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DIRECTOR'S REPORT

Vodafone Idea Ltd.

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Market Cap. (₹) 8476.94 Cr. P/BV 0.15 Book Value (₹) 19.68
52 Week High/Low (₹) 23/3 FV/ML 10/1 P/E(X) 0.00
Bookclosure 27/08/2019 EPS (₹) 0.00 Div Yield (%) 0.00
Year End :2019-03 

Directors' Report

Dear Shareholders,

We have pleasure in presenting the Twenty Fourth Annual Report, together with the audited financial statements of the Company for the Financial Year ended March 31, 2019.

Company Overview:

The merger of Vodafone India Limited and Vodafone Mobile Services Limited into your Company effective from August 31, 2018, has led to creation of Vodafone Idea Limited, a partnership between two strong promoters Aditya Birla Group and Vodafone Group. Post-merger, your Company is a leading telecommunications operator in India offering voice, data, enterprise services and other value added services ("VAS"), including short messaging services, digital services, content, IoT and enterprise solutions etc. As of March 31, 2019, the subscriber base of your Company stands at 368.3 Mn (on VLR), with subscriber market share of 36.0%, which is highest in the Industry. The Revenue Market Share (RMS) on Gross Revenue basis (GR) for your Company stands at 32.8% (excluding BSNL/ MTNL wire line) for the quarter ended March 2019.

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 the largest spectrum holding amongst all Indian telecom operators comprising 1,849.6 MHz spectrum across 22 circles, of which 1,714.8 MHz is liberalized spectrum which can be used towards deployment of any technology.

Your Company's mobile telecommunication services cover approximately 1 billion Indians. As of March 31, 2019, your Company has around 372,000 broadband (3G 4G) sites and all of the 4G sites are VoLTE enabled, creating a better customer experience. The broadband network is spread over 273,000 towns and villages and covers approximately 69% of the Indian population, while 4G networks covers approximately 65% of Indian population. Your Company has a portfolio of ~345,000 km of Optical Fiber Cable (OFC), including own built and Indefeasible Right of Use (IRU) OFC. Your Company has started deployment of latest technology of Dynamic Spectrum Re-farming (DSR), Massive MIMO and Small cells to maximize spectrum efficiency. Additionally, your Company has started deploying LTE on TDD in 2300 MHz and 2500 MHz spectrum bands to expand the capacity and on 900 MHz band on select sites to improve customer experience in dense areas. Your Company also derives revenue from carrying India inbound ILD traffic through arrangements with other mobile telecommunications companies and long distance carriers operating outside India.

All of your Company's services and products are currently offered under and Q vodafone brands. Both the brands are complementary in nature and have generated strong customer affinity throughout the years. The strength of brands and advertising is reflected in several brand recognition awards that your Company has won. Idea was listed among the top three brands in the Telecom category in AFAQS! India's Buzziest Brands of 2018. Vodafone India won two silver and three bronze awards in EFFIES 2018 and won the Emvies Media client of the year 2018.

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 ecosystem of digital channels as well as extensive on-ground presence.

Financial Results

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, 2019 which are not comparable with the figures for the previous financial year due to the merger of Vodafone Mobile Services Limited and Vodafone India Limited during this financial year, as mentioned subsequently in this report, are summarized as follows:

(in ' Mn)

Particulars

Standalone

Consolidated

2018-19

2017-18

2018-19

2017-18

Income from Services

367,668

278,000

370,056

282,471

Other Operating Income

1029

682

968

318

Other Income

10,733

6,065

7,311

3,530

Total Revenue

379,321

284,351

378,236

286,319

Operating Expenses

329,799

221,843

330,495

222,314

EBITDA

49,522

62,508

47,741

64,005

Particulars

Standalone

Consolidated

2018-19

2017-18

2018-19

2017-18

Depreciation and Amortization

144,098

83,148

145,356

84,091

EBIT

(94,576)

(20,640)

(97,615)

(20,086)

Interest and Finance charges

94,713

48,968

94,628

48,130

EBT

(189,289)

(69,608)

(192,243)

(68,216)

Exceptional Items (Net)

12,367

-

8,521

-

Share of JV/Associates

-

-

1,968

3,224

Taxes

(36,362)

(25,025)

(35,715)

(23,310)

Profit / (Loss) after Tax

(140,560)

(44,583)

(146,039)

(41,682)

Other Comprehensive Income, net of tax

(3,198)

(4,517)

328

283

Total Comprehensive Income

(143,758)

(49,100)

(145,711)

(41,399)

The results for the current financial year include the results of the erstwhile Vodafone Mobile Services Limited (VMSL) and Vodafone India Limited (VInL) which merged into the Company effective August 31, 2018 for the period subsequent to that date till the end of the financial year (Refer Note 3 to the Standalone Financial Statements for further details). Accordingly, the figures for the current financial year ended March 31, 2019 are not comparable with the figures of the previous financial year ending March 31, 2018.

Standalone revenue of your Company stood at Rs,368,588 Mn, an increase in annual revenue for this year by 32.5%. The EBITDA fell to Rs,49,522 Mn, registering a decline of 20.77% over the previous year. The Net Loss of the Company for the Financial Year March 31, 2019 stood at Rs,143,758 Mn, for Financial Year 2018-19 vis-a-vis Rs,49,100 Mn, for the previous year.

On a consolidated basis, the total revenues stood at Rs,378,236 Mn, an increase of 32.1% over the previous year. The EBITDA at Rs,47,741 Mn reflects decrease of 25.41% as compared to the previous year. The consolidated Net Loss stood at Rs,145,711 Mn, for Financial Year 2018-19 vis-a-vis Rs,41,399 Mn for the previous year.

Operations Review

The Indian wireless industry has continued to remain under significant pressure with unrelenting pricing pressure since launch of services by the new 4G mobile operator in September 2016. All the operators are forced to sell at heavily discounted tariffs, in order to ring-fence their existing customers, which has led to significant ARPU erosion. As a result the Gross Revenue (GR) for FY19 has declined by nearly Rs,304 Bn in last two years, a fall of 16.0% compared to FY17, inspite of increase in active subscribers.

