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Idea Cellular Ltd.

BSE: 532822 Sector: Telecom
NSE: IDEA ISIN Code: INE669E01016
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OPEN 79.40
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VOLUME 848687
52-Week high 123.75
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P/E
Mkt Cap.(Rs cr) 28,206
Buy Price 78.20
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Sell Price 0.00
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OPEN 79.40
CLOSE 80.30
VOLUME 848687
52-Week high 123.75
52-Week low 66.00
P/E
Mkt Cap.(Rs cr) 28,206
Buy Price 78.20
Buy Qty 83.00
Sell Price 0.00
Sell Qty 0.00

Idea Cellular Ltd. (IDEA) - Director Report

Company director report

Dear Shareholders

We have pleasure in presenting the Twenty Second Annual Report together with theaudited financial statements of the Company for the Financial Year ended March 31 2017.

Company Overview

Your Company is the third largest mobile telecommunications operator in the countrywith Pan India operations offering Voice Broadband Data Value Added Services (VAS)Digital Content and Mobile Banking Services. The Revenue Market Share (RMS) for yourCompany stands at 18.7% for the quarter ended December 2016. As of February 2017 thesubscriber base of your company stands at 196.1 Mn (on VLR) with subscriber market shareof 19.4%.

The GSM-based 2G services of your Company are available in all 22 service areas ofIndia covering approximately 1 billion Indians in nearly 400000 towns and villages. InOctober 2016 spectrum auction your Company has acquired 349.2 MHz of spectrum andcompleted its Pan India broadband spectrum footprint. Y our Company now owns 3G spectrumin 15 Service Areas and 4G spectrum in 20 Service Areas out of 22 Service Areas.

During the year your Company has launched 3G services in 2 additional service areas ofBihar and Rajasthan on its own spectrum taking the total count to 15 from earlier 13.However the 3G services of your Company are available in 21 Service Areas (excludingOdisha) including through intra-circle roaming arrangements with other mobiletelecommunications service providers. On 4G front your Company has rolled out 4G servicesin 9 new service areas during the year. The 4G launch in Mumbai service area is slated byend of May 2017 post which the 4G services of your Company will be available in 20Service Areas (Except Kolkata and Delhi).

Y our Company also holds licenses to offer NLD ILD and ISP services and registrationfor IP-1 services. While the NLD and ISP services mainly cater to the captive needs of theCompany the ILD and IP-1 services cater to external customers as well.

Financial Results

The financial statements of the Company have been prepared in accordance with theIndian Accounting Standards (Ind AS) notified under section 133 of the Companies Act 2013read with Companies (Accounts) Rules 2014. The financial statements for the FinancialYear ended March 31 2017 are the Company's first Ind AS compliant annual financialstatements with comparative figures for the year ended March 31 2016 also under Ind AS.The date of transition is April 1 2015. The disclosure and effects of first time adoptionof Ind AS are detailed in Note 5 of the standalone financial statements and Note 6 of theconsolidated financial statements for detailed disclosure and effects on the first timeadoption of Ind AS.

The standalone and consolidated financial highlights of your Company for the FinancialYear ended March 31 2017 are summarized as follows:

' Mn
Particulars

Standalone

Consolidated

2016-17 2015-16 2016-17 2015-16
Income from Services 352565 357725 355527 359164
Other Operating Income 222 312 231 330
Other Income 1970 1773 3069 2131
Total Revenue 354757 359810 358827 361625
Operating Expenses 251838 239091 252995 239819
EBITDA 102919 120719 105832 121806
Depreciation and Amortisation 77000 62232 78272 62561
EBIT 25919 58487 27560 59245
Interest and Finance charges 40109 17778 40411 20961
EBT (14190) 40709 (12851) 38284
Share of JV/Associates - - 4218 4217
Taxes (5879) 14246 (4636) 15220
Profit/(Loss) after Tax (8311) 26463 (3997) 27281
Other Comprehensive Income/(Loss) net of tax (32) (134) (43) (139)
Total Comprehensive Income/(Loss) (8343) 26329 (4040) 27142

Operations Review

The Indian wireless industry witnessed an unprecedented disruption in the second halfof the year on account of free voice and mobile data promotions by the new entrant. TheOctober 2016 to March 2017 period can be best described as 'Period of TelecomDiscontinuity' permanently changing mobility business parameters. Consequently therevenue KPIs and financial parameters for all mobile operators have sharply declined in H2FY17. For the first time in its history the flourishing Indian Mobility industry istrending towards an annual revenue decline of ~2% in FY17 (vs FY16).

As a result of this industry upheaval the standalone revenue of your Company droppedto an unforeseen level of Rs.354757 Mn registering the first ever annual revenue declineof 1.4%. The EBITDA fell to Rs.102919 Mn registering a decline of 14.7% over theprevious year. The Net Loss of the Company for the Financial Year March 31 2017 stood atRs.8311 Mn as compared to Net Profit of Rs.26463 Mn for the previous year.

On a consolidated basis the total revenues stood at Rs.358827 Mn a decline of 0.8%over the previous year. The EBITDA at Rs.105832 Mn reflects decrease of 13.1% as comparedto the previous year. The consolidated Net Loss stood at Rs.3997 Mn as compared to theconsolidated Net Profit of Rs.27281 Mn for the previous year.

Your Company withstood the unprecedented prolonged free services offers of the newentrant in the industry and maintained its tag of 'One among the Top Three' operators inIndia. Your Company continues to maintain and strengthen its market position both in termsof Revenue and Subscribers.

Despite the free voice and data services by new operator your Company continues tomaintain its attractiveness for subscribers. As on February 28 2017 the reportedsubscriber base of your Company was 193.3 Mn an increase of 18.6 Mn subscribersrepresenting a growth of 10.7% over last 12 month period. The VLR subscriber base of yourCompany grew by 7.5% during same period and stands at 196.1 Mn representing market shareof 19.4% as on February 28 2017. Percentage of active subscriber base to total subscriberbase for your Company stands at 101.4%. With over 198 Mn VLR subscribers in March 2017the Company opens multiple vistas for growth in Broadband Digital Content and PaymentServices etc.

As per latest published TRAI reports your Company has gained 29.3% incremental RevenueMarket Share (RMS) of the Indian mobile telecommunication service industry during ninemonths period from April 2016 to December 2016. Further your Company maintained itsleadership position in Mobile Number Portability (MNP) based on the net subscriberadditions. The trends emerging from MNP are clearly distinguishing the strong operators interms of customer preference for better quality of services and brand value. As on March31 2017 your Company has net MNP gain of 22.1 Mn subscribers with one out of every fourexisting mobile customers who ports out from their existing mobile operator preferring toshift and stay with world class Idea services.

Y our Company carried 836 billion voice minutes on its network during Financial Year2016-17 a growth of 6.4% compared to 786 billion minutes in previous year. The total datausage of 436 billion MB registered a growth of 46.5% compared to previous year.

Your Company continues to invest in the long term value creators and remains committedtowards increasing its geographical coverage as well as improve the capacity of network toaddress the growing demand of both voice and data. Over the last two financial years(2015-16 & 2016-17) your Company has expanded its telecom infrastructure by 69%adding 98882 network sites (2G+3G+4G) including nearly quadrupling its wirelessbroadband sites (3G+4G) from 30291 in March 2015 to 110054 in March 2017.

During the year your Company added a total of 50004 sites across 2G 3G and 4Ghighest ever site addition by the Company in a year. On the 2G front Company added 46532G sites expanding the 2G site count to 131486 as of March 31 2017. 2G services are nowavailable in nearly 400000 towns and villages covering around 1 billion Indiansrepresenting approximately 82% of Indian population. On 3G front your Company added19142 sites expanding the 3G site count to 69202. 3G services of your Company are nowavailable in more than 92000 towns and villages covering more than 45% of population in15 service areas where it is providing 3G services with own spectrum.

Further your Company after launch of its 4G services on December 23 2015 has rapidlyexpanded its presence and as on March 31 2017 offers 4G Services in 19 service areas onits own spectrum and is slated to introduce 4G services in 20th service area of Mumbaitelecom service area in May 2017. Idea added 26209 4G sites across these 19 serviceareas during the year taking the total 4G site count to 40852. The 4G services are nowavailable in more than 23000 towns and villages covering 23% of population in these 19service areas.

Y our Company is rapidly working in expanding its Optical Fibre Cable (OFC) backbonenetwork to support growth for broadband data services. During the year your Companyexpanded its OFC transmission network to 144600 km compared to 115500 km a year ago anexpansion of 29100 km.

Dividend

As your Company has incurred a net loss during the year your Directors have notrecommended any dividend for the year.

Changes in Share Capital

During the year under review your Company issued and allotted 4818853 Equity Sharesof Rs.10/- each fully paid-up to the OptionRSU grantees pursuant to the exercise ofStock Options/Restricted Stock Units (RSU's) by the eligible employees under the EmployeeStock 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 ofyour Company as on March 31 2017 stood at Rs.36053282310- comprising of3605328231 Equity Shares of Rs.10/- each.

Borrowings

During the year under review your Company raised Rs.70000 Mn through issuance ofNon-Convertible Debentures (NCDs) at face value of Rs.1 Mn each on private placementbasis. NCDs issued by the Company carry a coupon ranging from 7.57% to 8.12%. Further thesaid NCDs have tenure of 5 years to 7 years and all the NCDs are listed on the WDM Segmentof National Stock Exchange of India Limited.

