3.7 Provisions and contingent liabilities
3.7.1 General
Provisions are recognised when the Company has a present obligation (legal or constructive) as a
result of a past event, it is probable that an outflow of resources embodying economic benefits
will be required to settle the obligation and a reliable estimate can be made of the amount of the
obligation. When the Company expects some or all of a provision to be reimbursed, the expense
relating to a provision is presented in the statement of profit and loss net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre¬
tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is
used, the increase in the provision due to the passage of time is recognised as a finance cost.
3.7.2 Contingent liabilities
A disclosure for contingent liabilities is made where there is a possible obligation or a present
obligation that may probably not require an outflow of resources. When there is a possible or a
present obligation where the likelihood of outflow of resources is remote, no provision or
disclosure is made.
3.7.3 Onerous Contracts
Provision for onerous contracts i.e. contracts where the expected unavoidable cost of meeting
the obligations under the contract exceed the economic benefits expected to be received under it,
are recognised when it is probable that an outflow of resources embodying economic benefits
will be required to settle a present obligation as a result of an obligating event based on a reliable
estimate of such obligation.
3.8 Borrowing Costs
Borrowing costs directly attributable to the acquisition or construction of those property, plant and
equipment which necessarily takes a substantial period of time to get ready for their intended use are
capitalised. All other borrowing costs are expensed in the period in which they incur in the statement
of profit and loss.
3.9 Revenue Recognition
Revenue from renting/access of land is recognised, when the right to use of the asset have been
transferred to the buyer, recovery of the consideration is probable, the associated costs, if any, with
regard to the use of the asset, can be estimated reliably and the amount of revenue can be measured
reliably.
3.10 Financial instruments - initial recognition, subsequent measurement and impairment
3.10.1 Financial Assets
Financial Assets are measured at amortised cost or fair value through Other Comprehensive
Income or fair value through Profit or Loss, depending on its business model for managing those
financial assets and liabilities and the assets and liabilities contractual cash flow characteristics.
Subsequent measurements of financial assets are dependent on initial categorisation. For
impairment purposes significant financial assets are tested on an individual basis, other financial
assets are assessed collectively in groups that share similar credit risk characteristics.
3.10.1.1 Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at
amortised cost using the effective interest method, less provision for impairment.
Impairment is made on the expected credit losses, which are the present value of the cash
shortfalls over the expected life of financial assets. The estimated impairment losses are
recognised in a separate provision for impairment and the impairment losses are recognised
in the Statement of Profit and Loss within other expenses.
Subsequent changes in assessment of impairment are recognised in provision for impairment
and the change in impairment losses are recognised in the Statement of Profit and Loss
within other expenses.
For foreign currency trade receivable, impairment is assessed after reinstatement at closing
rates.
Individual receivables which are known to be uncollectible are written off by reducing the
carrying amount of trade receivable and the amount of the loss is recognised in the
Statement of Profit and Loss within other expenses.
Subsequent recoveries of amounts previously written off are credited to other Income.
3.10.1.2 Investment in equity shares
Investment in equity securities are initially measured at fair value and are recognised through
Profit and Loss account.
3.10.2 Financial Liabilities
At initial recognition, all financial liabilities other than fair valued through profit and loss are
recognised initially at fair value less transaction costs that are attributable to the issue of financial
liability. Transaction costs of financial liability carried at fair value through profit or loss is
expensed in profit or loss. However, borrowings, which is likely to be assigned or negotiated are
initially measured at fair value through profit and loss account. Other borrowings are measured at
amortised cost using the effective interest rate method. Amortised cost is calculated by taking
into account any discount or premium on acquisition and fee or costs that are an integral part of
the Effective rate of interest (EIR). The EIR amortisation is included in finance costs in the
Statement of Profit and Loss.
3.10.2.1 Trade and other payables
Trade and other payables are presented as current liabilities unless payment is not due within
12 months after the reporting period. They are recognised initially at their fair value and
subsequently measured at amortised cost using the effective interest method.
3.10.2.2 Redeemable preference shares
The Company’s redeemable preference shares were classified as compound financial
instruments, comprising both a financial liability and an equity component. This
classification is made in accordance with the substance of the contractual terms and the
definitions set out in applicable financial reporting standards.