While the operating environment continues to remain challenging, the industry has now consolidated into three large private players, i.e. Vodafone Idea, Bharti and Jio, and one government operator, i.e. BSNL/ MTNL, with all operators committed to support the growing data demand. With unlimited offerings getting more traction, the subscribers are migrating their usage to single SIM. Additionally, the launch of 'service validity vouchers' by Vodafone Idea and Bharti Airtel which requires customers to make a minimum recharge of Rs,35 (28 days validity) to continue to use the network, led to further consolidation of subscribers in the second half of FY19.

Industry VLR subscriber base stands increased to 1,022 Mn as of March 31, 2019 compared to 998 Mn as of March 31,

2018, of which the top three operators comprise of more than 93%. During FY19, industry broadband penetration continued to improve supported by heavily discounted data prices, increasing affordability of smartphones and rising income levels. Wireless broadband subscriber are now 545 Mn (broadband penetration ~47%) as of March 31, 2019 compared to 395 Mn (broadband penetration ~33%) a year ago.

Following the merger of VInL and VMSL into your Company, the challenging phase of integration is underway with a very clearly defined strategy, having no dependencies on external factors. Through meticulous planning, your Company has created a blueprint to improve revenue, profitability and competitive position in the marketplace. The outcome of this exhaustive planning is the following well-defined five-pillar strategy which forms the basis for all the ongoing strategic initiatives.

1. Accelerate Integration - Your Company is focused on rapidly integrating operations to derive operational synergies and reduce expenditure. Your Company is progressing well ahead of plan and intends to deliver synergies by FY21, two years earlier than previously stated target. Your Company has already consolidated spectrum and radio access network in 10 out of the 22 service areas. On operational integration, your Company has completed consolidation of all zonal and circle offices and has also completed the targeted integration of distribution network, retailers, service stores and service centers. Your Company is thus integrating at a great pace and has already achieved 60% of our targeted opex synergies during last quarter of FY19.

2. Prioritizing investments in profitable districts -

Your Company has segregated districts in India based on their growth potential and revenue and EBITDA contribution to identify high potential districts which are the key focus areas for incremental investments. Prioritizing investments in profitable districts will optimize capital expenditure and offer superior customer experience enabling your Company to gain its fair share of 4G in these districts. In non-profitable districts, your Company is working on to shut down the weaker of the two networks, which will enable it to incur operating expenses for one network while generating revenue from customers of both brands. This will help in further reducing operating expenses while ensuring that both brands get the experience of the stronger network.

3. Drive ARPUs through Simplification - Your Company intends to simplify its customer offerings and has already made significant progress in that direction. Your Company has introduced low value 'service validity vouchers' with minimum recharge of Rs,35 (28 days validity) primarily targeting customers who used to have only incoming minutes on our network or who had an ARPU below a certain threshold. This led to a subscriber consolidation as expected but led to ARPU uplift and subsequent improvement in revenues in Q4FY19.

4. Focusing on Fast-Growing Revenue Streams and partnerships - Your Company has a market leading position in enterprise services and intends to focus on fast growing streams such as Internet of Things (IoT), cloud services and converged communications leveraging Vodafone group's global IoT leadership. Your Company is the first operator in the world to have executed voice and data calls on public cloud. 'My Vodafone App' became the first application to be co-hosted with vNFs (converged One-Cloud across Network and IT).

In the order to provide the 'Best in Class' offerings to its customers, your Company is following a partnership approach tying with several regional and global content partners. 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 the Company and its partners.

5. Strengthening our Balance Sheet - Your Company successfully concluded the rights issue of Rs,250 Bn recently, largest in India, which was oversubscribed reflecting strong support from the investors. Further, your Company has the option to monetize its

11.15% stake in Indus, which has an implied value of ~Rs,53.6 billion as on June 30, 2019. This coupled with potential monetization of fiber assets will provide sufficient financial flexibility.

Your Company has made significant progress on all the initiatives across each of these strategic pillars. Your Company is thus well on track to achieve its guided synergy targets 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 a net loss during the year, 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, your Company had issued 4,375,199,464 Equity Shares of face value of Rs,10/- each pursuant to amalgamation of Vodafone Mobile Services Limited ('VMSL') and Vodafone India Limited ('VInL') with the Company in accordance with the provisions of the Companies Act, 2013 and Chapter VIII of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009.

Additionally, your Company issued and allotted 1,037,935 Equity Shares of Rs,10/- each, fully paid-up, to the Option/ RSU grantees pursuant to the exercise of Stock Options/ Restricted Stock Units (RSU's) by the eligible employees under the Employee Stock Options Scheme, 2006 (ESOS-2006) and Employee Stock Option Scheme, 2013 (ESOS-2013).

Consequent to the above, the issued, subscribed and paid-up equity share capital of your Company as on March 31, 2019 stood at Rs,87,355,583,290 comprising of 8,735,558,329 Equity Shares of Rs,10/- each.

Finance

As on March 31, 2019, the Company had cash and cash equivalents of Rs,6,759 Mn and short-term investments of Rs,66,890 Mn. The Company's net debt as on March 31, 2019 increased by Rs,662,217 Mn to Rs,1,185,750 Mn as compared to Rs,523,533 Mn last year.

During the year under review your Company raised Rs,15,000 Mn through issuance of Non-Convertible Debentures (NCDs) on private placement basis at a coupon of 10.90% for a tenor of 5 years. The Company also raised Rs,40,000 Mn under a long term rupee loan arrangement with Yes Bank Limited (a further Rs,10,000 Mn was raised on similar terms by Vodafone Mobile Services Limited prior to merger with the Company). The Company also drew a short term rupee loan of Rs,30,430 Mn in March 2019.

All scheduled loan repayments and deferred spectrum fee installments to the DoT were made on respective due dates. However, some short term loans were repaid prior to their due dates as agreed with the lenders.

Credit Rating

As of March 31, 2019, your Company enjoyed a long term credit rating of 'CARE AA-' / Negative (previous year end rating 'CARE AA ' / Credit Watch with developing implications) in respect to its long term banking facilities and certain Non-Convertible Debentures. The short term banking facilities and Commercial Paper programme have a rating of 'CARE A1 '.

