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AUDITOR'S REPORT

Vodafone Idea Ltd.

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Market Cap. (₹) 16810.20 Cr. P/BV 0.30 Book Value (₹) 19.68
52 Week High/Low (₹) 23/5 FV/ML 10/1 P/E(X) 0.00
Bookclosure 27/08/2019 EPS (₹) 0.00 Div Yield (%) 0.00
Year End :2019-03 

Independent Auditor's Report

To the Members of Vodafone Idea Limited

Report on the Audit of the Standalone Ind AS Financial Statements

Opinion

We have audited the accompanying standalone Ind AS financial statements of Vodafone Idea Limited (formerly known as Idea Cellular Limited) ("the Company"), which comprise the Balance sheet as at March 31, 2019, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Companies Act, 2013, as amended ("the Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2019, its loss including other comprehensive income its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the 'Auditor's Responsibilities for the Audit of the standalone Ind AS Financial Statements' section of our report. We are independent of the Company in accordance with the 'Code of Ethics' issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.

Emphasis of Matter

We draw your attention to note 45(A)(i) of the standalone Ind AS financial statements which describes the uncertainties related to the legal outcome in respect of the Department of Telecommunications (DoT) demand notices for one time spectrum charges. Our report is not qualified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone Ind AS financial statements for the financial year ended March 31, 2019. These matters were addressed in the context of our audit of the standalone Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor's responsibilities for the audit of the standalone Ind AS financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone Ind AS financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone Ind AS financial statements.

Key audit matters

How our audit addressed the key audit matter

Impairment assessment of intangibles

(as described in note 65 of the Standalone Ind AS financial statements)

At March 31, 2019, the carrying value of intangible asset were Rs,1,300,646 million.

Impairment indicators were identified, that gave rise to a risk that intangible assets may be impaired. Consequently, impairment assessment was performed for spectrum assets amongst others that gave rise to the risk of impairment.

The inputs to the impairment testing model which have the most significant impact on the recoverable value include projected Earnings before interest, tax and depreciation and amortization (EBITDA), revenue growth rate, discount rates and capital expenditure.

The impairment testing model included sensitivity testing of key assumptions, including EBITDA, revenue growth rate, discount rate and capital expenditure.

Our audit procedures included the following:

- We read/understood management's assessment of the indicators of impairment and evaluated the significant assumptions adopted.

- Specifically, where impairment indicators were identified, we have evaluated the valuation models used to determine the amounts by assessing the key assumptions used by management.

- Evaluated the design and operating effectiveness of the key processes and controls associated with the estimation of impairment of intangible assets.

- With the assistance of valuation experts, we tested the data and assumptions used by the management and evaluated the adequacy of headroom available for recoverable value by sensitivity analysis. We assessed the adequacy of impairment related disclosures in the financial statements

Claims and exposures relating to litigation from taxation matters and change in regulatory environment

(as described in note 45 of the Standalone Ind AS financial statements)

At March 31, 2019, the value of tax and regulatory disputes disclosed as contingent liabilities was Rs,326,260 million.

Taxation, regulatory and litigation exposures have been identified as a key audit matter due to ever-changing regulatory environment and significant judgment required by management in assessing the exposure of each case and thus a risk that such cases may not be adequately provided for or disclosed.

Our audit procedures included the following:

- Obtained summary of all tax, regulatory and litigation matters and analysed management's position through detailed inquiries.

- Performed walkthroughs and test of controls of the management's risk assessment process for taxation, regulatory and legal matters.

- Obtained and read external legal opinions (where considered necessary) and other evidence to corroborate management's assessment of the risk profile in respect of legal claims.

- Engaged tax/regulatory specialists to technically assess the tax/ regulatory positions taken by management with respect to tax/ regulatory litigations.

- Inspected the relevant disclosures made within the financial statements to validate they appropriately reflect the facts and circumstances of the respective tax and regulatory exposures and are in accordance with the requirements of accounting standards.

Accounting for business combination and integration cost

(as described in note 3 of the Standalone Ind AS financial statements)

Effective August 31, 2018, Vodafone India limited and Vodafone Mobile Services Limited, merged into the Company. The Company accounted for the merger under pooling of interest method.

