We have pleasure in presenting the Twenty Seventh Annual Report, together with the audited financial statements of the Company for the Financial Year ended March 31, 2022.
Your Company, a partnership between two strong promoters Aditya Birla Group and Vodafone Group, is a major telecommunications operator in India, offering voice, data, enterprise services and other Value Added Services ("VAS"), including Short Messaging Services, Digital Services, Internet of Things (IoT) etc. As of March 31, 2022, the subscriber base of your Company stands at 226.1 Mn (on VLR), with the subscriber market share on VLR stands at 22.1%. The Wireless Revenue Market Share (RMS) on the basis of Gross Revenue (GR) for your Company stands at 19.9% for the third quarter of Financial Year 2022.
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 increasing demand for both, data and voice services. Your Company has a large spectrum holding comprising 1,768.4 MHz spectrum across 22 circles, of which 1,738.4 MHz is liberalised spectrum which can be used towards deployment of any technology.
Your Companys mobile telecommunication services cover more than 1.2 billion Indians. As of March 31, 2022, your Company has 455,264 broadband (3G+4G) sites and all of its 4G sites are VoLTE enabled, offering a better customer experience. Your Company provides Voice over WiFi (VoWiFi) in several circles which will be gradually expanded to rest of the country. The 4G network is spread over 338,000 towns and villages and covers more than a billion Indians. Your Company has been deploying Dynamic Spectrum Re-farming (DSR), Massive Multiple-Input Multiple-Output Sites (MIMO) and Small cells to maximize spectrum efficiency. Additionally, your Company has been actively deploying 4G/LTE on TDD band of 2300 MHz and 2500 MHz spectrum band to expand its data capacity as well as on 900 MHz band to improve customer experience in dense areas.
Your Company also derives revenue from carrying India inbound ILD traffic through arrangements with other mobile telecommunication companies and long distance carriers operating outside India. Your Company is also a leading player in offering Business (Enterprise) services to customer across sectors. Your Company has a portfolio of ~289,000 km of Optical Fibre Cable (OFC), including own built and Indefeasible Right of Use (IRU) OFC, excluding overlapping routes between erstwhile Vodafone India and Idea Cellular.
The brand V/l, launched in September 2020, continues to garner strong awareness and building brand affinity across all customer segments in the country. Your company continues to make extensive progress on the marketing front by communicating key differentiators, entering into various alliances to enhance its offerings to customers as well as introducing various innovative products and services both for retail and enterprise customers. VI is building a competitive advantage by increasing customer engagement and heralding a new Digital Ecosystem with the introduction of Music, Games, Jobs & Education Services, which is expected to be further expanded over a period of time. Vi GIGAnet continues to offer superior network experience on both, data and voice, as reflected in top rankings on 4G download speeds in independent external reports and TRAI "MyCall" app data respectively. Your Company has one of the largest DSR (Dynamic Spectrum Refarming) deployment, Indias largest AI-powered Massive MIMO sites along with advanced cloud deployment across Core Network locations Pan-India making it a 5G ready network.
Your Companys vision is to ‘Create world class digital experiences to connect and inspire every Indian to build a better tomorrow. To achieve this end, your Company is developing world-class infrastructure to introduce newer and smarter technologies, making both retail and enterprise customers future ready with innovative offerings, conveniently accessible through an eco-system of digital channels as well as extensive on-ground presence.
Financial Results and Summary
The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under section 133 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014.
The standalone and consolidated financial highlights of your Company for the Financial Year ended March 31, 2022 are summarized as follows:
|Income from sale of goods and services||382,024||416,589||384,984||419,382|
|Other Operating Income||183||138||171||140|
|Depreciation and Amortisation||228,575||229,062||235,843||236,385|
|Interest and Finance charges||209,734||179,916||209,808||179,981|
|Exceptional Items (Net)||627||(221,036)||1,643||(199,681)|
|Share of JV/Associates||-||-||12||2,314|
|Profit / (Loss) Before Tax||(282,372)||(463,145)||(282,341)||(442,534)|
|Profit / (Loss) after Tax||(282,372)||(462,937)||(282,454)||(442,331)|
|Other Comprehensive Income, net of tax||89||(4,152)||89||368|
|Total Comprehensive Income||(282,283)||(467,089)||(282,365)||(441,963)|
Standalone revenue of your Company stood at Rs 382,207 Mn, a decrease of 8.3% over previous year. The EBITDA stood at Rs 155,310 Mn, registering a decrease of 6.9% over the previous year. The Net Loss including amount specified in other comprehensive income of the Company for the Financial Year 2021-22 stood at Rs 282,283 Mn, vis-a-vis Rs 467,089 Mn, for the previous year.
On a consolidated basis, the revenue of your Company stood at Rs 385,155 Mn, a decrease of 8.2% over the previous year. The EBITDA at Rs 161,655 Mn reflects decrease of 5.6% as compared to the previous year. The Consolidated Net Loss including amount specified in other comprehensive income of the Company stood at Rs 282,365 Mn, for Financial Year 2021-22 vis-a-vis Rs 441,963 Mn for the previous year.
The Indian wireless industry witnessed testing times as various COVID-19 related restrictions created multiple challenges in ensuring seamless connectivity to millions of Indians, in addition to ongoing challenges of hyper competition and unsustainable tariffs. However, your Company, along with other operators, remained the backbone of the digital infrastructure and allowed the nation to work, learn and connect online.
During the year, all the operators have taken tariff interventions across all prepaid bundled plans, entry level combo voucher plans as well as post-paid plans. While this has helped drive ARPU improvement, tariffs continue to remain unsustainable and need to improve significantly from current levels to improve overall industry health and generate reasonable returns to promote future investments, including investments towards advance technologies. Though the operating environment continues to remain challenging, the increasing digital penetration, increasing content consumption, especially through video and social media usage and increasing e-commerce, is driving strong demand for high speed connectivity and thus it is a massive opportunity for telecom industry, especially as the pricing has started to revive and likely to improve further in future.
Post realization of merger synergies, your Company had undertaken a cost optimization exercise and realized 90% of the targeted Rs 40 Bn annualized opex savings on a run rate basis as of end of Calendar Year 2021. Below are the other ongoing major strategic initiatives to improve your Companys revenue and profitability as well as to strengthen its overall position in the market:
1. Focused network investments for superior customer experience - Your Company continues to have a focused approach to investments, biased towards the profitable areas, to utilize capex effectively while ensuring that it offers superior customer experience in these areas. Your Company has been driving incremental 4G investments in the 17 priority circles, which contribute 98% of Ul revenue and 93% of industry revenue. Your Company also has been adding 4G capacity through spectrum refarming in these areas. Your Company has been deploying several 5G ready technologies such as, Massive MIMO, DSR, Cloudification of Core, which are central to its future growth strategy. Your Company has also initiated 5G trials with major network partners and is well prepared to offer 5G services in line with the evolution of 5G ecosystem.
2. Market initiatives to drive ARPU improvement - As
tariff hikes remain crucial to improve the overall industry health, your Company has taken tariff interventions during the year across unlimited bundled plans, combo voucher plans as well as postpaid plans. Your Company has also undertaken several market initiatives to improve ARPU by driving 4G/UL penetration. As a part of the customer excellence drive, your Company has been transforming customer servicing across all touchpoints with a clear focus towards shift to digital. Further, as part of its digital first approach, your Company has renewed its focus on digitalization of distribution channel to completely automate sales process creating seamless and efficient journey for the channel partners.
3. Focusing on Business Services and Fast-Growing Revenue Segments - In line with our stated strategy of transformation from telco to techco, your Company is offering services beyond connectivity and becoming a preferred choice of partner for our customers in their digital journey. Your Company leverages its multi-year relationships with customers and derives tremendous synergies from strength of Vodafone group especially its global leadership in IoT space. While your Company continues to focus on enterprise mobility and fixed line connectivity, your Company is having incremental focus on new revenue streams and strengthening proposition on IoT and cloud service. Your Company thus continues to strengthen partnerships with customers with a range of offerings like Ul Integrated IoT, an end to end IoT solution, Managed SIP, Ul Cloud Firewall Service and wi Business Plus bundled mobility offering.
