We have audited the accompanying standalone financial statementsof Vodafone Idea Limited (“the Company”), which comprise theBalance Sheet as at March 31, 2025, the Statement of Profit andLoss, including the statement of Other Comprehensive Income, theStatement of Cash Flows and the Statement of Changes in Equityfor the year then ended, and notes to the standalone financialstatements, including a summary of material accounting policiesand other explanatory information.
In our opinion and to the best of our information and accordingto the explanations given to us, the aforesaid standalone financialstatements give the information required by the Companies Act,2013, as amended (“the Act”) in the manner so required and givea true and fair view in conformity with the accounting principlesgenerally accepted in India, of the state of affairs of the Company asat March 31, 2025, its loss including other comprehensive loss, itscash flows and the changes in equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statementsin accordance with the Standards on Auditing (SAs), as specifiedunder section 143(10) of the Act. Our responsibilities under thoseStandards are further described in the ‘Auditor’s Responsibilities forthe Audit of the Standalone Financial Statements’ section of ourreport. We are independent of the Company in accordance with the‘Code of Ethics’ issued by the Institute of Chartered Accountantsof India together with the ethical requirements that are relevant toour audit of the financial statements under the provisions of theAct and the Rules thereunder, and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Codeof Ethics. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our audit opinionon the standalone financial statements.
Material Uncertainty Related to Going Concern
We draw attention to Note 5 to the standalone financial statements,which describes the Company’s financial condition as of March 31,2025 including its debt obligations due for the next 12 months.The Company’s financial performance has impacted its ability togenerate cash flows that it needs to settle/refinance its liabilities asthey fall due. The Company’s ability to continue as a going concern isdependent on support from the DoT on the AGR matter, successfullyarranging funding and generation of cash flow from its operationsthat it needs to settle its liabilities as they fall due. Our opinion isnot modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professionaljudgment, were of most significance in our audit of the standalonefinancial statements for the financial year ended March 31, 2025.These matters were addressed in the context of our audit of thestandalone financial statements as a whole, and in forming ouropinion thereon, and we do not provide a separate opinion on thesematters. For each matter below, our description of how our auditaddressed the matter is provided in that context.
In addition to the matter described in the ‘Material UncertaintyRelated to Going Concern’ section, we have determined the mattersdescribed below to be the key audit matters to be communicatedin our report. We have fulfilled the responsibilities described in theAuditor’s responsibilities for the audit of the standalone financialstatements section of our report, including in relation to thesematters. Accordingly, our audit included the performance ofprocedures designed to respond to our assessment of the risks ofmaterial misstatement of the standalone financial statements. Theresults of our audit procedures, including the procedures performedto address the matters below, provide the basis for our audit opinionon the accompanying standalone financial statements.
Key audit matters
How our audit addressed the key audit matter
Revenue recognition (as described in note 6(a) of the Standalone financial statements)
For the year ended March 31, 2025, theservice revenue recognised was ' 430,449million.
Revenue recognition has been identifiedas a key audit matter due to complexity ofsystems in recognizing revenues, significanceof volumes of data process by system,constantly evolving pricing with discountedtariffs and operation in highly competitivemarketplace.
Our audit procedures included the following:
• With the assistance by IT specialists, we obtained an understanding, evaluated the designand tested the operating effectiveness of key IT general and application controls related torevenue recognition processes. We also tested relevant IT infrastructure and applications thatresult in generation of various IT reports used for billing and revenue recognition process.
• We tested the operating effectiveness of IT dependent manual controls, performed dataanalytics and trend analysis, test of reconciliations between billing systems and other ITsystems, prepaid applications and the general ledger. We also performed procedures totest the computation of deferred revenue.
• We read and assessed the revenue related accounting policy, estimates and assumptionsand disclosures in the standalone financial statements.
Assessment of claims related to regulatory, taxation and legal matters (as described in note 3, 44(viii) and 46 of the Standalonefinancial statements)
At March 31, 2025 the value of regulatory, taxand legal disputes disclosed as contingentliabilities was ' 191,686 million.
Pursuant to the Hon’ble Supreme Courtjudgement, the Company has recorded andcarrying liability of ' 759,452 million relatedto AGR matter and ' 75,813 million relatedto one time spectrum charges (OTSC) formore than 6.2 MHz spectrum.