The details of repayments/pre-payments of loans and deferred payment obligationstowards Department of Telecommunications during the year are as under:

Scheduled Repayments:

(i) Rupee Loans of Rs.5225 Mn;

(ii) External Commercial Borrowing of USD 127 Mn; and

(iii) Deferred Payment Liability amounting to Rs.16919 Mn. Pre-payments:

(i) Rupee Loans of Rs.1800 Mn; and

(ii) Deferred Payment Liability amounting to Rs.17530 Mn.

In addition to this an amount of USD 64 Mn External Commercial Borrowing was primarilyrefinanced for lowering the cost of borrowing and an amount of Rs.11100 Mn was borrowedand repaid in the form of Inter Corporate Deposit from Aditya Birla Telecom Ltd. a whollyowned subsidiary.

Capital Expenditure

Your Company continues to expand its telecommunication infrastructure on 2G 3G and 4Gtechnology and Optical Fibre Cable (OFC) transmission backbone network (own and throughIRU arrangements with other companies) along with building core subscriber and trafficcapacities as required. Your Company's telecom network now offers its GSM servicescovering over 1 billion Indians in nearly 400000 towns and villages. Further yourCompany's mobile broadband services are now available to approximately 500 million Indiansacross nearly 100000 towns and villages in 21 service areas.

During the Financial Year 2016-17 in addition to Rs.130569 Mn incurred for freshspectrum procurement the capital expenditure (including capital advances) incurred duringthe year was Rs.77653 Mn and Rs.78407 Mn at standalone and consolidated levelsrespectively.

Deposits

Your Company has not accepted any fixed deposits and as such no amount of principalor interest was outstanding as on the date of the Balance Sheet.

Credit Rating

Your Company enjoys credit rating of 'CARE AA+' for its Long Term borrowings andNon-Convertible Debentures and CARE A1+ for its short term debt program. On the outlookfront CARE has assigned the outlook of 'Credit Watch with developing implications'.Additionally Brickwork Ratings has assigned credit rating of "BWR AA+" withStable Outlook for Non-Convertible Debentures amounting to Rs.1000 crore.

Significant Developments:

Spectrum Auction - October 2016

Your Company participated in Spectrum Auction conducted by Department ofTelecommunications (DoT) in October 2016 and acquired 349.2 MHz of spectrum primarily toexpand its broadband services coverage to Pan India and increase its broadband capacity inmost of the circles including 149.2 MHz (2x74.6 MHz) spectrum in FDD technology on 1800MHz and 2100 MHz frequency bands and 200 MHz of capacity spectrum in TDD technology on2300 MHz and 2500 MHz frequency bands at an aggregate value of Rs.128 billion with lessthan 1% premium paid over the DoT reserve price. With this incremental spectrum purchaseyour Company has successfully completed its mobile broadband footprint across all 22service areas in India to be used with 3G and 4G technologies and also acquiredsubstantial capacity spectrum to meet future capacity needs for its ever growing 198 Mnquality customer base.

The circle wise spectrum acquired and total commitment is tabulated below:

Spectrum Won (in MHz)
Circle

FDD

TDD

Total

Payout (' Mn)

1800 2100 2300 2500 (FDD*2+TDD) 1800 2100 2300 2500 Total
Andhra Pradesh - - - 10.0 10.0 - - - 6800 6800
Assam 5.0 - - 10.0 20.0 2000 - - 200 2200
Bihar 5.0 5.0 - 10.0 30.0 3100 4300 - 600 8000
Gujarat 8.4 - - 10.0 26.8 19992 - - 3900 23892
Haryana 4.8 - - 10.0 19.6 2366 - - 800 3166
Himachal Pradesh 0.6 - - 10.0 11.2 96 - - 100 196
Jammu & Kashmir 5.0 - - 10.0 20.0 650 - - 100 750
Kerala - - 10.0 10.0 20.0 - - 1757 1608 3365
Madhya Pradesh 4.6 - 10.0 20.0 39.2 3818 - 820 1600 6238
Maharashtra 2.0 - 10.0 10.0 24.0 6360 - 6306 5800 18466
Mumbai - 5.0 - - 10.0 - 23050 - - 23050
North East - - - 10.0 10.0 - - - 100 100
Odisha - - - 10.0 10.0 - - - 400 400
Punjab 2.0 - - - 4.0 1540 - - - 1540
Rajasthan 5.0 5.0 - 10.0 30.0 4595 7000 - 600 12195
Uttar Pradesh (East) - 5.0 - 10.0 20.0 - 5500 - 900 6400
Uttar Pradesh (West) 7.2 - - 10.0 24.4 7222 - - 1200 8422
West Bengal 5.0 - - 10.0 20.0 2300 - - 500 2800
Total 54.6 20.0 30.0 170.0 349.2 54039 39850 8883 25208 127980

Post October 2016 spectrum auction your Company's overall spectrum holding hasexpanded to 891.2 MHz including 108 MHz on 900 MHz 413.2 MHz on 1800 MHz 160 MHz on 2100MHz 30 MHz on 2300 MHz and 170 MHz on 2500 MHz to be used for expanding coverage andcapacity for Idea on 2G 3G & 4G services using GSM HSPA and LTE technologiesrespectively. The below table provides circle-wise and band-wise spectrum holding for yourCompany.

Service Areas

Idea Spectrum Holding

FDD TDD

FDD (2x)* +TDD

GSM Broadband Carrier

900 1800 2100 Total 2300 2500 Total (2G) services 3G 4G
Maharashtra 9.0 11.0 5.0 25.0 10.0 10.0 20.0 70.0 / 2 5
Kerala 6.0 10.0 5.0 21.0 10.0 10.0 20.0 62.0 / 1 5
Madhya Pradesh 7.4 11.6 5.0 24.0 10.0 20.0 30.0 78.0 / 2 7
Uttar Pradesh (West) 5.0 9.4 5.0 19.4 10.0 10.0 48.8 / 1 4
Gujarat 5.0 10.0 5.0 20.0 10.0 10.0 50.0 / 1 4
Andhra Pradesh 5.0 6.0 5.0 16.0 10.0 10.0 42.0 / 1 3
Punjab 5.6 10.0 5.0 20.6 41.2 / 1 2
Haryana 6.0 10.8 5.0 21.8 10.0 10.0 53.6 / 1 4
8 Leadership Circle
(Sub Total) 49.0 78.8 40.0 167.8 30.0 80.0 110.0 445.6 10 32
Uttar Pradesh (East) 6.2 10.0 16.2 10.0 10.0 42.4 / 1 3
Rajasthan 11.2 5.0 16.2 10.0 10.0 42.4 / 1 3
Bihar 10.80 5.0 15.8 10.0 10.0 41.6 / 1 3
Himachal Pradesh 9.8 5.0 14.8 10.0 10.0 39.6 / 1 3
Delhi 5.0 8.6 13.6 27.2 / 1 0
Mumbai 6.4 5.0 11.4 22.8 / 1
Karnataka 5.0 6.0 11.0 22.0 / 1
7 Emerging Circle
(Sub Total) 10.0 59.0 30.0 99.0 40.0 40.0 238.0 5 12
Tamil Nadu 11.4 11.4 22.8 / 1
Kolkata 5.0 5.0 10.0 20.0 / 1
West Bengal 11.4 11.4 10.0 10.0 32.8 / 3
Odisha 10.0 10.0 10.0 10.0 30.0 / 3
Assam 10.0 10.0 10.0 10.0 30.0 / 3
North East 11.0 11.0 10.0 10.0 32.0 / 3
Jammu & Kashmir 10.0 5.0 15.0 10.0 10.0 40.0 / 1 3
7 New Circle
(Sub Total) 68.8 10.0 78.8 50.0 50.0 207.6 2 14
Total 22 Circle 59.0 206.6 80.0 345.6 30.0 170.0 200.0 891.2 22 17 57

*FDD spectrum consisting of uplink and downlink

5 MHz of paired FDD spectrum = 1 carrier 10 MHz of unpaired TDD spectrum =1.5carrier.

Launch of Digital Idea

On January 30 2017 your Company announced its arrival into the digital world withlaunch of 3 new exciting Mobile Apps - Idea Music Lounge Idea Movie Club and Idea GameSpark - giving birth to a "Digital Idea". The new suite ofintegrated Digital Apps provides one of the best ranges of entertainment content to yourCompany's 192 Million plus customer base. These Apps deliver world class user experiencein domains that are 'telecom adjacencies' viz. Music Movies Live TV and Gaming. The DigitalIdea movement will not only digitize our existing processes and strengthen thembut will also build the Company's capability for future marking first entry of Idea intointernet based economy. Within first 60 days of introduction of digital entertainmentapplications around 1.5 million customers started to enjoy Idea's digital content servicesincluding approximately 550000 customers on Idea Music App around 275000 customers onIdea Movie Club App and around 500000 customers on Idea Game Spark App.

A growing percentage of Idea's existing customers prefer prepaid recharges postpaidpayments and product activations on the Company's digital channels and your Companyremains committed to push online adoption even further in line with our Prime Minister'sDigital India vision. Your Company has been constantly driving Digital Enablement byaugmenting the capabilities on its Website and simplifying 'My Idea' mobileapplication. As on March 31 2017 over 10 Mn Idea subscribers have installed 'MyIdea' mobile application for self-care and product purchases.