4. Driving partnerships and digital revenue streams - Your Company has launched several digital initiatives to address the changing requirements of todays digital society enabling individuals and enterprises to get a range of benefits and value-adds. Vi offers not just enriched connectivity but also an array of digital products and services to complement the core business. On content, one of the key focus areas is to grow your Companys digital footprint through strategic digital and content partnerships. During the year, your Company has also launched some very exciting propositions in various categories like Music, gaming, education, skilling & health, which are available on the Vi app as part of an integrated access. All these propositions should help us build our digital community increasing customer stickiness. Your Company will thus continue to focus on its platform capabilities to offer deeper integration with its partners for a differentiated experience, create monetization opportunities and truly become an integrated digital service provider.
Following the announcement of the government relief package, your company has reinitiated fund raising exercise with new vigor which will enable the company to achieve its strategic intent. A step in that direction, your Company has raised Rs 45 Bn, from Promoters/Promoters Group entities on a preferential basis. Vodafone Group has contributed Rs 33.75 Bn and Aditya Birla Group has contributed Rs 11.25 Bn. Your company continues to actively engage with lenders and investors for further fund raising.
Your Company has thus been making significant progress on various strategic initiatives and continues to strive towards transforming from a pure play mobile operator to a truly integrated digital service provider.
As your Company has incurred net loss during the Financial Year 2021-22, 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, the Company raised Rs 45,000 Mn by issuing 3,38,34,58,645 Equity Shares of Rs 10/- each at an issue price of Rs 13.30 per Equity Share on a preferential basis under chapter VII of SEBI (ICDR) Regulations, 2018 to entities belonging to the Promoter/Promoter Group. Consequent to the above preferential issue, the issued, subscribed and paid- up equity share capital of your Company as on March 31, 2022 stood at Rs 321,188 Mn comprising of 32,118,847,885 Equity Shares of Rs 10/- each.
Further during the year under review, the Authorised Share Capital of the Company was increased from existing Rs 500,000 Mn to Rs 750,000 Mn.
On a standalone basis, the Company had Cash and Cash Equivalents of Rs 14,144 Mn and Fixed Deposits with banks having maturity of 3 to 12 months of Rs 2 Mn as on March 31, 2022. The Companys net debt as on March 31, 2022 increased by Rs 95,164 Mn to Rs 1,896,593 Mn as compared to Rs 1,801,429 Mn last year.
On a consolidated basis, the Company had Cash and Cash Equivalents of Rs 14,532 Mn and Fixed Deposits with banks having maturity of 3 to 12 months of Rs 57 Mn as on March 31, 2022. The Companys net debt as on March 31, 2022 increased by Rs 95,015 Mn to Rs 1,894,588 Mn as compared to Rs 1,799,573 Mn last year.
The Department of Telecommunications (DoT) had, vide its communication dated October 14, 2021 (DoT Communication), provided various options to the Company in connection with Telecom Reforms Package. The options that were made available to the Company pursuant to the aforesaid DoT Communication, were as under:
(a) Defer payment of Spectrum Auction Instalments due upto 4 years with immediate effect, excluding the instalments due in respect of Spectrum Auction 2021;
(b) One-time opportunity to opt for deferment of AGR related dues as determined by Honble Supreme Court in the AGR case, by a period of 4 years with immediate effect.
(c) One-time opportunity to exercise the option of paying interest for the 4 years of deferment on the deferred spectrum instalments and AGR dues by way of conversion into equity of the NPV of such interest amount.
The Company has availed all the above options. Accordingly, there has been no payment of Spectrum and AGR dues installment to DoT in Financial Year 2021-22.
All other scheduled loan repayments were made on respective due dates, including Non-Convertible Debentures aggregating to Rs 60,000 Mn were fully redeemed on respective maturity dates between December 2021 and February 2022.
During this year, the Company has availed a Short Term Loan of Rs 22,500 Mn, which has been repaid fully post March 31, 2022. The Company had also availed a Long Term Loan of Rs 5,000 Mn.
On the 13th August 2021, CARE downgraded the Companys rating with respect to Long Term Bank Facilities and certain Non-Convertible Debentures to ‘CARE B- (Credit Watch with negative implications) [previous year end rating ‘CARE B+ (Credit Watch with negative implications)]. On February 1, 2022, CARE upgraded the Companys rating with respect to Long Term Bank Facilities and certain Non-Convertible Debentures to ‘CARE B+ (Stable).
Consequent to full repayment of certain Non-Convertible Debentures the credit ratings issued on these instruments by Brickworks have been withdrawn.
On a standalone basis, the capital expenditure (including capital advances and excluding RoU assets and Spectrum) incurred was Rs 34,232 Mn in the Financial Year 2021-22.
On a consolidated basis, the capital expenditure (including capital advances and excluding RoU assets and Spectrum) incurred was Rs 36,503 Mn in the Financial Year 2021-22.
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.
• Government Reform Package
On September 15, 2021, the Government announced a comprehensive reform package for the Indian telecom sector including measures to address the structural, procedural and liquidity issues. To address the immediate liquidity concerns of the sector, Government has provided an option of up to four years of moratorium on AGR dues and spectrum instalments due between October 2021 and September 2025 with an option to convert interest arising from such deferment into equity upfront. Your company has already opted for deferment of Spectrum and AGR dues as well as conversion of interest arising from such deferment into equity. Other reforms include clarity on AGR definition, reduction in bank guarantees, removal of penalty and reduction of interest for delay in payment of LF and SUC etc. All these reforms are expected to provide long term benefit to all the operators, including the company. The reforms package and the implementation has been welcomed by all the company stakeholders including the banks and investors.
Your Company had opted for 4 years of deferment for both Spectrum and AGR dues in October 2021. This will provide liquidity support and direct the cash flow generation towards capex investment. Further, on 10th January 2022, the Board of your Company also approved the upfront conversion of the full amount of interest arising due to deferment of spectrum instalments and AGR dues into equity. NPV of this interest is Rs 161.33 billion. The conversion of this DoT debt to equity will reduce the overall debt of the Company.
• TRAI Consultation paper on 5G Spectrum
The TRAI had initiated consultation on 5G pricing during the year where all the operators had requested the pricing of 5G spectrum to be reduced by 90-95% and were seeking lenient payment terms like no upfront payments, to enable them to direct the cashflows towards 5G network investments. TRAI has incorporated several of the operators requests and the pricing for 5G spectrum has come down by ~35%. Your Company continues to engage with TRAI and DoT on this matter and auctions are expected to happen during the Financial Year 2022-23.
• Preferential Issuance of Equity shares to Promoter Entities
The Board of Directors of the Company on March 3, 2022 approved capital raise of (a) Rs 45,000 Mn through a preferential allotment to the Promoter Group entities and (b) up to Rs 100,000 Mn through equity or equity linked instruments.
The preferential allotment was approved by shareholders in the Extraordinary General Meeting held on March 26, 2022 and on March 31, 2022 3,38,34,58,645 Equity Shares of face value of Rs 10/- each at an issue price of Rs 13.30 per share (including premium of Rs 3.30 per share) which is at a premium compared to floor price as per SEBI ICDR Regulation, for an aggregate consideration of Rs 45,000 Mn, were allotted to Promoters/Promoters Group entities on a preferential basis. Vodafone Group (through Euro Pacific Securities Ltd. and Prime Metals Ltd.) has contributed Rs 33,750 Mn and Aditya Birla Group (through Oriana Investments Pte. Ltd.) has contributed Rs 11,250 Mn. As a result of this preferential allotment, the aggregate shareholding of the Promoter Group in your Company has increased from 72.05% to 74.99%.
• AGR Matter
The Honble Supreme Court on October 24, 2019 along with supplementary order dated July 20, 2020 and final order dated September 1, 2020 delivered its judgment (together referred to as "AGR Judgment") upholding the view considered by Department of Telecommunications ("DoT") in respect of the definition of Adjusted Gross Revenue ("AGR") ("AGR Judgment"). The order upheld the principal demand, levy of interest, penalty and interest on penalty. This AGR Judgment has significant financial implications on the Company.