Taxation, regulatory and litigation exposureshave been identified as a key audit matterdue to changing regulatory environmentand significant judgement required bymanagement in assessing the exposure ofeach case.
• We obtained summary of all tax, regulatory and litigation including management’s assessment.
• We obtained an understanding, evaluated the design, and tested the operatingeffectiveness of the controls related to management’s risk assessment process fortaxation, regulatory and legal matters.
• We obtained and read external legal opinions (where considered necessary) and otherevidence provided by management to corroborate management’s assessment of theregulatory and legal matters.
• Engaged tax/regulatory specialists to assess the tax/regulatory positions taken bymanagement with respect to tax/regulatory litigations.
• Verified the provisions recorded in the books by the Company including the interestcomputations based on the demands received by the Company from DoT, internalrecords of the Company based on the Hon’ble Supreme Court judgement and validatedthe computations in accordance with license agreement and Hon’ble Supreme Courtjudgement for the provisions recorded in the books.
• Assessed the relevant accounting policies and disclosures in the standalone financialstatements for compliance with the requirements of accounting standards.
Borrowings, interest and debt covenant testing (as described in note 24, 25, 28 and 30 of the Standalone financial statements)
At March 31, 2025, current and non¬current borrowings was ' 1,972,557 million(including interest accrued but not due)of which Loan from banks and others of' 23,451 million and Deferred paymentobligations towards Spectrum and AGRliability of ' 1,949,106 million.
Outstanding bank guarantee and letter of creditas at March 31, 2025 was ' 93,140 million.Annual covenant testing as at March 31,2025 resulted in certain ratios breachingthe specified covenant threshold for loansaggregating ' 23,260 million. Accordingly,the Company has classified ' 7,260 millionfrom non-current borrowings to currentmaturities of long-term debt.
Borrowings has been identified as a key auditmatter due to debt covenant breach, changein credit ratings of the loans and variouscorrespondences received from banks andfinancial institutions for additional security/ increase in interest/commission rateresulting in recognition, presentation andmeasurement complexities.
• We tested the debt covenant ratio specified in the loan agreements and the computationand assessed the classification of the borrowing in financial statement based on theresults of such testing and waiver from the banks, if any.
• We obtained independent confirmation from the banks with respect to borrowings andnon-fund based facilities [including bank guarantees/letter of credit] outstanding as atMarch 31, 2025 and compared the amounts as per confirmations with the amounts inthe books of accounts and tested with the reconciliation provided by the management.
• We verified the interest/commission rate used by the Company for computation of interestcost with the loan/bank guarantee agreements and various correspondences receivedby the Company from respective banks and corresponding increase in rates due to debtcovenant breach and change in credit rating, if any.
• We verified the security created against fund and non-fund based facilities with theagreements and documents related to charges filed with Registrar of Companies.
• We assessed the borrowing related accounting policy and disclosures in the standalonefinancial statements for compliance as per Ind AS 107.
• We obtained various correspondences received from the Department of Telecommunications(‘DOT’) with respect to deferment / moratorium / future installment related to Deferredpayment obligations towards Spectrum and AGR and compared the same with amountsconsidered in the books of accounts.
Other Information
The Company’s Board of Directors are responsible for the otherinformation. The other information comprises the informationincluded in the Annual Report but does not include the standalonefinancial statements and our auditor’s report thereon. The AnnualReport is expected to be made available to us after the date of thisauditor’s report.
Our opinion on the standalone financial statements does not coverthe other information and we do not express any form of assuranceconclusion thereon.
In connection with our audit of the standalone financial statements,our responsibility is to read the other information identified abovewhen it becomes available and, in doing so, consider whether suchother information is materially inconsistent with the standalonefinancial statements or our knowledge obtained in the audit orotherwise appears to be materially misstated.
Responsibilities of Management for the StandaloneFinancial Statements
The Company’s Board of Directors are responsible for the mattersstated in section 134(5) of the Act with respect to the preparationof these standalone financial statements that give a true and fairview of the financial position, financial performance including othercomprehensive income, cash flows and changes in equity of theCompany in accordance with the accounting principles generallyaccepted in India, including the Indian Accounting Standards (Ind AS)specified under section 133 of the Act read with the Companies (IndianAccounting Standards) Rules, 2015, as amended. This responsibilityalso includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonableand prudent; and the design, implementation and maintenance ofadequate internal financial controls, that were operating effectively forensuring the accuracy and completeness of the accounting records,relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from materialmisstatement, whether due to fraud or error.
