million s Wireline subscribers: ~37.04 million (Source: Press Information Bureau- July 8,2025)
These figures show a steady growth in Indias digital footprint, especially in rural and tier-2/3 areas, supported by rising data usage and expanding mobile broadband access.
Draft National Telecom Policy 2025 (NTP-25)
On July 23, 2025, the Department of Telecommunications released NTP-25 for public consultation. It sets targets for 2030: 100% 4G coverage, 90% 5G population coverage, one million public Wi-Fi hotspots, and 100 million fixed-broadband homes. The policy is built around six strategic missionsincluding spectrum, reform, domestic manufacturing, cyber security, digital innovation, and green telecom. (Source: voicendata.com - July 24,2025)
PM-WANI Tariff & Framework Reforms
On June 16, 2025, TRAI capped backhaul tariffs for Public Data Offices ("PDOs") under PM-WANI at no more than twice the corresponding retail FTTH rate. This reduces PDO costs by up to ten-fold, accelerating grassroots Wi-Fi deployment and expanding affordable internet access in urban and rural areas. (Source: Press Information Bureau - July 16,2025)
Security Regulations
DoT issued revised security regulations in May 2025 for foreign operators.
> Mandatory real-time location tracking of terminals,
> Local data centre requirements, NavIC integration, and indigenous sourcing mandates (20% localization within 5 years),
> Prohibition of remote access to Indian infrastructure without secure protocols, and
> Data sovereignty norms requiring all Indian traffic to be routed through local infrastructure
(Source: www.monevcontrol.com - May 6,2025)
Key Developments
5G Coverage
India has achieved 99.8% district coverage with 5G services across all states and union territories, supported by over 0.486 million BTS installations as of June 2025, with telecom service providers expanding beyond minimum rollout obligations and focusing on techno-commercial considerations for mobile service expansion in both urban and rural markets. (Source: tele.net - July 25,2025)
6G Coverage
The Bharat 6G Alliance and TSDSI strategic partnership, formalized in July 2025, focuses on co-developing 6G standards, addressing Indias technology priorities, facilitating regular information exchange on global forum activities, and strengthening Indias participation in international standards development processes to accelerate the countrys leadership in 6G and emerging digital technologies. (Source: tele.netAugust 4,2025)
Fixed Wireless Access (FWA) Market Expansion
The Indian telecom sector has witnessed significant growth in 5G-based Fixed Wireless Access services, with the market leader adding 1.03 million FWA subscribers in May 2025 to reach 5.85 million total users, positioning India to become home to the worlds largest FWA provider by end-June 2025. The 5G-based FWA services are achieving premium pricing with ARPU of 650-700, over three times higher than mobile broadband ARPU. (Source: tecknexus.com - January 9.2025, TelecomTalk - August 4,2025)
Network Infrastructure Densification & Service Portfolio Expansion
Major operators accelerated infrastructure investments in Q4 FY25 by adding 19,900 new towers, deploying 44,400 km of fiber optics, and installing 812,000 FWA home passes. They also launched IPTV services in 2,000 cities and rolled out Indias first unlimited international-roaming plans covering 189 countries. (Source: TelecomLead, May 13.2025, Airtel press release - April 25,2025)
Satellite Communication
Satellite Communication in India is rapidly evolving with multiple global and domestic players entering the market. Starlink secured its GMPCS licence from DoT in May 2025 and a five-year IN-SPACe authorisation by July 2025, becoming the third approved provider after Eutelsat- OneWeb and Jio-SES. Airtel and Jio Platforms each struck distribution pacts with SpaceX in March 2025 to offer Starlinks high-speed satellite broadband through their retail and online channels, pending regulatory clearances. Meanwhile, Amazons Project Kuiper formally applied for a GMPCS licence in May 2025, aiming to deploy its 3,200-satellite LEO constellation. These developments are set to expand ground station deployments, enhance backhaul resilience, and bring high-capacity internet connectivity to Indias most remote regions.
Energy Footprint & Green Shift
> India has approximately 8.24 lakh telecom towers and nearly 2.98 million transceiver stations, consuming about 70 TWh annually, which contributes to over 49 million tonnes of CO2 emissions per year. (Source: Mercomindia.com - April 7,2025)
> Current demand for telecom related Li-ion storage is estimated at ~15 GWh, expected to grow to 54 GWh by FY 27, and 127 GWh by FY30 nationallyindicating major infrastructure scale-up needs (ET Auto / ICRA / ICEA) (Source: Economic times - November 19,2024)
> Telecom infrastructure companies have 1,250 MW of solar power in the deployment pipeline, as they seek alternatives to diesel generators across network operations. (Source: Mercomindia.com - April 7,2025)
Tower companies are embracing diversified energy mixes combining grid power, diesel generators, battery storage, and renewables like solar or windto cut diesel use and emissions. Integrating clean energy with modern battery systems enhances operational resilience and delivers substantial cost and environmental benefits.
