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Company Information

Home » Market » Company Information

Vodafone Idea Ltd.

Dec 09, 09:53
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VOLUME : 46013383
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Dec 09, 09:44
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Market Cap. ( ₹ ) 42959.41 Cr. P/BV -1.12 Book Value ( ₹ ) -13.32
52 Week High/Low ( ₹ ) 16/5 FV/ML 10/1 P/E(X) 0.00
Bookclosure 30/09/2020 TTM EPS ( ₹ ) -9.05 Div Yield (%) 0.00
DIRECTOR'S REPORT
You can view full text of the latest Director's Report for the company.
Year End :2021-03 

summarized as follows:

(in ' Mn)

Particulars

Standalone Consolidated

2020-21

2019-20 2020-21

2019-20

Income from sale of goods and services

416,589

446,830 419,382

449,167

Other Operating Income

138

320 140

408

Other Income

2,584

10,861 1,742

10,393

Total Revenue

419,311

458,011 421,264

459,968

Operating Expenses

252,442

300,976 250,065

300,450

EBITDA

166,869

157,035 171,199

159,518

Depreciation and Amortisation

229,062

238,888 236,385

243,564

EBIT

(62,193)

(81,853) (65,186)

(84,046)

Interest and Finance charges

179,916

153,772 179,981

153,920

EBT

(242,109)

(235,625) (245,167)

(237,966)

Exceptional Items (Net)

(221,036)

(387,242) (199,681)

(383,557)

Share of JV/Associates

-

- 2,314

3,553

Profit / (Loss) Before Tax

(463,145)

(622,867) (442,534)

(617,970)

Taxes

(208)

108,448 (203)

120,811

Profit / (Loss) after Tax

(462,937)

(731,315) (442,331)

(738,781)

Other Comprehensive Income, net of tax

(4,152)

(18,242) 368

(90)

Total Comprehensive Income

(467,089)

(749,557) (441,963)

(738,871)

We have pleasure in presenting the Twenty Sixth Annual Report, together with the audited financial statements of the Company for the Financial Year ended March 31, 2021.

Company Overview

Your Company, a partnership between two strong promoters Aditya Birla Group and Vodafone Group, is a major telecommunications operator in India, offering voice, data, enterprise services and other Value Added Services (“VAS”), including Short Messaging Services, Digital Services, IoT etc. As of March 31, 2021, the subscriber base of your Company stands at 255.7 million (on VLR). The subscriber market share on VLR stands at 25.7%, as of March 2021. The Wireless Revenue Market Share (RMS) on Gross Revenue basis (GR) for your Company stands at 23.2% for the Financial Year 2021.

Your Company provides Voice and Data services on 2G, 3G and 4G technologies across all 22 service areas and has strong spectrum portfolio and network footprint to support the burgeoning demand for both, data and voice. Your Company has a large spectrum holding comprising 1,768.4 MHz spectrum across 22 circles, of which 1,738.4 MHz is liberalised spectrum which can be used towards deployment of any technology.

Your Company's mobile telecommunication services cover more than 1.2 billion Indians. As of March 31, 2021, your Company has 452,650 broadband (3G 4G) sites and all of the 4G sites are VoLTE enabled, offering a better customer experience. Your Company has also launched Voice over WiFi (VoWiFi) in several circles this year, which will be expanded to rest of the country soon. The broadband network is spread over 331,000 towns and villages and covers more than a billion Indians. Your Company has been deploying Dynamic Spectrum Re-farming (DSR), Massive MIMO and Small cells to maximize spectrum efficiency. Additionally, your Company has been actively deploying LTE on TDD band of 2300 MHz and 2500 MHz spectrum band to expand the capacity and on 900 MHz band to improve customer experience in dense areas. Your Company also derives revenue from carrying India inbound ILD traffic through arrangements with other mobile telecommunication companies and long distance carriers operating outside India. Your Company has a portfolio of over ~376,000 km of Optical Fibre Cable (OFC), including own built and Indefeasible Right of Use (IRU) OFC.

After successful completion of our network and IT consolidation in FY20, as the last leg of the integration journey, your Company launched the new unified brand Vj, on September 07, 2020. The new brand leverages on the legacy of two of the most loved brands of the country - Ovodarc™ and ,

which have brand saliency established over decades. Vi™ is built to be strong, ever-dependable, agile, intuitive, and a brand in tune with the needs of the customers, in these ever-changing times. Your Company also launched GIGAnet - an integrated 4G network for its users. GIGAnet is the result of the largest network integration completed in record time and one of the world's largest DSR (Dynamic Spectrum Refarming) exercise. It has India's largest AI-powered Massive MIMO sites along with largest deployment of universal cloud making it a 5G ready network.

Your Company's vision is to ‘Create world class digital experiences to connect and inspire every Indian to build a better tomorrow'. To achieve this end, your Company is developing world-class infrastructure to introduce newer and smarter technologies, making both retail and enterprise customers future ready with innovative offerings, conveniently accessible through an eco-system of digital channels as well as extensive on-ground presence.

Financial Results and Summary

The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under section 133 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014.

The standalone and consolidated financial highlights of your Company for the Financial Year ended March 31, 2021 are summarized as follows:

Standalone revenue of your Company stood at ' 416,727 Mn, a decrease of 6.8% over previous year. The EBITDA stood at ' 166,869 Mn, registering an increase of 6.3% over the previous year. The Net Loss including amount specified in other comprehensive income of the Company for the Financial Year March 31, 2021 stood at ' 467,088 Mn, vis-a-vis ' 749,557 Mn, for the previous year.

On a consolidated basis, the revenue of your Company stood at ' 419,522 Mn, a decrease of 6.7% over the previous year. The EBITDA at ' 171,198 Mn reflects increase of 7.3% as compared to the previous year. The Consolidated Net Loss including amount specified in other comprehensive income of the Company stood at ' 441,964 Mn, for Financial Year

2019- 20 vis-a-vis ' 738,871 Mn for the previous year.

Operations Review

The Indian wireless industry continues to grapple with challenges of hyper competition and unsustainable tariffs which were further aggravated by the COVID-19 pandemic. The pandemic and the subsequent lockdowns continue to cause significant disruption and slowdown of economic activities. Through these difficult and challenging times, your Company has played a critical role in providing seamless connectivity to millions of Indians. Vodafone Idea's high quality mobile network has formed the backbone to the digital infrastructure of the country, as throughout the pandemic, several businesses and corporations shifted to virtual workspaces and friends and families connected online. Your Company also extended support to its marginalized customers, who were the most severely affected, through validity extension, free talktime and other means. As the second wave continues to wreak havoc, your Company remains committed in providing uninterrupted services to all Indians in this difficult time, while ensuring exceptional quality of services. After extending free validity and talktime in the first wave to the marginalized customers, your Company again offered special relief package during the severe second wave of the pandemic to low income users offering free validity and talktime.

While the operating environment continues to remain challenging, increasing digital penetration which has got a further boost during the pandemic, remains a massive opportunity for telecom industry especially when the pricing revives in future. Increasing content consumption, especially through video, and social media usage is driving strong demand for high speed internet, and all the telecom operators with their massive network investments, are well placed to benefit from this trend. During Financial Year

2020- 21, wireless broadband penetration continued to improve supported by growing work-from-home culture and

businesses moving online. Wireless broadband subscriber base was 755.4 million (broadband penetration ~64.0%) as of March, 2021 compared to 668.3 million (broadband penetration ~57.7%) as of March, 2020. During the year, TRAI has also abolished the domestic interconnect regime and moved to Bill & Keep starting January 1, 2021.

