Home  »  Company  »  Idea Cellular Ltd.  »  Quotes  »  Directors Report
Enter the first few characters of Company and click 'Go'

Directors Report of Idea Cellular Ltd.

Mar 31, 2015

Dear Members,

We have pleasure in presenting the Twentieth Annual Report, together with the audited financial statements of the Company for the Financial Year ended March 31, 2015.

Company Overview

Your Company is the third largest mobile telecommunications operator in the country, with pan India operations offering voice, data and other value added services (VAS). Your Company provides GSM-based 2G and 3G mobile telecommunications services in all 22 service areas in India and 21 service areas respectively. The Company offers 3G services in 12 service areas pursuant to spectrum allocated to the Company and provides 3G services in remaining service areas through intra-circle roaming (ICR) arrangements with other mobile telecommunication service providers. Your company also provides WiFi services in select locations. Your company also has the capability to launch 4G in earmarked service areas based on the spectrum it acquired in February 2014 and March 2015 auctions.

Your company also holds licenses to offer NLD, ILD, ISP and IP-1 services. While the NLD and ISP services mainly cater to the captive needs of the company currently, the ILD and IP-1 services cater to both external and captive needs.

Financial Results

The financial statements of the Company have been prepared in accordance with the mandated Generally Accepted Accounting Principles (Indian GAAP). The standalone and consolidated financial highlights of your Company for the Financial Year ended March 31, 2015 are summarized below:

Rs. Mn

Particulars Standalone Consolidated

2014-15 2013-14 2014-15 2013-14

Income from 312,521 261,104 315,269 264,320 Services

Other Operating 274 691 440 869 Income

Other Income 4,523 2,239 4,697 2,268

Total Revenue 317,318 264,034 320,406 267,457

Operating 216,061 188,938 207,593 182,268 Expenses

EBITDA 101,257 75,096 112,813 85,189

Depreciation and Amortisation 48,550 40,932 53,036 45,194

EBIT 52,707 34,164 59,777 39,995

Interest and Finance charges 9,316 8,111 10,452 9,552

EBT 43,391 26,053 49,325 30,443

Taxes 15,293 9,160 17,396 10,765

Profit 28,098 16,893 31,929 19,678 after Tax

Operations Review

Your Company is pleased to report another year of splendid performance outpacing the sector growth, maintaining its track record of growing faster than the sector. On a standalone basis, your Company clocked total revenues of Rs. 317,318 Mn, a growth of 20.2% over the previous year, primarily driven by solid growth in Voice and data volumes. The EBITDA also increased to Rs. 101,257 Mn, representing a growth of 34.8 % over the previous year. The Profit after Tax stood at Rs. 28,098 Mn, a rise of 66.3% as compared to the previous year.

On a consolidated basis, the total revenues were Rs. 320,406 Mn, a growth of 19.8% over the previous year. The EBITDA at Rs. 112,813 Mn, reflects a growth of 32.4% as compared to the previous year. The consolidated Profit after Tax stood at Rs. 31,929 Mn, up by 62.3% compared to the previous year.

As on March 31, 2015 the subscriber base of your company was 157.8 Mn, representing a growth of 16.2% over the previous year. Your company continues to improve its market position by gaining higher incremental market share both in terms of revenue as well as in terms of subscribers, and positioned itself as 'One among the Top Three' operators in India.

As per TRAI reports, during the Financial Year 2014-15, your Company gained incremental revenue market share (RMS) of 29.7% of the Indian mobile telecommunication service industry, resulting in RMS improvement of 1.3% compared to the previous year, highest among all telecom operators, thus taking up the RMS to 17.5%. In terms of subscriber market share, during the year your company added 22 Mn subscribers, while the industry added 65.4 Mn subscriber, capturing 33.7% incremental subscriber market share. The subscriber market share for your Company stood at 16.3% as of March 31, 2015, compared to 15% as of March 31, 2014, an improvement of 1.3%. Your company also maintains its leadership position in terms of percentage of active subscriber base to total subscriber base. Further, your Company strengthened its leadership position in Mobile Number Portability (MNP), based on the net subscriber additions.