Similarly to keep pace with changing customer expectations and ensuring seamlesscustomer experience at all times your Company has embarked on 'Customer ExperienceManagement' and advanced analytics journey during the year. This enables deliveryof a superior customer experience for mobile broadband and data services and proactivecustomer care practices through accurate diagnostics leading to higher up-time and an evenhigher satisfaction for its customers.

4GLaunch

Your Company now provides 4G services in 19 service areas with 7 new service areaslaunched through 1800 MHz spectrum in Gujarat Uttar Pradesh (West) Bihar RajasthanWest Bengal Assam and Jammu & Kashmir and 1 service area of Uttar Pradesh (East)launched on 2100 MHz integrating spectrum acquired in October 2016. Launch of 4G servicesin Mumbai service area is scheduled in Q1 FY18 through 2100 MHz frequency band. In theOctober 2016 Spectrum Auction your Company won 2*54.6 MHz spectrum block in 1800frequency band and 20 MHz in 2100 MHz frequency band including 4G LTE compatiblecontiguous blocks of 5 MHz in 9 service areas and 3G spectrum in 2 service areas. Furtherin October 2016 auctions your Company won additional capacity of 30 MHz in three serviceareas in 2300 MHz band and 170 MHz in 16 service areas in 2500 MHz band. As at end ofMarch 2017 your Company provides 4G coverage to 272 million Indian population with 40852sites across 23000 towns and villages. Post launch of 4G services in 9 new service areasand 3G in 2 new service areas the broadband service offerings (3G/4G) of your Company nowcovers 21 service areas on its own broadband spectrum ~96.5% of Idea revenue and ~93.5%of Industry revenue (As per Q3 TRAI reported revenue) and more than 500 million Indians.

Paperless E-KYC Activations

Taking the digital dream of our Honorable Prime Minister forward your Company hasenabled Aadhar Based Biometric new subscriber activations which not only benefit thecustomer with instant and paperless activation but also helps the economy by reducingcarbon footprint. As on year end your Company had moved 85% prepaid activations to E-KYCactivations and is targeting to reach 95% at the earliest.

Launch of FTTH services

Your Company has ventured into Wireline broadband services to provide ultra-high speedbroadband services at customers' home through FTTH (Fiber-to-the-home) technology. In themonth of March 2017 FTTH service was launched in select premium housing societies in thecity of Pune with speeds ranging from 20 Mbps to 200 Mbps. This FTTH service is capable ofdelivering upto 1 Gbps speeds in near future. The new service is fully scalable to delivermulti-play product and services. This end-to-end fully underground OFC network in Pune isalso scalable to deliver multi-play product and services as Idea's FTTH is integrated onits own. The expansion of FTTH services will be linked to business performance andexperience from Pune. With this initiative your Company endeavors to stay ahead andprovide high speed internet access in the connected world with relevant products andservices to cater to emerging market opportunities.

Merger of Idea Mobile Commerce Services Limited with Aditya Birla IdeaPayments Bank Limited

To comply with the Reserve Bank of India (RBI) guidelines on Payments Bank Idea MobileCommerce Services Limited (IMCSL) wholly owned subsidiary of the Company had filed apetition under section 391 to 394 of the Companies Act 1956 with Hon'ble High Court ofDelhi at New Delhi for its amalgamation with Aditya Birla Idea Payments Bank Limited(ABIPBL) an associate Company which had also filed similar petition in the Hon'ble BombayHigh Court. The Hon'ble High Court of Bombay and the Hon'ble High Court of Delhi at NewDelhi have sanctioned the Scheme of Amalgamation vide

their orders dated December 9 2016 and January 3 2017 respectively. The said schemeof amalgamation is conditional to be effective upon receipt of certainapprovals/authorization from RBI. ABIPBL has received license from RBI to carry onPayments Bank business and has also received authorization to carry on PPI business. Thebusiness of IMCSL shall be folded into ABIPBL as and when ABIPBL is ready to commence itsoperations for which permission is yet to be received from RBI.

Distribution of assets with consequent reduction in share capital ofAditya Birla Telecom Limited a wholly- owned subsidiary

During the year Aditya Birla Telecom Limited (ABTL) a wholly owned subsidiary of theCompany received approval of the Hon'ble High Court of Bombay for its application undersection 100 of the Companies Act 1956 for distribution of assets with consequentreduction in share capital held by P5 Asia. Pursuant to this P5 Asia holds direct equitystake of 4.85% in Indus Towers Ltd. and their stake in ABTL is extinguished.

Merger of Vodafone India Limited and Vodafone Mobile Services Limited withthe Company

The Board of Directors of your Company had at its Meeting held on March 20 2017approved merger of Vodafone India Limited (VIL) and Vodafone Mobile Services Limited(VMSL) with your Company (Idea). The said merger shall be subject to receipt of necessaryapprovals of shareholders and creditors SEBI Stock Exchanges National Company LawTribunal the Competition Commission of India Department of Telecommunications ForeignInvestment Promotion Board Reserve Bank of India and other governmental authorities asmay be required.

Key Highlights of the Merger of VIL and VMSL with Idea are as under:

- Entire business of VIL and VMSL (excluding VIL's investment in Indus Towers Ltd. andtheir certain international network assets and information technology platforms which willbe disposed of prior to the merger being effective) will vest in the Company.

- Merged company shall be governed by the shareholders agreement. Both Vodafone Groupand existing promoters of Idea shall exercise joint control in the merged company. Shareexchange ratio considered for the purpose of merger scheme is consistent withrecommendations of joint independent valuers.

- Post implementation of the composite scheme of amalgamation and arrangement under the

applicable provisions of the Companies Act 2013 Vodafone Group and existing Promotersof Idea (i.e. Aditya Birla Group and its affiliates) will hold 45.1% and 26% of the equityshare capital of the merged company respectively and the balance 28.9% will be held bythe public shareholders. With a view to equalizing the shareholdings of the Vodafone Groupand existing Promoters of Idea over a period of time the existing Promoters of Idea havethe right to acquire upto 9.5% additional stake from Vodafone Group under an agreedmechanism. If Vodafone Group and the existing Promoters of Idea do not have equalshareholding by the expiry of the 4th year from completion of the amalgamationVodafone Group is obliged to reduce its holding in order to equalise its shareholding withthat of the existing Promoters of Idea over the following 5 year period.

- Until equalization is achieved the additional shares held by Vodafone Group will berestricted and votes will be exercised jointly under the terms of the shareholder'sagreement.

- Existing Promoters of Idea and Vodafone Group shall have the right to nominate 3directors each. The Board will include Independent Directors as required under law;

- Existing Promoters of Idea have the sole right to appoint the Chairman. Theappointment of the Chief Executive Officer and the Chief Operation Officer will requirethe approval of both the existing Promoters of Idea and the Vodafone Group. Vodafone Grouphas the right to appoint the Chief Financial Officer of the merged company;

- Certain critical matters of the merged company such as the issue of shares otherwisethan on a rights basis consolidation subdivision or reclassification of share capitalliquidation amendments to the constitutional documents entry into related partytransactions change to the name or key brands or branding strategy of the company etc.are subject to the affirmative consent of the existing Promoters of Idea and VodafoneGroup; and

- The Combination of Idea and Vodafone will create the scale to meet customer's rapidlyaccelerating demand for data consumption and enable significant efficiencies. Run rateoperating cost and capex synergies are expected to reach INR 140 billion on annual basisby the fourth full year post completion.

The Board of Directors of your Company believes that the proposed amalgamation willresult in amongst others the following:

- Creation of largest Indian telecom operator with widest mobile network in the countryand Pan India 3G /4G footprint;

- Sufficient spectrum to compete in the market while offering innovative andattractively priced mobile service to customers;

- Acceleration of expansion of wireless broadband networks across India to deliver theGovernment of India's 'Digital India' mission;

- Substantial operating cost and capex synergies creating value for shareholders; and

- Leveraging the customer's affinity for both the existing brands.

Awards and Recognitions

Some key awards and recognitions received by your Company are:

• Idea was voted by investors as one of the Top 10 Asia's Best Companies in 2017in a poll conducted by Finance Asia magazine in the categories of (i) Best CEO (ii) BestCFO (iii) Most Committed to Corporate Governance (iv) Best at CSR and (v) Best at InvestorRelations.

• Idea won the ET Telecom Award 2017 for the 'Best Enterprise Mobility ServiceProvider' for Logistics Tracking Solution.

• Idea won the 'Golden Peacock Award' for Corporate Social Responsibility forbeing the best in CSR among Indian T elecom Companies.

• Idea won Voice & Data Telecom Leadership Awards 2016 in the followingcategories: (i) CTO of the Year Award for the company's record breaking network rollout in2016

(ii) Highest Subscriber Additions in 2016 in Maharashtra & Goa and Madhya Pradesh& Chhattisgarh circles

(iii) Enterprise Business Award for Workforce Tracking Management Solution

(iv) Customer Service Award for Centre Management System

(v) VAS Award for USSD *191# portal

(vi) Marketing Award for Pooling product

(vii) Internet & Broadband Award for Internet for All initiative InfrastructureInnovation Award for Telematics product on IOT by ICISL.