We have determined this to be a key audit matter in view of magnitude of the transaction, complexity involved in selection of accounting policy for merger, significant management judgment involved with respect to alignment of accounting policies, estimates and accounting for integration costs post-merger.

Our audit procedures included the following:

- We evaluated the appropriateness of 'Pooling of interest' method of accounting adopted by the management to account for the merger.

- We corroborated management's alignment of accounting policies and estimates by comparing the significant accounting policies and estimates of erstwhile Vodafone India Limited and comparing with the Company's accounting policies and estimates.

- We read the merger arrangements/scheme and focused on accounting for non-routine transaction, estimates and judgements in respect of the recognition and measurement of guarantees, indemnities etc.

- We performed specific procedures to validate the carrying amount of assets and liabilities merged on August 31, 2018.

Key audit matters

How our audit addressed the key audit matter

- We validated the appropriateness of estimates used in recognition and measurement of integration cost through enquiries and testing of supporting documents.

- We inspected the disclosures in respect of this transaction including those disclosures related to significant accounting judgments and estimates.

Revenue recognition

(as described in note 5(a) of the Standalone Ind AS financial statements)

For the year ended March 31, 2019, the revenue recognized was Rs,367,668 million.

Revenue recognition has been identified as a key audit matter due to complexity of systems in recognizing revenues, constantly evolving pricing with heavily discounted tariffs and operation in highly competitive market place.

Our audit procedures included the following:

- Performed walkthroughs and test of controls, assisted by our IT specialists, of the revenue recognition processes and assessed the design and operating effectiveness of key IT and manual controls.

- Our audit procedures included evaluating the appropriateness of the Company's accounting policies and assessing compliance with the policies in terms of the applicable accounting standards, including revisions pursuant to implementation of Ind AS 115.

- We tested the revenue assurance procedures and reconciliations performed by the management to validate the billing minutes, tariffs and other revenue recognition parameters.

- Tested the relevant IT infrastructure and applications that result in generation of various IT reports used for billing and revenue recognition process.

- We performed other substantive procedures, including analytics, review of unusual items and trends.

Recoverability of Deferred Tax Assets

(as described in note 58 of the Standalone Ind AS financial statements)

At March 31, 2019, net deferred tax assets recognized were Rs,89,351 million.

The deferred tax assets recognized includes carry forward losses, unabsorbed depreciation of Rs. 249,474 million. The recognition of deferred tax assets, involves judgment regarding the likelihood of the realization of these assets, in particular whether there will be sufficient taxable profits in future periods that support the recognition of these assets.

Given the degree of judgment involved in considering these deferred tax assets as recoverable or otherwise, we considered this to be a key audit matter.

Our audit procedures included the following:

- Our procedures included obtaining an understanding of the process and testing the controls over preparation of the taxable profit forecast.

- We performed procedures to test the inputs and assumptions used in the taxable profit forecast against historical performance, economic and industry indicators, publicly available information and including strategic plans.

- We inspected the disclosures in respect of the deferred tax asset balances including those disclosures related to significant accounting judgments and estimates.

Other Information

The Company's Board of Directors are responsible for the other information. The other information comprises the Performance Highlights, Corporate Governance Report, Directors' Report, Management Discussion and Analysis Report and Business Responsibility Report, but does not include the standalone Ind AS financial statements and our auditor's report thereon. The Performance Highlights, Corporate Governance Report, Directors' Report, Management Discussion and Analysis Report and Business Responsibility Report is expected to be made available to us after the date of this auditor's report.

Our opinion on the standalone Ind AS financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.

In connection with our audit of the standalone Ind AS financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether such other information is materially inconsistent with the standalone Ind AS financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

Responsibilities of Management for the Standalone Ind AS Financial Statements

The Company's Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone Ind AS financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Standalone Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone Ind AS financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone Ind AS financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

- Identify and assess the risks of material misstatement of the standalone Ind AS 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 appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.

- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

- Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.