Future of the Telecom Industry
Indias telecom sector is entering a new era of intelligent automated connectivity driven by the convergence of 5G networks, artificial intelligence ("AI"), and robotics. This trifecta will reshape network operations, service delivery, and business modelsfuelling an estimated INR 1 trillion impact by 2030 and positioning India as a global leader in digital infrastructure.
5G as the Backbone of Intelligent Connectivity
> Ultra-low latency & high throughput: Indias 5G footprint grew to 492,520 base transceiver stations (BTS) by July 31, 2025 up 6,450 BTS in a single month while active 5G subscriptions have crossed 155 million as rapid FWA uptake and smartphone upgrades fuel adoption. (Source: TelecomTalk - August 4,2025)
> I ndustrial use cases: Private 5G slices in 3.7-3.8 GHz and 4.8-4.99 GHz support smart manufacturing, enabling real-time robotics control and IoT automation. (Source: www.communicationstodav.co.in - May, 2025)
> Edge computing growth: As 5G roll-out nears 100% district coverage, demand for distributed edge data centres is surging to meet sub-millisecond processing for AR/VR and autonomous vehicles. (Source: Economic times - December 26,2024)
Artificial Intelligence (AI): The Cognitive Layer for
Autonomous Networks
> Network optimization: AI-driven analytics have boosted network efficiency by 20-30%, cutting outages through predictive maintenance and automated fault detection. (Source: www.communicationstoday.coin - May, 2025)
> Customer experience automation: Over 65% of customer service queries in Indias telecom sector are now resolved by AI-driven multilingual chatbots, cutting average response times by 40% and significantly reducing call-centre workloads. (Source: Communications Today May 15,2025)
> Security & fraud prevention: Real-time AI monitoring prevents SIM-swap fraud and phishing, saving an estimated 1,700 Crores annually. (Source: www. communica tionstoday. coin - May, 2025)
> Operational impact: 55% of Indian TMT firms have scaled AI use cases, with 67% reporting ROI >10% on AI investments. (Source: www.communicationstoday.co.in - May, 2025)
Robotics: Automating Field Operations
> Inspection drones: UAVs now perform tower inspections in minutes, cutting time by 75% and costs by 50% compared to manual methods.
> Autonomous maintenance bots: Ground robots for underground duct inspections and cable laying increase safety and speed network expansions.
> RPA in back-office: Robotic process automation handles billing, order processing, and compliance reportingreduces errors by 60% and costs by 30%.
(Source: www.financialexpress.com - June 14,2025)
The fusion of 5G, AI, and Robotics represents a paradigm shift transforming Indias telecom operators into providers of autonomous intelligent connectivity fabrics. By capitalizing on these converging technologies, India can deliver ubiquitous, secure, and sustainable digital services, driving economic growth and social inclusion.
OPPORTUNITIES AND THREATS OPPORTUNITES:
Budget Allocation for 2025-26
The Indian government has allocated 1.29 lakh Crores to the telecom sector. This allocation includes significant funding for various projects and entities under the Department of Telecommunications. Key components of this budget include:
The Union Budget 2025-26 allocated 81,005 Crores to the Department of Telecommunications, with a sharp shift toward capital expenditure 51,785 Crores (64%) for projects like Bharat Net ( 22,000 Crores) and BSNL/MTNL revival ( 33,758 Crores)while revenue spending stands at 29,220 Crores. Key opportunities include:
> Rural connectivity via Bharat Net fibre rollout and Wi-Fi last-mile access
> Public-sector modernization through 4G/5G network upgrades at BSNL/MTNL
> PLI incentives ( 1,965 Crores) for telecom equipment manufacturers
> Duty cuts on carrier-grade Ethernet switches (20%10%) boosting domestic manufacturing and data-centre buildout
> R&D funding ( 20,000 Crores for private-sector initiatives; 2,000 Crores for India AI Mission)
(Source iprsindia.ora, www.cnbctv18.com - February 1,2025)
5G Network Densification
Continued 5G rollout requires higher tower density and small-cell installations. (Source: June 9,2025, Voice Data)
Fiberization and Backhaul Expansion
Government targets 80% tower fiberization by 2030 under NTP-25, up from ~46% today. (Source: July 24, 2025, www.newindianexpress.com)
Satellite Backhaul & Edge Sites
The entry and expansion of Starlink, Airtel-SpaceX, Jio-SES, and Amazons Project Kuiper in Indias satellite broadband market collectively drive substantial demand for new ground station deployments and edge gateway sites to support backhaul, low-latency services, and network densification.