In preparing the standalone financial statements, management isresponsible for assessing the Company’s ability to continue as agoing concern, disclosing, as applicable, matters related to goingconcern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to ceaseoperations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing theCompany’s financial reporting process.
Auditor’s Responsibilities for the Audit of the StandaloneFinancial Statements
Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from materialmisstatement, whether due to fraud or error, and to issue an auditor’sreport that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conductedin accordance with SAs will always detect a material misstatementwhen it exists. Misstatements can arise from fraud or error and areconsidered material if, individually or in the aggregate, they couldreasonably be expected to influence the economic decisions ofusers taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professionaljudgment and maintain professional skepticism throughout theaudit. We also:
• Identify and assess the risks of material misstatement of thestandalone financial statements, whether due to fraud or error,design and perform audit procedures responsive to those risks,and obtain audit evidence that is sufficient and appropriateto provide a basis for our opinion. The risk of not detecting amaterial misstatement resulting from fraud is higher than forone resulting from error, as fraud may involve collusion, forgery,intentional omissions, misrepresentations, or the override ofinternal control.
• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriatein the circumstances. Under section 143(3)(i) of the Act, weare also responsible for expressing our opinion on whether theCompany has adequate internal financial controls with referenceto financial statements in place and the operating effectivenessof such controls.
• Evaluate the appropriateness of accounting policies usedand the reasonableness of accounting estimates and relateddisclosures made by management.
• Conclude on the appropriateness of management’s use ofthe going concern basis of accounting and, based on theaudit evidence obtained, whether a material uncertainty existsrelated to events or conditions that may cast significant doubton the Company’s ability to continue as a going concern.If we conclude that a material uncertainty exists, we arerequired to draw attention in our auditor’s report to the relateddisclosures in the financial statements or, if such disclosuresare inadequate, to modify our opinion. Our conclusions arebased on the audit evidence obtained up to the date of ourauditor’s report. However, future events or conditions maycause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of thestandalone financial statements, including the disclosures, andwhether the standalone financial statements represent theunderlying transactions and events in a manner that achievesfair presentation.
We communicate with those charged with governance regarding,among other matters, the planned scope and timing of the auditand significant audit findings, including any significant deficienciesin internal control that we identify during our audit.
We also provide those charged with governance with a statementthat we have complied with relevant ethical requirements regardingindependence, and to communicate with them all relationshipsand other matters that may reasonably be thought to bear on ourindependence, and where applicable, related safeguards.
From the matters communicated with those charged withgovernance, we determine those matters that were of mostsignificance in the audit of the standalone financial statements forthe financial year ended March 31, 2025 and are therefore the keyaudit matters. We describe these matters in our auditor’s reportunless law or regulation precludes public disclosure about thematter or when, in extremely rare circumstances, we determine thata matter should not be communicated in our report because theadverse consequences of doing so would reasonably be expectedto outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor’s Report) Order, 2020(“the Order”), issued by the Central Government of India interms of sub-section (11) of section 143 of the Act, we givein the “Annexure 1” a statement on the matters specified inparagraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, we report, to theextent applicable, that:
(a) We have sought and obtained all the information andexplanations which to the best of our knowledge andbelief were necessary for the purposes of our audit ofthe aforesaid standalone financial statements;
(b) In our opinion, proper books of account as required by lawhave been kept by the Company so far as it appears fromour examination of those books except for the mattersstated in the paragraph 2(j)(vi) below on reporting underRule 11(g);
(c) The standalone Balance Sheet, the standalone Statementof Profit and Loss including the Statement of OtherComprehensive Income, the standalone Statement ofCash Flows and the standalone Statement of Changes
in Equity dealt with by this Report are in agreement withthe books of account;