- Evaluate the overall presentation, structure and content of the standalone Ind AS financial statements, including the disclosures, and whether the standalone Ind AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone Ind AS financial statements for the financial year ended March 31, 2019 and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to 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, 2016 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure 1" a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

(c) The Balance Sheet, the Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;

(e) On the basis of the written representations received from the directors as on March 31, 2019 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2019 from being appointed as a director in terms of Section 164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company with reference to these standalone Ind AS financial statements and the operating effectiveness of such controls, refer to our separate Report in "Annexure 2" to this report;

(g) In our opinion, the managerial remuneration for the year ended March 31, 2019 has been paid/ provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;

(h) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements - Refer Note 45 to the standalone Ind AS financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company

Re: Vodafone Idea Limited (formerly known as Idea Cellular

Limited) ('the Company')

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets, except situation of certain network assets in the records maintained by the Company.

(b) Pursuant to merger, the management has revised its regular programme of physical verification designed to cover all the items over a period of three years. As per the programme, a portion of fixed assets and capital work in progress has been physically verified by the management during the year, which in our opinion is reasonable having regard to the size of the Company and nature of its assets. According to the information and explanations given to us, no material discrepancies were noticed on such verification. During the previous year the Company was in the process of reconciling the physical verification results with the records maintained by the Company, which was completed in the current year. No material discrepancies were noticed on completion of such verification.

(c) According to information and explanations given by the management and based on the examination of the financial statements/registered deed/transfer deed/conveyance deed/court approved scheme of arrangements or amalgamations, the title deeds of all freehold land, leasehold land and buildings disclosed as property, plant and equipment are held in the name of the Company. In respect of immovable properties that have been taken on lease and disclosed as property, plant and equipment, the lease agreements are in the name of the Company, where the Company is the lessee in the agreement.

(ii) As explained by the management, it has conducted physical verification of inventory (other than inventory with third parties) at reasonable intervals during the year and no material discrepancies were noticed on such physical verification.

(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly, the provisions of clause 3 (iii) (a), (b) and (c) of the Order are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to us, there are no loans, investments, guarantees, and securities granted in respect of which provisions of section 185 and 186 of the Companies Act, 2013 are applicable and hence not commented upon.

(v) The Company has not accepted any deposits from public.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013, related to Telecommunication Services, and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of records with a view to determine whether they are accurate or complete.

(vii) (a) The Company has generally been regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees' state insurance, income-tax, duty of custom, goods and service tax, cess and other material statutory dues applicable to it. The provisions relating to excise duty are not applicable to the Company.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees' state insurance, income-tax, sales-tax, service tax, duty of custom, value added tax, goods and service tax, cess and other material statutory dues were outstanding, as at March 31, 2019 for a period of more than six months from the date they became payable. The provisions relating to excise duty are not applicable to the Company.

(c) According to the records of the Company, the dues of income-tax, sales-tax, service tax, duty of custom, value added tax and cess on account of any dispute, are as follows:

Name of Statute

Type of Tax

Period to which the amount relates

Forum where Dispute is Pending

Amount Involved (Rs in Mn)

The Customs Act,1962

Custom Duty

2004-05

Assistant Commissioner

6

Kerala Sales tax Act, 1963

Sales Tax

1998-99

Deputy Commissioner of Sales Tax

0

Income Tax Act, 1961

Income Tax

2005-06, 2009-10, 2010-1 1, 2012-13, 2015-16, 2017-18

Assistant Commissioner of Income Tax

32

Income Tax Act, 1961

Income Tax

1997-98, 2013-16 & 2007-08

Deputy Commissioner of Income Tax

687

Income Tax Act, 1961

Income Tax

2001-18

Commissioner of Income Tax (Appeals)

7,211

Income Tax Act, 1961

Income Tax

2002-06, 2001-02, 2003-04, 2007-15, 2005-06, 2007-08, 2012-13, 2014-15

Income Tax Appellate Tribunal

73,700

Income Tax Act, 1961

Income Tax

1999-03, 2004-05,

2009-11, 2012-13, 2015-16, 2003-04 &

2010-11

Assessing Officer

2,314

Income Tax Act, 1961

Income Tax

2001-05, 2009-13

High Court of Karnataka

15,824

Income Tax Act, 1961

Income Tax

2004-10, 2014-16

High Court of Hyderabad

310

Income Tax Act, 1961

Income Tax

2009-11

High Court of Punjab & Haryana

39

Income Tax Act, 1961

Income Tax

2006-09

High Court of Madhya Pradesh

130

Income Tax Act, 1961

Income Tax

2002-04, 2007-10, 201 1-13, 2005-06 to 2009-10 & 201213 to 2013-14

Supreme Court of India

336

Income Tax Act, 1961

Income Tax

2003-13

High Court of Gujarat

1,756

Income Tax Act, 1961

Income Tax

2009-10,20101 1,201 1-12,201213

High Court of Kolkata

175

Bombay sales tax Act 1959

Sales Tax

2000-01

Sales tax Tribunal

44

Central Sales Tax Act, 1956

Sales Tax

2007-08,2010-11

Joint Commissioner (Appeals)