Additionally, Brickwork Ratings has an outstanding rating of 'BWR AA-' / Negative (previous year end 'BWR AA ' / Stable) in respect to Non-Convertible Debentures rated by CARE, amounting to Rs,35,000 Mn. The Commercial Paper programme has a rating of BWR A1 .

Non-Convertible Debentures issued by companies that merged into the Company have a rating of 'CRISIL A / Negative' and 'Ind A ' / Negative from CRISIL and India Ratings respectively.

Capital Expenditure

During the Financial Year 2018-19, the capital expenditure (including capital advances) incurred during the year was Rs,114,715 Mn and Rs,1 15,033 Mn at standalone and consolidated levels respectively.

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:

- Merger of Vodafone India Limited and Vodafone Mobile Services Limited with the Company

The Board of Directors of your Company had at its Meeting held on 20 March 2017, had approved the merger of Vodafone India Limited (VInL) and Vodafone

Mobile Services Limited (VMSL) [excluding VInL's 42% equity interest in Indus Towers Limited] through a Composite Scheme of Amalgamation and Arrangement ("Scheme") with your Company, subject to all necessary approvals.

Post receipt of all the regulatory and other necessary approvals, your Company was in receipt of the final approval of merger from the Department of Telecommunications on July 26, 2018. The National Company Law Tribunal (Mumbai Bench) vide its order dated August 30, 2018, approved dissolution without winding up of Vodafone India Limited and Vodafone Mobile Services Limited and consequently, with effect from August 31, 2018, both the companies (VInL and VMSL) amalgamated with your Company. Consequent to the Scheme becoming effective on August 31, 2018, Vodafone Group became promoter of your Company with 45.1% stake in the combined Company after transferring a stake of 4.8% to the Aditya Birla Group for an agreed consideration concurrent with completion of the merger. The holding of the Aditya Birla Group, the existing Promoter of the Company reduced from 42.6% to 26.0% of the combined Company with public shareholders owning the remainder 28.9%. As part of the merger arrangement, Aditya Birla Group retained the right to acquire up to 9.5% additional stake in the Company from Vodafone Group under an agreed mechanism with a view to equalising the shareholdings over time. Further, with effect from August 31, 2018, all subsidiaries and joint ventures of erstwhile VInL and VMSL became the subsidiaries and joint ventures of your Company.

Pursuant to merger, the Board was reconstituted comprising of 12 Directors of whom 3 Directors each were nominated by Vodafone Group and Aditya Birla Group and 6 were appointed as Independent Directors.

- Name Change of the Company

Pursuant to the merger of Vodafone India Limited and Vodafone Mobile Services Limited with your Company, it was intended to change the name of the Company from Idea Cellular Limited to "Vodafone Idea Limited". The members had approved the aforesaid change of name of the Company at the Extra-ordinary General Meeting held on June 26, 2018. It was intended that the Company is able to use the new name i.e. Vodafone Idea Limited, from the date on and from which the amalgamation of VMSL and VInL with the Company becomes effective. Thus, with effect from August 31,

2018, the name of your Company changed to 'Vodafone Idea Limited', pursuant to issue of certificate of name change by Registrar of Companies on August 31, 2018.

- Rights Issue of '250 Billion

The board of directors of your Company on January 23, 2019, approved raising of funds by way of Rights Issue aggregating to Rs,250 billion. Subsequently, on March 20, 2019, the Board approved issuance of equity shares on a rights basis in the ratio of 87 Equity Shares for every 38 fully paid-up Equity Shares held by the eligible equity shareholders as on record date i.e. April 2, 2019, at an issue price of Rs,12.50 per equity share. Subsequent to the close of the financial year, on May 4, 2019, the Company issued and allotted 19,999,830,911 Equity Shares of face value of Rs,10/- each to the eligible existing equity shareholders under Rights Issue at an issue price of Rs,12.50 (including a premium of Rs,2.50) per equity share, thereby raising funds aggregating to Rs,249,998 Mn.

The rights issue of the Company received strong support from both existing shareholders as well as from other investors. The Company witnessed participation from both domestic and foreign public shareholders. The issue was oversubscribed approximately 1.08x and the public participation was approximately 1.2x relative to the rights entitlement. The final allotment to the promoter / promoter group was Rs,179.2 billion (Rs,0.9 billion over their aggregate rights entitlement). Post allotment, the total promoter / promoter group aggregate shareholding increased to 71.57% from 71.33% as on the record date.

- Merger of Aditya Birla Telecom Limited with the Company

With the overall objective of rationalizing multiple subsidiaries post-merger, a Scheme of Amalgamation of Aditya Birla Telecom Limited (ABTL), a wholly owned subsidiary, with the Company was approved by the Board of Directors of the Company on September 17,

2018. The National Company Law Tribunal, Ahmadabad bench vide its order dated November 13, 2018 approved the said Scheme with an appointed date of April 1, 2018. Pursuant to filing of the said order with the Registrar of Companies, the said scheme became effective on November 30, 2018 and accordingly, ABTL has been amalgamated with the Company.

- Demerger of Fibre Undertaking of the Company to Vodafone Towers Limited

The Board of Directors of the Company approved a Scheme of Arrangement for transfer of Fibre Infrastructure Undertaking from the Company to Vodafone Towers Limited, a wholly-owned subsidiary, subject to all necessary approvals. Pursuant to receipt of approval by the Stock Exchanges, the said Scheme of Arrangement was approved by the equity shareholders and secured and unsecured creditors of the Company at their respective meetings held on June 6, 2019. The order approving the Scheme is awaited from National Company Law Tribunal, Ahmedabad.

- Scheme of Amalgamation of Idea Telesystems Limited and Vodafone India Digital Limited with the Company

As part of streamlining the corporate structure of the Company, the Board of your Company had approved a Scheme of Amalgamation of Idea Telesystems Limited (ITL) and Vodafone India Digital Limited (VIDL) (both wholly owned subsidiaries of the Company) with the Company. ITL is in the business of trading in devices and VIDL has no business and thus is a non-operating subsidiary. Your Company is in process of filing the application with National Company Law Tribunal for approval of the said scheme.