On July 20, 2020, the Honble Supreme Court, after hearing all parties, observed that the amount to be recovered (preliminary assessed) given by DoT in its modification application are taken to be as final amount and there can be no dispute raised about it. The Company during the year paid further sum of Rs 10,000 Mn and accordingly, the total payment as at March 31, 2021 (including the payment of Rs 68,544 Mn paid during year ended March 31, 2020) towards the dues following this AGR Judgment stands at Rs 78,544 Mn.
Subsequent to the same, the Honble Supreme Court vide its final order dated September 1, 2020, has inter-alia directed that for the demand raised by the DoT in respect of the AGR dues based on the judgment of this Court, there shall not be any dispute raised by any of the Telecom Operators and that there shall not be any reassessment; the Telecom Operators shall at the first instance, make the payment of 10% of the total dues as demanded by DoT by March 31, 2021 and thereafter, Telecom Operators to make payment in yearly instalments commencing from April 1, 2021 to March 31, 2031 payable by 31st March of every succeeding financial year. The cumulative amount paid by the Company of Rs 78,544 Mn exceeded 10% of the total liability, and accordingly the Company filed an affidavit with Honble Supreme Court including the compliance letter confirming payment of 10% of the total dues along with an undertaking to pay the arrears as per the Court judgement from FY 21-22 onwards.
The Company had on August 10, 2021 filed a review petition with the Honble Supreme Court for considering to hear the modification application on correction of manifest / clerical / arithmetic errors in the computation of AGR demands which is still pending to be heard.
The Union Cabinet on September 15, 2021 approved major structural and process reforms in the telecom sector to boost the proliferation and penetration of broadband and telecom connectivity. Further to address liquidity requirements, the Cabinet has also approved deferment of AGR dues which are payable in annual instalments as determined by the Honble Supreme Court for up to four years without any change in the instalment period and deferment of spectrum auction instalments payable from October 1, 2021 to September 30, 2025 excluding the instalments due for spectrum auction conducted in 2021. The DoT also revised the definition of AGR effective October 1, 2021 to exclude non-telecom revenues. On October 14, 2021, DoT issued the required notifications giving an option for moratorium of Spectrum instalment and AGR dues to be confirmed by the Company on or before October 29, 2021. It also provided a period of 90 days to confirm upfront conversion, if any, of the interest amount arising due to such deferment into equity. The Company has conveyed its acceptance for the deferment of Spectrum auction instalments & AGR dues by a period of four years with immediate effect and has also requested for inclusion of the amounts after the affidavit period till AGR judgement of 2019 to be covered by the cabinet relief package.
At its meeting held on January 10, 2022, the Board of Directors approved the conversion of the full amount of such interest on the deferred instalments related to deferred annual spectrum liabilities and AGR dues into shares in the company, either ordinary and / or preference, at the discretion of government. Subsequently on March 31, 2022, DoT has computed the Net Present value (NPV) of the interest liability on moratorium period amounting to Rs 161,331 Mn towards AGR dues (as per Honble Supreme Court affidavit dated September 1, 2020) and deferred annual Spectrum liabilities respectively as on the date of exercise of option i.e. January 10, 2022, which the Company has confirmed on April 14, 2022. Further the accounting of such conversion will happen upon the completion of the process concluding with the actual issue of shares. Such conversion will result in dilution to all the existing shareholders of the Company, including Promoters.
• One-time Spectrum Charge Matter
In respect of levy of One Time Spectrum Charge (‘OTSC), the DoT has raised demand on the Company and erstwhile Vodafone India Limited (VInl) and Vodafone Mobile Services Limited (VMSL) in January 2013 for spectrum beyond 6.2 MHz in respective service areas for retrospective period from July 1, 2008 to December 31, 2012 and for spectrum beyond 4.4 MHz in respective service areas effective January 1, 2013 till expiry of the period as per respective licenses. In the opinion of the Company, the above demand amounts to alteration of financial terms of the licenses issued in the past and therefore the Company filed a petition in the Honble High Court of Bombay, which vide its order dated January 28, 2013, had directed the DoT to respond and not to take any coercive action until the next date of hearing. Similarly erstwhile VInl and VMSL had filed a petition before the Honble TDSAT. Honble TDSAT vide its order dated July 4, 2019 held that for spectrum below 6.2 MHz, OTSC is not chargeable and accordingly demand is set aside. For spectrum beyond 6.2 MHz, if spectrum is allotted after July 01, 2008,
OTSC shall be levied from the date of allotment of such spectrum and if spectrum is allotted before July 01, 2008, OTSC shall be levied from January 01, 2013 till the date of expiry of licenses and ordered DoT to issue revised demands, if any, as per terms of direction given. The Company filed an appeal before the Honble Supreme Court against the Order of the TDSAT. On March 16, 2020, Honble Supreme Court dismissed the petition filed by the Company challenging the levy of OTSC beyond 6.2 MHz. Following the dismissal of the Companys appeal by the Honble Supreme Court, the Company is yet to receive any demand from DoT in line with the TDSAT order. DoT preferred an appeal against the TDSAT judgement and sought stay on the impugned judgement. The matter is currently being heard in Honble Supreme Court and the Central Government is reviewing and/or re-considering the decision to proceed with the present proceedings of appeal.
The new & unified brand VI, of your Company completed a year and celebrated the anniversary with its customers, trade & employees. It has already garnered strong awareness and continues to build brand affinity & consideration across all customer segments in the country.
Your brands health has improved significantly as reflected in brand NPS as well as on key KPIs like Spontaneous Awareness, Total Awareness and Non User Consideration. It has also shown significant improvements across all other brand Imagery parameters. Further, from being at rank 3, your Company is now leaders on the aspects of Customer Service, Price and Setup as well as joint leaders on Network, Digital and Emotional Connect.
Your Companys achieved top rankings across various third party reports on both data and voice, including the highest rated voice quality in the country as per TRAIs "MyCall" app data for 15 out of 17 months between November 2020 and March 2022.
Marketing and other initiatives
During the year under review, your Company made extensive progress on the marketing front by communicating and differentiating, by entering into various alliances, and by introducing various innovative products and services. Some of these are:
• Building a competitive advantage by leveraging the Ookla certification of being the Fastest 4G in the country, your company launched the #SpeedSeBadho campaign - that showcases how one could thrive in life by getting ahead with speed using Vi powered by GIGAnet- the fastest 4G of India. To engage with customers, we launched #SpeedSeBadho challenge on social wherein through a fun filter, people experienced the speeds of GIGAnet. The campaign was extensively promoted on TV & Digital.
• The next phase of #SpeedSeBadho showcased stories of how digital creators are growing with Vi during IPL and the campaign was extensively promoted on TV & Digital.
• Leveraging the coveted Fastest mobile network of India 2021 award by Ookla?, your Company built on the next leg of #SpeedSeBadho by showcasing how one could always find a way when they have speed at hand. The campaign was extensively promoted on TV & Digital. These differentiated campaigns helped build strong brand consideration and network perception.
• With the need for data increasing with each day and to build a competitive advantage by talking about the differentiated offerings, your Company positioned the pack offering "Unlimited Night Data" and "Weekend Data Rollover" as Hero Unlimited Packs and an impactful campaign was launched to highlight these benefits quirkily by Vinay Pathak. The campaign was extensively promoted on TV & Digital & on ground.
• With an objective to increase customer engagement and herald a new Digital Ecosystem, your Company transitioned Vi app into multifaceted app which now provides its customers Movies & Live TV, Music, Games, Jobs and Education Services and more in addition of doing recharges and payments.
• Vi Movies & TV - our OTT app has been integrated with Vi app giving customers access to their favorite shows & movies right on Vi app itself. And, to provide the best in class content, the Company partnered with various content creators and OTT apps like Zee5, Voot Select, Fireworks, SunNXT, Shemaroo Me, Colours, Lionsgate Play, Hungama, TV Today, Discovery and others. The app provides a range of content including Movies, TV shows & Live TV from over 400 TV channels, Original shows and short format videos in 16+ languages.
• With the objective of driving high-end/heavy data users with premium content, the Company also has product bundling tie ups with leading content providers like Amazon Prime, Hotstar, and Netflix.
• Vi partnered with Hungama Music to offer our customers ad-free music with unlimited downloads. This was extensively promoted on TV, digital, PR & for a 360 integrated campaign packing impact. It was further supported with a Valentines contest to create user generated playlist and an AI filter that suggests you songs basis your mood and an extensive influencer campaign with celebrity singers.