The overall demand for both Voice and Data remained strong during the year. Your company has added 95.7 Bn voice minutes on its network, highest incremental voice minutes addition in last 4 years, taking the total minutes of usage on the network for the Financial Year 2014-15 to 683.4 Bn, a growth of 16.3% compared to previous year. The total data usage continue to grow by more than 100% on YoY basis. The total data usage of 172.5 Bn MB registered a growth of 117.3%, compared to previous year.

Your Company continues to invest in the long term value creators and remain committed towards increasing its geographical coverage as well as improve the capability of network to address the growing demand of both voice and data. During the year, your Company added 7,589 2G sites, taking the 2G site count to 112,367 as of March 31, 2015. 2G services are now available in more than 360,000 towns and villages. On 3G front, your Company added 8,910 sites increasing its 3G site count to 30,291. Your Company is focused to improve its Optical Fibre Cable (OFC) transmission network, with the growing demand of data. During the year your Company expanded its OFC transmission network approximately to 93,200 km compared to 82,000 km a year ago, an increase of more than 11,000 km

In the recent spectrum auction held in March, 2015, your Company was successful in retaining spectrum in the crucial 900 MHz band in nine of its leadership service areas, and won 54 MHz of 900 MHz Spectrum (including additional 5 MHz in Maharashtra for second carrier of 3G service), which account for over 73% of the company's revenues. Your Company also acquired 20.4 MHz additional spectrum in the 1800 MHz band in six of its key service areas and 5 MHz in the 2100 MHz for launching 3G services in the metro market of Kolkata. This will enable company to further expand its 3G Services on own spectrum to 13 service areas covering 80% of its revenue and provide capability to do 4G roll out on 1800 MHz in 10 Service Areas covering 61% of its revenue.

Dividend

Your Directors are pleased to recommend a dividend of Rs. 0.60 per equity share of Rs. 10/- each (6 % of face value) for the year ended March 31, 2015. Based on the outstanding paid-up share capital as at the year end, the total dividend payout will amount to Rs. 2,598 Mn inclusive of Rs. 439 Mn of dividend distribution tax. This payment is subject to your approval at the ensuing Annual General Meeting of the Company.

Transfer to Reserves

Your Company has not transferred any amount to the General Reserve for the financial year ended March 31, 2015. However, in line with statutory requirements, your Company has transferred Rs. 103 Mn to Debenture Redemption Reserve.

Changes in Share Capital

During the year under review, your Company had raised Rs. 30,000 Mn by issuing 223,880,597 Equity Shares of Rs. 10/- each under a Qualified Institutions Placement as per Chapter VIII of SEBI (ICDR) Regulations, 2009, at an issue price of Rs. 134/- per Equity Share.

Further, the Company also raised Rs. 7,500 Mn by issuing 51,838,540 Equity Shares of Rs. 10/- each on a preferential basis under Preferential Issue guidelines as per Chapter VII of SEBI (ICDR) Regulations, 2009, to Axiata Investments 2 (India) Limited, (a subsidiary of Axiata Group Berhad, Malaysia), an existing key shareholder of the Company at an issue price of Rs. 144.68 per Equity Share.

Additionally, your Company also issued and allotted 2,493,529 Equity Shares of Rs. 10/- each, fully paid-up, to the option grantees pursuant to the exercise of stock options by eligible employees under the Employee Stock Option 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, 2015 stood at Rs. 35,978,444,270 comprising of 3,597,844,427 equity shares of Rs. 10/- each.

Capital Raising

During the year under review, your Company successfully, managed to raise Rs. 30,000 Mn through a Qualified Institutional Placement (QIP Issue). The issue witnessed strong interest from both foreign and domestic investors and there was a strong participation from long only investors. The issue price of Rs. 134/- per equity share, achieved was strong too, representing a discount of just 2.18% to the floor price.

Additionally, your Company also raised Rs. 7,500 Mn by allotting 51,838,540 equity shares of Rs. 10/- each, on a preferential issue basis to Axiata Investments 2 (India) Limited, an existing key shareholder of the Company, at an issue price of Rs. 144.68 per share.

The above capital raising has enabled to put in place a strong capital structure to support our strategic business plan.

Finance

During the year under review, your Company raised long term borrowings of Rs. 80,500 Mn by way of Rupee Term Loans, of which Rs. 76,475 Mn has been prepaid by the Company on May 14, 2015. Further, during the year, Rupee Term Loans aggregating to Rs. 4,055 Mn have been prepaid and Non-Convertible Debentures (NCDs) amounting to Rs. 750 Mn have been repurchased by the Company.