Your Company has successfully completed the integration exercise and fully realized the targeted synergies at a record pace in comparison with any global mergers, especially given the size, scale and complexity of the integration. The five pillar strategy which acted as a compass to navigate the critical phase of integration continues to guide your Company going forward. As a natural progression or evolution of the strategy, below are the ongoing major strategic initiatives to improve your Company's revenue and profitability as well as to strengthen its overall position in the market:

1. Focused network investments for superior customer experience - Your Company continues to have a focused approach to investments, biased towards the profitable areas, to utilize capex effectively while ensuring that it offers superior customer experience in these areas. Your Company has been driving incremental 4G investments in the 16 priority circles, which contribute 94% of Vi revenue and 86% of industry revenue. Your Company also has been adding 4G capacity through spectrum refarming in these areas. Your Company has been deploying several 5G ready technologies such as, Massive MIMO, DSR, Cloudification of Core, which are central to its future growth strategy. Your Company has also initiated 5G trials with major network partners.

2. Market initiatives to drive ARPU improvement -

While tariff hikes remain crucial to improve the overall industry health, your Company has undertaken several market initiatives to improve ARPU by driving 4G/UL penetration. As a part of the customer excellence drive, your Company has been transforming customer servicing across all touchpoints with a clear focus towards shift to digital. Further, as part of its digital-first approach, your Company has renewed its focus on digitalization of distribution channel to completely automate sales process creating seamless and efficient journey for the channel partners.

3. Focusing on Business Services and Fast-Growing Revenue Segments - Business services remains one of the key focus areas where your Company leverages its multi-year relationships with customers and global strength of Vodafone group. Vi Business continues to deliver growth by partnering both large enterprises and

SMBs, in their digital transformation programs which have got accelerated during the pandemic. In new business streams, cloud services remains central to the growth strategy. Your Company continues to maintain strong positioning in IoT offerings, which has a potential to grow manifold in the near future.

4. Driving partnerships and digital revenue streams - Your Company continues to focus on its platform capabilities to offer deeper integration with its partners for a differentiated experience, create monetization opportunities and truly become an integrated digital service provider. On content, your Company's strategy has always been to partner “best in class" across global and regional content aggregators. Further, the tie-ups with e-commerce platforms, handset manufacturers, financial institutions, NBFCs among many others will drive value not only for the customers, but also for your Company and its partners.

5. Cost optimization to drive organizational efficiency - After successfully achieving targeted merger opex synergies of ' 84 billion, your Company has undertaken the cost optimization exercise across the organization in line with the evolving industry structure and business model. Your Company targets to achieve ' 40 billion of annualized cost savings by end of calendar year 2021. Through several initiatives, your Company has already achieved ~65% of the targeted annualised savings on a run-rate basis by the end of FY21.

Your Company has thus been making significant progress on various strategic initiatives and continues to strive towards transforming from a pure play mobile operator to a truly integrated digital service provider.

Dividend

As your Company has incurred net loss during the Financial Year 2020-21, your Directors have not recommended any dividend for the year.

Transfer to Reserves

During the Financial Year under review, the Board has not proposed to transfer any amount to Reserves.

Changes in Share Capital

During the year under review, there was no fresh issue of capital by the Company. The issued, subscribed and paid-up equity share capital of your Company as on March 31, 2021 stood at ' 287,354 Mn comprising of 28,735,389,240 Equity Shares of ' 10/- each.


Finance

On a standalone basis, the Company had Cash and Cash Equivalents of ' 2,402 Mn and Fixed Deposits with banks having maturity of 3 to 12 months of ' 2 Mn as on March 31, 2021. The Company's net debt as on March 31, 2021 increased by ' 674,525 Mn to ' 1,801,429 Mn as compared to ' 1,126,904 Mn last year.

On a consolidated basis, the Company had Cash and Cash Equivalents of ' 3,503 Mn and Fixed Deposits with banks having maturity of 3 to 12 months of ' 27 Mn as on March 31, 2021. The Company's net debt as on March 31, 2021 increased by ' 674,378 Mn to ' 1,799,573 Mn as compared to ' 1,125,195 Mn last year.

The Department of Telecommunications (DoT) had provided an option for deferment of payment of spectrum auction installments due for payment during the Financial Years 2020-21 and 2021-22. We have opted for deferment of instalments due during these financial years, due to which there have been no instalment payments to DoT in Financial Year 2020-21.

During the year, the Company had opted for moratorium on interest and principal payments on rupee term loans from banks pursuant to the RBI notifications dated March 27, 2020 and May 23, 2020 permitting inter-alia, banks to grant a moratorium of six months to each borrower in respect to interest and principal payments falling due between March 1, 2020 and August 31, 2020. All amounts covered under the moratorium have been subsequently paid in full except as follows:

(i) In respect one of the term loans, the lender had granted an option of converting the interest accrued during moratorium period as principal. The Company availed this option due to which interest amounting to ' 2,143 Mn has been capitalized and will be repaid alongwith the last installment.

(ii) In respect to another term loan, principal payment of ' 625 Mn was due for payment on June 30, 2020. The lender has granted deferment of the entire loan repayment schedule by 3 months and accordingly the amount due on June 30, 2020 was repaid on September 30, 2020.

All other scheduled loan repayments were made on respective due dates.

Credit Rating

During the Financial Year 2020-21, CARE downgraded the Company's rating with respect to Long Term Bank Facilities and certain Non-Convertible Debentures to ‘CARE B /Credit

Watch with negative implications' (previous year end rating ‘CARE BB- / Credit Watch with negative implications'). Further, Brickwork Ratings has withdrawn the rating watch with respect to certain Non-Convertible Debentures amounting to ' 25,000 Mn to ‘BWR BB-/Stable' (previous year end ‘BWR BB-/Credit Watch with negative implications'). Consequent to full repayment of Non-Convertible Debentures due on July 10, 2020 the credit ratings issued on these instruments by CRISIL and India Ratings have been withdrawn.

On 21st July 2021, Brickworks has revised the outlook with respect to certain Non-Convertible Debentures amounting to ' 25,000 Mn from BWR BB- (Stable) to BWR BB- (Negative).

On 13th August, 2021, CARE has further downgraded the Company's rating with respect to Long Term Bank Facilities and Non-Convertible Debentures to CARE B- (Credit Watch with Negative Implications).

Capital Expenditure

On a standalone basis, the capital expenditure (including capital advances and excluding RoU assets and Spectrum) incurred was ' 36,244 Mn in the Financial Year 2020-21. Further to the above, the Company has incurred ' 3,552 Mn towards Bandwidth and ' 5,747 Mn paid towards the upfront payment for the unassigned spectrum.

On a consolidated basis, the capital expenditure (including capital advances and excluding RoU assets and Spectrum) incurred was ' 37,981 Mn in the Financial Year 2020-21. Further to the above, the Company has incurred ' 3,552 Mn towards Bandwidth and ' 5,747 Mn paid towards the upfront payment for the unassigned spectrum.

Fixed Deposits

Your Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding, as on the date of the Balance Sheet.

Significant Developments • Spectrum Auction - March 2021

Your Company participated in Spectrum Auction conducted by Department of Telecommunications (DoT) in March, 2021 and acquired 23.6 MHz of spectrum across 900 and 1800 MHz in Tamil Nadu, Karnataka, Uttar Pradesh (East), Uttar Pradesh (West), and West Bengal at an aggregate value of ' 19.93 billion. Your Company has also optimized spectrum holding in some of the circles. Post March 2021 spectrum auction, your Company's overall spectrum holding is 1,768.4 MHz

across different frequency bands out of which 1,738.4 MHz spectrum is liberalised and can be used towards deployment of any technology (2G, 3G, 4G or 5G).

• Amalgamation of Indus Towers Limited with Bharti Infratel Limited

Indus Towers Ltd. (Indus), was a joint venture between the Company, Bharti Infratel Ltd. (Bharti Infratel) and Vodafone Group and the Company held 11.15% stake in Indus. On April 25, 2018, the merger of Bharti Infratel and Indus Towers was announced to create a listed Pan-India Tower Company. On November 19, 2020, the merger of Indus and Bharti Infratel was completed. The Company has sold its 11.15% stake in Indus on completion of the merger for a cash consideration of ' 37,642 Mn in accordance with the terms of agreement. Out of the consideration received from Bharti Infratel, the Company has made a prepayment of ' 24,000 Mn to the merged tower entity, which was fully adjusted in line with terms of the agreement.