THREATS:
Market Duopoly Risk: The growing dominance of two large operators poses a structural risk of duopoly, especially if the third private operator fails to stabilize. In a duopoly environment, pricing power and contract terms tend to concentrate with the leading players, which can compress margins across the value chain, reduce flexibility in commercial negotiations, and slow decision cycles for network expansion.
Capital Expenditure (Capex): Telecom operators are planning to invest 50,000 Crores over the next two years in solarization of nearly 100,000 towers to reduce diesel consumption, but this high up-front investment poses significant financial risks, delaying ROI and pressuring balance sheets. (Source: Mercom India - April 10,2025)
Apart from the above capex requirements, as has been discussed elsewhere, the telecom industry may have to continue investing in further Capex, related to Network and Technology upgradations to cater to the future needs.
Cost Pressures & OPEX: Rising energy and maintenance costs for rural towers increase operating expenses; solar transitions require high capex. (Source: Financial Express - November26,2024)
Regulatory Uncertainty: Continued auction deferments and evolving satcom / IoT security rules increase compliance costs. (Sources: Economic Times, June 4, 2024 and May 6,2025)
OUTLOOK
As reported in the Directors Report, on account of the adverse circumstances surrounding the telecom and power sectors, the Company got admitted into Corporate Debt Restructure ("CDR") in July 2011 and its efforts to arrive at an One Time Settlement ("OTS") / Negotiated Settlement ("NS") did not yield fruitful results till 2023, on account of the various developments mentioned in the Directors Reports of earlier years. However, the years of effort and the continued discussion by the Company with the lenders resulted in the issuance of In-Principle approval for an OTS proposal by the Monitoring Institution in January 2024. Pursuant to that the Company after depositing the settlement amount in the Escrow Account has settled the dues of ten original secured lenders (including Canara Bank). Consequently, while the Honble National Company Law Tribunal ("NCLT") has dismissed the Petition filed by Canara Bank as withdrawn, the Debt Recovery Tribunal ("DRT") has allowed withdrawal of the Applications filed by nine secured lenders. Canara Bank is also in the process of withdrawing its Application. Further pending the outcome of Arbitration Proceedings, the Company is continuing its efforts to arrive at settlement in respect of Arbitration matters as well. The Company is also awaiting the OTS sanctions from the rest of the lenders.
That apart, presently GTL has only one customer viz. GTL Infrastructure Ltd., which is also having its own financial difficulties. Thus, in the given circumstances, the Company would continue to take steps for early revival of the Company and track industry developments closely to align with market and customer developments.
Needless to say, that having exhausted / in the process of exhausting all its financial resources, with a limited term contract period with GIL and emerging duopoly market scenario (which may create financial impact on short to medium term), it may become inevitable for the Company to restructure, realign, reposition or exit its existing business, and / or explore new business opportunities, while keeping in mind the interest of its employees and stakeholders for growth prospects. The stakeholders have to make note of the above developments along with the mitigation measures taken in respect of the Risks and Concerns given below.
SEGMENT WISE PERFORMANCE
The Company is engaged in the business of providing "Network Services" only. Accordingly, the performance of the Company from Network Services business is presented below.
DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE
The Financial Analysis of FY 2024-25 is as under:
Profit & Loss Account Items Revenue
Revenue in FY 2024-25, stood at 253.88 Crores as compared to 201.92 Crores in FY 2023-24.
As GIL is the only customer for the Company and the Company has aligned its business plans with that of GIL to sustain business continuity, the Companys revenue goes along with that of GIL.
Cost of Purchases and Services Rendered
In the FY 2024-25, cost of purchases and services rendered stood at 25.84 Crores as against 22.67 Crores in FY 2023- 24. The said increase is on account of increase in revenue in the current year.
Employee Benefits Expenses
In the FY 2024-25, employee benefit expenses stood at 81.80 Crores as against 74.83 Crores in FY 2023-24. The increase is in the normal course of business.
Other Expenses
In the FY 2024-25, other expenses including administrative expenses, travelling, conveyance, rent, consultancy, foreign exchange variation and others stood at 81.75 Crores as against 43.98 Crores in FY 2023-24. The increase in these expenses compared to previous year is mainly on account of increase in the exchange losses due to change in USD / INR. In the previous year, the exchange loss was 16.31 Crores; whereas in the current year it is 32.37 Crores. These are non-cash expenses. While the legal and professional fees have also increased from 13.14 Crores in 2023-24 to 21.57 Crores in 2024-25 on account of the various litigation matters. There is also increase in certain expenses in the normal course of business.
Finance Cost
In the FY 2024-25 Finance Cost stood at 33.85 Crores as against 28.87 Crores in FY 2023-24.