4

Central Sales Tax Act, 1956

Sales Tax

2008-11, 2013-14, 2015-16

Assistant Commissioner Sales Tax

1

Central Sales Tax Act, 1956

Sales Tax

2008-09

Deputy Commissioner of Sales Tax

4

Delhi Sales Tax Act, 1975

Sales Tax

2002-03

Additional Commissioner (Appeals)

2

Gujarat Sales Tax Act, 1969

Sales Tax

1998-02

State Tax Tribunal

9

Gujarat Sales Tax Act, 1969

Sales Tax

2006-07

Assessing Officer

1

Kerala Sales tax Act, 1963

Sales Tax

1997-98

State Tax Tribunal

0

Madhya Pradesh Commercial Tax Act, 1994

Sales Tax

2000-01

CG Appellate Board

0

Uttar Pradesh Trade Tax Act, 1948

Sales Tax

2003-12

Joint Commissioner (Appeals)

2

Delhi Value Added Tax Act, 2004

Value Added Tax

2007-08, 1997-98 to 2010-11

State Tax Tribunal

505

Name of Statute

Type of Tax

Period to which the amount relates

Forum where Dispute is Pending

Amount Involved (Rs in Mn)

Kerala Value Added Tax Act, 2003

Value Added Tax

2005-09

Deputy Commissioner Commercial Tax (Appeals)

1

Kerala Value Added Tax Act, 2003

Value Added Tax

2008-09, 2011-12

Assistant Commissioner Sales Tax

38

Maharashtra Value Added Tax Act, 2002

Value Added Tax

2008-09, 2011-12

Joint Commissioner (Appeals)

15

Rajasthan Value Added Tax, 2003

Value Added Tax

201 1-12, 2013-14

Assistant Commissioner Sales Tax

12

The Bihar Value Added Tax Act, 2005

Value Added Tax

2008-14

State Tax Tribunal

41

The Bihar Value Added Tax Act, 2005

Value Added Tax

2016-17

Commissioner

1

The Bihar Value Added Tax Act, 2005

Value Added Tax

2014-15

Joint Commissioner (Appeals)

22

The Uttar Pradesh Value Added Tax Act, 2007

Value Added Tax

2006-07, 2012-13 2008-14, 2017-18

Deputy Commissioner of Sales Tax

22

The Uttar Pradesh Value Added Tax Act, 2007

Value Added Tax

2003-05, 2007-08

High Court of Allahabad

3

The Uttar Pradesh Value Added Tax Act, 2007

Value Added Tax

2011-2013

Additional Commissioner (Appeals)

8

The Finance Act, 1994

Service Tax

2004-05 to 2008-09

High Court of Andhra Pradesh

25

The Finance Act, 1994

Service Tax

1998-99, 2002-03, 2004-07

High Court of Punjab & Haryana

36

The Finance Act, 1994

Service Tax

2004-17

Commissioner of Central Excise & Service Tax

70

Income Tax Act, 1961

Income Tax

2006-10 to 2010-11

High Court of Bombay

11,581

Kerala Value Added Tax Act, 2003

Value Added Tax

2009-10

State Tax Tribunal

0

Kerala Value Added Tax Act, 2003

Value Added Tax

2011-12

Assessing Officer

0

Central Sales Tax Act, 1956

Sales Tax

2011-12

Sales Tax Tribunal

34

Madhya Pradesh Commercial Tax Act, 1994

Sales Tax

2004-05

Deputy Commissioner of sales tax

2

West Bengal Value Added Tax Act, 2003

Value Added Tax

2007-08, 2017-2018

State Tax Tribunal

22

The Finance Act, 1994

Service Tax

2003-04

High Court of Kerala

1

Uttar Pradesh Goods and Service Tax Act, 2017

GST

2017-18

Additional Commissioner (Appeals) GST

1

Central Excise Act, 1944

Excise Tax

2004-06

Customs Excise & Service Tax Appellate Tribunal

8

The Finance Act, 1994

Service Tax

2001-02, 2003-15, 2017-18

Customs Excise & Service Tax Appellate Tribunal

23,684

The Finance Act, 1994

Service Tax

2005 -09, 2007-10, 2008-09 2009-10, 2010-11, 2011-12, 2012-13,

Supreme Court of India

1,836

The Central Sales Tax Act, 1956

CST

2007-08 & 2008-09

Joint Commissioner of Sales Tax (Appeal)