• Idea bagged the Business world Golden Cart Summit and Awards 2016 for India'smost preferred brand in the category of 'Telecommunication Services'.

• Idea was recognized among 'Top 25 Best Companies to Work' in 2016 byBusiness Today.

• Idea won GSMA Chairman's Award for collectively enabling 'Mobile Connect' inIndia.

• Idea was ranked amongst the 'Buzziest Brands of the Y ear' in 2016 and ratedamong Top 3 Brands in 'T elecom' category by afaqs.

New Initiatives

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

Some of these are:-

• To announce launch of 4G services your Company launched the "Biggest SmallChange" campaign with a focus on upgrading customers from 2G3G to 4G. The campaignleveraged the insight that for those who live online a small change in technology couldmake a big impact on their online experience. 4G revolutionized the digital experience forconsumers who could now make seamless video calls stream videos on the go playmultiplayer games watch movies in HD and stream all their favourite music on theirmobile. This was a high decibel campaign across all mediums including TV Radio Outdoorand Digital amongst others.

• Your Company has always been the pioneer in terms of propagating the use ofmobile internet. Therefore to get more customers online your Company had to tackle theissue of internet relevance. The 'Get India Online' campaign encouraged existing Internetusers to share free Internet benefits with non-Internet users and get more people into thedata fold and share the advantages of being online. The campaign was truly innovative asit created a new currency for sharing. To support this product initiative your companylaunched a communication campaign 'Internet for all'. Besides Television this campaignwas amplified via media integrations on Radio & Digital.

• After launching Idea 4G with the Biggest Small Change campaign your Companydemocratized 4G in the "Reverse Migration" campaign to focus on the fact that 4Gtranscends all boundaries and is truly for everyone. One of the biggest issues India facestoday is lack of opportunities in Rural and small town India. People leave the comfort oftheir homes and find shelter in already overcrowded cities impacting the lives of both themigrants & the residents breaking up families increasing the gap between thedevelopments of the cities versus the development of the villages. Idea 4G was positionedas the new-age infrastructure that would bring opportunities to every Indian across thecountry and could bridge the gap between urban and rural India. With Idea 4G creatingopportunities in villages every village would now prosper like a city thus creating amovement of "Reverse Migration" from urban to rural India.

• Y our Company launched digital services with the launch of three unique appsMusic Lounge Game Spark and Movie Club. Idea customers can now enjoy a host ofentertainment services with these apps. As of March 31 2017 around 1.5 millionsubscribers enjoy the new digital content services.

• Your Company launched Long term plans for subscribers that not only madeInternet more affordable but also ensured long term engagement of customers. These packscame with the commitment of offering data at the rate of just Rs.50/GB.

• Y our Company introduced data pack offering 1GB/day for postpaid 4G handsetusers. This was a first of its kind offer with such a huge benefit to a large base ofpostpaid customers in India. The package was designed to catalyse data usage amongstexisting customers and to attract more postpaid customers to the Idea network.

• For increased usage and adoption of 4G technology your Company encouraged itscustomers to upgrade to a 4G Handset and 4G SIM with innovative offers. Upon upgrading toa 4G handset customers got 10 GB data for the price of 1GB. Upon upgrading to a 4G SIM4G handset customers could get up to 4GB data free.

• Y our Company initiated an engagement drive for MyIdea App; for checking thepack status and doing recharge Data users were incentivized through better benefits onrecharge through MyIdea App. Subscribers were notified about offers that were tailor madefor each subscriber. As a result of this initiatives within 3 months App downloadsincreased by 9% App recharge revenue increased by 6% App active users increased by 18%.

• Your Company launched industry first offers with the most prominent and leadinge-commerce players Flipkart and Amazon. Also Idea's website now partners with Amazon &Flipkart and offers handpicked popular handsets with propositions that bring significantvalue to customers and enhance 4G penetration.

• For Data users your Company launched 4G netsetter (dongle) Smart Wi-Fi hub andHome Wi-Fi which are available at competitive price with compelling data plans at selectIdea stores across the country.

• While working towards strengthening the digital economy your Company became thefirst operator in India to introduce carrier billing on Google Play Store. Idea customerscan now buy various apps e-books movies music etc. available on Google Play Store bypaying through their prepaid balance or postpaid bill.

• Your Company worked with GSMA and 5 other Indian operators for launching MobileConnect - a secured way of authentication. Y our Company became the first Indian operatorto have a working customer facing app by enabling mobile connect login in the MyIdea App.

• Y our Company launched Opera games club service with Opera. Idea Games Club is asubscription based app distribution model. Once the user has subscribed to the serviceuser can download Games Spark app and get access to unlimited downloads of exceptionalgaming content. The store contains premium content which has 4+ rating in Google playstore.

• Idea now allows its net savvy customers to interact with customer careprofessionals online. Targeted to serve select high end Prepaid & Postpaid Customersthe Live Chat Solution is currently positioned to assist our "online users"during their Recharge Bill Payment & Self Care through Idea Cellular website.

• Delivering superior customer experience is a key pillar of sustainable growthand profitability. To consistently deliver a high quality customer experience requires anyorganization to be completely Customer Centric. Your Company is committed to thephilosophy of designing it's product and service offerings from the point of view of thecustomer. Your Company has been doing this through understanding and meeting customerexpectations with help of various Feedback programs direct VOC listening programs and inthis year launched a company-wide Hello Bosstomer program aimed at harnessing thecollective employee knowledge and ideation capabilities to devise actions towardsimproving customer experience and thereby creating a true Customer-Centric culture acrossthe company.

• Your Company also scaled up digital governance at My Idea stores. An app-basedgovernance system was launched which can be used by field staff to track the stores andcustomer interactions leading to more active and real-time training need identification.

Subsidiaries Joint Ventures and Associates

As on March 31 2017 your Company has five subsidiary companies one joint venturecompany and one Associate company details whereof are as under:

Subsidiaries

Aditya Birla Telecom Limited is engaged in the trading of mobility devicesand holds 11.15% shareholding in Indus Towers Limited (Indus) as on March 31 2017.

• Idea Cellular Services Limited provides manpower services to the Company.

• Idea Cellular Infrastructure Services Limited is a tower Company owning telecomtowers of your Company in all the 22 service areas.

• Idea Telesystems Limited is engaged in the trading of mobility devices.

• Idea Mobile Commerce Services Limited (IMCSL) is engaged in operating PrepaidPayment Instruments in India. IMCSL is in the process of being amalgamated with ABIPBL.Business of IMCSL shall be folded into ABIPBL as and when ABIPBL is ready to commence itsoperations for which permission is yet to be received from RBI.

Joint Venture Company

Indus Towers Limited in which Aditya Birla Telecom Limited (ABTL - awholly-owned subsidiary of the Company) holds 11.15% stake continues to be a jointventure with the Bharti Group and Vodafone Group and provides passive infrastructureservices in 15 service areas. Following the direct stake by P5 Asia of 4.85% the stake ofABTL in Indus stands at 11.15% from 16% held at the beginning of the year.

Associate Company

Aditya Birla Idea Payments Bank Limited (ABIPBL) is an Associate Companywherein your Company currently holds 9.84% of the equity capital and the balance is heldby Aditya Birla Nuvo Limited. Upon merger of IMCSL with ABIPBL your Company willultimately hold 49% of the equity capital and balance 51% of the equity capital will beheld by Aditya Birla Nuvo Limited. ABIPBL has received banking license for carrying on thebusiness of Payments Bank from Reserve Bank of India (RBI) on 3rd April 2017and has also received an authorisation to carry on the business of Prepaid PaymentsInstrument business. ABIPBL is in the process of launching its operations commercially.

In accordance with the provisions contained in section 136(1) of the Companies Act2013 (Act) the Annual Report of the Company containing therein its standalone and theconsolidated financial statements are available on the Company's websitewww.ideacellular.com.

Further pursuant to the said requirement the financial statements of each of theaforesaid subsidiary companies are available on the Company's website www.ideacellular.comand shall be available for inspection during business hours at the Registered Office ofthe Company. Any member who is interested in obtaining a copy of the financial statementsmay 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 theCompanies (Accounts) Rules 2014 a report on the performance and financial position ofeach of the subsidiaries and joint venture companies is provided as 'Annexure A' to thisreport.

Consolidated Financial Statements

In accordance with the provisions of Section 129(3) of the Companies Act 2013 andRegulation 34 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations2015 the Consolidated Financial Statements forms part of this Annual Report and shallalso be laid before the ensuing Annual General Meeting of the Company. The ConsolidatedFinancial 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. The consolidated financial statements for the financial year endedMarch 31 2017 are the Company's first IND-AS compliant annual consolidated financialstatements with comparative figures for the year ended March 31 2016 also under IND-AS.The date of transition is April 1 2015.

Risk Management

In compliance with the requirements of regulations contained in the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 and the provisions of theCompanies Act 2013 your Company has constituted

a Risk Management

Committee details whereof are set out in the Corporate Governance Report forming partof the Annual Report. Further your Company has formally adopted a Risk Management Policyto identify and assess the key risk areas monitor and report compliance and effectivenessof the policy and procedure.