• AGR Matter

The Hon'ble Supreme Court on October 24, 2019 along with supplementary order dated July 20, 2020 and final order dated September 1, 2020 delivered its judgment (together referred to as “AGR Judgment") upholding the view considered by Department of Telecommunications (“DoT") in respect of the definition of Adjusted Gross Revenue (“AGR") (“AGR Judgment"). The order upheld the principal demand, levy of interest, penalty and interest on penalty. This AGR Judgment has significant financial implications on the Company.

On July 20, 2020, the Hon'ble Supreme Court, after hearing all parties, observed that the amount to be recovered (preliminary assessed) given by DoT in its modification application are taken to be as final amount and there can be no dispute raised about it. The Company during the year paid further sum of ' 10,000 Mn and accordingly, the total payment as at March 31, 2021 (including the payment of ' 68,544 Mn paid during year ended March 31, 2020) towards the dues following this AGR Judgment stands at ' 78,544 Mn.

Subsequent to the same, the Hon'ble Supreme Court vide its final order dated September 1, 2020, has inter-alia directed that for the demand raised by the DoT in respect of the AGR dues based on the judgment of this Court, there shall not be any dispute raised by

any of the Telecom Operators and that there shall not be any reassessment; the Telecom Operators shall at the first instance, make the payment of 10% of the total dues as demanded by DoT by March 31, 2021 and thereafter, Telecom Operators to make payment in yearly instalments commencing from April 1, 2021 to March 31, 2031 payable by 31st March of every succeeding financial year. As the cumulative amount paid by the Company exceeded 10% of the total liability, which it believes is as demanded by DoT for the period upto the date of judgment, the next instalment would be payable only by 31st March, 2022. Accordingly, the Company has informed DoT that it has paid more than 10% of the total dues and has complied with the Hon'ble Supreme Court order. The Company has also filed affidavit with the Hon'ble Supreme Court order confirming payment of 10% of the total dues with an undertaking to pay arrears as per the court judgment.

Further, on January 7, 2021, the Company had approached Hon'ble Supreme Court requesting them to allow DoT to correct manifest/clerical/arithmetic errors in the computation of AGR demands and carry out the corrections in accordance with law within a reasonable period of time. The Supreme Court vide its order dated July 23, 2021, rejected the application filed by the Company and other operators. Subsequently, on August 10, 2021, the Company has filed a review petition against the order dated July 23, 2021, which is pending for outcome. Meanwhile DoT issued additional demands for which the Company has written to them requesting corrections of certain computational errors, admissible pass-through not considered based on the principles laid down in the AGR judgement.

• One-time Spectrum Charge Matter

In respect of levy of One Time Spectrum Charge (‘OTSC'), the DoT has raised demand on the Company and erstwhile Vodafone India Limited (VInl) and Vodafone Mobile Services Limited (VMSL) in January 2013 for spectrum beyond 6.2 MHz in respective service areas for retrospective period from July 1, 2008 to December 31, 2012 and for spectrum beyond 4.4 MHz in respective service areas effective January 1, 2013 till expiry of the period as per respective licenses. In the opinion of the Company, the above demand amounts to alteration of financial terms of the licenses issued in the past and therefore the Company filed a petition in the Hon'ble High Court of Bombay, which vide its order dated January 28, 2013, had directed the DoT

to respond and not to take any coercive action until the next date of hearing. Similarly erstwhile VInl and VMSL had filed a petition before the Hon'ble TDSAT. Hon'ble TDSAT vide its order dated July 4, 2019 held that for spectrum below 6.2 MHz, OTSC is not chargeable and accordingly demand is set aside. For spectrum beyond 6.2 MHz, if spectrum is allotted after July 01, 2008, OTSC shall be levied from the date of allotment of such spectrum and if spectrum is allotted before July 01, 2008, OTSC shall be levied from January 01, 2013 till the date of expiry of licenses and ordered DoT to issue revised demands, if any, as per terms of direction given. The Company filed an appeal before the Hon'ble Supreme Court against the Order of the TDSAT. On March 16, 2020, the Hon'ble Supreme Court dismissed the appeal of the Company and did not interfere with the TDSAT judgement. The DoT's appeal against the said TDSAT Order for the levy on Spectrum below 6.2 MHz is pending.

Brand Overview

Your Company launched (on September 7, 2020) a new & unified brand iff, on the back of the world’s largest network integration. The new brand leverages the legacy of two of the most loved brands of the country - Ovodafone and \!dea I, which have brand equity established over decades. Vi™ is a brand with its eyes set on the future, it's built for and around the customer - as we partner every Indian to create a better and brighter tomorrow, together. Vi™ is built to be strong, ever-dependable, agile, intuitive, and a brand in tune with the needs of the customers, in these ever-changing times. It is future ready and committed to dynamically serve and enable a digital society to progress in life.

Your new brand \/| has already garnered strong awareness and continues to build brand affinity & consideration across all customer segments in the country.

Vi™ powered by GIGAnet - an integrated 4G network is the result of the largest network integration completed in record time. It was backed with one of the world's largest DSR (Dynamic Spectrum Refarming) and has India's largest AI-powered Massive MIMOs sites along with largest deployment of universal cloud.

It was the fastest 4G network in the country with the best download & upload speeds - verified by Ookla®, as well as the best voice quality - consecutively for 3 quarters, since its launch.

Marketing and other initiatives

During the year under review, your Company made extensive progress on the marketing front by communicating and differentiating, by entering into various alliances, and by introducing various innovative products and services. Some of these are:

• Your Company launched the new unified brand VI through a high impact, high decibel Marketing & PR campaign starting with a media launch and complete roadblock of the entire Zee network to announce the arrival of Vi and built rapid awareness. This was one of the world's largest brand launch to have been done amidst the pandemic. The launch of Vi was further amplified with TV & digital ads showcasing people from all around coming together to welcome Vi and also had many partners, as well as other brands welcoming the new brand. Also, to offer personalized Vi experience we launched personalized caller tune service and a personalized AR Filter.

• During the launch of Vi, we had announced Happy Surprises on the Vi app and website, where customers were delighted with various prizes when they were part of the gamified engagement with the brand. This was promoted on digital & TV and helped build strong engagement & affinity with the brand.

• As a way to build affinity, stickiness & consideration, your Company launched a delights campaign wherein one could experience Vi GIGAnet and share their experience, get gifts in return and be delighted. We also promoted to non-users by saying that the best time to join Vi is now. This was promoted on TV & digital.

• To build a competitive advantage by leveraging the network integration and its benefits, your Company launched GIGAnet - A network that's built with the strength of two - Vodafone & Idea. This was supported through a campaign on TV & Digital which showcased emotional connect stories of the role the network plays in our lives and how it helps us thrive. This has led to stronger network perception.

• Vi GIGAnet was the fastest 4G network in the country between July 2020 and March 2021, as per Ookla. In order to leverage this and to showcase the re-energised network, your Company ran phased campaigns.

o The first campaign #Fastest4GIsHere was functional and introduced GIGAnet as the fastest 4G of India and in many states and cities as

well. This was further supported by customized communication that had a multiplied impact by claiming to be the fastest not just in that city, but also the state and in the country.

o It was followed with an emotional connect campaign #SpeedSeBadho - that showcased how one could thrive in life by getting ahead with speed using Vi powered by GIGAnet- the fastest 4G of India. To engage with customers, we launched #SpeedSeBadho challenge on social media wherein through a fun filter, people experienced the speeds of GIGAnet. The campaign was extensively promoted on TV & Digital.

• In the post Covid world, the role of internet has become more relevant and digital adoption & usage has accelerated. Entertainment, work from home, learning and health care became of prime importance. Your Company devised multiple ways to support customers on these fronts.

o In line with your Company's strategy of accelerating unlimited base & 4G adoption through attractive content & device-led propositions, your Company introduced a Zee5 pack & plan for prepaid as well as postpaid users and was promoted on Radio & TV & digital.

o Vi continued to partner content companies and promoted new & engaging content through Vi Movies & TV and movie on demand on digital.

o With the need for data increasing more & more, your Company launched & promoted on digital and on-ground.

