Vodafone Idea Ltd 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 wireline) 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 liberalised 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.

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 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 financialhighlights 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 Rs. 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 920 286 869 318
Income
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 Amortisation 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 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 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 yourCompanytogain progress on all the 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 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 fiberassets will provide sufficient financial flexibility.

Your Company has made significant 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 instalments 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. 115,033 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 change by Registrar of Companies on August 31, 2018.

Rights Issue of Rs. 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 rationalising 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, Ahmedabad 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 Authorisation 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 push to the 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 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 forwomen.Abouquetoffeaturesincluding Sponsor of Fans ". This campaign led to 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 smartphones 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 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 Bollywood 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, wearables 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 rationalising 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 LawTribunal Bench at Ahmedabad.

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 Ahmedabad.

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 Ahmedabad 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

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 and material orders passed by 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.developments section of the Board’s report. 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 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 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

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)