• Next your Company launched Vi Games, in partnership with Nazara Digital, a casual gaming portal with 1000+ games including exclusive titles from Disney & Pixar. We also organized, Vi Play Along - a gaming tournament of sorts during IPL to meaningfully engage with cricket lovers.
• Your Company also launched Jobs & education proposition on the Vi app, in line with our brand philosophy of enabling our customers to thrive, by partnering with 3 marquee start-ups - Apna (now a unicorn), Enguru and Pariksha. These propositions are specifically targeted at Bharat Youth with the aim of enabling them to have an equal opportunity of access to services like finding jobs & professional networking, learning to speak English and prepare of government exams.
• India is a cricket loving nation and IPL gives a great opportunity to connect with customers and therefore the brand co-sponsored IPL on the Star sports broadcast network. To engage with the users, increase usage of the website and app, a digital campaign "Vi Fan of the Match" was launched. This campaign led to Vi becoming the buzziest brand and generating strong engagement amongst the users.
• In line with your Companys strategy of accelerating our unlimited base & 4G adoption through attractive content propositions, your Company continued to promote the Hotstar pack for prepaid users during IPL and was promoted on digital & offline.
• With the completion of a year since the launch of til, your Company celebrated the 1st anniversary as ‘Vi day to engage with the customers and retailers by delighting them with gifts. The campaign was done on ground as well as on digital.
• Through the year, Vi engaged with its users on social media via various topical campaigns around events such as Friendship Day, Diwali (#LookUp), Childrens Day, Christmas and Holi etc. Some of these were also extended to Vi Retail stores. All these helped in driving positive sentiments and buzz for the brand keeping it on top of the mind of the users and also build a stronger brand affinity.
• Your Company also commissioned a state-of-the-art Consumer & Marketing Analytics Platform - Indias 1st Big Data AI/ML & Advanced Cloud Analytics Platform among Telcos, which now gives us the capability to compute and process at scale apart from the ability to also access open source knowledge banks. This essentially means that going forward we are increasingly going to entrust the task of defining the next best action to machines.
Big Data, Advanced Analytics (Artificial Intelligence & Data Science) and Business Intelligence Edge
• Vi launched Indias 1st Big Data AI/ML Cloud Advanced Analytics Platform over AWS Cloud enabling smarter and faster Marketing interventions & plan recommendation generated by our Data Science & AI/ML based predictive & prescriptive models especially for UL Recruitment, UL Renewals, Churn Reduction and Digital Adoption/ Engagement and is indeed a step taken forward in our journey of transition from Telco-Techco.
• Our Artificial Intelligence & Data Science driven Big Data Analytics platform brings in Massive Parallel Processing & Compute Capability enabling faster GTM along with Speed, Scale capability across multiple AI/ML Models to run on Pan-India subscriber base at once.
• Today our Big Data Analytics Platform enables enhanced Customer Acquisition, Engagement, Retention, Digital/ Vi App Adoption/Engagement, Churn Reduction, Upsell/ Cross-Sell, Data Monetization, Text/Social Media/ Sentiment Analytics and accelerates migration of 2G/3G subscribers to 4G as part of our both ARPU & market share growth strategy.
• GTM time for AI/ML Models execution reduced from monthly to weekly frequency and now has capability to perform near Real-time Predictive & Prescriptive Analytics at scale. This also enhances our capability to apply Deep Learning Algorithms over large volume of Data concurrently instead of just experimenting with conventional Ensemble Machine Learning Algorithms thereby enabling better and scalable campaign performance.
• The deployed Big Data Analytics Platform over AWS Cloud has the most cost effective architecture that leverages both Data Lake & AWS Cloud storage & compute components optimally to keep the cost as low as possible. CAPEX reduced almost to Zero with OPEX flexible and elastic to incorporate additional business impacting AI/ML Models that have high Business impact/value.
Our Core Business Intelligence team completed one of the worlds largest Telco Data lake integration enabling quality master data management over Hadoop Data lake Ecosystem along with massive cost reduction enabling sunset of high cost licensed data warehousing tools Netezza & DB2. Our Data Lake supports almost all the functions with data, analytics & decision support.
Partnerships & Alliances
• Vi Business has expanded its range of digital propositions for small and medium businesses, along with the best of partner offerings. In partnership with Google Cloud India, Vi Business Plus, corporate postpaid mobility proposition offers Google Workspace solutions for SMEs and start-ups in order to help them strike the right balance between business objectives and employee flexibility. Vi Business is the first & only telecom company in India to offer Managed SIP service, with high security, resilience, customization, flexibility and best in class features in business communication services for businesses. The digital propositions such as Cloud Firewall and Managed Security Services help businesses adopt digital in a safe and secure manner, foster remote working while ensuring workforce safety and promote employee collaboration.
• Vi Business is creating a multi cloud marketplace through its own assets and strategic partnerships in order to accelerate digital transformations for enterprises.
• With its focus on empowering businesses to grow and reinvent in a dynamic digital ecosystem, we are working with partners and customers to build Private LTE solutions to drive Industry 4.0.
• Integrated IoT Solutions
One of the strategic focus areas for your Company has been to strengthen its market leadership in IoT and other emerging technology businesses. Vi Business, the enterprise arm of your Company, had hence last year strengthened its loT portfolio with the launch of Integrated IoT solutions for enterprises. With this industry first initiative, VIL has become the only telecom company in India to offer a secure end-to-end IoT solution offering that comprises connectivity, hardware, network, application, analytics, security and support. The offering is designed to simplify and accelerate the digital transformation journey for enterprises.
In this one year, Vi Business has successfully implemented Smart Mobility, Smart Infrastructure and Smart Utility I IoT solutions in leading companies across FMCG, Manufacturing, Automotive and infrastructure sectors. In Smart Mobility, the solutions are enabling a leading FMCG company to manage sales & fleet productivity of its foods product. Our Smart Infrastructure solution is enabling a leading denim and apparel manufacturer reinvent and build smart factory with the help of autonomous mobile robots solution deployed in their warehouse; This has resulted in an increased textile production capacity & productivity, removing laborious process of transporting textile materials and thus reduce their damages.
Vi Business also enabled VILs own Health, Safety and Wellness (HSW) team by delivering Smart Fleet Management solution which is ensuring better workplace environment for employees, women safety and stress free commute to employees.
Vi Business has been a dominant IoT provider to connected vehicle industry, and has further extended its leadership in automotive, transportation and logistics sectors with Smart Mobility solution. Our solutions are powering several Electric Vehicle (EV) OEMs and Last-mile delivery companies in the EV ecosystem, enabling business critical use cases such as vehicle tracking, battery monitoring, and EV charging station management.
There are similar several other industries which are impacted through our successful Integrated IoT solutions deployments.
• IoT Self-Scan: Framework for IoT Maturity
Highlighting the potential of IoT adoption in manufacturing, Vi Business also launched an IoT Insights report "Vi IoT Self Scan: Framework for accessing IoT maturity" basis its key learnings of working closely with the manufacturing companies. According to the report,
manufacturing companies recognize the business need to build a connected factory ecosystem. Most companies wish to automate their plant operations with IoT in the next few years. IoT Self Scan Report identifies other reasons like production monitoring, planning and scheduling, quality and compliance and process optimization as triggers for manufacturing companies to adopt IoT.
• Vi Business continues to support enterprises, SMEs and COVID-19 vaccine ecosystem with our Techco solutions during the pandemic.
• Vi Business Plus, an industry leading mobility solution, enables todays mobile workforce to connect, communicate, collaborate and do a lot more with their postpaid plans. The Mobile plans are bundled with Security and location services to help enterprises and businesses balance the corporate and individual needs.
• Vi Business has launched Managed Security Services, in partnership with Fortinet, to serve growing security needs of enterprises as they embrace digital ways of operations.