Ý Unlimited night data - a differentiated proposition wherein one gets unlimited data between 0000-0600 hrs on unlimited packs above ' 249/-.

Ý Weekend Data Rollover - an exclusive proposition of being able to carry forward unused data from weekdays to weekends on unlimited packs above ' 249/-.

o As learning became completely online and the need for upskilling increased, Vi offered upskilling options through partnerships with Pedagogy, udemy, upgrad which was promoted on TV & digital.

o With health being of prime importance, customers could stay healthy with Vi through the benefits your Company offered via partnerships with 1 mg, cure.fit, Mfine which was promoted on TV & digital. It also partnered with Aditya Birla Health Insurance to offer free health insurance to its customers on select packs.

• India is a cricket loving nation and IPL gives a great opportunity to connect with customers. To engage with the users, increase usage of the website and app, Vi launched a digital campaign “Vi 20 FanFest". This campaign led to Vi becoming one of the most buzziest brands and generating strong engagement amongst the users.

• Through the year, Vi engaged with its users on social media via various topical campaigns around events such as Friendship Day, Diwali (#ViKiPehliDiwali), Children's Day, Christmas and Holi etc. Some of these were also extended to Vi Retail stores as the lockdowns were lifted. All these helped in driving positive sentiments and buzz for the brand keeping it on top of the mind of the users and also build a stronger brand affinity.

Partnerships & Alliances

• Vi Business has expanded its range of meaningful propositions for small and medium businesses, along with the best of partner offerings, to help enterprise customers build a better tomorrow. The digital propositions help businesses with administer finance and invoicing digitally on an app, workflow and process automation solutions and global marketplace.

Integrated loT Solutions

One of the strategic focus areas for your Company has been to position itself as a market leader in loT and other emerging technology businesses. Vi Business, the enterprise arm, has strengthened its loT portfolio with the launch of Integrated loT solutions for enterprises. With this industry first initiative, VIL has become the only Telecom Company in India to offer a secure end-to-end IoT solution offering that comprises connectivity, hardware, network, application, analytics, security and support. The offering is designed to simplify and accelerate the digital transformation journey for enterprises.

Recognizing the challenges faced by enterprises in conceptualizing, designing and deploying IoT as a strategic driver, with Vi Integrated IoT solutions, the

telco is now adopting a consulting-led engagement to support businesses in identifying their needs, design and develop the right IoT solution and implementation. It is also providing them with tailored solutions to be integrated with best-in-class enterprise-grade IoT framework.

Vi is the largest IoT player in India and with this launch, it has further strengthened its portfolio by providing a comprehensive range of IoT solutions across Industries for - Smart Infrastructure, Smart Mobility and Smart Utilities, on its 5G-ready network. With Vi Integrated IoT Solutions, an enterprise can now focus on its core strength, thus simplifying and accelerating IoT Innovation.

With this launch, Vi is well positioned to capitalize on future growth driven by the Government's push towards ‘Digital India' and ‘Smart Cities'. A trusted and valued IoT partner in the nascent industry, and with its strong foundation, Vi is helping enterprises succeed in IoT, thereby paving the way for a digitally enhanced market in India. The launch of Vi Integrated IoT Solutions is a strategic step towards making Vi Business - an IoT ecosystem integrator for Indian enterprises, and positioning Vi to have an Ecosystem Play driving our transformation from a ‘Telco' to ‘TechCo.

IoT Self-Scan: Framework for IoT Maturity

Highlighting the potential of IoT adoption in manufacturing, Vi Business also launched an IoT Insights report “Vi IoT Self Scan: Framework for accessing IoT maturity" basis its key learnings of working closely with the manufacturing companies. According to the report, manufacturing companies recognize the business need to build a connected factory ecosystem. Most companies wish to automate their plant operations with IoT in the next few years. IoT Self Scan Report identifies other reasons like production monitoring, planning and scheduling, quality and compliance and process optimization as triggers for manufacturing companies to adopt IoT.

• Vi Business continues to support enterprises, SMEs and COVID vaccine ecosystem with our Techco solutions during the pandemic.

• Vi Business Plus, an industry leading mobility solution, enables today's mobile workforce to connect, communicate, collaborate and do a lot more with their postpaid plans. The Mobile plans are bundled with

ANNUAL REPORT 2020-21 13

Subsidiaries and Joint Ventures

As on March 31, 2021, your Company has ten subsidiary companies, one joint venture company and one associate company, details whereof are given below:

Subsidiaries

1. Vodafone Idea Manpower Services Limited (VIMSL) erstwhile Idea Cellular Services Limited

VIMSL is engaged in the business of providing manpower services to the Company. During the year under review, the total income stood at ' 702 Mn compared to ' 938 Mn in the previous year.

2. Vodafone M-pesa Limited (VMPL)

VMPL was in the business of Prepaid Payment Instruments (PPI) and Business Correspondence and provided customers with a mobile wallet and money transfer services in the form of M-pesa. During the Financial Year 2019-20, the Company surrendered its PPI License issued by the RBI under the Payment and Settlement System Act, 2007 with effect from September 30, 2019 as per the guidance and approval of RBI - Department of Payment and Settlement System [Refer Note 40(iii) to the Standalone Financial Statements for further details]. During the year, VMPL has total income of ' 27 Mn as compared to ' 129 Mn in the previous year.

3. Vodafone Idea Business Services Limited (VIBSL) erstwhile Vodafone Business Services Limited

VIBSL is an outsourcing hub for backend IT support, data centre operations and hosting services to the Company and its subsidiaries. It also has an OSP business. During the year under review, the total income stood at ' 1,609 Mn as compared to ' 2,238 Mn in the previous year.

4. Vodafone Idea Communication Systems Limited (VICSL) erstwhile Mobile Commerce Solutions Limited

VICSL is engaged in the business of trading of Mobile handsets, data card and related accessories and services. During the year under review, the total income stood at ' 329 Mn compared to ' 329 Mn in the previous year.

5. Connect (India) Mobile Technologies Private Limited (CIMTPL)

CIMTPL is a wholly owned subsidiary of VICSL. For the Financial Year 2020-21, the total income stood at ' 7 Mn compared to ' 12 Mn in the previous year. The

Security and location services to help enterprises and businesses balance the corporate and individual needs.

• Vi Business has launched Managed Security Services, in partnership with Fortinet, to serve growing security needs of enterprises as they embrace digital ways of operations.

Awards and Recognitions

Some key awards and recognitions received by your Company during the period are:

• Vi Business won two Frost & Sullivan India ICT Awards:

- F & S Managed Enterprise Wi-Fi Provider of the Year

- F & S M2M Connectivity Service Provider of the Year

• Vi Business won four CIO Choice awards:

- CIO Choice recognition as the most preferred service provider for IoT;

- CIO Choice recognition for most preferred service provider for Telecom carrier (mobile access);

- CIO Choice recognition for most preferred service provider for Managed Mobility; and

- CIO Choice recognition for most preferred service provider for SIP Trunk.

• Enterprise digital platform for Vi business mobility was recognized by a global jury at ICMG Global awards 2020, for having the best customer centricity and architectural design.

• Vi App won the UI-UX award at the prestigious DNA Paris Design Awards in 2021.

• Vi won the Global Omni Award Spring 2021 edition for its interactive learning management system for frontline customer service workforce.

• Vi's VIC Chatbot received the top global prize award for the best chat-bot integration with Google Business Messaging platform by Google.

• Vi won a Silver for ‘Vi - Together for Tomorrow' Integrated PR Campaign for the new brand launch at the 11th E4M IPRCCA Awards 2020.

• Vi won a Bronze for ‘Vi - Championing Digital India' campaign under ‘Best Use of PR by a Corporate category' at the 11th E4M IPRCCA Awards 2020.