Upon initial recognition, the fair value of the liability component is determined by
discounting the contractual stream of future cash flows using the market interest rate
applicable to an instrument of similar non-compound instrument. This liability component is
subsequently measured at amortised cost using the effective interest rate method until it is
settled or redeemed.The residual amount, representing the difference between the issue price
of the instrument and the fair value of the liability component at inception, is recognised as
equity. This component is not remeasured subsequent to initial recognition.
Following the conversion, the modified instrument continues to be accounted for as a
financial instrument, with appropriate re-evaluation of its liability components where
applicable, based on the revised terms.
3.11 Impairment
3.11.1 Financial Assets
The Company recognises loss allowances using the expected credit loss (ECL) model for the
financial assets which are not fair valued through Statement of Profit and Loss. Loss allowance
for trade receivables with no significant financing component is measured at an amount equal to
lifetime ECL. For all other financial assets, expected credit losses are measured at an amount
equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial
recognition in which case those are measured at lifetime ECL. The amount of expected credit
losses (or reversal) that is required to adjust the loss allowance at the reporting date to the
amount that is required to be recognised is recognised as an impairment gain or loss in the
Statement of Profit and Loss.
3.11.2 Non-Financial Assets
An asset is considered as impaired when at the date of Balance Sheet there are indications of
impairment and the carrying amount of the asset, or where applicable the cash generating unit to
which the asset belongs exceeds its recoverable amount (i.e. the higher of the net asset selling
price and value in use).The carrying amount is reduced to the recoverable amount and the
reduction is recognized as an impairment loss in the Statement of Profit and Loss. The
impairment loss recognized in the prior accounting period is reversed if there has been a change
in the estimate of recoverable amount. Post impairment, depreciation is provided on the revised
carrying value of the impaired asset over its remaining useful life.
3.12 In accordance with Ind AS 36, an entity is required to test intangible assets with indefinite useful life
for impairment. Goodwill arises from business combinations and is generally determined as the excess
of the fair value of the consideration transferred, plus the fair value of any non-controlling interests in
the acquire, over the fair value of the net assets acquired and liabilities assumed as of the acquisition
date. Goodwill and intangible assets acquired in purchase business combination and determined to
have an indefinite useful life are not amortized, but tested for impairment at least annually or more
frequently if events and circumstances exists that indicate that a goodwill impairment test should be
performed. Intangible assets with definite useful lives are amortized over their estimated useful lives
to their estimated residual values. Goodwill is the only intangible assets with an indefinite life on our
balance sheet.
29. The balances of Trade Receivables, Trade Payables, Non-Current Borrowings, Current Borrowings, Other Financial
Liabilities, Other Current Liabilities, and Other Financial Assets shown in financial statements are subject to
confirmation and reconciliation
30. (a) The Company had received funds of Rs. 130,00,00,000/- (Rupees One Hundred and Thirty Crores) from
Government of India, in previous financial year(s) against which the Company allotted 13 crore Non-Cumulative
Redeemable Preference shares of 0.01% @ Rs. 10 each to the promoter i.e President of India, acting through
Ministry of Housing & Urban Affairs on 12.11.2021 and 17.05.2021 after taking due approvals from Competent
Authorities.
Subsequently, in FY 2023-24, the Competent Authority sanctioned a variation in the terms of these preference
shares, reclassifying them from Non-Cumulative to Cumulative Redeemable Preference Shares. This alteration was
duly approved by the Company's Board of Directors on February 7, 2024, and ratified by the Shareholders on
March 31, 2024.
The said financial instruments have been accounted for by the Company in accordance with IND AS 109.
(b) Further, the terms of issue of the said Preference Shares regarding the redemption value at the end of 20 years is
varied with the approval of Competent Authority.
31. During the year, the Company procured Land Security and Maintenance Services from various CPWD divisions
across Delhi, Kolkata, Pune, Chattarpur and Chennai. The expenses in connection with Land Security and
Maintenance and renovation of buildings are recognized on provision basis supported by Utilization certificates
issued by the respective CPWD’s.
CPWD has informed the Company that, there is no mechanism under CPWD (a GOI undertaking) to raise any GST
invoice. Consequently, Company book these expenses on the basis of Form 65 and Utilization certificates issued by
the CPWD’s. Moreover, as confirmed by CPWD, the statutory compliance with respect to above said expenses is
done by CPWD and there is nothing related to client regarding GST.