Awards and Recognitions
Some key awards and recognitions received by your Company during the period are:
• Vi was awarded the prestigious ET Telecom Awards 2022 for:
- Best Customer Service
- Social Cause Based Initiative for Vi CSRs SmartAgri program
• Vi Business won multiple recognition at the CIO Choice Awards 2022 under the following categories:
- Enterprise Mobility Vendor Category - Vis Managed Mobility services
- Hardware, Network & Storage Vendor Category - Vis Internet of Things (IoT) solutions
- Telecom Services Vendor Category - Best Telecom Carrier
- Mobility Vendor Category - SIP trunk in Enterprise
• Vi Business was awarded the Frost & Sullivan Award 2022 for:
- Best Practices under Indian Cellular IoT Connectivity Service Provider category
- Best Practices Technology Innovation Leadership Award for Indian Session Initiation Protocol (SIP) Trunking Technology
• Vi won the Aegis Graham Bell Award 2022 for Innovation in Supply Chain
• Vi won Corporate Excellence Awards 2022 for ‘Most Active Participation across All Domains and bagged Gold for Industry 4.0 & Analytics category for intelligent transport & contract management
• Vi was awarded for Excellence in Pandemic Response by Fintech India Innovation at Fintech India Expo 2022
• Vi was ranked amongst the Top 45 companies in Businessworld Indias Most Sustainable Companies Listing 2022
• Vi was awarded the Ookla Speed Test Award for being the Fastest Mobile Network for the quarters Q1-Q2 2021
• Vi won the Voice & Data Excellence Awards 2021 in the following categories:
- Security: Privacy by Design Framework
- Innovation: Transferable Best Practises Model
- IoT / AI: Policy Compliance Portal
- CSR: Health, Safety & Wellness Training in Logistic Areas
• Vi Business was recognized as the Managed Mobility Solution Provider of the year at Quantic Business Medias BFSI Excellence Awards 2021
• Vi won the Apex Award 2021 in the Virtual Communication category for Education & Training
• Vi won two awards at the DSCI Excellence Awards 2021. These are:
- Best Security Operations Centre of 2021
- Best Security Leader of 2021
• Vodafone Idea Foundations Smart Agri program was awarded the ‘Most Innovative Best Practice under ‘Innovations in CSR category at the CII DX Awards 2021
• Vi was also recognized at the CII DX Awards 2021 for Innovative Best Practices for Digital Transformation under:
- Innovations in Supply Chain & Logistics - Vis Neo Digital Acquisition
- Innovation in Customer Experience - Vis Neo Digital Acquisition
- Innovation in Digital Distribution - UPI Auto Pay enablement for Trade Apps
- Innovation in Customer Experience - Vi App
• Vi was awarded Bronze for Best Digital Customer Service Experience through VIC Chatbot at the International Customer Service Awards 2021
• Vi won a Bronze at the International Business Awards 2021 (Stevie Awards) for providing exemplary customer experience
• Vi Corporate Communication team was ranked 10th in the Top 30 Corporate Communications Teams in India for 2021 by Reputation Today
• Vodafone Idea Foundation was awarded by the British Business Group for Excellence in CSR category for its SmartAgri initiative
• Vodafone Idea Foundations Jigyasa program won the Rotary CSR Awards 2021 for excellence in basic education & literacy
Subsidiaries and Joint Ventures
As on March 31, 2022, your Company has ten subsidiary companies, one joint venture company and one associate company, details whereof are given below:
1. Vodafone Idea Manpower Services Limited (VIMSL)
VIMSL is engaged in the business of providing manpower services to the Company. During the year under review, the total income stood at Rs 684 Mn compared to Rs 702 Mn in the previous year.
2. Vodafone M-pesa Limited (VMPL)
VMPL was in the business of Prepaid Payment Instruments (PPI) and Business Correspondence and provided customers with a mobile wallet and money transfer services in the form of M-pesa. VMPL has ceased all operations and surrendered its Prepaid Payments Instruments Licence issued by the RBI under the Payment and Settlement System Act, 2007 with effect from September 30, 2019 as per the guidance and approval of RBI - Department of Payment and Settlement System (DPSS) and also terminated its Business Correspondence Agreement with ICICI Bank with effect from July 31, 2019.
During the year under review, as per the directives issued by Reserve Bank of India (RBI), Customers were only allowed to withdraw / redeem their existing balances. During the year, VMPL has total income of Rs 12 Mn as compared to Rs 27 Mn in the previous year.
3. Vodafone Idea Business Services Limited (VIBSL)
VIBSL is an outsourcing hub for backend IT support, data centre operations and hosting services to the Company and its subsidiaries. It also has an OSP business. During the year under review, the total income stood at Rs 1,256 Mn as compared to Rs 1,609 Mn in the previous year.
4. Vodafone Idea Communication Systems Limited (VICSL)
VICSL is engaged in the business of trading of Mobile handsets, data card and related accessories and services. During the year under review, the total income stood at Rs 548 Mn compared to Rs 329 Mn in the previous year.
On August 11, 2021, the Board of Directors of VICSL approved the scheme of amalgamation under section 230 to 232 of the Companies Act, 2013 between its wholly owned subsidiary Connect (India) Mobile Technologies Private Limited (CIMTPL) and VICSL for transfer of assets and liabilities of the CIMTPL to VICSL. The scheme has been filed with the NCLT on March 29, 2022. The transaction has not been consummated till March 31, 2022.
5. Connect (India) Mobile Technologies Private Limited (CIMTPL)
CIMTPL is a wholly owned subsidiary of VICSL. During the year under review, the total income stood at Rs 6 Mn compared to Rs 7 Mn in the previous year.
On August 11, 2021, the Board of Directors of the CIMTPL approved the scheme of amalgamation under section 230 to 232 of the Companies Act, 2013 between its immediate holding company Vodafone Idea Communication Systems Limited (VICSL) and CIMTPL for transfer of assets and liabilities of CIMTPL to VICSL. The scheme has been filed with the NCLT on March 29, 2022. The transaction has not been consummated till March 31, 2022.
6. Vodafone Idea Telecom Infrastructure Limited (VITIL)
VITIL is engaged in renting out passive infrastructure to telecommunication service providers for hosting their active equipment on existing fibre portfolio of ~168,000 kms. During the year under review, the total income stood at Rs 8,142 Mn compared to Rs 6,091 Mn in previous year.
7. Vodafone Idea Shared Services Limited (VISSL)
VISSL is an outsourcing hub for Finance & Accounts, Human Resources, Supply Chain Management, Credit & Collection Support, Customer Support and catering to the Information Technology (IT) needs for data consolidation, back end IT support for the Company and its subsidiaries. During the year under review, the total income stood at Rs 1,401 Mn compared to Rs 1,426 Mn in the previous year.
8. Vodafone Idea Technology Solutions Limited (VITSL)
VITSL is engaged in providing Technology, Software, Hardware, Value Added Services (VAS), Application Software, Contents and related products and services that facilitate and develop access to IT enabled VAS products and services whether on single or multiple platform(s) or operating system(s). VITSL is also engaged in the business of providing Data Centre related services and IT Solutions (including E-SIMs) to its customers. During the year under review, the total income stood at Rs 79 Mn compared to Rs 57 Mn in the previous year.
9. You Broadband India Limited (YBIL)
YBIL is engaged in providing high speed broadband internet access through cable network, high bandwidth internet broadband services to enterprise segment, infrastructure support to licensed telecommunication service providers. During the year under review, the total income stood at Rs 1,568 Mn compared to Rs 1,849 Mn in the previous year.
10. Vodafone Foundation (VF)
VF is a section 8 Company as per Companies Act 2013. Pursuant to the enactment of Companies Act, 2013 and Section 135 of the Companies Act, 2013, VF is an implementing agency and carries out Corporate Social Responsibility (‘CSR) activities for the Company, its subsidiaries, associate and joint venture, promoter group companies in line with the Schedule VII of the Companies Act, 2013. VF primarily focuses on CSR activities that includes promoting and development of (a) education, (b) financial literacy, (c) empowerment of women, (d) healthcare, (e) environment, (f) eradication of poverty, (g) improving socio-economic condition of farmers.
Joint Venture Company Firefly Networks Limited
Firefly Networks Limited (‘FireFly) is a joint venture with Bharti Airtel Limited, with each partner having equal (50% each) shareholding. The main objective of Firefly is to conduct the business of site acquisition, installation, commissioning, operations and maintenance of Infrastructures at the Hotspots to enable telecommunication and internet service providers, to offer customers Wi-Fi access across the territory. Revenue from operations for the year under review was Rs 163 Mn as compared to previous years Rs 153 Mn. The Board of Directors have resolved to sell the equity held in the said joint venture, subject to all necessary approvals.