Board of CIMTPL has approved amalgamation of CIMTPL with its holding Company namely VICSL and the scheme of amalgamation is in process of being filed with NCLT.

6. Vodafone Foundation (VF)

VF is a section 8 Company as per Companies Act 2013. Pursuant to the enactment of Companies Act, 2013 and Section 135 of the Companies Act, 2013, VF is an implementing agency and carries out Corporate Social Responsibility (‘CSR') activities for the Company, its subsidiaries, associates and joint ventures, promoter group companies in line with the Schedule VII of the Companies Act, 2013. VF primarily focuses on CSR activities that includes promoting and development of (a) education, (b) financial literacy, (c) empowerment of woman, (d) healthcare, (e) environment, (f) agriculture & livelihood, (g) eradication of poverty.

7. Vodafone Idea Telecom Infrastructure Limited (VITIL) erstwhile Vodafone Towers Limited

VITIL is engaged in providing the fibre infrastructure services to its customers on existing fibre portfolio of ~165,000 kms. For the Financial Year 2020-21, the total income stood at ' 6,091 Mn compared to ' 2,184 Mn in previous year.

8. Vodafone Idea Shared Services Limited (VISSL) erstwhile Vodafone India Ventures Limited

VISSL is an outsourcing hub for Finance & Accounts, Human Resources, Supply Chain Management, Credit & Collection Support, Customer Support and catering to the Information Technology (IT) needs for data consolidation, back end IT support for Vodafone Idea Limited and its Subsidiary Companies. During the year under review, the total income stood at ' 1,426 Mn compared to ' 1,362 Mn in the previous year.

9. Vodafone Idea Technology Solutions Limited (VITSL) erstwhile Vodafone Technology Solutions Limited

VITSL has commenced E-Sim business in the current year. During the year under review, the total income stood at ' 57 Mn compared to ' 0.3 Mn in the previous year.

10. You Broadband India Limited (YBIL)

YBIL is engaged in providing high speed broadband internet access through cable network, high bandwidth internet broadband services to enterprise segment, infrastructure support to licensed telecommunication service providers. During the

Financial Year 2020-21, You System Integration Private Limited (YSIPL) have been merged with the YBIL effective March 15, 2021 with an appointed date of April 1, 2020. For the Financial Year 2020-21, the total income stood at ' 1,849 Mn compared to ' 1,865 Mn in the previous year.

11. You System Integration Private Limited (YSIPL)

YSI PL, a wholly- owned subsidiary of YBIL had amalgamated with You Broadband India Limited with effect from March 15, 2021.

Joint Venture Company1. Indus Towers Limited (Indus)

During the Financial Year 2020-21, the scheme of amalgamation and arrangement between Bharti Infratel and Indus became effective from November 19, 2020. Pursuant to aforesaid, Indus was dissolved without being wound up and got merged with Bharti Infratel Limited (the merged entity is hereafter named as Indus Towers Limited “Indus") on a going concern basis.

The Company has sold its 11.15% stake in Indus for a consideration of ' 37,642 Mn (Post the closing adjustments) to Bharti Infratel thereby recognizing a loss on sale amounting to ' 170 Mn as exceptional item.

2. Firefly Networks Limited

Firefly Networks Limited (‘FireFly') is a joint venture with Bharti Airtel Limited, with each partner having equal (50% each) shareholding. The main objective of Firefly is to conduct the business of site acquisition, installation, commissioning, operations and maintenance of Infrastructures at the Hotspots to enable telecommunication and internet service providers, to offer customers Wi-Fi access across the territory. Revenue from operations for the Financial Year ended March 31, 2021 was ' 163 Mn as compared to previous year's ' 150 Mn. The Board of Directors have resolved to sell the equity held in the said joint venture, subject to all necessary approvals.

Associate Company

Aditya Birla Idea Payments Bank Limited (ABIPBL),

an associate of the Company had decided to wind up business voluntarily on July 19, 2019, due to unanticipated developments in the business landscape of payments bank that have made the economic model unviable. ABIPBL had filed for voluntary winding up before the Bombay High

Court and the Hon'ble High Court vide its order dated September 18, 2019, approved voluntary winding up of ABIPBL. ABIPBL is in process of winding-up.

In accordance with the provisions contained in section 136(1) of the Companies Act, 2013 (Act), the Annual Report of the Company, containing therein its standalone and the consolidated financial statements are available on the Company's website www.vodafoneidea.com.

Further, pursuant to the said requirement, the financial statements of each of the aforesaid subsidiary companies are available on the Company's website www.vodafoneidea.com and shall be available for inspection during business hours at the Registered Office of the Company. Any member who is interested in obtaining a copy of the financial statements may write to the Company Secretary at the Registered Office of the Company.

In terms of provisions contained in Section 129(3) of the Act, read with Rule 5 of the Companies (Accounts) Rules, 2014, a report on the performance and financial position of each of the subsidiaries and joint venture companies in Form AOC-1 is provided as 'Annexure A' to this report.

Consolidated Financial Statements

In accordance with the provisions of Section 129(3) of the Companies Act, 2013 and Regulation 34 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Consolidated Financial Statements forms part of this Annual Report and shall also be laid before the shareholders in the ensuing Annual General Meeting of the Company. The Consolidated Financial Statements have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under section 133 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014.

Risk Management

In compliance with the requirements of regulations contained in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the provisions of the Companies Act, 2013, your Company has constituted a sub-committee of Directors known as Risk Management Committee, details whereof are set out in the Corporate Governance Report forming part of the Annual Report to oversee Enterprise Risk Management Framework. The role of the Risk Management Committee is inter-alia to approve the strategic risk management framework of the Company, and review the risk mitigation strategies and results of risk identification, prioritization & mitigation plans.

Your Company has a well-established Enterprise-wide Risk Management (ERM) framework in place for identification, evaluation and management of risks, including the risks which may threaten the existence of the Company. In line with your Company's commitment to deliver sustainable value, this framework aims to provide an integrated and organized approach for evaluating and managing risks.

A detailed exercise is carried out to identify, evaluate, manage and monitor the risks. As required the Committee/Board meets to review the risks and steps to be taken to control and mitigate the same.

Detailed discussion on Risks forms part of Management Discussion and Analysis Report which forms part of this Annual Report under section 'Opportunities, Risks, Concerns and Threats'. At present there is nothing further to report.

Employee Stock Option Schemes

Your Company values its employees and is committed to adopt the best HR practices for rewarding them suitably. In this direction your Company had implemented the Employee Stock Option Scheme, 2006 (ESOS-2006) and Employee Stock Option Scheme, 2013 (ESOS-2013) with an objective of enabling the Company to attract and retain talented human resources by offering them the opportunity to acquire a continuing equity interest in the Company and made grants to eligible employees under ESOS-2006 and ESOS-2013 from time to time.

The Board of your Company has also approved broad parameters for implementing a new Employee Stock Option Scheme - 2018 (ESOS-2018), which has also been approved by the members at the Annual General Meeting held on December 22, 2018. The said Scheme is in the process of being implemented. Further, details of plans also form part of Notes to Financial Statements.

In terms of the provisions of the SEBI (Share Based Employee Benefits) Regulations, 2014, the details of the Stock Options and Restricted Stock Units granted under the above mentioned Schemes are available on your Company's website www.vodafoneidea.com.

A certificate from M/s. Umesh Ved & Associates, Company Secretaries, Secretarial Auditors, certifying that the Company's Stock Option Plans are being implemented in accordance with the ESOP Regulations would be placed at the Annual General Meeting for inspection by Members.

Internal Financial Control Systems and its adequacy

Your Company has in place adequate internal control systems commensurate with the size of its operations. The Company has in place adequate controls, procedures and policies, ensuring orderly and efficient conduct of its business, including adherence to the Company's policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records, and timely preparation of reliable financial information. Based on the framework of internal financial controls and compliance systems established and maintained by the Company, the work performed by the internal auditors and the reviews performed by management and the audit committee, the Board is of the opinion that the Company's internal financial controls were adequate and effective during the Financial Year 2020-21.