Your Company has a well-established Enterprise-wide Risk Management (ERM) framework inplace for identification evaluating and management of risks including the risks whichmay threaten the existence of the Company. In line with your Company's commitment todeliver sustainable value this framework aims to provide an integrated and organizedapproach for evaluating and managing risks.

A detailed exercise is carried out to identify evaluate manage and monitor the risks.The Committee/Board periodically reviews the risks and suggest steps to be taken tocontrol and mitigate the same through a properly defined framework.

Employee Stock Option Schemes

Your Company values its employees and is committed to adopt the best HR practices forrewarding them suitably. In this direction your Company had implemented the Employee StockOption Scheme 2006 (ESOS-2006) and Employee Stock Option Scheme 2013 (ESOS-2013) andmade grants to eligible employees under ESOS-2006 and ESOS-2013 from time to time. Duringthe year under review in terms of ESOS-2013 the Nomination and Remuneration Committeehas granted 416033 Options at an exercise price of Rs.110.45 per option and 161869Restricted Stock Units (RSU) at an exercise price of Rs.10/- per RSU. Each Option isconvertible into one Equity Share of the Company upon vesting and would vest in 4 equalannual installments after one year of the grant (subject to meeting performance targets)and shall be exercisable within a period of 5 years from the date of vesting. Further eachRSU is convertible into one Equity Share of the Company upon vesting and all RSUs wouldvest at the end of 3 years from the date of grant and shall be exercisable within a periodof 5 years from the date of vesting.

In terms of the provisions of the SEBI (Share Based Employee Benefits) Regulations2014 the details of the Stock Options and Restricted Stock Units granted under the abovementioned Schemes are available on your Company's website www.ideacellular.com.

A certificate from Ms. Deloitte Haskins & Sells LLP Statutory Auditors withrespect to the implementation of the Company's Employee Stock Option Scheme(s) would beplaced at the ensuing Annual General Meeting for inspection by the Members and a copy willalso be available for inspection at the Registered Office of the Company.

Internal Control Systems

Your Company's internal control systems are commensurate with the nature of itsbusiness and the size and complexity of its operations. The internal controls coveroperations financial reporting compliance with applicable laws and regulationssafeguarding assets from unauthorised use and ensure compliance of corporate policies.Internal controls are reviewed periodically by the internal auditors and are subject tomanagement reviews with significant audit observations and follow up actions reported tothe Audit Committee. The Audit Committee actively reviews the adequacy and effectivenessof internal control systems and suggests improvements for strengthening them in accordancewith the changes in the business dynamics if required.

Human Resources

Your Company continues to be an Employer of Choice with robust hiring of high qualitytalent high engagement scores focus on development and effective retention of highpotential employees.

Value based HR programs have enabled your company's HR team to be Strategic Partnersfor the Business. To keep pace with the evolving demands of the Mobility Business and theNew Business Lines like Digital HR has shifted focus to building capability in newerareas to be able to predict diagnose and take actions that will improve businessperformance. The Employee Engagement Scores continue to be high despite a great deal ofvolatility and disruption in the macro environment. This has resulted in your Company'sability to retain best talent.

Your Company has had continuous focus on Diversity and Inclusivity. Being an employerof choice your company has hired some of the best talent from premier Management andEngineering Colleges. In addition your company has laid stress to build a women friendlyworkplace by introducing various initiatives around hiring development and progression ofwomen employees in the organization.

Your Company has focused on identifying internal talent and nurture them through theculture of continuous learning and development thereby building capabilities for creatingfuture leaders. The efforts in efficient and effective talent development through internalcapability deployment was recognized across industries when your company was awarded theGold Category Award for the "Best Program for Sales Enablement" at the 5thedition of the Tata Institute of Social Sciences Leapvault CLO Awards- India in September2016.

Your Company has also focused on continual process improvement through driving SixSigma and Lean methodologies. These HR strategies have continued to have strong alignmentwith your Company's vision to successfully build and sustain Company's standing as one ofIndia's most admired and valuable corporations despite unrelenting competitive pressures.

Your Company has demonstrated the qualities of a good Corporate citizen by investing inthe area of Corporate Social Responsibility. Various innovative projects through whichsocio-economic challenges of under privileged community are addressed were rolled out. Interms of outreach these have been extended to 14 states. Idea Cellular has been ranked 3rdamongst 271 companies for blending CSR with responsible growth by Economic Times. YourCompany has also been bestowed the prestigious Golden Peacock Award by Institute ofDirectors for the year 2016.

Management Discussion and Analysis

The Management Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is presented in a separate section forming part of the Annual Report.

Corporate Governance

Your Company is committed to maintain the highest standards of Corporate Governance.Your Company continues to be compliant with the requirements of Corporate Governance asenshrined in SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015('Listing Regulations'). A Report on Corporate Governance as stipulated under the ListingRegulations forms part of the Annual Report. A certificate from the Statutory Auditors ofthe Company confirming compliance with the conditions of Corporate Governance asstipulated in the Listing Regulations forms part of the Annual Report.

Business Responsibility Report

As stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 the Business Responsibility Report describing the initiatives taken by the Companyfrom environmental social and governance perspective is presented in a separate sectionforming part of the Annual Report.

Corporate Social Responsibility

In terms of the provisions of section 135 of the Companies Act 2013 read withCompanies (Corporate Social Responsibility Policy) Rules 2014 the Board of Directors ofyour Company has constituted a Corporate Social Responsibility ("CSR")Committee. The composition and terms of reference of the CSR Committee is provided in theCorporate Governance report which forms part of this report.

Your Company has also in place a CSR Policy and the same is available on your Company'swebsite http://www.ideacellular.com/investor-relationscorporate governance.

During Financial Year 2016-17 the Company has spent Rs.369.6 Mn towards CSR activitiesas against Rs.731.9 Mn required to be spent during the financial year 2016-17. The Companyduring the year has gradually increased the CSR expense and the number of CSR projectsbeing undertaken. The expense and the number of projects undertaken during the currentfinancial year was around two times the amount spent and projects undertaken during theprevious year. The Company's key objective is to make a difference to the lives of theunderprivileged and help bring them to a self-sustaining level and is committed to CSRengagement. We are increasing capacity of CSR team to take up more projects. As a sociallyresponsible Company we are committed to play larger role in India's sustainabledevelopment. The implementation has been acknowledged and awarded.

The particulars required to be disclosed pursuant to the Companies (Corporate SocialResponsibility Policy) Rules 2014 are given in 'Annexure B' forming part of this Report.

Directors' Responsibility Statement

Pursuant to Section 134 of the Companies Act 2013 ('Act') the Directors to the bestof their knowledge and belief confirm that:

(a) in the preparation of the annual accounts the applicable accounting standards havebeen followed;

(b) the Directors had selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a trueand fair view of the financial position of the Company at the end of the financial yearand of the financial performance and cash flows the Company for that period;

(c) the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

(d) the annual accounts were prepared on a going concern basis;

(e) the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively;

(f) the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

Directors

In accordance with the provisions of the Companies Act 2013 Mrs. Rajashree Birla andDr. Shridhir Sariputta Hansa Wijayasuriya retire from office by rotation and beingeligible offer themselves for re-appointment at the ensuing Annual General Meeting of theCompany.

During the year under review Mr. R.C. Bhargava an Independent Director resigned fromthe Board of your Company with effect from October 1 2016 citing personal reasons for hisresignation. Further Mrs. Madhabi Puri Buch an Independent Director has also resignedfrom the Board of your Company with effect from April 3 2017 citing her inability tocontinue to hold any directorships pursuant to her taking up the position as Whole TimeMember of SEBI. The Board places on record its sincere appreciation for the valuableguidance and contribution made by Mr. Bhargava and Mrs. Buch in the deliberations of theBoard during their tenure as Independent Directors on the Board of Directors of theCompany.

Further based on recommendation of Nomination and Remuneration Committee Mrs. Alka M.Bharucha (DIN: 00114067) was appointed as an Additional (Independent) Director on theBoard of your Company with effect from December 26 2016. As per the provisions ofCompanies Act 2013 she holds office upto the date of ensuing Annual General Meeting ofthe Company.

Additionally based on recommendation of Nomination and Remuneration Committee Mr.Baldev Raj Gupta (DIN: 00020066) was appointed as an Additional (Independent) Director onthe Board of your Company with effect from May 13 2017. As per the provisions ofCompanies Act 2013 he holds office upto the date of ensuing Annual General Meeting of theCompany.

Your Company has received Notice under Section 160 of the Companies Act 2013 togetherwith requisite deposit from a member proposing appointment of Mrs. Alka Bharucha and Mr.Baldev Raj Gupta as Director(s) on the Board of your Company. Necessary resolution seekingapproval of the members for appointment of Mrs. Alka Bharucha and Mr. Baldev Raj Gupta asdirector(s) has been incorporated in the Notice of the ensuing Annual General Meeting.

The Independent Directors have given the declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013.

Brief profile of the directors proposed to be appointedre-appointed are annexed to theNotice convening Annual General Meeting forming part of this Annual Report.

Board Evaluation and Familiarization Programme

The Board has carried out the annual performance evaluation of its own performanceBoard Committees and Individual Directors pursuant to the provisions of the Companies Act2013 and Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. The manner in which the evaluation has been carried out has beenprovided in the Corporate Governance Report.