1

The Customs Act,1962

Custom Duty

2001-02 & 2006-07

Adjudicating Authority

46

The Customs Act,1962

Custom Duty

2007-08,201718,2018-19, 2001-03 to 201516,2008-10

Commissioner of Customs

155

Name of Statute

Type of Tax

Period to which the amount relates

Forum where Dispute is Pending

Amount Involved (Rs in Mn)

The Maharashtra Value Added Tax Act, 2002

Value Added Tax

2006-07 to 2010-11

Joint Commissioner of Sales Tax (Appeal)

16

Andhra Pradesh Value Added Tax Act, 2005

Value Added Tax

2005-06

Appellate Tribunal

6

Delhi Value Added Tax Act, 2004

Value Added Tax

2008-09, 2014-15, 2016-17, 2005-06 to 2009-10

Commissioner of Commercial Taxes, (Appeal)

20

The Finance Act, 1994

Service Tax

1999-01, 2003-04, 2005-12, 200809, 2010-15, 2011-16,201215,2012-17,201415,2015-16,201517, 2010-15 &

201 1-13,2011-13 to 2015-18, 2007-12 & 2015-16, 2006-11, 2008-09,201114,2012-16

Commissioner of Service Tax (Appeal)

4,755

The Finance Act, 1994

Service Tax

2004 to 2014

High Court of Mumbai

280

The Finance Act, 1994

Service Tax

2004-08,200409,2007-08 to 2009-10, 2010-14

High Court of Chandigarh

57

The Finance Act, 1994

Service Tax

2004-09

High Court of Karnataka

101

The Finance Act, 1994

Service Tax

2007-09

High Court of Hyderabad

434

The Finance Act, 1994

Service Tax

2004-10,2008-12

High Court of Delhi

91

The Finance Act, 1994

Service Tax

2004-08,2008-09

High Court of Madras

8

The Finance Act, 1994

Service Tax

2004-08,2008-09

High Court of Chennai

159

The Finance Act, 1994

Service Tax

2006-07,2007

08,2009-10,2010-11

High Court of Ahmedabad

107

The Finance Act, 1994

Service Tax

2005-07,2006

07,2007-08,2005-08

High Court of Lucknow

97

The Finance Act, 1994

Service Tax

1995-00 to 2004-06

Additional Commissioner of Service Tax

8

The Finance Act, 1994

Service Tax

2002-03, 200609,2007-09,200810, 2012-13

Assistant Commissioner of Service Tax

37

Gujarat Value Added Tax Act, 2003

Value Added Tax

1998-99,2006-07

Deputy Commissioner of Commercial Taxes

8

Gujarat Value Added Tax Act, 2003

Value Added Tax

2006-07

Appellate Tribunal

9

Karnataka Value Added Tax Act, 2003

Value Added Tax

2008-09 to 2010-11

Additional/Joint Commissioner Commercial Taxes

236

Kerala Value Added Tax Act, 2003

Value Added Tax

2007-08

Commissioner of Commercial Taxes, (Appeal)

2

Kerala Value Added Tax Act, 2003

Value Added Tax

2015-16

Deputy Commissioner of Commercial Taxes

0

Name of Statute

Type of Tax

Period to which the amount relates

Forum where Dispute is Pending

Amount Involved (Rs in Mn)