As per Ind AS 40, land parcels were classified as Investment Property and valuation has been done on cost model.
As per clause 3.2 of Scheme of Arrangement and Reconstruction, upon the scheme becoming effective, all the assets
and liabilities pertaining to the surplus land stand transferred to and vested in the Transferee Company (HPIL) at
their respective book values as appearing in the books of Transferor Company. Therefore, the value of the land has
been taken as the book value of the land in the audited balance sheet of Tata Communications Limited for the FY
2019-20 and onwards. The Company holds land parcels comprises of 739.69 acres at different locations i.e. Pune-524
acres, Halisahar (Kolkata)-35.19 acres, Chennai-53.04 acres, Chattarpur (Delhi)-58 acres, Greater Kailash (Delhi)-
69.46 acres.
As per Ind-AS 40 and Ind-AS 113, the fair value of Investment property was carried out by the IBBI registered
Valuer during F.Y. 2023-24. No fair valuation has been carried out in the current financial year, as there have been
no significant changes in the condition, usage, or circumstances of the property, and there is an absence of an active
market for comparable properties. Accordingly, the same valuation is considered for FY 2024-25.
34. Contingent Liabilities not provided for:
a. Differential Liability towards Stamp Duty to be paid for the Conveyance of Title Deeds
The Stamp duty of ? 65100.00 lakhs on transfer of title deed was calculated on the circle rates prevailing
during financial year 2016-17. However, the Circles rates/stamp duty rates may vary at the time of actual
payment of stamp duty from circle rates prevailing in financial year 2016-17 and amount of stamp
duty/registration charges payable might differ from Rs 65100.00 lakhs. During FY 2020-21, the stamp duty
amounting of ? 65100.00 lakhs was treated as liability on the basis of budget approved by the Ministry of
Housing and Affairs.
Out of the above provision of Rs. 65,100 lacs, Stamp Duty of Rs. 774.30 lacs has been paid during the
Previous financial year 2022-23, for the Conveyance Deed registration of the Chennai land Parcel. Further,
Development Fees @ 1% of Rs 309.10 lacs has been booked payable for the Kolkatta Land Parcel,
Halisahar Municipal Corporation and paid in May 2024.
Any liability over and above the amount of Rs. 65100 lacs which may arise in future is contingent in nature.
b. There are 27 cases of litigation, claims and disputes pertaining to the land parcels known as on 31.03.2025
which are pending under various forums. These litigations, claims and disputes, where earlier Tata
Communications Limited was a party, subsequent to approval of the Scheme and transfer of land, have
now been transferred and belong to Hemisphere Properties India Limited. The Company is in the process
of contesting all such litigations, claims and disputes. The financial implications associated with all such
litigations, if any, is undeterminable as of March 31, 2025.
(Details as per Annexure I attached).
c. Non Determination of Property tax/Urban Land Tax Liability for the Chennai Land Parcel
The demand for Property tax has not been raised by the Revenue Authorities of Chennai, for the Land
parcels of 53.04 acres in Chennai since the date of transfer of ownership to the Company till March 31,
2025.
d. Difference Property Tax Liability for the Greater Kailash, New Delhi Land Parcel due to payment
of Property tax on Self-Assessment Basis
The Company is paying property tax on self-assessment basis, for the land parcels at Greater Kailash, New
Delhi. In FY 2022-23,2021-22 and 2019-20, the Company has calculated property tax by using
multiplication factor @0.5 and rate of tax @ 15% where as in FY 2020-21, multiplication factor @0.3 and
rate of tax @15% was used to calculate the property tax. But, the additional property tax demand may be
raised by Revenue Authority by using multiplication factor @0.3 for FY 2019-20 and 0.5 for FY 2020-21
and rate of tax may be used @ 20% for FY 2019-20, 2020-21, 2021-22 and 2022-23. In addition, there may
be certain additional liabilities, which may arise for previous financial years as well, for the said Land Parcel.
e. Fines imposed by NSE and BSE
During the current financial year, the NSE and BSE (the stock exchanges) have imposed fines for Rs.
235.64 Lakhs on the Company for Non-Compliance of appointment number of Independent Directors.
The Company has made an application to NSE and BSE for waiver of such penalties, since the
appointment of Independent Directors is subject to the approval of Competent Authority. In view of the
above, no provision for fines have been made during the year.