- Winding up of Aditya Birla Idea Payments Bank Limited

The Board of Aditya Birla Idea Payments Bank Limited (ABIPBL), an associate of the Company has 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.

- Closure of businesses in Vodafone M-Pesa Limited

Pursuant to merger of Vodafone India Limited with your Company, Vodafone M-Pesa Limited (VMPL) having Prepaid Payment Instruments (PPI) business became subsidiary of your Company. As per the RBI guidelines, same promoter group cannot have Payments Bank business in one entity and Prepaid Payment Instruments (PPI) business in another entity. Based on various discussions, the Regulator had initially permitted these two entities to carry on the business until December 31, 2018 which was later extended to March 31, 2019. VMPL Board has subsequently approved surrender of PPI Authorization and cease the wallet and Business Correspondent business.

Awards and Recognitions

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

- "Golden Peacock Award" for Corporate Social Responsibility for being the best among Indian Telecom Companies for CSR.

- Vodafone Idea Business Services won Frost & Sullivan India ICT Awards under 3 categories:

- Enterprise Telecom Service Provider of the Year -SMB Segment

- Managed Enterprise Wi-Fi Provider of the Year

- Enterprise Mobile Service Provider of the Year

- 8 awards across categories at the Voice & Data Biz & Tech Awards at Telecom Leadership Forum 2019:

- SMP for Mobility & IoT in Enterprise Business Services

- Smart Tracking & Infra System in Network Infra Innovation

- "Order Management" Digital Transformation project in Business Process Innovation

- Vodafone IoT solution for Internet of Things

- Filmy recharge in Marketing

- Sakhi for VAS & Apps

- Bill Guarantee for Customer Service

- RUDI Sandesh Vyavhara for Corporate Social Responsibility

- Vodafone Brand won 1 Gold, 1 Silver and 2 Bronze in APAC Effies along with Grand Effie going on to become the Brand of the Year and Marketer of the Year.

- Vodafone Sakhi won Black, Gold and 4 Blue Elephants awards at Kyoorius Creative Awards 2018 and was showcased by GSMA as the Best Initiative for 'Connected Women' at the Mobile World Congress 2019 in Barcelona

- Idea Brand won Silver at Maddies 2018 for "Best Use of Social Media On A Campaign" - LookLook FB 360 Newsfeed Game

- Idea was adjudged Runners-up in the prestigious BML Munjal Awards for Business Excellence through Learning and Development in Private Sector - Services Category at Mindmine Summit 2018

Marketing and other initiatives

During the year under review, your Company together with its subsidiaries made extensive progress on the marketing and customer care front by entering into various alliances and introducing various innovative products and services.

Some of these are:-

- Cloud Express Connect - Private and secure MPLS network extended to Microsoft Azure and Google, thereby ensuring better win in the market place for the Fixed Line data products.

- Launch of multiple products like Global Calling Services, 6 Class of service in GMPLS to further accelerate growth through connectivity, PinSight & DEP in the Analytics area.

- The Company won a prestigious contract of 5 Mn smart meter, India's first ever largest IoT rollout in this space.

Your Company expanded VoLTE (Voice over LTE) services across all 22 4G service areas, offering offer High Definition call quality as compared to a standard voice call. Currently VoLTE is available on 200 handset models and supported on over 95% of new 4G devices launched.

- Your Company believes in offering compelling content proposition for it consumers such as Amazon prime free subscription to Nirvana postpaid plans, offering free Idea Movies and TV app to the consumers etc.

- As a planned strategy, your Company redesigned its postpaid portfolio under RED & Nirvana to bring in important non-telco and innovative telco benefits for its high value postpaid consumers.

- To accelerate the adoption of Unlimited Vouchers, your Company introduced a range of new propositions to cater to different segments of prepaid customers. Monthly Unlimited Voucher pricing was lowered from Rs,199 to Rs,169 and Long Validity Versions (84 days and 365 days) were launched. Further to cater to the needs of customers using non 4G Devices, Unlimited Voice voucher at Rs,119 (28 days) was launched. These interventions have given a significant push to the adoption of Unlimited Vouchers and have resulted in better retention.

- To drive an assured recharge revenue and to ensure a minimum participation price to utilize the network, in October 2018 your Company introduced Combo Vouchers starting at Rs,35, targeting the bottom end of the prepaid market.

- Tapping into a large opportunity to bridge the gender gap in mobile access and usage, this year your Company launched an innovative offering for Women, 'Sakhi', a first-of-its kind mobile based safety service, designed exclusively for women. A bouquet of features including Emergency Alerts, Emergency Balance and Private Number Recharge, provide safety measures through the mobile connection, to women customers using the VIL network, anywhere in the country. Sakhi works seamlessly across smart phones and feature-phones, even without any balance or mobile internet, thus ensuring that the service extends to millions of women in India. Sakhi also won many awards and accolades on national and international platforms.

- To engage with rural subscribers, in April 2019 your Company launched "Myna Ka Kehna", a completely free missed-call based audio entertainment platform, across Hindi speaking markets as well as Maharashtra, Gujarat and West Bengal. The platform aims at engaging with rural feature phone users who form the bulk of rural subscriber base via audio content comprising of songs, entertaining banter and targeted product pitches as well as product information. The audio content is completely customized as per the listener's profile. Since the launch, the platform has been very well received by the subscribers for its ease of use and entertaining content and is going strong in its aim to engage with the rural subscriber base. The platform is uniquely positioned to target the last mile rural consumer and has immense potential to grow into a monetizable rural media channel.

- Targeted at driving data usage amongst low/non-data users, your Company launched Filmy Recharge, now an award-winning offering. At a pocket-friendly price of Rs,16, Filmy Recharge bundles free access to a large catalogue of movies through a very simple integrated user journey. Keeping the target audience in mind, the proposition was created to work seamlessly without any application download.