Kerala Value Added Tax Act, 2003

Value Added Tax

2012-13

Intelligence Officer Commercial Taxes

0

Kerala Value Added Tax Act, 2003

Value Added Tax

2006-07

Appellate Tribunal

19

Madhya Pradesh Value Added Tax Act, 2002

Value Added Tax

2014-15

Joint Commissioner of Commercial Taxes

0

Madhya Pradesh Value Added Tax Act, 2002

Value Added Tax

2010-11

Additional Commissioner Commercial Taxes

5

Madhya Pradesh Value Added Tax Act, 2002

Value Added Tax

2013-14

Appellate Authority

2

Madhya Pradesh Value Added Tax Act, 2002

Value Added Tax

2012-13

Appellate and Revisional Board

1

Maharashtra Value Added Tax Act, 2002

Value Added Tax

2013-14

Commissioner of Commercial Taxes,(Appeal)

2

Maharashtra Value Added Tax Act, 2002

Value Added Tax

2001-05

Joint Commissioner of Commercial Taxes

18

Tamilnadu Value Added Tax Act, 2006

Value Added Tax

2007-12

Assistant Commissioner of Commercial Taxes

1

Tamilnadu Value Added Tax Act, 2006

Value Added Tax

2003-04

Appellate Tribunal

0

The Bihar Value Added Tax Act, 2005

Value Added Tax

2008-09 to 2014-15

Appellate Tribunal

46

The Rajasthan Value Added Tax Act, 2003

Value Added Tax

2001-02

Commissioner of Commercial Taxes,(Appeal)

1

The Bihar Value Added Tax Act, 2005

Value Added Tax

2011-12

Commissioner of Commercial Taxes,(Appeal)

0

The Bihar Value Added Tax Act, 2005

Value Added Tax

2005-06 to 2007-08

Deputy Commissioner of Commercial Taxes

2

The Central Sales Tax Act, 1956

CST

2011-12 to 2013-14

Additional Commissioner Commercial Taxes (Appeal)

0

The Central Sales Tax Act, 1956

CST

2014-15

Appellate and Revisional Board

2

The Central Sales Tax Act, 1956

CST

201 1-12, 2012-13, 2013-14 to 2014-15

Assessing Officer

9

The Central Sales Tax Act, 1956

CST

2015-16

Assistant commissioner of Commercial Taxes

32

The Central Sales Tax Act, 1956

CST

2010-11 to 2015-16

Commissioner of Commercial Taxes

19

The Central Sales Tax Act, 1956

CST

201 1-12, 2013-14

Deputy Commissioner of Commercial Taxes

8

The Central Sales Tax Act, 1956

CST

2007-08 ,2010-11, 2012-13,201214,2015-16

Joint Commissioner of Commercial Taxes

50

The Central Sales Tax Act, 1956

CST

2005-06 to 2007-08, 2008-09, 2009-10

Appellate Tribunal

102

The Central Sales Tax Act, 1956

CST

2011-12

High Court of Kolkata

16

The Central Sales Tax Act, 1956

CST

2007-08

Additional Commissioner Commercial Taxes

0

The Central Sales Tax Act, 1956

CST

201 1-12, 2015-16

Appellate Authority

7

The Customs Act,1962

Custom Duty

2003-04, 2009-14, 2008-09, 2015-16

Customs Excise & Service Tax Appellate Tribunal

7,145

Name of Statute

Type of Tax

Period to which the amount relates

Forum where Dispute is Pending

Amount Involved (Rs in Mn)

The Customs Act,1962

Custom Duty

2012-13 ,2013-14 & 2014-15

Assistant/Deputy Commissioner of Customs

4

The Customs Act,1962

Custom Duty

2001-03

Supreme Court of India

8

The Haryana Value Added Tax Act, 2003

Value Added Tax

2002-03

Assessing Officer

80

The Uttar Pradesh Value Added Tax Act, 2007

Value Added Tax

2005-07,2006-07

,2009-10

Joint excise and taxation commissioner (Appeal)

1

West Bengal Value Added Tax Act, 2003

Value Added Tax

2012-13

Joint excise and taxation commissioner (Appeal)

1

The Haryana Value Added Tax Act, 2003

Value Added Tax

2006-07, 2007-08

Joint excise and taxation commissioner (Appeal)