The details of programme for familiarization of Independent Directors of your Companyis available on your Company's website www.ideacellular.com.

Remuneration Policy

The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy on remuneration of Directors and Senior Management Employees. Theremuneration policy is attached as 'Annexure C' to this report.

Dividend Distribution Policy

The Board has in compliance with SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 formulated Dividend Distribution Policy. This policy will provideclarity to the stakeholders on the dividend distribution framework of the Company. ThePolicy sets out various internal and external factors which shall be considered by theBoard in determining the dividend payout. The dividend distribution policy is attached as'Annexure I' to this report and is also available on the website of the Companywww.ideacellular.com.

Board Meetings

During the year seven meetings of the Board of Directors were held. The details of themeetings and the attendance of the Directors are provided in the Corporate GovernanceReport.

Board Committees

Your Company has in place the Committee(s) as mandated under the provisions of theCompanies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. There are currently seven committees of the Board namely:

- Audit Committee

- Nomination & Remuneration Committee

- Stakeholders' Relationship Committee

- Risk Management Committee

- Corporate Social Responsibility Committee

- Finance Committee

- Securities Allotment Committee

Details of the Committees along with their charter composition and meetings heldduring the year are provided in the Corporate Governance Report which forms part of thisreport.

Audit Committee

Audit Committee currently comprises of Mr. Arun Thiagarajan as Chairman of the AuditCommittee with other members being Ms. Tarjani Vakil Dr. Shridhir Sariputta HansaWijayasuriya and Mrs. Alka M. Bharucha. Further details relating to the Audit Committeeare provided in the Corporate Governance Report which forms part of this report. Mrs.Madhabi Puri Buch ceased to be the member of the Committee with effect from April 3 2017.Mrs. Alka M. Bharucha was inducted as a member of the Committee with effect from April 212017.

Key Managerial Personnel

In terms of the provisions of Section 203 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 Mr. HimanshuKapania Managing Director; Mr. Akshaya Moondra Whole-time Director and Chief FinancialOfficer; and Mr. Pankaj Kapdeo Company Secretary are the Key Managerial Personnel of theCompany. They continue to hold the respective offices.

Contract and Arrangements with Related Parties

During the year under review the Company acquired 10000 Equity Shares of face valueof Rs.10 each of Idea Cellular Infrastructure Services Limited (ICISL) a wholly ownedsubsidiary of the Company at an issue price of ~ Rs.496297 per Equity Share each forconsideration other than cash against transfer of tower infrastructure undertaking by theCompany to ICISL with approval granted by the Audit Committee and the board of directorsat their respective meetings. All contractsarrangementstransactions entered by the Companyduring the financial year with the related parties as detailed in Note no. 59 of theStandalone Financial Statements were in ordinary course of business and at an arm's lengthbasis.

The related party transaction which can be considered material during the year is theexisting arrangement with Indus T owers Limited (Indus) a joint venture of the whollyowned subsidiary of your Company which provides Passive Infrastructure services andrelated operations and maintenance services to various telecom operators in Indiaincluding your Company. Indus is currently one of the world's largest independent passiveinfrastructure providers. Your Company had entered into a Master Service Agreement (MSA)with Indus in 2008 for availing passive infrastructure services provided by them incertain service areas. The MSA requires individual tenancy service contracts to beexecuted for each passive infrastructure site the terms of which vary depending on thelocation type of site number of existing tenants etc. and contain lock in period forensuring continuity. Such terms are similarly applicable to all other telecom providershaving arrangement with Indus. The details of the material related party transaction withIndus for the Financial Year ended March 31 2017 is provided in Form AOC-2 which isattached as 'Annexure D' to this report.

None of the related party transactions entered into by the Company were in conflictwith the Company's interest. There are no materially significant related partytransactions made by the Company with Promoters Directors or Key Managerial Personneletc. which may have potential conflict with the interest of the Company at large. Member'sapproval for material Related Party Transaction as defined under the Listing Regulationsshall be obtained at the ensuing Annual General Meeting.

All Related Party Transactions are placed before the Audit Committee/Board asapplicable for their approval. Omnibus approvals are taken for the transactions which arerepetitive in nature. The Company has implemented a Related Party Transaction manual andStandard Operating Procedures for the purpose of identification and monitoring of suchtransactions. The details of the transactions with Related Parties are provided in theaccompanying financial statements as required under Ind AS 24.

The policy on Related Party Transactions is uploaded on the Company's websitewww.ideacellular.com.

Particulars of Loans Guarantees and Investments

As your Company is engaged in the business of providing infrastructural facilities theprovisions of Section 186 of the Companies Act 2013 relating to loans made guaranteesgiven or securities provided are not applicable to the Company. The details of such loansmade and guarantees given are provided in the standalone financial statements at Note no.59. Particulars of investments made by the Company are provided in the standalonefinancial statements at Note nos. 9 and 13.

Vigil Mechanism

Your Company has in place a vigil mechanism for directors and employees to reportconcerns about unethical behaviour actual or suspected fraud or violation of yourCompany's Code of Conduct. Adequate safeguards are provided against victimization to thosewho avail of the mechanism and direct access to the Chairman of the Audit Committee inexceptional cases.

The Vigil Mechanism is available on your Company's website www.ideacellular.com.

Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo

The information on conservation of energy technology absorption and foreign exchangeearnings and outgo as required to be disclosed pursuant to Section 134(3)(m) of theCompanies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 are givento the extent applicable in 'Annexure E' forming part of this report.

Particulars of Employees

Disclosures pertaining to remuneration and other details as required under section197(12) read with Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is annexed herewith as 'Annexure F' 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 otherparticulars of employees drawing remuneration in excess of the limits set out in theaforesaid Rules forms part of this Report. However in line with the provisions ofSection 136(1) of the Act the Report and Accounts as set out therein are being sent toall Members of your Company excluding the aforesaid information about the employees. AnyMember who is interested in obtaining these particulars about employees may write to theCompany Secretary at the Registered Office of your Company.

Statutory Auditors

In terms of the provisions of Section 139 of the Act read with the Companies (Audit andAuditors) Rules 2014 an audit firm can hold office as statutory auditor for two terms offive consecutive years i.e. for a maximum period of ten years.

Further as per the provisions of the Act Company is required to comply with theseprovisions within three years from the commencement of the Act.

M/s. Deloitte Haskins & Sells LLP Chartered Accountants Mumbai were appointed asthe Statutory Auditors of the Company in September 2005 and were re-appointed at everyAnnual General Meeting (AGM) thereafter. As they have been in office for more than 10years in compliance with the provisions of the Act the Company had to appoint a newauditor in their place by March 31 2017. In terms of the shareholder's resolution passedat the 19th Annual General Meeting of the Company held on 26thSeptember 2014 M/s Deloitte Haskins & Sells LLP shall hold office until theconclusion of the ensuing 22nd AGM.

The Board of Directors has at its Meeting held on February 11 2017 recommendedappointment of M/s. S.R. Batliboi & Associates LLP Chartered Accountants FirmRegistration No. 101049W/E300004 as the new statutory auditors of the Company to holdoffice for one term of 5 years commencing from conclusion of the ensuing 22nd AnnualGeneral Meeting upto the Annual General Meeting of the Company to be held in calendar year2022.

The Company has received a certificate from the Statutory Auditors to the effect thattheir appointment if made shall be in compliance with the provisions of Section 139 and141 of the Companies Act 2013. Accordingly the Board proposes appointment of M/s. S.R.Batliboi & Associates LLP Chartered Accountants as the statutory auditors of theCompany in place of M/s. Deloitte Haskins & Sells LLP to hold office from theconclusion of this AGM until the conclusion of the 27th AGM of your Company.Necessary resolution seeking approval of the members for appointment of new statutoryauditors has been incorporated in the Notice convening the Annual General Meeting formingpart of this Annual Report.

Auditors' Report and Notes to Financial Statements

The Board has duly reviewed the Statutory Auditors' Report on the Financial Statementsincluding the emphasis of matter relating to the one-time spectrum fee demand raised bythe Department of Telecommunications in January 2013. As explained in the Notes to theFinancial Statements the matter remains sub-judice and does not call for any furtherexplanationclarification under Section 134(3)(f) of the Companies Act 2013.

Cost Auditors

In conformity with the provisions of Section 148 of the Companies Act 2013 read withthe Companies (Cost Records and Audit) Amendment Rules 2014 the Board on therecommendation of the Audit Committee has appointed M/s. Sanjay Gupta & AssociatesCost Accountants as the Cost Auditors to conduct the Cost Audit of your Company for theFinancial Year ended March 31 2017 at a remuneration as specified in the noticeconvening the Annual General

Meeting. The Cost Audit Report for the Financial Year 2016-17 will be placed before theBoard at the next Meeting of Board of Directors.

As required under the Companies Act 2013 the remuneration payable to the CostAuditors is required to be ratified by the shareholders. Accordingly the Board recommendsthe same for ratification by the shareholders at the ensuing Annual General Meeting.

Secretarial Auditor

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 hadappointed M/s. Umesh Ved & Associates Company Secretaries Ahmedabad as theSecretarial Auditor for conducting the Secretarial Audit of your Company for the financialyear ended March 31 2017.

The report of the Secretarial Auditor is annexed to this report as 'Annexure G'. Thesecretarial audit report does not contain any qualification reservation or adverseremark.