- To strike a chord with the millennials, your Company launched 'Vodafone U', a digital only platform exclusively for our youth customers that enables them to maximise life with limited resources. In line with Vodafone U philosophy, your Company launched an exclusive offer on Amazon Prime, where customers could avail a 50% discount on Amazon Prime membership, making shopping and entertainment even more affordable.

Two Brands - One Company:

- India is a cricket loving nation and IPL gives a great opportunity to connect with consumers. To engage with the subscriber base, increase usage of the website and app, brand Vodafone launched a digital campaign "Unofficial Sponsor of Fans™". This campaign led to Vodafone becoming the most loved brand, increased usage of the website and app and enhanced customer experience on-ground amongst the users.

- Your Company takes pride in providing the customers with great value & seamless connectivity in India and abroad. Building on strong international roaming tie-ups, brand Vodafone launched an International Roaming campaign with a claim of "Best International Roaming Plan" offering unlimited data and calling at just Rs,215/- day in 23 countries. A digital campaign specifically targeting users planning to travel abroad in the months of April-June was also launched.

- In the constant endeavor to engage and provide exclusive offers to high value customers, brand Vodafone has created a differentiated experience. iPhone Forever is one such exclusive proposition for the high value customers. It is a one-of-its kind program where the customer gets free repair, replacement and easy upgrades on their iPhones. The campaign has Print and Digital legs targeting towns and cities with high iPhone penetration in the country.

- Since the launch of Idea 4G, the focus was to establish brand Idea as a strong 4G player. This year as well, brand Idea focussed all its advertising efforts on building preference for Idea 4G. Idea launched 3 TV campaigns aimed at building 4G credentials: Network - "India ka Live Network", Affordability - "Dekhte Jao" and Thematic - #MeriRealLife. These were high decibel TV campaigns, supported with Radio, Outdoor and Digital among other media.

- The "Dekhte Jao" campaign aimed at showcasing Idea at the forefront of the unlimited data revolution so it becomes the network of choice for data-hungry Indians. Promoting Idea's Unlimited recharges portfolio, the campaign showcased how everyone can now watch videos endlessly, without hesitation. The upbeat and celebratory TVC had an extremely catchy jingle composed by Bolly wood music director Amit Trivedi.

- The "MeriRealLife" campaign was aimed at increasing brand affinity among the social media savvy youth by powering an alternate wave of thinking. The campaign propagated a culture of "Responsible use of Social Media" that encourages people to drop the pressure of chasing and sharing perfection online; and instead share real, authentic and unfiltered stories of their lives.

- The "India ka Live Network" campaign aimed at enhancing Idea's 4G network quality credentials.

The campaign showcased how everyone can tackle irresponsible behaviour by going live anytime with Idea 4G's seamless network. In quintessential Idea fashion, the campaign transformed LIVE video from just a tool of social sharing and fun, into a tool of empowerment and societal change.

Partnerships & Alliances:

- Your Company partnered with Amazon India, to build a unique 'Shop-in-Shop' model at our Company-owned stores - providing an assisted sales model involving promoters placed by Amazon, who are responsible for driving sales of Amazon exclusive devices through our stores. Currently operational in 100 Vodafone branded stores across 6 circles and 7 cities, the Shop-in-Shop model is expanding to cover over 400 stores in the coming months.

- Your Company partnered with Apple to launch the world's first iPhone Forever Program exclusively for high-value customers. With benefits such as replacement and repair at no extra cost and upgrade at the best price; the iPhone Forever Plan built engagement and enhanced loyalty of our premium customers.

- Your Company also partnered with leading OEMs -Samsung, OnePlus, Oppo, Vivo, Moto, Huawei, Nokia, Panasonic and Lava to offer special offers on leading handsets, which aided the landing of these partner phones on our network. A number of these tie-ups were accompanied by extensive print, digital and offline promotions in association with the partners.

Fueling Growth of Digital:

- To cater to the Digitally-evolved consumer, your Company offers a rich bouquet of digital content via strategic partnerships with Sony LIV, ZEE5, Shemaroo Entertainment, EROS, Discovery and others for our video properties - Vodafone Play and Idea Movies and TV. These partnerships get us access to a large repertoire of movies, TV shows, Live TV channels, original shows, music videos and other genres.

- With an enhanced 4G footprint across key markets and increased Smartphone penetration, regional content acts as a catalyst to explode data consumption. To fuel this growth, Vodafone Play and Idea Movies and TV have exponentially increased regional content portfolio with exclusive partnerships with leading regional content OTT apps like SheemooMe for Gujarat market, SunNxt for all four South languages, Hoichoi for entire East and Bengal market.

- To accelerate the digital footprint and create more value for our customers, your Company partnered with popular digital wallets - PayTM, PhonePe and Amazon Pay to unlock exciting cashback offers, making the plans more affordable and convenient to recharge. Through strategically planned Application Programming Interface (APIs) integrations, Vodafone and Idea prepaid recharges and postpaid bill payments are enabled across most third party digital wallets and payment systems.

Consumer IoT:

Internet of Things (IoT) is poised for exponential growth with an increasing number of consumer applications in various categories like smart home, wearable’s and connected cars. Being a frontrunner in Industrial IoT domain, your Company is exploring the next generation of consumer IoT use cases with the right set of strategic partners to bring connected living to the Indian market.

Subsidiary, Associate and Joint Venture Companies

As on March 31, 2019, your Company has thirteen subsidiary companies, two joint venture companies and one associate company. Post-merger, the management is working towards rationalizing subsidiaries. The details are as under:

Subsidiaries

1. Idea Cellular Services Limited (ICSL)

ICSL is engaged in the business of providing manpower services to the Company and Idea Telesystems Limited. For the Financial Year 2018-19, the total income stood at Rs,1,062 Mn compared to Rs,1332 Mn in the previous year.

2. Idea Telesystems Limited (ITL)

ITL is engaged in the business of trading of mobility devices. For the Financial Year 2018-19, the total income stood at Rs,56 Mn as against Rs,164 Mn in the previous year. Subsequent, to the Balance Sheet date, the Board of Directors of your Company have at its meeting held on May 13, 2019 approved a Scheme of Amalgamation ("Scheme") for merger of Idea Telesystems Limited with your Company. The Scheme is yet to be filed with the National Company Law Tribunal Bench at Ahmadabad.