Aditya Birla Idea Payments Bank Limited (ABIPBL),
an associate of the Company had decided to wind up business voluntarily on July 19, 2019, due to unanticipated developments in the business landscape of payments bank that have made the economic model unviable. ABIPBL had filed for voluntary winding up before the Bombay High Court and the Honble High Court vide its order dated September 18, 2019, approved voluntary winding up of ABIPBL. ABIPBL is in process of winding-up.
In accordance with the provisions contained in section 136(1) of the Companies Act, 2013 (Act), the Annual Report of the Company, containing therein its standalone and the consolidated financial statements are available on the Companys website www.myvi.in.
Further, pursuant to the said requirement, the financial statements of each of the aforesaid subsidiary companies are available on the Companys website www.myvi.in and shall be available for inspection during business hours at the Registered Office of the Company. Any member who is interested in obtaining a copy of the financial statements may write to the Company Secretary at the Registered Office of the Company.
In terms of provisions contained in Section 129(3) of the Act, read with Rule 5 of the Companies (Accounts) Rules, 2014, a report on the performance and financial position of each of the subsidiaries and joint venture companies in Form AOC-1 is provided as ‘Annexure A to this report.
Consolidated Financial Statements
In accordance with the provisions of Section 129(3) of the Companies Act, 2013 and Regulation 34 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Consolidated Financial Statements forms part of this Annual Report and shall also be laid before the shareholders in the ensuing Annual General Meeting of the Company. The Consolidated Financial Statements have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under section 133 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014.
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 Companys commitment to deliver sustainable value, this framework aims to provide an integrated and organized approach for evaluating and managing risks.
A detailed exercise is carried out to identify, evaluate, manage and monitor the risks. As required the Committee/Board meets to review the risks and steps to be taken to control and mitigate the same.
Detailed discussion on Risks forms part of Management Discussion and Analysis Report which forms part of this Annual Report under section ‘Opportunities, Risks, Concerns and Threats.
Employee Stock Option Schemes
Your Company values its employees and is committed to adopt the best HR practices for rewarding them suitably. In this direction your Company had implemented the Employee Stock Option Scheme, 2006 (ESOS-2006) and Employee Stock Option Scheme, 2013 (ESOS-2013) with an objective of enabling the Company to attract and retain talented human resources by offering them the opportunity to acquire a continuing equity interest in the Company and made grants to eligible employees under ESOS-2006 and ESOS-2013 from time to time.
The Board of your Company has also approved broad parameters for implementing a new Employee Stock Option Scheme - 2018 (ESOS-2018), which has also been approved by the members at the Annual General Meeting held on December 22, 2018. The said Scheme is in the process of being implemented. Further, details of plans also form part of Notes to Financial Statements.
In terms of the provisions of the SEBI (Share Based Employee Benefits) Regulations, 2014, the details of the Stock Options and Restricted Stock Units granted under the above mentioned Schemes are available on your Companys website www.myvi.in.
A certificate from M/s. Umesh Ved & Associates, Company Secretaries, Secretarial Auditors, certifying that the Companys Stock Option Plans are being implemented in accordance with the ESOP Regulations would be placed at the Annual General Meeting for inspection by Members.
Internal Financial Control Systems and its adequacy
Your Company has in place adequate internal control systems commensurate with the size of its operations. The Company has in place adequate controls, procedures and policies, ensuring orderly and efficient conduct of its business, including adherence to the Companys 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 Companys internal financial controls were adequate and effective during the Financial Year 2021-22.
Human Resource Management
Your Companys 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.
Your Company is committed to maintain the highest standards of Corporate Governance. Your Company continues to be compliant with the requirements of Corporate Governance as enshrined in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations). A Report on Corporate Governance as stipulated under the Listing Regulations forms part of the Annual Report. A certificate from the Statutory Auditors of the Company, confirming compliance with the conditions of Corporate Governance, as stipulated in the Listing Regulations forms part of the Annual Report.
Business Responsibility Report
As stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Business Responsibility Report, describing the initiatives taken by the Company from environmental, social and governance perspective is presented in a separate section forming part of the Annual Report.
Corporate Social Responsibility
In terms of the provisions of section 135 of the Companies Act, read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors of your Company has constituted a Corporate Social Responsibility ("CSR") Committee. The composition and terms of reference of the CSR Committee is provided in the Corporate Governance Report which forms part of this report.
The Company has revised the policy on Corporate Social Responsibility (‘CSR) to include changes based on Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 and the revised policy was recommended by the CSR Committee and approved by the Board and the same can be accessed on the Companys website at www.myvi.in.
In view of the losses incurred by the Company during the last three financial years, the Company has no obligation for CSR spend during the Financial Year 2021-22.
However, believing in giving and caring for the underprivileged and inclusion of all, as well as the dispensation of Ministry of Corporate Affairs, your Company spent Rs 229 Mn towards CSR activities in Financial Year 2021-22. In view of the continued pandemic, your Company had sought a one- quarter moratorium on the Ministrys dispensation to spend the unspent CSR obligation for Financial Years 2015-16 and 2016-17 in eight equal quarters beginning from April-June of 2019. MCA had granted your Company an extension of one quarter in disbursement and reporting and the spend has been completed by the Company. Additionally, MCA has directed the Company to spend the unspent CSR obligation of Rs 228 Mn for Financial Year 2017-18 in 8 equal instalments over 8 quarters, commencing from April 2021. Accordingly, the Board of the Company had passed a resolution to spend the unspent CSR obligation for Financial Year 2017-18 in eight equal quarters beginning from April-June 2021. During Financial Year 2021-22 Company has spent 4 Quarters obligation of Rs 114 Mn.
The Companys CSR initiatives positively impacted the lives of around 44 Lakh people across 23 States through multiple initiatives undertaken in the domains of (a) education, (b) financial literacy, (c) empowerment of women, (d) agriculture & livelihood, (e) eradication of poverty. Your Company during the second year of the pandemic period kept the project activities on-going using the Technology platforms that have been developed during the course of the project and provided support to COVID-19 affected families by distributing dry ration kits, scholarship to students of affected families. Your Company also provided facilitation support in getting 10 Lakh people vaccinated.
The Companys key objective is to actively contribute to the social and economic development of the communities by leveraging technology and purposeful innovation to catalyze social prosperity, digital literacy and inclusivity. Your Company during the reporting year expanded the much appreciated Smart Agri project where loT solutions have been deployed for realtime inputs by farmers in their farm field to additional
1.09 Lakh farmers across Uttar Pradesh and Rajasthan and also continued support to 55,000 farmers of previous year. Your Company acknowledging the need of hour provided scholarship to 3,000 students whose families were affected by the pandemic. And also to encourage the meritorious teachers your Company provided scholarship to 300 teachers.
The brief outline of the CSR policy of the Company and the initiatives undertaken by the Company on CSR activities during the year under review are set out in RsAnnexure B of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021.
Directors Responsibility Statement
The Audited Financial Statements for the year under review are in conformity with the requirements of the Companies Act, 2013 and the applicable Accounting Standards. The financial statements reflect fairly the form and substance of transactions carried out during the year under review and reasonably present your Companys financial condition and results of operations. Your Directors, to the best of their knowledge and belief, confirm that:
a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures, if any;
b) the accounting policies selected have been applied consistently and judgements and estimates are made that are reasonable and prudent, so as to give a true and fair view of the state of affairs of your Company as at the end of the financial year and of the financial performance and cash flows of the Company for that period;
c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;
d) the annual accounts were prepared on a going concern basis;
e) your Company had laid down internal financial controls and that such internal financial controls are adequate and were operating effectively; and
f) your Company has devised a proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Directors and Key Managerial Personnel
During the year under review, Mr. Kumar Mangalam Birla, NonExecutive Director and Chairman, who has been heading the Board since June 2006, stepped down from the Board of the Company with effect from August 4, 2021. The Board has elevated Mr. Himanshu Kapania, Non-Executive Director as Chairman with effect from August 4, 2021. The Board places on record its sincere appreciation for the outstanding efforts, contribution, support and above all the vision provided by Mr. Kumar Mangalam Birla, to the Company all along the journey.