Extract of Annual Return

In terms of the provisions of Section 92 (3) of the Companies Act 2013 read with theCompanies (Management and Administration) Rules 2014 an extract of the Annual Return inForm MGT 9 for the Financial Year ended March 31 2017 is annexed herewith as 'Annexure H'to this report.

Other Disclosures

- There are no material changes and commitments affecting the financial position ofyour Company between end of financial year and the date of report.

- Y our 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 are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and the Company's operations in future.

- The number of complaints received during the Financial Year 2016-17 under the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 areavailable in the Business Responsibility Report which is part of this Annual Report.

Acknowledgement

Your Directors place on record their sincere appreciation to the Department ofTelecommunications Telecom Regulatory Authority of India the Central Government theState Governments all its investors & stakeholders bankers technology providersequipment suppliers value added service partners all the business associates and aboveall our subscribers for the co-operation and support extended to the Company. YourDirectors also wish to place on record their deep appreciation to the employees for theirhard work dedication and commitment. The perseverance and unstinting efforts of theemployees has enabled the Company to retain the 'Fastest Growing Indian Telecom Brand'within the sector.

For and on behalf of the Board
Place: Mumbai Kumar Mangalam Birla
Date : May 13 2017 Chairman

Annexure 'E' to the Directors' Report

Disclosure of particulars with respect to Conservation of Energy Technology Absorptionand Foreign Exchange Earnings and Outgo as prescribed under Rule 8(3) of the Companies(Accounts) Rules 2014.

A. CONSERVATION OF ENERGY

With the second largest population in the world and a rapidly growing economy Indiahas the second largest wireless telecom market. Indian telecom industry has been able topenetrate well across the country where even the grid has not been able to reach in morethan half a century. As per license conditions a telecom operator needs to maintain anetwork availability higher than 99.5%. Assured power 24x7 supply ranging from the load of15 KW each is therefore a pre-requisite for any telecom tower site. One of the biggestchallenges being faced now is power deficiency in most of the areas along with lack ofpower infra while the focus of the telecom sector is on rural penetration. In thisbackground your Company Idea Cellular Limited (Idea) as the fastest growing IndianTelecom operator has been accelerating Pan India infrastructure spread and tapping allemerging opportunities in mobile voice and broadband business. While expanding the networkinfrastructure exponentially across the geography of India Idea maintained the need forincreasing energy efficiency and reducing energy consumption.

Accordingly cost-effective energy-efficiency initiatives were deployed across allspectrum of network expansion in the last Financial Year. This includes more emphasis oninfrastructure-sharing deployment of high efficient network hardware replacement of highconsuming hardware with more efficient telecom hardware increasing the energy efficiencyof existing installations etc.

(a) Steps taken or impact on conservation of energy:

During the year under review several steps were taken for conservation of energy someof which are listed below:

Networks

On the Network front Idea continued to adopt environmentally sustainable practices intheir transactions with the same foundational objectives laid down as part of Green Idealaunched in 2013:

• Reduced Carbon Emissions at the existing & New Telecom Sites of Idea

• Adopt better battery hybrid solutions to reduce consumption

• Continue with the procurement of most energy efficient Telecom Hardware

• Encourage Infrastructure Provider partners to adopt low carbon operations

The initiatives undertaken are as below:

• Presently 19% of Idea Owned telecom towers are operational with hybridsolutions resulting emission reduction by 36373 tonnes.

• Over 67% of Idea's BTS portfolio - Outdoor BTS (25% reduction in Energyconsumption compared to Indoor BTS).

• 5458 indoor sites were converted to outdoor sites in FY17 resulting in reducingCO2 emissions of about 31000 tons in addition to 10497 sites converted till FY16reducing cumulative carbon emissions by 61000 tons.

• The tenancy ratio of Idea is about 2.8 which is highest in the country thatfurther reduces the size of its carbon footprint.

• 100% of the telecom hardware procurement comprise of low power consuming telecomhardware.

• Energy optimization based on the usage of deep discharge battery solutions suchas lithium ion batteries and flow batteries are being evaluated and inducted for siteoperations.

• RET based generation through PPAs against Idea's consumption is approx 5 MW.

Data Centre

Your Company's Data Centre located at Hinjewadi Pune is well under the"Efficient" category on Standard Parameter of PUE (Power Usage Effectiveness).Your Company measures the Energy efficiency of the Data Centre on an ongoing basis and theAverage PUE is 1.82 (which falls under the "Efficient" Category). The followingmeasures are being undertaken to reduce energy use and/or save energy and relatedemissions in your data centre:

• Water based Air cooled chillers have been used in the Data Centre to reduceenergy consumption.

• Hot & Cold Aisle concept for better air circulation in Data Centre - Usageof Pro-curtain for separation of cold aisle and hot aisle for better cooling. Cold aislecontainment implemented to increase HVAC efficiency saving on energy consumption and toreduce related emissions.

• Active Floor based cooling system - directing the cool air to the area where itis required rather than flooding the entire Area.

• False Flooring & False Ceiling void for better cooling.

• Different Temperature zones to reduce air loss.

• Thermal Insulation along the flooringceiling to reduce heat dissipation.

• Usage of Blanking panel in empty space of server Racks to reduce short cyclingof cold air and hence for improved HVAC efficiency.

• Usage of APFC to improve Power Factor in electrical distribution system and toreduce the energy consumption & Harmonics.

• Usage of PAC (Precision Air Conditioner) - Non DX units (without compressor andHVAC gases).

• V ariable Frequency Drives (VFDs) have been installed in the data center's HVACsystems to automatically reduce the speed and power consumption of motors when there islower system load.

• Based on power audits and an extensive study of energy usage variousinitiatives have been undertaken over the years to optimize the usage of electricity suchas:

- Identification and rectification of hot spots

- Optimization of lighting and AC usage

• DAPC (Digital Active Power Conditioning) has been installed for HarmonicDistortion to avoid Power Losses Protection of non-linear load and to improve PowerQuality.

• During Winter Season Chiller Optimization obtained by operating 3 Circuits of 2Chillers in the night. By practicing this the data centre has achieved 140 KWH savings perhour while maintaining the desired DC Temp.

• In PAC (Precision Air Conditioner) Blower FAN operates as per the Set PointTemp. Blower Fan's Maximum Rated Load is 3.2 KW on 100% Fan speed. It is running BlowerFan at 70% Speed which consume 1.6 KW without affecting the Cooling Requirement of theData Centre.

• VRV (Variable Refrigerant Volume) System are installed in office areas foroffice cooling. The VRV Systems are set to 24C set point & scheduled for all officeareas between 8:30 a.m. to 6:00 p.m. Apart from Workstation Area the VRV System operateson need basis in Meeting Rooms and Cabins. Also on weekends VRV System operates on needbasis only in areas where the actual staff is present.

• Implemented LED lighting system in DC and some of the office floors and alsooffice area lighting is scheduled from 8:30 a.m. to 7:00 p.m. and will be switched on needbasis in areas where the actual staff is present after the office hours. By practicingthis we are achieving power saving without compromising lux level in required officeareas.

Facilities

Y our Company is working to reduce its Carbon footprint by adoption of newertechnologies and changing the consumption mix to include more renewable energy generators.The company's new Projects are conceptualized giving high priority to the energy efficientdesign. The company operates with lux levels below 300 and keeps a good mix of natural andartificial illumination for conserving energy.

• Your Company's office facilities have lighter surface colours and patterns whichabsorb less and contribute to better lighting. The company uses a combination of energyefficient CFL and LED lighting for illumination at our facilities. However new projectshave all LED fittings.

• In Air-conditioning space your Company uses star rated BEE (Bureau of EnergyEfficiency) certified air conditioners in our facilities. The company also uses VRVsystems apart from the energy efficient chillier plants in your facilities.

• Idea's Energy Management includes regular monitoring of energy consumption ofdifferent types of loads on a daily basis and helps the company to take correctivemeasures on an immediate basis. The company's average square feet consumptions havereduced over a period and match the benchmarks for office space.

• Some of the other measures in the Company's office premises include:

- Usage of Electronic ballasts instead of Copper ballasts for improved efficiency andreduction in energy consumption and emissions.

- Usage of logic controlling for emergency lights. Automatically is set on during powerfailure.

- VRV based Air conditioning is being used in office area instead of a centralizedsystem.

- Switching off all non- critical loads (office AC lights unused meeting rooms/cabinsetc.) after working hours.

- Switching off all FACADE lights near to outer glass of premises.

• Your Company is replacing existing CFL based lighting fixtures to LED basedfixtures on OPEX model for older facilities to achieve 100 percent conversion to lesserconsumption loads.

• All new facilities are being designed to conform to LEED certificationstandards. This will ensure lesser energy consumption per sq. ft. basis and also reducethe company's carbon footprint.

(b) Steps taken by the Company for utilizing alternate sources of energy:

The following initiatives have been undertaken by the

Company to utilize alternate sources of energy:

• Exclusive Solar solutions at over 1200 sites: Cumulative solar deployment ispresently about 5.4 MW. Idea uses a unique vendor engagement model known as EnergyManagement Service (EMS) Provisioning where RET- based generation (Solar Energy) and siteoperation management is combined under one Master Services Agreement.