3. Vodafone m-pesa Limited (VMPL)

Vodafone m-pesa Limited (subsidiary of erstwhile Vodafone India Limited) has become the subsidiary of the Company effective August 31, 2018. VMPL provides customers with a mobile wallet and money transfer services in the form of M-pesa, the world renowned mobile wallet and money transfer service. For the Financial Year 2018-19, VMPL earned a service revenue of Rs,789 Mn as compared to Rs,1,027 Mn in the previous year.

4. Vodafone Idea Business Services Limited (VIBSL) earlier known as Vodafone Business Services Limited

VIBSL (subsidiary of erstwhile Vodafone India Limited) has become the subsidiary of the Company effective August 31, 2018. The main source of revenue for VBSL is in the form of charge back to the Company and its subsidiaries towards use of certain common IT assets and accounting services and the charge back of operating cost related to Data Centre apart from OSP business. For the Financial Year 2018-19, the revenue earned was Rs,2,452 Mn as compared to Rs,2,200 Mn in the previous year.

5. Vodafone Idea Communication Systems Limited (VICSL) earlier known as Mobile Commerce Solutions Limited

VICSL (subsidiary of erstwhile Vodafone India Limited) has become the subsidiary of the Company effective August 31, 2018. VICSL is engaged in the business of trading in handsets, data cards, related accessories and other hardware. For the Financial Year 2018-19, the total revenue stood at Rs,378 Mn.

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

CIMTPL (a wholly owned subsidiary of VICSL) has become step-down subsidiary of the Company effective August 31, 2018. For the Financial Year 2018-19, the total revenue earned was Rs,8 Mn.

7. Vodafone Foundation (VF)

VF - a section 8 Company as per Companies Act,

2013 (subsidiary of erstwhile Vodafone India Limited) has become the subsidiary of the Company effective August 31, 2018. VF is an implementing agency and carries out CSR activities for the Company and its subsidiaries, associates, 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) the knowledge and skills of teachers, (b) financial literacy, (c) empowerment of women, (d) healthcare, (e) environment, (f) disaster relief, (g) eradication of poverty.

8. Vodafone Towers Limited (VTL)

VTL (subsidiary of erstwhile Vodafone India Limited) has become the subsidiary of the Company effective August 31, 2018. During the year, the Company approved the demerger of its Fiber Infrastructure Undertaking on a going concern basis to VTL. VTL has not yet commenced its operations. Accordingly, VTL does not have any revenues from operations.

9. Vodafone India Digital Limited (VIDL)

VIDL (subsidiary of erstwhile Vodafone India Limited) has become the subsidiary of the Company effective August 31, 2018. VIDL is yet to commence its operations. Accordingly, it does not have any revenues from operations. Subsequent, to the Balance Sheet date, the Board of Directors of your Company have at its meeting held on May 13, 2019 approved a Scheme of Amalgamation ("Scheme") for merger of VIDL with your Company. The Scheme is yet to be filed with the National Company Law Tribunal Bench at Ahmadabad.

10. Vodafone India Ventures Limited (VIVL)

VIVL (subsidiary of erstwhile Vodafone India Limited) has become the subsidiary of the Company effective August 31, 2018. VIVL is an outsourcing hub for finance and 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 in the group. The Company has set up its facilities at Ahmadabad and Pune location and commenced operations only in April 2018 after recruiting employees for providing services to group companies from both these locations. This being the first year of its operations, VIVL has earned a service revenue of Rs,1,864 Mn.

11. Vodafone Technology Solutions Limited (VTSL)

VTSL (subsidiary of erstwhile Vodafone India Limited) has become the subsidiary of the Company effective August 31, 2018 and is yet to commence operations. Accordingly, it does not have any revenue from operations.

12. You Broadband India Limited (YBIL)

YBIL (subsidiary of erstwhile Vodafone India Limited) has become the subsidiary of the Company effective August 31, 2018. 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 year under review, the total income from operations of YBIL stood at Rs,1,906 Mn.

13. You System Integration Private Limited (YSIPL)

YSIPL (subsidiary of YBIL) has become step-down subsidiary of the Company effective August 31, 2018. YSIPL principle business is providing system integrators, enterprise and home solution providers including supply, commissioning and integration of hardware, software and middleware towards providing security, storage and threat management and mitigation. YSIPL is a wholly owned subsidiary of YBIL.

With an objective of internal corporate restructuring, YSIPL has approved amalgamation of itself with its immediate holding company YBIL.

During the Financial Year 2018-19, Idea Cellular Infrastructure Services Limited ceased to be a subsidiary of the Company and Aditya Birla Telecom Limited amalgamated with your Company.

Joint Venture Company

1. Indus Towers Limited

Indus Towers Limited (Indus), in which your Company holds 11.15% stake, is a joint venture with the Bharti Group and Vodafone Group and provides passive infrastructure services in 15 service areas. The revenue from operations for the Financial Year 2018-19 was Rs,185,100 Mn as against Rs,187,865 Mn of previous year. During the year under review, Indus Towers Limited had approved a scheme of amalgamation with Bharti Infratel Limited. The said scheme is in final stages of approval.

2. Firefly Networks Limited (FireFly)

FireFly (a joint venture of erstwhile Vodafone Mobile Services Limited) has become the joint venture of the Company effective August 31, 2018. It was a joint venture of erstwhile Vodafone Mobile Services Limited and Bharti Airtel Limited with 50% shareholding each. The main objective of Firefly is to conduct the business of site acquisition, installation, commissioning, operations and maintenance of Infrastructures at the Hotpots to enable telecommunication and internet service providers, to offer customers Wi-Fi access across the territory. Revenue from operations for the Financial Year 2018-19 stood at Rs,153 Mn as compared to Rs,78 Mn in the previous year.