In addition to the aforesaid prepayment, Long Term Loans aggregating to Rs. 16,191 Mn (including Rs. 10,051 Mn towards External Commercial Borrowings) have been repaid, pursuant to the instalments that fell due.

Capital Expenditure

Your Company continues to expand the telecommunication infrastructure of 2G and 3G sites, Optical Fibre Cable (OFC) transmission network (own and through IRU arrangements with other companies) along with the core capacities as required.

Your Company also participated in the Government conducted spectrum auction held in March, 2015 and committed Rs. 301,375 Mn, which includes Rs. 276,398 Mn towards 54 MHz spectrum in the 900 MHz band, Rs. 19,198 Mn towards 20.4 MHz spectrum in 1800 MHz band and Rs. 5,780 Mn towards spectrum in 2100 MHz band. Out of the above commitment, Rs. 19,350 Mn has been paid before March 31, 2015 and included in Capital Advances.

In addition to the above amount relating to spectrum, the capital expenditure (including capital advances) incurred during the year was Rs. 41,729 Mn and Rs. 45,785 Mn at standalone and consolidated level respectively.

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.

Credit Rating

With the certainty of 900 MHz spectrum in the key nine service areas and the consistent healthy operational performance, Credit Analysis & Research Limited (CARE), has revised its rating for Long Term borrowings and Non- Convertible Debentures to 'CARE AA ' from 'CARE AA'. Additionally, your Company continues to enjoy credit rating of CARE A1 and CRISIL A1 for its short term debt program.

Significant Developments:

* Spectrum Auction - March 2015

The Auction for Spectrum in 800 MHz band, 900 MHz band, 1800 MHz band and 2100 MHz band commenced on March 4, 2015. The auction was limited to 20 service areas for 800 MHz band, 17 service areas for 900 MHz band, 15 service areas for 1800 MHz band and 17 service areas for 2100 MHz band. The total spectrum put to auction, in all four bands, was 470.75 MHz i.e. 108.75 MHz in 800 MHz band, 177.8 MHz in 900 MHz band, 99.2 MHz in 1800 MHz band and 85 MHz in 2100 MHz band. A large chunk of the spectrum put to auction in 800 MHz band and 1800 MHz band was new spectrum and also the entire spectrum put to auction in 2100 MHz band was new spectrum. However the spectrum put to auction in 900 MHz band was entirely 'in-use' spectrum of existing operators whose licenses were due for extension / renewal in the year 2015/2016.

With renewal of licenses across nine key markets where the 20 years of the license period was ending in December 2015/April 2016, auction was critical for your Company as these nine service areas contributes ~73% of its revenues. Your Company remained focused on framing an auction strategy that ensures business continuity in these leadership markets and lay foundation for the digital age going forward.

As a result, your Company successfully won 54 MHz of 900 MHz band spectrum in these nine key markets. With data business expected to continue its stupendous growth over the next few years, company has also acquired 5 MHz of 2100 MHz band for 3G services in the strategic metro market of Kolkata and contiguous spectrum in the 1800 MHz band in Tamil Nadu and Odisha service areas, for deployment of 4G services at appropriate juncture in the future. This will further expand 3G coverage to 13 circles covering 80% of company's revenues and enable it to roll out 4G services on 1800 MHz band across 10 service areas covering 61% of its revenues. The 9 MHz spectrum won in Maharashtra & Goa will also enable the company to deploy 3G services on 900 MHz (in addition to the existing 2100 MHz band), at an opportune time.

As the Company continues to focus on growing the voice business and enhancing customer experience across all its circles, your Company also acquired additional top up spectrum in 1800 MHz band in UP West - 2.2 MHz, Karnataka - 1 MHz, Himachal Pradesh - 4.8 MHz and North East - 1 MHz.