10

The Rajasthan Value Added Tax Act, 2003

Value Added Tax

2015-16

Assistant Commissioner of Commercial Taxes

0

The Uttar Pradesh Value Added Tax Act, 2007

Value Added Tax

2008-09 ,201617,2016-17

Additional Commissioner Commercial Taxes

26

The Uttar Pradesh Value Added Tax Act, 2007

Value Added Tax

2008-09, 2011-12

Deputy Commissioner of Commercial Taxes

6

The Bihar Value Added Tax Act, 2005

Value Added Tax

2016-17

Joint Commissioner of Commercial Taxes

0

The Uttar Pradesh Value Added Tax Act, 2007

Value Added Tax

2005-06

Joint Commissioner of Commercial Taxes

0

The Uttar Pradesh Value Added Tax Act, 2007

Value Added Tax

2005-06, 2006-08, 2007-08, 2008-09, 2009-10 to 2012-13

Trade Tax Tribunal

128

Tamilnadu Value Added Tax Act, 2006

Value Added Tax

2012-13

Additional Commissioner Commercial Taxes

0

West Bengal Value Added Tax Act, 2003

Value Added Tax

2006-07 to 2014-15

Appellate and Revisional Board

20

West Bengal Value Added Tax Act, 2003

Value Added Tax

2008-09 to 200910,2015-16

Joint Commissioner of Commercial Taxes

1

West Bengal Value Added Tax Act, 2003

Value Added Tax

2000-01 to 200203,2011-12

High Court of Kolkata

250

West Bengal Value Added Tax Act, 2003

Value Added Tax

2008-09 ,2014-15 to 2015-16

Senior Joint Commissioner of Commercial Taxes

18

Income Tax Act, 1961

Income Tax

2000-01 & 2009-10 & 2011-12

High Court of Delhi

4,711

Income Tax Act, 1961

Income Tax

2012-13 to 2015-16

Dispute Resolution Panel

69,436

Income Tax Act, 1961

Income Tax

2004-05 & 2011-12 to 2012-13

High Court of Rajasthan

41

Income Tax Act, 1961

Income Tax

2006-07 to 2010-11

High Court of Punjab

7

Income Tax Act, 1961

Income Tax

2007-08 to 200809 & 2012-13 to 2014-15

High Court of Madras

116

Income Tax Act, 1961

Income Tax

2010-11 to 2016-17

High Court of Telangana

271

Of the above cases, total amount deposited in respect of Income

Tax is Rs. 85,033 Mn, Service Tax is Rs. 1,643 Mn, Sales Tax, Value

Added Tax and GST is Rs. 308 Mn and Custom Duty is Rs. 352 Mn.

(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of dues to financial institutions, banks, debenture holders or government.

(ix) During the current year, the Company has not raised monies by way of initial public offer or further public offer. In our opinion and according to the information and explanations given by the management, the Company has utilized the monies raised by way of debt instruments in the nature of non-convertible debenture and term loans for the purposes for which they were raised, other than temporary investment of surplus funds that were ultimately utilized for stated end-use.

(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or on the Company by the officers and employees of the Company has been noticed or reported during the year.

(xi) Based on our audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that during the current year, the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.

(xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3 (xii) of the Order are not applicable to the Company and hence not commented upon.

(xiii) Based on our audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of the Companies Act,

2013 where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the Company and hence not commented upon.

(xv) Based on our audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, the Company has not entered into any noncash transactions with directors or persons connected with him as referred to in section 192 of Companies Act, 2013.

(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of Vodafone Idea Limited (Formerly known as Idea Cellular Limited) ("the Company") as of March 31, 2019 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting with reference to these standalone financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting with reference to these standalone financial statements was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls over financial reporting with reference to these standalone financial statements and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting with reference to these standalone financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls over financial reporting with reference to these standalone financial statements.

Meaning of Internal Financial Controls Over Financial Reporting With Reference to these Financial Statements

A company's internal financial control over financial reporting with reference to these standalone financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting with reference to these standalone financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting With Reference to these Standalone Financial Statements

Because of the inherent limitations of internal financial controls over financial reporting with reference to these standalone financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting with reference to these standalone financial statements to future periods are subject to the risk that the internal financial control over financial reporting with reference to these standalone financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, adequate internal financial controls over financial reporting with reference to these standalone financial statements and such internal financial controls over financial reporting with reference to these standalone financial statements were operating effectively as at March 31, 2019, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For S.R. Batliboi & Associates LLP

Chartered Accountants

ICAI Firm Registration Number: 101049W/E300004

per Prashant Singhal

Partner

Membership Number: 93283

Place: Mumbai

Date: May 13, 2019

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