The Company has neither paid nor provided interest on its borrowings during the FY 2024-25 for the reasons stated in Note 22.4 of the Financial Statements. Had such interest been recognized, the Finance Cost for the year ended March 31,2025 would have been more by 383.44 Crores as stated in note no. 32.1.
Balance Sheet Items Equity Share capital
As on March 31,2024, the equity share capital was 157.30 Crores. There is no change in share capital and as such as at March 31,2025 the share capital remains at 157.30 Crores as under:
Particulars | No. of Equity Shares | Rs in Crores |
Equity Share Capital as at March 31,2024 | 157,296,781 | 157.30 |
Equity Share Capital as at March 31,2025 | 157,296,781 | 157.30 |
Other Equity
Particulars | Rs in Crores |
As at March 31,2024 | (6,178.65) |
Movement in Other Equity | (7.96) |
As at March 31,2025 | (6,186.61) |
Net Worth
Particulars | Rs in Crores |
Equity Share Capital as at March 31,2025 | 157.30 |
Other Equity as at March 31,2025 | (6,186.61) |
Total Net Worth | (6,029.31)) |
Borrowings
Borrowings as on March 31, 2025 were 3,815.06 Crores as against 3,979.83 Crores as on March 31,2024. The Company based on the "In-Principle" approval for One Time Settlement ("OTS") communicated by the Monitoring institution and individual sanctions funded the Escrow Account maintained for the said purpose and settled the dues of nine original secured lenders, besides entering into Upside Sharing Agreement with eligible lenders for sharing 75% of the net recovery amount of Arbitration Proceedings amongst the lenders in the agreed proportion. The Company was awaiting the outcome of Arbitration Proceedings and also the OTS sanction from rest of the lenders, while taking appropriate measures for resolution of NCLT and DRT related issues. For further update reference may be made to the write up under Mitigation Measures Taken in respect of the "Risks and Concerns" given below.
Net Fixed Assets
As on March 31,2025, the net fixed assets were 15.76 Crores as against 29.97 Crores as on March 31,2024. The reduction in net fixed assets was mainly on account of sale of assets by lenders under SARFAESI and consequent closure of leased assets as per the Indian Accounting Standard (Ind AS 116) on "Lease".
Receivable & Inventory
The receivables as on March 31,2025 were 14.90 Crores as against 21.43 Crores as on March 31,2024. The decrease in the receivables is mainly on account of higher realisation from business.
The Inventory as on March 31,2025 was Nil as against Nil as on March 31,2024.
Contingent Liabilities and Related Party Transactions
For details thereof, please refer to Note No. 39.C & 40.2 in the Financial Statements respectively.
Significant changes in key financial ratios
Particulars | UoM | FY 2024-25 | FY 2023-24 |
Debtors Turnover | No. of Days | 26 | 49 |
Inventory Turnover (Refer Note 1) | No. of Times | N.A. | N.A. |
Interest Coverage Ratio (Refer Note 2) | No. of Times | N.A. | N.A. |
Current Ratio | No. of Times | 0.02 | 0.03 |
Debt Equity Ratio (Refer Note 3) | No. of Times | N.A. | N.A. |
Operating Profit Margin (Net profit / (Loss) (Before Exceptional items) | % | 25.58 | 17.56 |
Particulars | UoM | FY 2024-25 | FY 2023-24 |
Net Profit Margin (%) (Net Profit / (Loss) (After Exceptional items and OCI) | % | (3.22) | 98.88 |
Return on Net Worth (Refer Note 3) | % | N.A. | N.A. |
Notes: (1) At the Financial year ended March 31,2025 and March 31,2024, inventory was NIL hence stated as N.A. (2) The Company has neither paid nor provided interest on its borrowings during the FY2024-25 & 2023-24, hence stated as N.A. (3) In view of negative Net Worth, Debt / Equity Ratio and Return on Net Worth are not furnished above.
Explanation for significant changes in ratios:
The debtors turnover decreased from 49 days to 26 days on account of higher realisations from the customer.
The Operating Profit Margin [Net Profit/(Loss) (before Exceptional items)] in % terms has increased from 17.56% to 25.58% mainly on account of increase in Revenue and optimisation of energy and other services costs.
The Net Profit Margin (%) [(Net Profit / (Loss) (After Exceptional items, Tax and OCI)] has decreased from 98.88% to (3.22%) mainly on account of deferred tax charged during the current year and higher exceptional items in the previous year.
The Current Ratio has remained steady from 0.03 to 0.02.