(d) In our opinion, the aforesaid standalone financialstatements comply with the Accounting Standardsspecified under Section 133 of the Act, read withCompanies (Indian Accounting Standards) Rules, 2015,as amended;
(e) The matter described in Material Uncertainty Related toGoing Concern paragraph above, in our opinion, may havean adverse effect on the functioning of the Company;
(f) On the basis of the written representations received fromthe directors as on March 31, 2025 taken on record bythe Board of Directors, none of the directors is disqualifiedas on March 31, 2025 from being appointed as a directorin terms of Section 164 (2) of the Act;
(g) The modification relating to the maintenance of accountsand other matters connected therewith are as stated inparagraph 2(b) above on reporting under Section 143(3)(b) and paragraph 2(j)(vi) below on reporting under Rule
11(g);
(h) With respect to the adequacy of the internal financialcontrols with reference to these standalone financialstatements and the operating effectiveness of suchcontrols, refer to our separate Report in “Annexure 2” tothis report;
(i) In our opinion, the managerial remuneration for the yearended March 31, 2025 has been paid/provided by theCompany to its directors in accordance with the provisionsof section 197 read with Schedule V to the Act;
(j) With respect to the other matters to be included inthe Auditor’s Report in accordance with Rule 11 of theCompanies (Audit and Auditors) Rules, 2014, as amendedin our opinion and to the best of our information andaccording to the explanations given to us:
i. The Company has disclosed the impact of pendinglitigations on its financial position in its standalonefinancial statements - Refer Note 46 to thestandalone financial statements;
ii. The Company did not have any material foreseeablelosses in long-term contracts including derivativecontracts during the year ended March 31, 2025;
iii. There has been no delay in transferring amounts,required to be transferred, to the Investor Educationand Protection Fund by the Company during the yearended March 31, 2025;
iv. a) The management has represented that, to
the best of its knowledge and belief, no fundshave been advanced or loaned or invested(either from borrowed funds or share premiumor any other sources or kind of funds) by theCompany to or in any other persons or entities,including foreign entities (“Intermediaries”),with the understanding, whether recorded inwriting or otherwise, that the Intermediaryshall, whether, directly or indirectly lend orinvest in other persons or entities identified inany manner whatsoever by or on behalf of theCompany (“Ultimate Beneficiaries”) or provideany guarantee, security or the like on behalf ofthe Ultimate Beneficiaries;
b) The management has represented that, tothe best of its knowledge and belief, no fundshave been received by the Company from anypersons or entities, including foreign entities(“Funding Parties”), with the understanding,whether recorded in writing or otherwise,that the Company shall, whether, directly orindirectly, lend or invest in other persons orentities identified in any manner whatsoeverby or on behalf of the Funding Party (“UltimateBeneficiaries”) or provide any guarantee,security or the like on behalf of the UltimateBeneficiaries; and
c) Based on the audit procedures performedthat have been considered reasonable andappropriate in the circumstances, nothinghas come to our notice that has caused usto believe that the representations undersub-clause (a) and (b) contain any materialmisstatement.
v. No dividend has been declared or paid during theyear by the Company.
vi. Based on our examination which included testchecks, the Company has used various accountingsoftware for maintaining its books of account
which have a feature of recording audit trail (editlog) facility and the same has operated throughoutthe year for all relevant transactions recorded inthe respective software except that in respect ofcertain supporting software, audit trail feature is notenabled, as described in Note 64 to the standalonefinancial statements.
Further, during the course of our audit, we did notcome across any instance of audit trail feature beingtampered with in respect of accounting softwareand other supporting software where the audit trailis enabled. Additionally, the audit trail has beenpreserved as per the statutory requirements forrecord retention in respect of accounting softwareand other reporting software where the audit trail isenabled.
Also, with respect to third-party operated softwareapplication, in the absence of comprehensiveinformation in the Service Organisation Controlsreport on audit trail, as described in Note 64 to thefinancial statements, we are unable to comment onwhether the audit trail feature with respect to third-party operated software application was enabledand operated throughout the year for all relevanttransactions recorded in this software applicationor whether there were any instances of the audittrail feature being tampered with. Additionally, weare unable to comment whether the audit trail hasbeen preserved by the Company as per the statutoryrequirements for record retention.
For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
per Amit Poddar
Partner
Membership No.: 509192
UDIN: 25509192BNFTRR9324
Place of Signature: Mumbai
Date: May 30, 2025