Further, Mr. D. Bhattacharya (representing Aditya Birla Group) resigned from the Board of the Company with effect from March 2, 2022. The Board places on record its sincere appreciation for the valuable guidance and contribution made by Mr. D. Bhattacharya in the deliberations of the Board during his tenure as Director.
The Board based on the recommendation of Nomination and Remuneration Committee, had appointed Mr. Sushil Agarwal (representing Aditya Birla Group), as an Additional Director (Non-Executive and Non-Independent) with effect from August 4, 2021 and Mr. K.K. Maheshwari (representing Aditya Birla Group) as an Additional Director (Non-Executive and Non-Independent) with effect from March 3, 2022. The Company had received requisite notice from a member under section 160 of the Companies Act, 2013, proposing the appointment of Mr. Sushil Agarwal and Mr. K.K. Maheshwari as a Director at the General Meeting. The members of the Company confirmed the appointment of Mr. Sushil Agarwal at the Annual General Meeting held on September 29, 2021 and that of Mr. K.K. Maheshwari at the Extra-ordinary General Meeting held on March 26, 2022.
In accordance with the provisions of the Companies Act, 2013, Mr. Sunil Sood and Mr. Diego Massidda 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.
Mr. Arun Adhikari (DIN: 00591057) and Mr. Ashwani Windlass (DIN: 00042686) had completed their term of 3 years on August 30, 2021. Ms. Neena Gupta (DIN: 02530640) had also completed her term of 3 years on September 16, 2021. Further, Mr. Krishnan Ramachandran (DIN: 00193357) and Mr. Suresh Vaswani (DIN: 02176528) had also completed their term of 3 years on December 26, 2021 and February 7, 2022 respectively.
Based on the recommendations of the Nomination and Remuneration Committee and being satisfied on the performance evaluation, considering the background and experience, the Board had subject to the approval of the shareholders, approved the re-appointment of above Independent Directors for a further term of 3 years viz. Mr. Arun Adhikari commencing from August 31, 2021; Mr. Ashwani Windlass commencing from August 31, 2021; Ms. Neena Gupta commencing from September 17, 2021; Mr. Krishnan Ramachandran commencing from December 27, 2021 and Mr. Suresh Vaswani commencing from February 8, 2022. These re-appointments have also been confirmed by the Shareholders by way of special resolutions at the Annual General Meeting held on September 29, 2021 and Extra-ordinary General Meeting held on March 26, 2022.
In addition to the above, Mr. Arun Thiagarajan shall cease to be an Independent Director with effect from August 26, 2022 upon completion of his second term as an Independent Director.
All Independent Directors have submitted their declaration of independence, pursuant to the provisions of Section 149(7) of the Act and Regulation 25(8) of the Listing Regulations, stating that they meet the criteria of independence as provided in Section 149(6) of the Act and Regulation 16(1) (b) of the Listing Regulations. The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience, expertise and hold highest standards of integrity.
All Independent Directors of your Company have registered their name in the data bank maintained with the Indian Institute of Corporate Affairs, in terms of the provisions of the Companies (Appointment and Qualification of Directors) Rules, 2014.
A brief profile of the directors proposed to be appointed/ re-appointed are annexed to the Notice convening Annual General Meeting forming part of this Annual Report.
Pursuant to the provisions of Section 203 of the Companies Act, 2013, the Key Managerial Personnel of the Company are Mr. Ravinder Takkar, Managing Director & Chief Executive Officer, Mr. Akshaya Moondra, Chief Financial Officer and Mr. Pankaj Kapdeo, Company Secretary.
Board Evaluation and Familiarization Programme
The evaluation framework for assessing the performance of Directors of your Company comprises of contributions at the meetings, strategic perspectives or inputs regarding the growth or performance of your Company, among others. The evaluation parameters and the process have been explained in the Corporate Governance Report forming part of the Annual Report of the Company. The Nomination & Remuneration Committee have laid down the manner in which formal evaluation of the performance of the Board, its Committee and individual Directors has to be made. The Board has carried out the annual performance evaluation of its own performance, Board Committees and Individual Directors pursuant to the provisions of the Companies Act, 2013 and Regulation 17(10) of Listing Regulations.
The details of programme for familiarization of Independent Directors of your Company is available on your Companys website www.myvi.in.
The Company has a Remuneration Policy in place encompassing the appointment and remuneration philosophy of the Company. The Policy comprises of the various elements and terms of appointment. The Policy consists of various aspects in connection to Remuneration Program applicable for Directors, Key Managerial Personnel and Senior Management of the Company, Performance Goal Setting, Benefit & Perquisites, Compliance and other such elements.
The policy was formulated by the Nomination and Remuneration Committee in terms of Section 178(3) of the Companies Act 2013 and it also includes the criteria for determining qualifications, positive attributes, independence of a Director and other matters. A copy of the said policy is available on the website of the Company www.myvi.in.
Dividend Distribution Policy
The Board has in compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, formulated Dividend Distribution Policy. This policy will provide clarity to the stakeholders on the dividend distribution framework of the Company. The Policy sets out various internal and external factors which shall be considered by the Board in determining the dividend payout. The dividend distribution policy is attached as Annexure G to this report and is also available on the website of the Company www.myvi.in.
During the year, thirteen meetings of the Board of Directors were held. The details of the meetings and the attendance of the Directors are provided in the Corporate Governance Report. Further, maximum interval between two meetings of the Board of the Directors has not exceeded 120 days.
Your Company has in place the Committee(s) as mandated under the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. There are currently seven committees of the Board, namely:
1. Audit Committee
2. Nomination & Remuneration Committee
3. Stakeholders Relationship Committee
4. Risk Management Committee
5. Corporate Social Responsibility Committee
6. Capital Raising Committee
7. Finance Committee
Details of the Committees along with their charter, composition and meetings held during the year, are provided in the Corporate Governance Report, which forms part of this report.
Contract and Arrangements with Related Parties
All contracts/arrangements/transactions entered by the Company during the financial year with the related parties are detailed in the Note 56 of the Standalone Financial Statements were in ordinary course of business and at an arms length basis.
The related party transaction which are considered material during the year is the existing arrangement with Indus Towers Limited (Indus), which provides Passive Infrastructure Services and related operations and maintenance services to various telecom operators in India, including your Company. Pursuant to a Scheme of Amalgamation and Arrangement between Bharti Infratel Limited and Indus, which became effective from November 19, 2020, Indus has been amalgamated with Bharti Infratel Limited and the merged entity is now known as Indus Towers Limited. Indus is continuing as a related party, as the same is a Joint Venture of the Promoter Group.
Indus is currently one of the worlds 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, 2022 is provided in Form AOC-2, which is attached as Annexure C to this report.
None of the related party transactions entered into by the Company were in conflict with the Companys 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. Members 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 Companys website www.myvi.in.
Particulars of Loans, Guarantees and Investments
As your Company is engaged in the business of providing infrastructural facilities, the provisions of Section 186 of the Companies Act, 2013 relating to loans made, guarantees given or securities provided are not applicable to the Company. The details of such loans made and guarantees given are provided in the standalone financial statements. Also, Particulars of investments made by the Company are provided in the notes to standalone financial statements.
Vigil Mechanism - Speak up policy
Your Company has in place a vigil mechanism for directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of your Companys 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 Companys website www.myvi.in.
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 RsAnnexure D forming part of this report.
Particulars of Employees
Disclosures pertaining to remuneration and other details as required under section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as Annexure E to this report.
In accordance with the provisions of Section 197(12) of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees drawing remuneration in excess of the limits set out in the aforesaid Rules, forms part of this Report. However, in line with the provisions of Section 136(1) of the Act, the Report and Accounts as set out therein, are being sent to all Members of your Company excluding the aforesaid information about the employees. Any Member, who is interested in obtaining these particulars about employees, may write to the Company Secretary at the email@example.com.
The members of the Company had at the 22nd 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 years till the conclusion of 27th Annual General Meeting of the Company to be held in the calendar year 2022. Consequently, the term of the existing Statutory Auditors shall conclude at the ensuing Annual General Meeting.