Overall, your Company won 79.4 MHz of spectrum i.e. 54 MHz in 900 band, 20.4 MHz in 1800 band and 5 MHz in 2100 band, across 14 circles for a total bid valued of approximately Rs. 301,375 Mn. The breakup of the spectrum won is given below:

S. Service 900 MHz 1800 MHz 2100 MHz No. Area Band Band Band

1 Maharashtra 9 MHz

2 Madhya 7.4 MHz Pradesh

3 Haryana 6 MHz

4 Kerala 6 MHz

5 Punjab 5.6 MHz

6 Andhra 5 MHz Pradesh

7 Gujarat 5 MHz

8 Karnataka 5 MHz 1 MHz

9 UP West 5 MHz 2.2 MHz

10 Tamil 6.4 MHz Nadu

11 Odisha 5 MHz

12 Himachal 4.8 MHz Pradesh

13 North East 1 MHz

14 Kolkata 5 MHz

Your Company opted for the deferred payment option and has made upfront payments of Rs. 77,342 Mn (including Rs. 19,350 Mn paid before March 31, 2015) The balance amount will be paid in ten equal instalments after two years moratorium including interest @ 10%.

* One Time Spectrum Charge

The Department of Telecommunications (DoT) had issued demand notices of Rs. 21,135 Mn towards levy of one time spectrum charge. The demand includes a retrospective charge of Rs. 3,691 Mn for holding GSM spectrum beyond 6.2 MHz for the period from July 1, 2008 to December 31, 2012 and also a prospective charge of Rs. 17,444 Mn for GSM spectrum held beyond 4.4 MHz for the period from January 1, 2013 till the expiry of the period of the respective licenses. In the opinion of the Company, the above demands, inter-alia, amount to alteration of financial terms of the licenses issued in the past. Your Company had, therefore, filed a petition before the Hon'ble High Court of Bombay, which directed DoT not to take any coercive action until the next date of hearing.

Subsequently, DoT raised the issue of maintainability. The Hon'ble Court passed a detailed order stating that the case is maintainable and that such issue cannot be taken-up by TDSAT. Interim protection continues and the matter is pending for final hearing.

* Transfer of licenses for Punjab and Karnataka service areas to the Company

In the pending legal matter of transfer of licenses for service areas of Punjab & Karnataka, DoT has transferred these licenses in the name of the Company as directed by Hon'ble Supreme Court pursuant to its order dated January 29, 2014, upon submission of an undertaking. These licences were registered in the name of erstwhile Spice Communications Limited (Spice), which had merged with the Company pursuant to amalgamation order passed by the Hon'ble High Court(s) of Gujarat and Delhi.

While the licenses in respect of Punjab and Karnataka service areas have been transferred to the Company pursuant to aforesaid directive given by Hon'ble Supreme Court to DoT upon furnishing of requisite undertaking by the Company to DoT, the matter relating to challenge of aforesaid demand of Rs. 6,000 Mn for alleged violations of license terms & conditions and merger & acquisition guidelines in connection with amalgamation of Spice, remains sub-judice before Hon'ble TDSAT.

* 3G Services and Intra-Circle Roaming Arrangements

Your Company is presently providing 3G services to its customers in all 11 service areas where it holds spectrum in 2100 MHz band, including Punjab service areas where company received authorization from DoT to launch 3G services in May 2014. Additionally, in March 2015 company has launched 3G services in Delhi service area on 900 MHz band spectrum that it won in February 2014 spectrum auction. Further, the Company provide 3G services in 9 other service areas based on intra-circle roaming arrangements with other leading telecom operators where company does not own 3G spectrum.

The DoT had issued notices to your Company and other operators to stop providing 3G services in the service areas where the operator had not won 3G spectrum, besides levying a penalty of Rs. 500 Mn in each service area. Out of such notices issued to operators, your Company received notices for six service areas. Subsequently matters were heard at TDSAT and in its final Judgment dated April 30, 2014, the Hon'ble Tribunal allowed our Petitions and quashed the DoT penalty notices. In this connection, the DoT had also filed contempt of court petition before Hon'ble High Court of Delhi against certain Directors and Officials of the Company for alleged violation of interim order passed by the Hon'ble High Court of Delhi, which too was later dismissed by Hon'ble Court.

Awards and Recognitions

Some key awards and recognitions received by your Company are:

* Your Company has been ranked 3rd in the best managed public companies, 4th in Corporate Governance and Investor Relations amongst Indian Companies across industries by Finance Asia magazine's annual poll of investors and analysts.