Associate Company

Aditya Birla Idea Payments Bank Limited (ABIPBL), is an Associate Company wherein your Company currently holds 49% of the equity capital and the balance is held by Grasim Industries Limited. ABIPBL has received banking license for carrying on the business of Payments Bank from Reserve Bank of India (RBI) on April 3, 2017 and also has an authorisation to carry on the business of Prepaid Payments Instrument business. ABIPBL offers Mobile Banking, Internet Banking and UPI services along with a range of banking products and services including savings bank account, domestic remittances and merchant payments. The Board of ABIPBL had at its meeting held on July 19, 2019, approved voluntary winding-up of ABIPBL, subject to receipt of all necessary approvals.

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 statement containing salient features of financial statements of each of the subsidiaries, associate and joint venture companies is provided in Form AOC-1 and is annexed 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 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. The Committee / Board periodically meets to review the risks and steps to be taken to control and mitigate the same through a properly defined framework.

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 ESOS-2018 scheme is in the process of being implemented.

In terms of the provisions of the SEBI (Share Based Employee Benefits) Regulations, 2014, the disclosure with respect to the ESOS Schemes of the Company as on March 31,

2019 has been uploaded on your Company's website www.vodafoneidea.com.

A certificate from M/s. S.R. Batliboi & Associates LLP, Chartered Accountants (Firm Registration No. 101049W/ E300004), Statutory Auditors, certifying that the Company's ESOS Schemes are implemented in accordance with the ESOP Regulations, would be placed before the shareholders at the Annual General Meeting for inspection by Members.

Internal Financial Control Systems

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 2018-19.

Human Resource Management

Vodafone Idea Limited, is an Aditya Birla Group and Vodafone Group partnership, making it India's largest telecom Company and second largest globally, by subscribers, at the time of merger. It is the coming together of two large established pan India telecom service providers.

Its 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.

Your Company has also in place a CSR Policy and the same is available on your Company's website 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 2018-19.

However, believing on giving and caring for the underprivileged and inclusion of all, the Company spent Rs,15 Mn towards CSR activities. Your Company reached out to around 1.11 lakh people (direct and indirect) across 9 States. 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 continued the previous programs and carried forward the learnings.

As a socially responsible caring Company, we are committed to play a larger role in India's sustainable development. Your Company has received accolades from Ministry of Drinking Water and Sanitation for Swachh Iconic Place - Somnath Temple project, Golden Peacock Award for Corporate Social Responsibility 2018, Voice and Data Award for CSR.

During the year, a notice calling information regarding the unspent CSR amount of previous Financial Year 2015-16 and 2016-17 was received. The Company made requisite and satisfactory representation to Ministry of Corporate Affairs (MCA) and MCA directed the Company to spend Rs,727 Mn in 8 equal installments in 8 quarters, beginning April 1, 2019.

The particulars required to be disclosed pursuant to the Companies (Corporate Social Responsibility Policy) Rules,

2014 are given in 'Annexure B' forming part of this Report.

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 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 judgments 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 flow 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;

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

Pursuant to the merger of Vodafone India Limited and Vodafone Mobile Services Limited with the Company effective August 31, 2018, the Board of your Company was reconstituted comprising of 12 Directors of whom 3 Directors each were nominated by Vodafone Group and Aditya Birla Group and 6 were appointed as Independent Directors.

During the year under review, the following changes took place in the Board composition:

Appointments

1. Mr. D. Bhattacharya, was appointed as an additional Director in the category of Non- Executive Director, representing Aditya Birla Group with effect from August 31, 2018;

2. Mr. Ravinder Takkar, was appointed as an additional Director in the category of Non-Executive Director, representing Vodafone Group with effect from August 31, 2018;

3. Mr. Vivek Badrinath, was appointed as an additional Director in the category of Non-Executive Director, representing Vodafone Group with effect from August 31, 2018;

4. Mr. Thomas Reisten, was appointed as an additional Director in the category of Non-Executive Director, representing Vodafone Group with effect from August 31, 2018;

5. Mr. Arun Kumar Adhikari, was appointed as an additional Director in the category of Independent Director, with effect from August 31, 2018;

6. Mr. Uday Khanna, was appointed as an additional Director in the category of Independent Director, with effect from August 31, 2018;

7. Mr. Ashwani Windlass, was appointed as an additional Director in the category of Independent Director, with effect from August 31, 2018;

8. Mr. Douglas Baillie, was appointed as an additional Director in the category of Independent Director, with effect from August 31, 2018;

9. Ms. Neena Gupta, was appointed as an additional Director in the category of Independent Director, with effect from September 17, 2018;

10. Mr. Krishnan Ramachandran, was appointed as an additional Director in the category of Independent Director, with effect from December 27, 2018; and

11. Mr. Suresh Vaswani, was appointed as an additional Director in the category of Independent Director, with effect from February 8, 2019;

Mr. D. Bhattacharya, Mr. Ravinder Takkar, Mr. Vivek Badrinath, Mr. Thomas Reisten, Mr. Arun Kumar Adhikari, Mr. Ashwani Windlass and Ms. Neena Gupta were confirmed as Director(s) at the last Annual General Meeting held on December 22, 2018.

Resignations

1. Ms. Rajashree Birla, Non-Executive Director, resigned from the Board with effect from August 31, 2018;

2. Mr. Sanjeev Aga, Non-Executive Director, resigned from the Board with effect from August 31, 2018;

3. Mr. Baldev Raj Gupta, Independent Director, resigned from the Board with effect from August 31, 2018;

4. Mr. Mohanbir Singh Gyani, Independent Director, resigned from the Board with effect from August 31, 2018;

5. Mr. Pejavar Murari, Independent Director, resigned from the Board with effect from August 31, 2018;

6. Mr. Akshaya Moondra, Whole-Time Director, resigned from the Board with effect from August 31, 2018. He is however continuing as the Chief Financial Officer of the Company;

7. Mr. Himanshu Kapania, stepped down from the position of Managing Director of the Company with effect from August 31, 2018. He is however continuing as a Non-Executive Director on the Board of the company representing Aditya Birla Group.

8. Ms. Tarjani Vakil, Independent Director, resigned from the Board with effect from September 17, 2018;

9. Mr. Uday Khanna, Independent Director, resigned from the Board with effect from September 28, 2018;

10. Mr. Douglas Baillie, Independent Director, resigned from the Board with effect from November 14, 2018;

The Board places on record its sincere appreciation for the valuable guidance and contribution made by the above Directors in the deliberations of the Board during their tenure as Directors on the Board of the Company.