Human Resource Management

Your Company's people architecture has been built on the principles of being a consumer centric company with technology as the bedrock. The organization has equipped itself for high change agility, has embedded trust at the foundation of its people agenda, and has adopted digital as the first port of call for all solution building.

Management Discussion and Analysis

The Management Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is presented in a separate section forming part of the Annual Report.

Corporate Governance

Your Company is committed to maintain the highest standards of Corporate Governance. Your Company continues to be compliant with the requirements of Corporate Governance as enshrined in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations'). A Report on Corporate Governance as stipulated under the Listing Regulations forms part of the Annual Report. A certificate from the Statutory Auditors of the Company, confirming compliance with the conditions of Corporate Governance, as stipulated in the Listing Regulations forms part of the Annual Report.

Business Responsibility Report

As stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Business Responsibility Report, describing the initiatives taken by the Company from environmental, social and governance perspective is presented in a separate section forming part of the Annual Report.

Corporate Social Responsibility

In terms of the provisions of section 135 of the Companies Act, read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors of your Company has constituted a Corporate Social Responsibility (“CSR”) Committee. The composition and terms of reference of the CSR Committee is provided in the Corporate Governance Report which forms part of this report.

The Company has revised the policy on Corporate Social Responsibility (‘CSR') to include changes based on Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 and the revised policy was recommended by the CSR Committee and approved by the Board and the same can be accessed on the Company's website at www.vodafoneidea.com.

In view of the losses incurred by the Company during the last two financial years, the Company has no obligation for CSR spend during the Financial Year 2020-21.

However, believing on giving and caring for the underprivileged and inclusion of all, as well as the directive of Ministry of Corporate Affairs, the Board of the Company had passed a resolution to spend the unspent CSR obligation for Financial Years 2015-16 and 2016-17 in eight equal quarters beginning from April-June 2019. In Financial Year 2020-21, your Company spent ' 316.82 Mn towards CSR activities. In view of the unique circumstances caused by the ongoing pandemic, your Company had sought a one-quarter moratorium on the Ministry's dispensation and requested that your Company be allowed to spend the balance unspent amount by Q1 FY 22. MCA had granted your Company an extension of one quarter in disbursement and reporting. Additionally, MCA has directed the Company to spend the unspent CSR obligation of ' 228.20 Mn for Financial Year 2017-18 in 8 equal instalments over 8 quarters, commencing from April 2021.

The Company's CSR initiatives positively impacted the lives of around 28.5 lakh people across 17 States through multiple initiatives undertaken in the domains of (a) education, (b) financial literacy, (c) empowerment of women, (d) healthcare, (e) environment, (f) agriculture & livelihood, (g) eradication of poverty. Your Company during this pandemic period kept the project activities going on using the technology platforms that have been developed during the course of the project.

The Company's key objective is to actively contribute to the social and economic development of the communities by leveraging technology and purposeful innovation to catalyse social prosperity, digital literacy and inclusivity. Your Company

during the reporting year leveraged the technology strength and provided farm advisories to 55,000 farmers on the basis of real time data received from the IoT solutions which are deployed in the farm fields. This helped farmers in applying correct and timely farm inputs. To encourage the meritorious Teachers and Students your Company provided Scholarship to 200 Teachers and 2,500 Students. 65,000 Teachers were provided online support including digital contents to continue the teaching. Your Company continued the previous programs and carried forward the learnings.

The brief outline of the CSR policy of the Company and the initiatives undertaken by the Company on CSR activities during the year under review are set out in 'Annexure B' of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021.

Directors' Responsibility Statement

The audited financial statements for the year under review are in conformity with the requirements of the Companies Act, 2013 and the applicable Accounting Standards. The financial statements reflect fairly the form and substance of transactions carried out during the year under review and reasonably present your Company's financial condition and results of operations. Your Directors, to the best of their knowledge and belief, confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures, if any;

b) the accounting policies selected have been applied consistently and judgements and estimates are made that are reasonable and prudent, so as to give a true and fair view of the state of affairs of your Company as at the end of the financial year and of the financial performance and cash flows of the Company for that period;

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

d) the annual accounts were prepared on a going concern basis;

e) your Company had laid down internal financial controls and that such internal financial controls are adequate and were operating effectively; and

f) your Company has devised a proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Directors and Key Managerial Personnel

Mr. Kumar Mangalam Birla, Non-Executive Director and Chairman, who has been heading the Board since June 2006, stepped down from the Board of the Company with effect from August 4, 2021. The Board has elevated Mr. Himanshu Kapania, Non-Executive Director as Chairman with effect from August 4, 2021. The Board places on record its sincere appreciation for the outstanding efforts, contribution, support and above all the vision provided by Mr. Kumar Mangalam Birla, to the Company all along the journey.

Mr. Himanshu Kapania, a nominee of the Aditya Birla Group, is a telecom industry veteran with more than 30 years of over-all experience. This includes significant board experience in telecom companies globally. Mr. Kapania has also served on the Global GSMA Board for two years and was also the Chairman of the Cellular Operators Association of India (COAI) for two years. He is presently the Chairman of the FICCI Council on Telecom, Electronics and Digital Economy. He was also the Managing Director of the Company before its merger with Vodafone India.

During the year under review, Mr. Thomas Reisten and Mr. Vivek Badrinath (representing Vodafone Group) resigned from the Board of the Company with effect from 24th February 2021. The Board places on record its sincere appreciation for the valuable guidance and contribution made by Mr. Thomas Reisten and Mr. Vivek Badrinath in the deliberations of the Board during their tenure as Director(s).

The Board based on the recommendation of the Nomination & Remuneration Committee appointed Mr. Sunil Sood and Mr. Diego Massidda as Additional Directors (Non-Executive and Non-Independent), representing Vodafone Group effective 24th February, 2021 and will hold office till the date of the ensuing Annual General Meeting (AGM). The Company has received requisite notice from a member under Section 160 of the Companies Act, 2013, proposing the appointment of Mr. Sunil Sood and Mr. Diego Massidda as Director(s) at the AGM. Accordingly, the Board recommends their appointment.

Further, the Board based on the recommendation of Nomination and Remuneration Committee, had appointed Mr. Sushil Agarwal, (representing Aditya Birla Group), as an Additional Director (Non-Executive and Non-Independent)

with effect from 4th August, 2021 and will hold office till the date of the ensuing Annual General Meeting (AGM). The Company has received requisite notice from a member under section 160 of the Companies Act, 2013, proposing the appointment of Mr. Sushil Agarwal as a Director at the AGM. Accordingly, the Board recommends his appointment.

In accordance with the provisions of the Companies Act, 2013, Mr. Himanshu Kapania is liable to retire from office by rotation, and being eligible, have offered himself for re-appointment at the ensuing Annual General Meeting of the Company.

Mr. Arun Adhikari (DIN: 00591057) and Mr. Ashwani Windlass (DIN: 00042686) will complete their term of 3 years on August 31, 2021 and have given their consent for re-appointment for a second term of 3 years. Further, Ms. Neena Gupta (DIN: 02530640) will complete her term of 3 years on September 17, 2021 and have given her consent for re-appointment for a second term of 3 years.

Based on the recommendations of the Nomination and Remuneration Committee and being satisfied on the performance evaluation, considering the background and experience, the Board has subject to the approval of the shareholders, approved the re-appointment of Mr. Arun Adhikari and Mr. Ashwani Windlass for a further term of 3 years commencing from August 31, 2021 and Ms. Neena Gupta for a further term of 3 years commencing from September 17, 2021. Shareholders' approval by way of special resolutions for the above Independent Directors have been included in the Notice of the ensuing AGM.