RISKS AND CONCERNS
In furtherance to the Risks and Concerns reported by the Company in the earlier Annual Reports, the Company reports the following Risks and Concerns,:
Strategic & Operational Risks
The Indian telecom industry is heavily concentrated, with two leading players controlling over 81% of revenue market share - Reliance Jio and Bharti Airtel. Vodafone Idea (Vi), the financially stressed third operator, has relied on fund raising efforts, spectrum payment deferrals, and government equity support to stay afloat. However, if Vi fails to stabilize its operations, in case of not getting financial support from government, the market would effectively transition into a duopoly dominated by Jio and Airtel. This increased concentration risks reducing demand flexibility and bargaining power for tower companies and their vendors, poses a strategic threat to businesses such as GIL, the single customer of the Company, whose fortunes are tied to the scale, financial health, and procurement policies of GIL.
Further, the Company has only one customer viz. GIL, which is also having financial difficulty. On expiry of current service contracts with GIL, the Company managed to renew its contracts only for a limited period. While on the expiry of the current service contracts, the Company could manage to renew its contracts with GIL for a limited period, its continuance depends upon further developments in both Companies. Presently, the Companys operations are at the minimum level. Thus, even the closure of the OTS of the Company, may not also scale up the Companys business operations or revenues or profitability, unless GIL also finds a solution to improve its financial health and its performance.
Skilled field staff shortages and high attrition, especially in tough regions like UP East, Bihar, Rajasthan, and the Northeast, further strain operations. Recruitment has become harder due to selective hiring trends and poaching by competitors, raising costs and threatening service continuity.
Needless to point out that the Company is having its own financial difficulties as well since 2011, when it got admitted into Corporate Debt Restructure ("CDR"). Since then, the Company had been taking various steps for arriving at a settlement with the lenders. In the meanwhile, the lenders were taking various actions for recovering their dues. However, the Company is seeing light at the end of the tunnel, in response to the efforts put in by the Company, Promoter and Management, the details of which are given below under the head "Mitigation Measures".
Legal & Compliance Risk
In the matter of settlement of the dues of the lenders, the petitions filed by lenders before DRT is pending for disposal.
The investigations initiated by the regulatory authorities as reported in the last Annual Report is pending.
Litigation proceedings and Arbitration proceedings against Maharashtra State Electricity Distribution Company Ltd. ("MSEDCL") and GIL are pending before various Forums.
As regards all litigations and compliance of various other regulatory requirements, shareholders are requested to refer to status of legal cases and Secretarial Audit & Compliance Report (forming part of the Directors Report) respectively.
Foreign Exchange and Commodity Price Risk
Members are requested to refer note no. 43 of the Financial Statements under the head Financial Risk Management Objectives and Policies for risk arising in respect of the above.
Mitigation measures taken
The Company continues to monitor the developments in the industry, engage with its lenders for settlements of the dues and co-ordinate with its customer. It is also extending necessary operational support to GIL to enable it to provide better service to its customers and also resolve issues with its lenders.
On the network operations front, it mitigates the operational risk through the establishment of a Circle Operations governance team empowered to conduct surprise site visits, validate operating conditions, and identify gaps, leakages, and asset misuse. To combat talent attrition and skill shortages, the Company has introduced circle-based recruitment pilots, engaging local recruiters to improve hiring efficiency and match attrition rates with phased replacements. Employee retention is further supported by targeted Induction Programs and remote training modules, highlighting GTLs indirect benefits and career progression pathways.
As regards its own financial difficulties and the Petition pending before NCLT, as reported in earlier Annual Reports, as early as 2014, the Company voluntarily offered to settle the dues of the lenders by monetizing its assets, business divisions and investments. The said proposal could not materialise on account of the delay in giving individual sanction by the lenders and withdrawal of the CDR facility by Reserve Bank of India ("RBI"). Thereafter based on subsequent RBI Circular and the decision of the lenders, the Company executed Inter Creditor Agreement with all but one bank. That proposal also could not proceed further on account of delay from lenders due to non-completion of the internal approval process. While the Company continued its settlement efforts all the time, the lender/s issued notices for recall of their loans, took possession of the secured assets and sold the moveable and immovable assets of the Company and also the shares pledged by the Company and Promoter and appropriated the amount against their dues; and also filed application before DRT / NCLT. However, within the challenges, the Company, Promoter and Management with their unwavering honest commitment towards the stakeholders, not only continued the business operations without interruptions; retained the trained manpower in the service-oriented business of the Company; and discharged the statutory liabilities to the Government, but also paid the dues of the lenders, whatever way possible (including recovery by lenders by sale of assets).
It may be clarified that over the years since 2009 - 10, the Company has made aggregate repayments of 5,629.74 Crores to lenders, by way of payment towards facilities / novation / issuance of securities / sale of assets etc.