As on 31 March 2019, the Board of Directors comprised of the following:

1. Mr. Kumar Mangalam Birla - Chairman (representing Aditya Birla Group)

2. Mr. D. Bhattacharya - Non-Executive Director (representing Aditya Birla Group)

3. Mr. Himanshu Kapania - Non-Executive Director (representing Aditya Birla Group)

4. Mr. Ravinder Takkar - Non-Executive Director (representing Vodafone Group)

5. Mr. Thomas Reisten - Non-Executive Director (representing Vodafone Group)

6. Mr. Vivek Badrinath - Non-Executive Director (representing Vodafone Group)

7. Mr. Arun Adhikari - Independent Director

8. Mr. Arun Thiagarajan - Independent Director

9. Mr. Ashwani Windlass - Independent Director

10. Ms. Neena Gupta - Independent Woman Director

11. Mr. Krishnan Ramachandran - Independent Director

12. Mr. Suresh Vaswani - Independent Director

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

Post the last Annual General Meeting held on December 22, 2018, Mr. Krishnan Ramachandran and Mr. Suresh Vaswani were appointed as Additional Directors qualifying as Independent Directors for a period of three years effective December 27, 2018 and February 8, 2019 respectively. Their appointment shall be placed at the ensuing Annual General Meeting (AGM) for approval by the shareholders.

Mr. Arun Thiagarajan, would be completing his present term as Independent Director at the ensuing Annual General Meeting. Based on the recommendation of the Nomination and Remuneration Committee, the Board has subject to the approval of the members recommended his re-appointment for a second term of three years at the ensuing AGM for approval of the members by way of special resolution.

The Independent Directors appointed during the year have given the declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the Listing Regulations.

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.

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 www.vodafoneidea.com.

Key Managerial Personnel

The Board of Directors pursuant to recommendation of Nomination and Remuneration Committee appointed Mr. Balesh Sharma as Chief Executive Officer of the Company w.e.f. August 31, 2018 for five years. His appointment was also approved by the members at the 23rd Annual General Meeting held on December 22, 2018.

Mr. Akshaya Moondra and Mr. Pankaj Kapdeo continue their office as Chief Financial Officer and Company Secretary respectively. During the year under review, there have been no other changes in the office of Key Managerial Personnel of the Company.

Dividend Distribution Policy

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

Board Meetings and Board Committees

During the year, eleven 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, the Board 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 six 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

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 as detailed in the Note No. 60 of the Standalone Financial Statements were in ordinary course of business and at an arm's length basis.

The related party transaction which can be considered material during the year is the existing arrangement with Indus Towers Limited (Indus), a joint venture of the Company which provides Passive Infrastructure services and related operations and maintenance services to various telecom operators in India, including your Company. 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, 2019 is provided in Form AOC-2, which is attached as 'Annexure C' to this report.

Your Directors wish to inform you that pursuant to the ongoing merger of Indus Towers Limited (Indus) with Bharti Infratel Limited (BIL), BIL shall also become Related Party and consequently approval of the members is also being obtained for contracts with Bharti Infratel Limited.

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 Note no. 60 to the standalone financial statements and particulars of investments made by the Company are provided in Note nos. 10 and 14 to the 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. Any Member, who is interested in obtaining these particulars about employees, may write to the Company Secretary at the Registered Office of your Company.

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, subject to ratification, if required of their appointment by members at every Annual General Meeting.

The requirement to place the matter relating to appointment of the Auditors for ratification by the members at every Annual General Meeting is done away with vide notification dated May 7, 2018 issued by the Ministry of Corporate Affairs. Accordingly, no resolution is proposed for ratification of re-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 one-time spectrum charges demand raised by the Department of Telecommunications in January, 2013. As explained in the Notes to the Financial Statements, the matter remains sub-judice and does not call for any further explanation/clarification under Section 134(3)(f) of the Companies Act, 2013. The report does not contain any qualification, reservation, disclaimer or adverse remarks.

Reporting of Frauds by Auditors:

During the year under review, neither the statutory auditors nor the secretarial auditors has 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 Auditors

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, 2019, 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 for Financial Year 2019-20 is required to be ratified by the members. Accordingly, a resolution seeking members ratification for the remuneration payable to the Cost Auditors 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, the Board had appointed M/s. Umesh Ved & Associates, Company Secretaries, Ahmadabad, as the Secretarial Auditor for conducting the Secretarial Audit of your Company for the Financial Year ended March 31, 2019. The Secretarial Auditors have submitted their report, confirming compliance by the Company of all the provisions of applicable corporate laws. The contents of the Secretarial Audit Report are self-explanatory and does not contain any qualification, reservation or adverse remark. The report of the Secretarial Auditor is annexed to this report as 'Annexure F'.

Extract of Annual Return

In terms of the provisions of Section 92 (3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return in Form MGT 9 for the Financial Year ended March 31, 2019 is annexed herewith as 'Annexure G' to this report.

Sustainability Journey

Telecom sector provides connectivity to individuals and 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 and governance.

Being India's leading 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.

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 Ltd, we understand the evolving dynamism in our operating environment. We try to preempt 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.

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 disaster relief.

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 intends to establish a robust Sustainability Framework of Policies, Technical Standards, and Guidance Notes based not just on the local laws but also on leading International standards

The Company is publishing regular (Bi-annual) dedicated Sustainability Reports as per international standards from FY16. It's first (FY16) and most recent (FY18) Sustainability Reports aligned to GRI G4 Guidelines are already in public domain and can be downloaded from the Company's website.

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 2018-19, 16 complaints pertaining to sexual harassment were received, of which 14 have been resolved. The 2 pending complaints were closed after March 31, 2019.

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.

- 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 in future, other than the orders passed by tribunal, 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.

For and on behalf of the Board of Directors of Vodafone Idea Limited

Kumar Mangalam Birla

Place: Kolkata Chairman

Date: July 26, 2019 (DIN: 00012813)

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