“Upon the Scheme becoming effective, the Transferee Company shall account for the Scheme and its effects
in its books of account with effect from the Appointed date as under:
i. The Transferee Company shall record the assets and liabilities of the splitting up and reconstruction
by way of transfer of Surplus land vested in it in accordance with this Scheme, as per the book values
attributable to such assets and liabilities.
ii. The shortfall, if any, on the difference of the aggregate value of the liabilities of the splitting up and
reconstruction by way of transfer of Surplus land taken over pursuant to this Scheme as detailed in
clause 3 shall be recorded as ‘goodwill’ in the books of Transferee Company.”
Thus, in accordance with above extracts of Scheme of Arrangement and Reconstruction, Goodwill of Rs.
28194.15 lacs was recorded in financial statements from FY 2019-20 and onwards till March 31, 2025.
Accordingly, the said accounting in not in violation of Ind AS 103, since the transfer of Surplus Land d oesn’t
constitute a Business (as defined in Ind AS 103), and the applicability of Ind AS 103 is overridden by virtue of
accounting of Goodwill in accordance with the Order of Demerger.
38. The title deeds of the immovable properties of Investment Property for 4 land parcels, are not executed in the name
of the Company as of March 31, 2025. Only the Conveyance Deed in respect of Chennai Land parcel is executed in
the name of the Company.
These land parcels were transferred to the Company from Tata Communications Limited as per the Scheme of
Arrangement and Reconstruction dated August 5, 2019. The details are as follows:
*The mutation of the Chattarpur Land Parcel has been successfully recorded in the name of Hemisphere Properties
India Limited (the Company) within the registers of both the Land and Development Office and the Municipal
Corporation of Delhi. However, the requisite stamp duty for this transfer remains unpaid due to ambiguities
concerning the terms of its remittance.
** The mutation of the Pune land parcel has been successfully recorded in the Gramm records. However, the
transfer of the name in the Municipal records is still pending except for Bopkhel land parcel. Furthermore, the
Competent Authorities have not yet raised the stamp duty payable on this transfer.
***In respect of the Kolkata land parcel, the Mutation of Land has been transferred under Halisahar Municipal
Corporation records as per mutation certificate on 17.05.2024. Furthermore, the Competent Authorities have not
yet raised the stamp duty payable on this transfer
39. Additional Information
a. No proceedings have been initiated or pending against the Company for holding any benami property
under the Benami Transactions (Prohibitions) Act, 1988 (45 of 1988) and the rules made there under, as at
March 31, 2025 and March 31, 2024.
b. The Company is not a declared willful defaulter by any bank or financial Institution or other lender, in
accordance with the guidelines on willful defaulters issued by the Reserve Bank of India, during the year
ended March 31,2025 and March 31, 2024.
c. There was no delay in the registration or satisfaction of any charges with Registrar of Companies during
the year ended March 31, 2025 and March 31, 2024.
d. The Company has not traded or invested in Crypto currency or Virtual Currency during the year ended
March 31,2025 and March 31, 2024.
e. There are no undisclosed incomes that has been surrendered or disclosed as income during the year in the
tax assessments under the Income Tax Act, 1961.
f. The Company has not granted any loans or advances to promoters, directors, KMP’s and the related
parties that are repayable on demand or without specifying any terms or period of repayment
g. The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including
foreign entities (Intermediaries) with the understanding that the Intermediary shall: (a) directly or indirectly
lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
company (ultimate beneficiaries) or (b) provide any guarantee, security or the like to or on behalf of the
ultimate beneficiary.
h. Previous year figures are regrouped and rearranged wherever necessary.
40. Notes 1 to 39 form an integral part of the accounts and have been authenticated.
As per our Report of even date attached
For Aggarwal & Rampal For and on behalf of Board of Directors of
Chartered Accountants Hemisphere Properties India Limited
FRN No. 003072N
Sd/- sd/- sd/-
Aditya Aggarwal D Thara Rajeev Kumar Das
Partner Chairperson & Managing Director Director
M. No. 515644 DIN: 01911714 DIN: 07730466
Sd/ sd/-
Bhavesh Singla Lubna
Chief Financial Officer Company Secretary
Place : New Delhi M.No. 551844 M.No. A53597
Date : 28th May 2025
UDIN: 25515644BMLKPQ8125
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