* At EFFIES 2014, Idea was recognized as 3rd Best Client of the Year with 3 awards as set under:

* Gold - Telecom Services category for "No Ullu Banaoing"

* Silver- Integrated Advertising Campaign category for "No Ullu Banaoing"

* Gold - For Best Ongoing Campaign category for "An Idea can change your life"

* Idea was rated 8th among Top 50 Brands across brand, product and service categories in India by BrandZ Awards 2014 basis brand evaluation by WPP Millward Brown.

* Your Company bagged "Pitch Top 50" Brands Award for the year 2014.

* Your Company won the ET Telecom Award for the Best Marketing Campaign of the year for "No Ullu Banaoing". This award is given for the marketing campaign that is not only unique in creativity but also gets the desired business results.

* Your Company yet again won the Economic Times Telecom Awards 2014 for 2 years in succession in the Enterprise category for cab management solution (for implementations for Bookmycab, Fastrack, Mango Cab).

* Idea won awards in Annual Telecom Leadership Forum organised by the popular ICT magazine Voice & Data (from the Cyber Media House).

* Internet and Broadband Category - for introducing the IN platform for billing postpaid data services.

* Marketing Category - for harnessing analytics to gain consumer insights enabling micro marketing.

* Marketing Category - for deployment of cloud based services for Idea's enterprise customers.

New 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, introducing various innovative products and services. Some of these are:-

* Idea continued to capture the consumers' imagination with its innovative advertising during the year. While the theme campaign 'No Ullu Banaoing' highlighted the power of mobile internet on Idea network, the latest campaign - 'Idea Internet Network' (IIN) - shows how education on mobile internet can help overcome the barriers created by traditional systems by delivering the power to learn into the hands of anyone who has the passion to learn and an Idea Internet Network connection.

* Idea followed the launch of its online bollywood destination site 'Idea Popcorn Street' (IPCS) (www.ideapopcornstreet.com), by extending the portal to South Indian filmdom - now IPCS has in place the latest on Tamil, Telugu, Malayalam and Kannada movies.

* Your Company launched Magic Recharge product as an innovative means of customer engagement where the simple recharge process got converted to one filled with excitement and customer delight.

* Idea revamped its much popular 121 and 122 USSD portals in its never ending quest to strengthen relationship with its customers and retailers respectively:

* Upfront display of best offers on the 121 USSD portal used by customers for balance enquiry made the customer(s) well aware about the best product deals available for them.

* Recharge feature on 122 USSD portal enabled retailers to check customer best offers as well as recharge for the same making the process easier and faster for them. Also Idea launched the online commission payment through 122, which made its relationship with the channel partners much more transparent and trustworthy.

* Your Company launched unique web portal www.ismartpacks.com which gives customized data offers to prepaid customers.

* Your Company launched easy share plans for prepaid customers which is Industry First and allows the customers to share internet, voice and SMS benefits with friends and family.

* For postpaid customers, your Company launched bouquet of customer centric products such as:

* "No Bill Shock" plans which ensured that customer doesn't get bill amount more than a pre-defined limit.

* Booster packs for customers who run out of data volume or speed in the middle of the bill cycle

* Successfully retained IOCL account for Automation of LPG booking for over 80 mn INDANE consumers by winning the national tender for smart gas solution. This has been one of the biggest enterprise business contracts bagged by any mobile operator in India.

* Idea strengthened its brand further by sustaining its association with high impact media properties through the year by timing its mass media campaigns well, making its presence felt during some of the most popular properties on TV. The brand extended its association with IPL by signing up with Sunrisers Hyderabad for the 2015 edition.

* To increase 3G device penetration amongst Idea customers, Idea (through its subsidiary) further strengthened 'Idea Smartphone' brand by launching five new models in the market in FY 2014-15.

Subsidiaries and Joint Venture

As on March 31, 2015, your Company has five subsidiary companies and one joint venture, details whereof are as under:

Subsidiaries

* Aditya Birla Telecom Limited, holds 16% shareholding in Indus Towers Limited and is engaged in the trading of mobility devices.

* Idea Cellular Services Limited, provides manpower services to the Company.

* Idea Cellular Infrastructure Services Limited, is a tower Company owning towers in Bihar and Odisha service areas and provides passive infrastructure services in these service areas.

* Idea Mobile Commerce Services Limited, is engaged in providing mobile banking services and operating Prepaid Payment Instruments in India.