All Independent Directors have submitted their declaration of independence, pursuant to the provisions of Section 149(7) of the Act and Regulation 25(8) of the Listing Regulations, stating that they meet the criteria of independence as provided in Section 149(6) of the Act and Regulation 16(1) (b) of the Listing Regulations. The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience, expertise and hold highest standards of integrity.

All Independent Directors of your Company have registered their name in the data bank maintained with the Indian Institute of Corporate Affairs, in terms of the provisions of the Companies (Appointment and Qualification of Directors) Rules, 2014.

A brief profile of the directors proposed to be appointed/ re-appointed are annexed to the Notice convening Annual General Meeting forming part of this Annual Report.

Pursuant to the provisions of Section 203 of the Companies Act, 2013, the Key Managerial Personnel of the Company are Mr. Ravinder Takkar, Managing Director & Chief Executive Officer, Mr. Akshaya Moondra, Chief Financial Officer and Mr. Pankaj Kapdeo, Company Secretary.

Board Evaluation and Familiarization Programme

The evaluation framework for assessing the performance of Directors of your Company comprises of contributions at the meetings, strategic perspectives or inputs regarding the growth or performance of your Company, among others. The evaluation parameters and the process have been explained in the Corporate Governance Report forming part of the Annual Report of the Company. The Nomination & Remuneration Committee have laid down the manner in which formal evaluation of the performance of the Board, its Committee and individual Directors has to be made. The Board has carried out the annual performance evaluation of its own performance, Board Committees and Individual Directors pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of Listing Regulations.

The details of programme for familiarization of Independent Directors of your Company is available on your Company's website www.vodafoneidea.com.

Remuneration Policy

The Company has a Remuneration Policy in place encompassing the appointment and remuneration philosophy of the Company. The Policy comprises of the various elements and terms of appointment. The Policy consists of various aspects in connection to Remuneration Program applicable for Directors, Key Managerial Personnel and Senior Management of the Company, Performance Goal Setting, Benefit & Perquisites, Compliance and other such elements.

The policy was formulated by the Nomination and Remuneration Committee in terms of Section 178(3) of the Companies Act 2013 and it also includes the criteria for determining qualifications, positive attributes, independence of a Director and other matters. A copy of the said policy is available on the website of the Company www.vodafoneidea.com.

Dividend Distribution Policy

The Board has in compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, formulated Dividend Distribution Policy. This policy will provide clarity to the stakeholders on the dividend distribution framework of the Company. The Policy sets out various internal and external factors which shall be considered by the Board in determining the dividend payout. The dividend distribution policy is attached as 'Annexure G' to this report and is also available on the website of the Company www.vodafoneidea.com.

Board Meetings

During the year, ten meetings of the Board of Directors were held. The details of the meetings and the attendance of the Directors are provided in the Corporate Governance Report. Further, maximum interval between two meetings of the Board of the Directors has not exceeded 120 days.

Board Committees

Your Company has in place the Committee(s) as mandated under the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. There are currently seven committees of the Board, namely:

1. Audit Committee

2. Nomination & Remuneration Committee

3. Stakeholders' Relationship Committee

4. Risk Management Committee

5. Corporate Social Responsibility Committee

6. Capital Raising Committee

7. Finance Committee

Details of the Committees along with their charter, composition and meetings held during the year, are provided in the Corporate Governance Report, which forms part of this report.

Contract and Arrangements with Related Parties

All contracts/arrangements/transactions entered by the Company during the financial year with the related parties are detailed in the Note 56 of the Standalone Financial Statements were in ordinary course of business and at an arm's length basis.

The related party transaction which are considered material during the year is the existing arrangement with Indus Towers Limited (Indus), which provides Passive Infrastructure Services

and related operations and maintenance services to various telecom operators in India, including your Company. Pursuant to a Scheme of Amalgamation and Arrangement between Bharti Infratel Limited and Indus, which became effective from November 19, 2020, Indus has been amalgamated with Bharti Infratel Limited and the merged entity is now known as Indus Towers Limited. Post the sale of 11.15% stake in Indus by the Company on November 19, 2020, Indus ceased to be a joint venture of the Company and the merged entity which has been renamed as Indus is continuing as a related party, as the same is an Associate of an entity, to which the Company is a Joint Venture.

Indus is currently one of the world's largest independent passive infrastructure providers. Your Company had entered into a Master Service Agreement (MSA) with Indus in 2008 (which has been amended from time to time) for availing passive infrastructure services provided by them in certain service areas. The MSA requires individual tenancy service contracts to be executed for each passive infrastructure site, the terms of which vary depending on the location, type of site, number of existing tenants, etc. and contain lock in period for ensuring continuity. Such terms are similarly applicable to all other telecom providers having arrangement with Indus. The details of the material related party transaction with Indus for the Financial Year ended March 31, 2021 is provided in Form AOC-2, which is attached as 'Annexure C' to this report.

None of the related party transactions entered into by the Company were in conflict with the Company's interest. There are no materially significant related party transactions made by the Company with Promoters, Directors or Key Managerial Personnel etc. which may have potential conflict with the interest of the Company at large. Member's approval for material Related Party Transaction, as defined under the Listing Regulations shall be obtained at the ensuing Annual General Meeting.

All Related Party Transactions are placed before the Audit Committee/Board, as applicable, for their approval. Omnibus approvals are taken for the transactions which are repetitive in nature. The Company has implemented a Related Party Transaction Manual and Standard Operating Procedures for the purpose of identification and monitoring of such transactions. The details of the transactions with Related Parties are provided in the accompanying financial statements as required under Ind AS 24.

The policy on Related Party Transactions is uploaded on the Company's website www.vodafoneidea.com.

Particulars of Loans, Guarantees and Investments

As your Company is engaged in the business of providing infrastructural facilities, the provisions of Section 186 of the Companies Act, 2013 relating to loans made, guarantees given or securities provided are not applicable to the Company. The details of such loans made and guarantees given are provided in the standalone financial statements. Also, Particulars of investments made by the Company are provided in the notes to standalone financial statements.

Vigil Mechanism - Speak up policy

Your Company has in place a vigil mechanism for directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of your Company's Code of Conduct. Adequate safeguards are provided against victimization to those who avail of the mechanism and direct access to the Chairman of the Audit Committee in exceptional cases.

The Vigil Mechanism - Speak Up policy is available on your Company's website www.vodafoneidea.com.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as required to be disclosed pursuant to Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014, are given to the extent applicable in 'Annexure D' forming part of this report.

Particulars of Employees

Disclosures pertaining to remuneration and other details as required under section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as 'Annexure E' to this report.

In accordance with the provisions of Section 197(12) of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees drawing remuneration in excess of the limits set out in the aforesaid Rules, forms part of this Report. However, in line with the provisions of Section 136(1) of the Act, the Report and Accounts as set out therein, are being sent to all Members of your Company excluding the aforesaid information about the employees. Any Member, who is interested in obtaining these particulars about employees, may write to the Company Secretary at the shs@vodafoneidea.com.

Statutory Auditors

The members of the Company had at its Annual General Meeting held on June 30, 2017, appointed M/s. S.R. Batliboi & Associates LLP, Chartered Accountants, Firm Registration No. 101049W/E300004), as the Statutory Auditors of the Company for a period of five consecutive years, i.e. till the conclusion of Twenty Seventh Annual General Meeting of the Company to be held in the calendar year 2022, by members at every Annual General Meeting.

The requirement to ratify the appointment of the Auditors at every Annual General Meeting is done away with pursuant to the Companies (Amendment) Act 2017. Accordingly, no resolution is proposed for ratification of appointment of the Auditors.

The Statutory Auditors have however confirmed that they are not disqualified to continue as Auditors and are eligible to hold office as Auditors of your Company.

Auditors' Report and Notes to Financial Statements

The Board has duly reviewed the Statutory Auditors' Report on the Financial Statements including the emphasis of matter relating to the Company's financial condition as at March 31, 2021 and its debt and AGR obligations due for the next 12 months, which has impacted the Company's ability to generate the cash flow that it needs to settle/refinance its liabilities and guarantees as they fall due, which along with its financial condition is resulting in material uncertainty that casts significant doubt on the Company's ability to make the payments mentioned therein and continue as a going concern. The report does not contain any qualification, disclaimer or adverse remarks.