Thus, the OTS presently arrived at with the lenders is a culmination of the continuous efforts and co-operation extended by the Company, Promoter and Management. In terms of the Final OTS as communicated by the Monitoring Institution in January 2024, the Company has deposited the amount due under the OTS and made payment to ten of the secured lenders, out of the amount deposited in the Escrow Account as of the date as under:
Particulars | Amounts payable | Balance funded |
OTS amount approved by secured lenders | 375.79* | |
Less : Amount appropriated on sale of immovable assets | 101.01 | |
Balance amount payable | 274.78 | |
Amount funded in Escrow Account | 274.78 | |
Less : Disbursements made from Escrow Account as per Sanctions in respect of 10 original secured lenders | 167.48 | |
Balance provided in Escrow Account | 107.30 |
* In addition to this amount to be paid to the secured tenders, as per terms of Upside Sharing Agreement executed with respective lenders, a significant portion of the proceeds arising on the success of the pending arbitrations would also be payable to the secured lenders.
Consequently, as reported in the Directors Report the Honble NCLT has dismissed the Petition filed by Canara Bank as withdrawn, DRT has allowed withdrawal of Application by nine secured lenders and Canara Bank is in the process of withdrawing its Application before DRT.
Thus, having exhausted / in the process of exhausting all its financial resources, with a limited term contract period with GIL and emerging duopoly market scenario (which may create financial impact on short to medium term), it may become inevitable for the Company to restructure, realign, reposition or exit its existing business and / or explore new business opportunities, while keeping in mind the interest of its employees and other stakeholders for growth prospects.
In the matter of investigation initiated by regulatory authorities, the Company continues to co-operate and providing appropriate legal documentation / information to defend and exonerate on its merits. Currently the same is underway. As regards, pending litigations and Arbitration matters, reference may be made to the Status of Legal Cases given below. As regards mitigation measures in respect of Foreign Exchange, Commodity and Other Risks, Members are requested to refer to note no 43 of Financial Statement under the head Financial Risk Management Objectives and Policies. For the reasons stated in Note no. 43.5, the question of carrying out commodity hedging activities does not arise.
Status of Legal Cases
The following is the status of pending legal cases:
i) 4 cases: The Company has been implicated as proforma defendant i.e., there are no monetary claims against the Company. In most of these cases, dispute concerns matter like loss of share certificate, title claim, ownership, transfer of the shares etc. The Companys implication in these matters is with a view to protect the interest of the lawful owners of the shares. Upon the final orders passed by the Court(s), the Company shall have to release the shares, which are presently under stop transfer, in this regard to the rightful claimants. There is no direct liability or adverse impact on the business of the Company on account of the said 4 cases.
ii) 9 cases: These cases pertain to Labour Court matter of earlier power business, wherein the employees filed for reinstatement on termination consequent to termination of Aurangabad Distribution Franchisee Agreement of the Company. These are being settled with affected employees. The contingent liability in respect of these 9 cases as on the date of Balance Sheet is 1.34 Crores.
iii) 6 cases: Out of these 6 cases of earlier power business, disputes in respect of 3 relate to billing, 1 relates to damages claimed regarding tower maintenance, 1 relates to workmen compensation and 1 relates to assessment of Local Body Tax on goods, all of which are pending before the appropriate authorities. The contingent liability in respect of these 6 cases as on the date of Balance Sheet is 0.31 Crore.
iv) 5 cases: Out of these 5 cases, dispute in respect of 1 relates to recovery, 1 relates to licence fees, 1 relates to trademark, 1 relates to bank claim and 1 relates to claim by a shareholder. The contingent liability in respect of these 5 cases as on the date of Balance Sheet is 0.75 Crore.
v) 9 cases: These 9 cases pertain to arbitration matters, out of which in 5 cases, the Company has invoked arbitration proceedings against MSEDCL in respect of the DF Contract & EPC Contract as explained below and the contingent liability towards counter claims of MSEDCL is 462.90 Crores. The other 4 matters, are arising out of challenge on the procedural orders by the Arbitrator and are being contested in the courts by the Companys advocates who have the necessary expertise on the subject. There is no contingent liability arising out of the four matters.
vi) 1 case: This case relates to a claim made by a bank against the Company based on a letter issued by it in favour of its erstwhile subsidiary towards their credit facilities. The contingent liability in respect of this as on the date of Balance Sheet is 237.28 Crores.
vii) 1 case: The Department of Telecom ("DoT") has raised a frivolous demand of 1,509.50 Crores based on Adjusted Gross Revenue for ISP license fee pertaining to the business carried out by the Company well before the year 2009. The relevant ISP license was surrendered to DoT in 2009 for which DoT had issued a no dues certificate in November 2010. Accordingly, the Company is contesting this demand before Telecom Disputes Settlement and Appellate Tribunal ("TDSAT"), which has granted stay in the matter.
viii) 1 case: IDBI Bank and other CDR lenders have filed a suit against the Company in Debt Recovery Tribunal, Mumbai, ("DRT") for 4,853.55 Crores. As has been stated elsewhere, the Company based on the approval communicated by IDBI Bank has settled the dues of ten original secured lenders and the remaining are in process. Accordingly, the settled lenders have filed/in the process of filing respective consent terms before the DRT for withdrawal of their respective claims.
ix) 1 case: An employee of staffing company has initiated legal proceedings in labour court against the Company. The same is being contested by the Company. The contingent liability in respect of the said case as on the date of Balance Sheet is 0.01 Crore.