Pursuant to Section 139(2) of the Act, the Company can appoint auditors firm for a second term of five consecutive years. M/s. S.R. Batliboi & Associates LLP, Chartered Accountants, are eligible for re-appointment and have consented to the said re-appointment.
The Board of Directors based on the recommendation of the Audit Committee approved the re-appointment of M/s. S.R. Batliboi & Associates LLP, Chartered Accountants, as the Statutory Auditors of the Company for second term of five consecutive years, i.e. to hold office from the conclusion of the ensuing 27th Annual General Meeting till the conclusion of the 32nd Annual General Meeting of the Company, subject to approval of the Members at the ensuing Annual General Meeting.
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 Companys financial condition as at March 31, 2022 and its debt obligations due for the next 12 months, which has impacted the Companys ability to generate the cash flow that it needs to settle/refinance its liabilities as they fall due, which along with its financial condition is resulting in material uncertainty that casts significant doubt on the Companys ability to make the payments mentioned therein and continue as a going concern. The report does not contain any qualification, disclaimer or adverse remarks.
Note 4 to the standalone financial statements covers the Material Uncertainty Related to Going Concern issue and the comments under para xix of Annexure 1 to the Independent Auditors Report, the clarification of which is self-explanatory. The Board believes that the Companys ability to continue as a going concern is now dependent on raising additional funds as required, successful negotiations with lenders for continued support and generation of cash flow from operations that it needs to settle its liabilities as they fall due. As of date, the Company has met all its debt obligations. Pending the outcome of the above matters, these financial statement have been prepared on a going concern basis.
Further, as regards the comments under para i(a)(A) and i(b) of Annexure 1 to the Independent Auditors Report regarding updation of situation and quantitative details relating to certain property, plant and equipment being relocated and physical verification of property, plant and equipment, it is to be noted that the Company has undertaken a large scale network integration activity as part of the network roadmap pursuant to the merger of erstwhile Vodafone with the Company. This has led to a delay in updation and the verification exercise. Further, this has been impacted due to COVID-19 vis-a-vis the verification programme scheduled by the Company in the usual circumstances. As of now, the Company is in the process of updating the situation and
quantitative details of such property, plant and equipment and the verification exercise in a manner so as to ensure that the entire property, plant and equipment is verified in the block of three years in line with the physical verification programme of the Company.
Also, as regards the comments under para ix(d) of Annexure 1 to the Independent Auditors Report regarding utilization of funds raised on short term basis (in form of trade payable and other liability) for long term purposes (representing acquisition of property, plant and equipment and to fund the losses of the Company), it is to be noted that the funds have been utilized in line with the purpose for which it was raised.
Reporting of Frauds by Auditors
During the year under review, neither the Statutory Auditors nor the Secretarial Auditors have reported to the Audit Committee under Section 143(12) of the Act, any instances of fraud committed against the Company by its officers and employees, the details of which would need to be mentioned in Boards Report.
Cost Audit and Cost Auditors
The Company is required to make and maintain cost records pursuant to Section 148 of the Companies Act 2013.
In terms of the provisions of Section 148 of the Companies Act, 2013, read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of Directors of your Company on the recommendation of the Audit Committee appointed M/s. Sanjay Gupta & Associates, Cost Accountants, as the Cost Auditors, to conduct the Cost Audit of your Company for the Financial Year ended March 31, 2022. The Cost Auditors will submit their report for Financial Year 2021- 22 within the timeframe prescribed under the Companies Act, 2013 and rules made thereunder. The Cost Audit report for the Financial Year 2020-21 did not contain any qualification, reservation, disclaimer or adverse remark.
The Board, on the recommendation of Audit Committee, has re-appointed M/s. Sanjay Gupta & Associates, Cost Accountants, as Cost Auditors of the Company for Financial Year 2022-23.
In accordance with the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, since the remuneration payable to the Cost Auditors has to be ratified by the shareholders, the Board recommends the same for approval by shareholders at the ensuing Annual General Meeting.
In terms of the provision of the Section 204 of the Act read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed M/s. Umesh Ved & Associates, Company Secretaries, Ahmedabad, as the Secretarial Auditor for conducting the Secretarial Audit of your Company for the Financial Year ended March 31, 2022. The report of the Secretarial Auditor is annexed to this report as Annexure F. The contents of the Secretarial Audit Report are self-explanatory and do not contain any qualification, reservation or adverse remark.
As per Regulation 24A of the Listing Regulations, material unlisted subsidiaries of a listed entity incorporated in India is required to annex a Secretarial Audit Report issued by a Company Secretary in practice. Due to networth of the Company being negative, You Broadband India Limited, Connect (India) Mobile Technologies Private Limited, Vodafone Idea Communication Systems Limited, Vodafone Idea Shared Services Limited and Vodafone Idea Manpower Services Limited were material subsidiaries of the Company. In compliance with the requirement, the Secretarial Audit Report of material subsidiaries is attached as Annexure F-1 to F-5 to the Annual Report.
Your Company is in compliance with the Secretarial Standards specified by the Institute of Company Secretaries of India.
As provided under Section 92(3) and 134(3)(a) of the Act, read with Rule 12 of Chapter VII Rules of the Companies (Management and Administration) Amendment Rules, 2020, Annual Return in Form MGT-7 for Financial Year 2021-22 is uploaded on the website of the Company and can be accessed at www.myvi.in.
Telecom sector provides connectivity to individuals & communities that fosters empowerment and inclusion. The near ubiquitous reach of the mobile makes it the most relevant channel for last mile outreach. The mobile phone has fast become the window to a world of information, better education, livelihood, employment, health, inputs on agricultural practices and governance.
Being a telecom company Vodafone Ideas corporate responsibility agenda is directed towards addressing some of Indias critical social and developmental challenges in both rural and urban communities using the inherent potential and reach of the mobile technology and platform and reducing the environmental impact with increasing preference and usage of digital. The technology platforms set up during the years under CSR initiatives helped in reaching out to the people including students during the continued year of COVID-19 pandemic.
Both promoter groups of the Company too are fully committed towards building sustainable businesses through a clearly crafted vision supported by relevant policies and frameworks.
At VIL, we understand the evolving dynamism in our operating environment. We try to pre-empt uncertainty by looking at alternate scenarios that allow us to understand the external risks to our business. We prioritize adaptability, agility and foresight to ensure that our business models, operations, acquisitions and projects are not locked into unsustainable paths. This was reflected during the pandemic years when all our business activities continued and were managed very efficiently and we successfully provided all necessary support to our customers.
We are fully committed towards creating value for all stakeholders from customers to partners, to employees, to communities and to the larger planet. We achieve this through our passion for customer satisfaction, supporting our partners as they build capacity, engaging with and valuing our employees in an inclusive agenda to instill pride in the work we do and develop sustainable business practices. This is being done with our responsible support towards digital inclusion as a national goal and in continuing with our practices of community development in areas like education & skilling, women empowerment and agriculture.
We will continue to be future-ready by staying ahead of the curve and being charged up to thrive in a sustainable tomorrow by building sustainable businesses and propositions. The Company has a robust Sustainability Framework of Policies, Technical Standards, and Guidance Notes based not just on the local laws but also on leading International standards.
We are in the process of designing long term risk and Enterprise Risk Management framework for business sustainability. We have also identified associated risks linked to external factors for telecom business.
Disclosure under Sexual Harassment of Women at Workplace (Prevention, Prohibition And Redressal) Act, 2013
The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set-up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. During the Financial Year 2021-22, 5 complaints pertaining to sexual harassment were received and as on March 31, 2022, three have been resolved and remaining two complaints are under investigation.
- 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 Boards Report.
- Your Company has not issued any shares with differential voting rights.
- There was no revision in the financial statements.
- Your Company has not issued any sweat equity shares.
- There has been no change in the nature of business of your Company.
- There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Companys operations, other than the order passed by the Honble Supreme Court on the AGR matter in October, 2019, which has been disclosed in the significant developments section of the Boards report.
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|
|Himanshu Kapania||Ravinder Takkar|
|Chairman||Managing Director &|
|(DIN : 03387441)||Chief Executive Officer (DIN : 01719511)|
|Place : Mumbai|
|Date : May 10, 2022|