• On-Site Solar implementation: This project was initiated in FY15. A 25 KW SolarPlant was constructed on the roof of Idea Delhi MSC. Its operating smoothly delivering theobjectives.

• Off-Site Renewable Energy (RE) Deployment: This concept was also initiated inFY15 based on Carbon abatement principle. In FY17-

- 4 MW Solar PPAs signed in Andhra Pradesh (AP) Circle and Madhya Pradesh (MP) Circlewith combined 4.9 Mn Solar Units generated neutralizing CO2 emission of 3975 tons.

- 1 MW Wind PPS signed in Tamil Nadu Circle (TNC) with 1.7 million Wind units generatedand neutralized Co2 emissions of 1398 tons.

There are plans underway in three other Circles to deploy a similar model where powerfrom will be generated from a solar at a remote place and fed to grid. The creditgenerated from the solar plant will be used to offset the cost of energy elsewhere.

Some of the tangible outcome of above activities/initiatives include:

• Reduction in Carbon Emission:

Co2 emission reduction of about 36373 tons have been achieved through PowerPurchase Agreements and indoor to outdoor conversions.

• Contributing to Greener Economy:

The DG running has been reduced by 4 hours per BTS on an average saving approximately2 Million litres of diesel in FY17. Reduction in diesel consumption is contributing notonly to greener economy but also to the national economy by reducing the use of subsidizeddiesel.

(c) The capital investment on energy conservation equipment:

The capital investment on energy conservation equipment was not material during theFinancial Year ended March 31 2017.

B. TECHNOLOGY ABSORPTION

a) Efforts made towards technology absorption

The Company owns and operates its telecom network Adaptation and Innovation using itsown resources. The focus of the company has been to enhance its 3G and 4G data broadbandconnectivity across the country.

b) Benefits derived like product improvement cost reduction product development orimport substitution

The cost of implementation of operations network is most optimal due to in-househandling of planning and designing. The speed to market was much better in terms of ruralrollout and rollout of 3G and 4G sites due to strong in-house competency.

The Company owns and operates its telecom network Adaptation and Innovation using itsown resources. Structured internal trainings are imparted to the team of engineers fortheir skill development and grooming.

c) In case of imported technology (imported during the last three years reckoned fromthe beginning of the financial year)

No technology has been imported. However telecom equipments are imported on an ongoingbasis.

d) Expenditure incurred on Research and Development (R&D)

None

C. FOREIGN EXCHANGE EARNINGS AND OUTGO

Total foreign exchange used and earned for the year:

(a) Total Foreign Exchange Earnings : Rs.6738 Mn
(b) Total Foreign Exchange Outgo : Rs.35338 Mn

Annexure 'F' to the Directors' Report

Disclosure of Remuneration under Section 197(12) of the Companies Act 2013 read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014

(i) The percentage increase in remuneration of each Director Chief Financial Officerand Company Secretary during the Financial Year 2016-17 ratio of the remuneration of eachDirector to the median remuneration of the employees of the Company for the Financial Year2016-17 are as under:

Sr. No. Name of Director/KMP and Designation Remuneration for FY 2016-17 (' in Lacs) % increase in Remuneration in FY 2016-17$ Ratio of remuneration of each Director to median remuneration of employees
1 Mr. Kumar Mangalam Birla Chairman & Non-Executive Director 3.30 - 0.42
2 Mrs. Rajashree Birla Non-Executive Director 3.60 - 0.46
3 Mr. Sanjeev Aga Non-Executive Director 5.90 - 0.76
4 Dr. Shridhir Sariputta Hansa Wijayasuriya Non-Executive Director 3.00 - 0.38
5 Mr. Arun Thiagarajan Independent Director 4.35 - 0.56
6 Ms. Tarjani Vakil Independent Director 8.55 - 1.10
7 Mr. P. Murari Independent Director 2.20 - 0.28
8 Mr. R.C. Bhargava1 Independent Director 1.50 - 0.19
9 Mrs. Madhabi Puri Buch Independent Director 4.50 - 0.58
10 Mr. Mohan Gyani Independent Director 1.50 - 0.19
11 Mrs. Alka M. Bharucha2 Independent Director 1.50 N.A. 0.19
12 Mr. Himanshu Kapania* Managing Director 934.18# 13.3A 119.77
13 Mr. Akshaya Moondra*3 Whole Time Director & Chief Financial Officer 233.34@@ 12.0A 29.92
14 Mr. Pankaj Kapdeo* Company Secretary 79.81@ 9.3A 10.23

Notes:

(a) Remuneration of Non-Executive Director for financial year ended March 312017includes only sitting fees as no commission was approved by the board for financial yearended March 31 2017. However Commission was paid to Non-Executive Directors forfinancial year ended March 31 2016. Accordingly the percentage increase in remunerationof Non-Executive Directors is not shown in the above table.

(b) The remuneration of Employees and Key Managerial Personnel (KMPs) does not includeperquisite value of stock options exercised during the Financial Year 2016-17.

$ Based on Annualized Remuneration.

* The remuneration includes variable pay for the financial year 2015-16 which was paidin the financial year 2016-17.

A The value of performance linked incentive (PLI) considered representsincentive that will accrue at 100% performance level. For effective comparison the PLIcomponent of their remuneration for FY 2015-16 has also been considered at 100%performance level.

# The remuneration of Mr. Himanshu Kapania excludes perquisite value of stock optionsof Rs.66.85 lacs exercised during the current financial year.

@ The remuneration of Mr. Pankaj Kapdeo excludes perquisite value of stock options ofRs.3.02 lacs exercised during the current financial year.

@@ The remuneration of Mr. Akshaya Moondra excludes perquisite value of stock optionsof Rs.144.22 lacs exercised during the current financial year.

1 Mr. R.C. Bhargava ceased to be Director with effect from October 1 2016.

2 Mrs. Alka M. Bharucha was appointed as an Independent Director with effectfrom December 26 2016.

3 Mr. Akshaya Moondra was appointed as the Whole Time Director designated asWhole Time Director & Chief Financial Officer of the Company with effect from July 82016.

(ii) The percentage increase in the median remuneration of the employees of the Companyfor the Financial Year 2016-17:

The median remuneration of the employees in the Financial Year 2016-17 was increased by8% as compared to the financial year 2015-16.

The Median Remuneration of Employees of the Company during the Financial Year 2016-17was Rs.7.80 Lacs.

(iii) The number of permanent employees on the rolls of the Company:

There were 11784 permanent employees on the rolls of Company as on March 31 2017.

(iv) The explanation on the relationship between average increase in remuneration andcompany performance:

Inspite of the hyper-competitive scenario and availability of large scale free servicesfrom a new entrant the mobile industry had witnessed unprecedented disruption in thesecond half of the financial year. As a result the overall revenue of the Company for theFinancial Year 2016-17 declined by 1% as compared to the financial year 2015-16 and theEBIDTA registered a de-growth of 14%. However the company responded to the changingmarket dynamics and improved its revenue market share from 18.6% (calendar year 2015) to19.0% (calendar year 2016) and maintained its subscriber market share (on VLR) at 19.4%.

The average increase in the median remuneration of employees for the Financial Year2016-17 is 8%. The average increase in median remuneration is in line with industrybenchmark and performance of the Company.

(v) Comparison of the remuneration of the Key Managerial Personnel(s) against theperformance of the Company:

The total remuneration of Key Managerial Personnel increased by 12.8%. The overallrevenue of the Company for the financial year 2016-17 declined by 1% as compared to thefinancial year 2015-16 and the EBIDTA registered a de-growth of 14%. However the companyresponded to the changing market dynamics and improved its revenue market share from 18.6%(calendar year 2015) to 19.0% (calendar year 2016) and maintained its subscriber marketshare (on VLR) at 19.4%.

(vi) (a) Variations in the market capitalization of the

Company:

The market capitalization of the Company as on 31st March 2017 was approx. Rs.30951Crore as compared to approx. Rs.39677 Crore as on March 31 2016 representing a declineof 22%.

(b) Price Earnings Ratio:

The Earnings Per Share for the current Financial Year 2016-17 is negative. However theprice earnings ratio of the Company as at March 31 2016 was 15.2.

(c) Percent increase over/decrease in the market quotations of the shares of thecompany as compared to the rate at which the company came out with the last public offer:

The closing price of the Company's Equity Shares on NSE and BSE as of March 31 2017was Rs.85.85 and Rs.85.70 respectively representing an increase of over 14% over IPOprice (NSE).

(vii) Average percentage increase already made in the salaries of employees other thanthe managerial personnel in the last Financial Year i.e. 2016-17 with the percentageincrease in the managerial remuneration:

The average increase in the remuneration of employees excluding KMPs during FY 2016-17was 7.6% and the average increase in the remuneration of Key Managerial Personnel was12.8%.

(viii) The key parameters for the variable component of remuneration availed by thedirectors:

Based on the recommendations of the Nomination and Remuneration Committee and as perthe Remuneration Philosophy/Policy of the Company.

(ix) The ratio of the remuneration of the highest paid director to that of theemployees who are not directors but receive remuneration in excess of the highest paiddirector during the year:

None of the employees has remuneration more than the highest paid directors.

(x) Affirmation that the remuneration is as per the remuneration policy of the Company:

The remuneration of Directors was as per the Remuneration Policy of the Company.