The details of Arbitration Proceedings in respect of Claim /
Counter Claims against MSEDCL in respect of Aurangabad
Distribution Franchisee ("DF") business and EPC Contracts as stated in para (v) above; and in respect of GIL are as below:
Arbitration in respect of DF :
Under the DF business with MSEDCL under the DF agreement, the Companys role was to draw electricity from MSEDCL at designated points and to distribute the same to the consumers in the Aurangabad Urban Division 1 and Aurangabad Urban Division II.
As the operation of DF proceeded, several issues arose on matters related to obligations of both parties as well as on financial aspects of the DFA. Disputes also arose on certain Commercial and Technical issues. The disputes could not be resolved in spite of several efforts, and consequently, the matter was submitted for resolution through arbitration proceedings.
The Company filed its claim against MSEDCL under the DF Agreement. The claim against MSEDCL on various account aggregates to approximately 2,203.60 Crores. MSEDCL has also filed counter claim against the Company aggregating to approximately 256 Crores. The said arbitration is now at the stage of final hearing after having concluded recording of evidence.
Arbitration in respect of EPC:
Under the EPC Contracts, the projects included supply, transport, construction, erection, testing and commissioning of distribution lines, distribution transformers of various capacities, substations and other allied works.
Disputes arose amongst the Company and MSEDCL, which could not be resolved despite various efforts taken and hence, was submitted for resolution through arbitration. The claims against MSEDCL arising out of 4 EPC Contracts as on date stands at 159.11 Crores. MSEDCL has also filed counter claim aggregating to approximately 207 Crores.
The Company is now awaiting the outcome of the Arbitration Proceedings in respect of DF and EPC Contract.
Arbitration in respect of GIL:
The Company has a claim against GIL in respect of operational services rendered by it. On account of nonresolution of Companys claim by GIL, the Company invoked arbitration in respect of disputed amount aggregating 890 Crores.
The Company had also filed an application under Section 17 of the Arbitration and Conciliation Act, 1996 seeking deposit of the amount, pending the final award in the Arbitration Proceedings and to enable GTL to keep the network ongoing. The Tribunal passed interim order dated December 17, 2019 thereby directing GIL to deposit 440 Crores in the manner provided in the order.
The interim order was challenged by GIL before Delhi High Court, which failed. Then one of the lenders of GIL also challenged the interim order before Delhi High Court, then before Honble Supreme Court. The Honble Supreme Court after hearing both the parties and lenders of the Company, disposed of the said SLP filed by GILs lender and directed that "the amount shall be subject to the order pending before Bombay High Court."
The Company is now awaiting the outcome of the Court / Arbitration Proceedings.
The Claim made by the Company in respect of MSEDCL (DF & EPC) and GIL are contingent assets and not yet crystallised and hence the effect of the claim are not made in financial statement.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company is committed to ensure that its operations are carried out within a well-defined internal control frame work. Good governance, strong systems and processes, an attentive finance function and an independent internal audit function are the key for strong internal control systems. The Company understands that a strong internal controls system is an essential pre-requisite for growing its business.
The Company has an internal control system in place, commensurate to size of its operations and conducting its efficient business, including adherence to management policies, prevention and detection of error, accuracy and completeness of the accounting function and timely preparation of financial information. The internal control system comprehend financial and operational controls and statutory compliances.
There are suitable controls in place with reference to policies and procedures, risk assessment and ethics which are clearly established, communicated and monitored. Also there is system on periodical review and assessment of the relevant controls to enhance improved effectiveness, cost reduction and improve business performance.
The coverage in the internal audit function of the Company is in line with the objectives of internal audit as prescribed by the Institute of Chartered Accountants of India (ICAI). The role of internal audit in the Company is as given below:
Understanding and assessing risks and evaluating adequacies of the prevalent internal controls.
Identifying areas for system improvement and strengthening controls.
Ensuring optimum utilisation of the resources of the Company.
Ensuring proper and timely identification of liabilities, including contingent liabilities of the Company.
Ensuring compliance with internal and external guidelines and policies of the Company as well as the applicable statutory and regulatory requirements.
Safeguarding the assets of the Company by setting up a process of every change record.
Reviewing and ensuring adequacy of information systems security control.
Reviewing and ensuring adequacy, relevance, reliability and timeliness of management information system.