Note 4 to the standalone financial statements covers the Emphasis of Matter issue and the Company's mitigation plan, the clarification of which is self-explanatory. However, the modification application as mentioned in Note 4 has been dismissed by the Hon'ble Supreme Court on July, 23, 2021. Subsequently, on August 10, 2021, the Company has filed a review petition with the Hon'ble Supreme Court for considering to hear the modification application again. The Board believes that the Company's ability to continue as a going concern is dependent on its ability to raise additional funds as required, successful negotiations with lenders on continued support/additional funding, monetization of certain assets, outcome of the review petition filed with the Hon'ble Supreme Court and clarity of the next instalment amount, acceptance of its deferment request by DoT and generation of cash flow from operations that it needs

to settle/renew its liabilities/guarantees as they fall due. As of date, the Company has met all its debt obligations. Pending the outcome of the above matters, these financial statement have been prepared on a going concern basis.

As regards the comments under para i(a) and i(b) of Annexure 1 to the Independent Auditors' Report regarding updation of quantitative and situation details relating to certain fixed assets being relocated and physical verification of assets, it is to be noted that the Company has undertaken a large scale network integration activity as part of the network roadmap pursuant to the merger of erstwhile Vodafone with the Company. This has led to a delay in updation and the verification exercise. Further, this has been impacted due to COVID-19 vis-a-vis the verification programme scheduled by the Company in the usual circumstances. As of now, the Company is in the process of updating the quantitative and situation details of such assets and would continue with the verification exercise subject to lifting of COVID-19 lockdown in various service areas in a manner so as to ensure that the entire asset base is verified in the block of three years in line with the physical verification programme of the Company.

Reporting of Frauds by Auditors

During the year under review, neither the Statutory Auditors nor the Secretarial Auditors have reported to the Audit Committee under Section 143(12) of the Act, any instances of fraud committed against the Company by its officers and employees, the details of which would need to be mentioned in Board's Report.

Cost Audit and Cost Auditors

The Company is required to make and maintain cost records pursuant to Section 148 of the Companies Act 2013.

In terms of the provisions of Section 148 of the Companies Act, 2013, read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of Directors of your Company on the recommendation of the Audit Committee appointed M/s. Sanjay Gupta & Associates, Cost Accountants, as the Cost Auditors, to conduct the Cost Audit of your Company for the Financial Year ended March 31, 2021, at a remuneration as specified in the notice convening the Annual General Meeting.

As required under the Act, the remuneration payable to the Cost Auditors is required to be ratified by the members. Accordingly, a resolution seeking members' ratification for the remuneration payable to the Cost Auditors for the Financial Year ended March 31, 2021 forms part of the Notice of the ensuing Annual General Meeting.


Secretarial Auditor

In terms of the provision of the Section 204 of the Act read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed M/s. Umesh Ved & Associates, Company Secretaries, Ahmedabad, as the Secretarial Auditor for conducting the Secretarial Audit of your Company for the Financial Year ended March 31, 2021. The report of the Secretarial Auditor is annexed to this report as 'Annexure F'. The contents of the Secretarial Audit Report are self-explanatory and do not contain any qualification, reservation or adverse remark.

As per Regulation 24A of the Listing Regulations, material unlisted subsidiaries of a listed entity incorporated in India is required to annex a Secretarial Audit Report issued by a Company Secretary in practice. Due to networth of the Company being negative, You Broadband India Limited, Connect (India) Mobile Technologies Private Limited, Vodafone Idea Communication Systems Limited, Vodafone Idea Shared Services Limited and Vodafone Manpower Services Limited were material subsidiaries of the Company. In compliance with the requirement, the Secretarial Audit Report of material subsidiaries is attached as Annexure F-1 to F-5 to the Annual Report.

Your Company is in compliance with the Secretarial Standards specified by the Institute of Company Secretaries of India.

Annual Return

As provided under Section 92(3) and 134(3)(a) of the Act, read with Rule 12 of Chapter VII Rules of the Companies (Management and Administration) Amendment Rules, 2020, Annual Return in Form MGT-7 for Financial Year 2020-21 is uploaded on the website of the Company and can be accessed at www.vodafoneidea.com.

Sustainability Journey

Telecom sector provides connectivity to individuals & communities that fosters empowerment and inclusion. The near ubiquitous reach of the mobile makes it the most relevant channel for last mile outreach. The mobile phone has fast become the window to a world of information, better education, livelihood, employment, health, inputs on agricultural practices and governance.

Being a telecom company Vodafone Idea's corporate responsibility agenda is directed towards addressing some of India's critical social and developmental challenges in both rural and urban communities using the inherent potential and reach of the mobile technology and platform and reducing

the environmental impact with increasing preference and usage of digital. The technology platforms set up during the years under CSR initiatives helped in outreaching the people including students during the COVID-19 pandemic

Both promoter groups of the Company too are fully committed towards building sustainable businesses through a clearly crafted vision supported by relevant policies and frameworks.

At Vodafone Idea Limited, we understand the evolving dynamism in our operating environment. We try to Pre-empt uncertainty by plotting scenarios that allow us to understand the external risks to our business. We prioritize adaptability, agility and foresight to ensure that our business models, operations, acquisitions and projects are not locked into unsustainable paths. This was reflected during the COVID-19 pandemic when all our business activities continued and managed very efficiently and we successfully provided all necessary support to our customers.

We are fully committed towards creating value for all stakeholders: from customers to partners, to employees, to communities and to the larger planet. We achieve this through our passion for customer satisfaction, supporting our partners as they build capacity, engaging with and valuing our employees in an inclusive agenda to instill pride in the work we do and develop sustainable business practices. This is being done with our responsible support towards digital inclusion as a national goal, or in continuing with our practices of community development in areas like education & skilling, women empowerment, preventive healthcare, sanitation and agriculture.

We will continue to be future-ready by staying ahead of the curve and being charged up to thrive in a sustainable tomorrow by building sustainable businesses and propositions. The Company has a robust Sustainability Framework of Policies, Technical Standards, and Guidance Notes based not just on the local laws but also on leading International standards.

We are in the process of designing long term risk and Enterprise Risk Management framework for business sustainability. We have also identified associated risks linked to external factors for telecom business.

Disclosure under Sexual Harassment of Women at Workplace (Prevention, Prohibition And Redressal) Act, 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set-up to redress complaints received regarding

sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. During the Financial Year 2020-21, 5 complaints pertaining to sexual harassment were received and as on March 31, 2021, 3 have been resolved and remaining two complaints are under investigation.

Other Disclosures

- There are no material changes and commitments affecting the financial position of your Company between end of financial year and the date of report, other than those disclosed in the significant developments section of the Board's Report.

- Your Company has not issued any shares with differential voting rights.

- There was no revision in the financial statements.

- Your Company has not issued any sweat equity shares.

- There has been no change in the nature of business of your Company.

- There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company's operations, other than the order passed by the Hon'ble Supreme Court on the AGR matter, which has been disclosed in the significant developments section of the Board's report.

Acknowledgement

Your Directors place on record their sincere appreciation to the Department of Telecommunications, Telecom Regulatory Authority of India, the Central Government, the State Governments, all its investors & stakeholders, bankers, technology providers, equipment suppliers, value added service partners, all the business associates and above all our subscribers for the co-operation and support extended to the Company. Your Directors also wish to place on record their deep appreciation to the employees for their hard work, dedication and commitment. The perseverance and unstinting efforts of the employees has enabled the Company to retain the ‘Fastest Growing Indian Telecom Brand' within the sector.

For and on behalf of the Board

Himanshu Kapania Ravinder Takkar

Chairman Managing Director &

(DIN : 03387441) Chief Executive Officer

Place: Mumbai (DIN : 01719511)

Place: Gurugram

Date: August 14, 2021