The internal audit function is monitored by the Audit Committee of the Board which periodically reviews audit plans, audit observations of both internal and external audits, audit coverage, risk assessment and adequacy of internal controls. Thus effective internal control structure has been set up in the Company to enhance organizational performance and contribute towards accomplishment of its objectives.
HUMAN RESOURCES
The Human Resources (HR) function continues to play a pivotal role in enabling our organizations growth, ensuring alignment of talent with business objectives, and fostering a culture of high performance, inclusion, and employee wellbeing.
Workforce Strength and Composition
As on March 31,2025, the Companys total workforce stood at 1,544 employees, including contract employees. We remain committed to building a balanced workforce that blends experience with fresh perspectives; and actively encourage gender diversity across all levels.
Talent Acquisition and Onboarding
The Company is in the service industry. Our business activities are spread across multiple locations in India with scattered workforce in projects across remote locations. HR facilitates the recruitment, transfer, and deployment of talent to meet business needs at different sites, ensuring that the right skills are available at the right place and time. The HR Departments focus has been on attracting and retaining talent in its present conditions and fostering a supportive, inclusive, and dynamic work environment that enables smooth running of the operations.
Since OME service is talent based and requires field experience, the Companys talent pool is always under risk of being targeted by the new service providers. This presents an operational risk to the Company for its ongoing services. To combat talent attrition and skill shortages, the Company has introduced circle-based recruitment by engaging local recruiters to improve hiring efficiency and match attrition rates with phased replacements.
Our structured on boarding programs ensured smooth integration, equipping new hires with the necessary tools, knowledge, and cultural orientation to perform effectively from the outset. Additionally, the Company also creates backup pipeline for new talent development and take necessary steps for talent retention. For mitigating the Operational Risk arising out of poaching of talent by competitors, the Company has successfully on boarded 330 new employees for strengthening its talent pool. This has been a critical task for the HR Team considering the current market situation and the challenges faced by the Company to recruit and retain good talent.
Performance Management
The Companys performance management framework is designed to align individual goals with organizational objectives, foster a culture of accountability, and drive continuous improvement. During the year, performance appraisals were conducted through a structured process that emphasized on measurable outcomes.
Employee Engagement and Culture
Employee engagement initiatives include interactive sessions, and cultural celebrations. The employees celebrated a festival of Navratri in their traditional attire. The Highlights of the day were having Potluck within/across departments for increased employees engagement and Photo booth for the employees to flaunt their Ethnic wear. Further the Company celebrated Holi Festival across all the locations and organized lunch within departments in addition to wearing Retro Theme dress code for the day. The Company facilitated outdoor celebrations at Pan India Level, on the eve of Womens Day. The Company has also made welfare arrangements for its employees on various occasions.
The Company has launched Employee Suggestion Box! As part of its ongoing commitment to fostering a culture of open communication and continuous improvement and pooling of ideas.
Spot Awards
The Company continues with Spot Awards as a quick and effective way to recognize employees who demonstrate exceptional performance, go beyond their regular duties, or contribute innovative ideas that create a positive business impact. These awards are given to acknowledge outstanding contributions made by employees.
The initiative has helped foster a culture of appreciation, motivate employees to take ownership, and encourage proactive problem-solving. By celebrating achievements, Spot Awards have enhanced morale, strengthened team spirit, and reinforced the Companys core values across all locations.
Health, Safety, and Well-being
The safety and well-being of our employees remain paramount. The Company continues to provide Health and Term Life policy to its employees. Health insurance is covered for employees and their family members. The Company provides in house medical facility and also has a doctor visiting the premises on a monthly basis.
Prevention of Sexual Harassment
The Company is committed to providing a safe and respectful workplace for all employees. An Internal Complaints Committee ("ICC") as required by Prevention of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH") is in place. The details of complaints received and disposed of during the year are as under:
Number of complaints of sexual harassment received in the year | NIL |
Number of complaints disposed off during the year; | Not Applicable |
Number of cases pending for more than ninety days | Not Applicable |
Compliance with the Maternity Benefit Act
The Company is fully compliant with the provisions of the Maternity Benefit Act, 1961 (as amended). All eligible women employees are provided maternity leave and related benefits in accordance with statutory requirements. The Company also extends additional support through flexible work arrangements, medical assistance, and a supportive workplace environment to ensure the well-being of employees during and after maternity.
IIFL Customer Care Number
(Gold/NCD/NBFC/Insurance/NPS)
1860-267-3000 / 7039-050-000
IIFL Capital Services Support WhatsApp Number
+91 9892691696
IIFL Capital Services Limited - Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213,IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248, DP SEBI Reg. No. IN-DP-185-2016, BSE Enlistment Number (RA): 5016
ARN NO : 47791 (AMFI Registered Mutual Fund Distributor)
This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.