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

Joint Venture

Indus Towers Limited, in which Aditya Birla Telecom Limited (ABTL), a wholly owned subsidiary of the Company holds 16% stake, continues to be a joint venture with the Bharti Group and Vodafone Group and provides passive infrastructure services in 15 service areas.

In accordance with the provisions contained in section 136(1) of the Companies Act, 2013 (Act), the Annual Report of the Company, containing therein its standalone and the consolidated financial statements are available on the Company's website www.ideacellular.com.

Further, pursuant to the said section, the financial statements of each of the aforesaid subsidiary companies are available on the Company's website www.ideacellular.com and shall be available for inspection during business hours at the Registered Office of the Company. Any member who is interested in obtaining a copy of the financial statements may write to the Company Secretary at the registered office of the Company.

In terms of provisions contained in Section 129(3) of the Act, read with Rule 5 of the Companies (Accounts) Rules, 2014, a report on the performance and financial position of each of the subsidiaries and joint venture is provided as Annexure A to this report.

Consolidated Financial Statements

In accordance with the provisions of Section 129(3) of the Companies Act, 2013 and Clause 32 of the Listing Agreement, entered into with the Stock Exchanges, the Consolidated Financial Statements forms part of this Annual Report and shall also be laid before the ensuing Annual General Meeting of the Company. The Consolidated Financial Statements have been prepared in accordance with the applicable Accounting Standards issued by the Institute of Chartered Accountants of India.

Risk Management

In compliance with the requirements of Clause 49 of the Listing Agreement and the provisions of the Companies Act, 2013, your Company has constituted a Risk Management Committee, details whereof are set out in the Corporate Governance Report forming part of the Annual Report. Further, your Company has formally adopted a Risk Management Policy to identify and assess the key risk areas, monitor and report compliance and effectiveness of the policy and procedure.

Your Company has a well-established Enterprise-wide Risk Management (ERM) framework in place for identification, evaluating and management of risks, including the risks which may threaten the existence of the Company. In line with your Company's commitment to deliver sustainable value, this framework aims to provide an integrated and organized approach for evaluating and managing risks. A detailed exercise is being carried out to identify, evaluate, manage and monitor the risks. The Committee / Board periodically reviews the risks and suggest steps to be taken to control and mitigate the same through a properly defined framework.

Employee Stock Option Scheme

Your Company values its employees and is committed to adopt the best HR practices for rewarding them suitably. In this direction your Company had implemented the Employee Stock Option Scheme, 2006 (ESOS-2006) and Employee Stock Option Scheme, 2013 (ESOS-2013) and made grants to eligible employees under ESOS-2006 and ESOS-2013 from time to time.

During the year under review, in terms of ESOS-2013, the ESOS Compensation Committee has granted 559,677 Options at an exercise price of Rs. 150.10 per option and 254,499 Restricted Stock Units (RSU) at an exercise price of Rs. 10/- per RSU. Each Option is convertible into one equity share of the Company upon vesting and would vest in 4 equal annual 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 each RSU is convertible into one equity share of the Company upon vesting and all RSUs would vest at the end of 3 years from the date of grant and shall be exercisable within a period of 5 years from the date of vesting.

In terms of the provisions of the SEBI (Share Based Employee Benefits) Regulations, 2014, the details of the Stock Options and Restricted Stock Units granted under the above mentioned Schemes are available on your Company's website www.ideacellular.com.

A certificate from M/s. Deloitte Haskins & Sells LLP, Statutory Auditors, with respect to the implementation of the Company's Employee Stock Option Scheme(s), would be placed at the ensuing Annual General Meeting for inspection by the Members and a copy will also 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 its business and the size and complexity of its operations. The internal controls cover operations, financial reporting, compliance with applicable laws and regulations, safeguarding assets from unauthorised use and ensure compliance of corporate policies. Internal controls are reviewed periodically by the internal auditors, and are subject to management reviews with significant audit observations and follow up actions reported to the Audit Committee. The Audit Committee actively reviews the adequacy and effectiveness of internal control systems and suggests improvements for strengthening them in accordance with the changes in the business dynamics, if required.

Human Resources

The human resource philosophy and strategy of your Company is to attract and retain the best talent, encourage innovation, create an engaging and motivating workplace environment and be an employer of choice. This was reflected by external recognition through the "HR Excellence Award" given for best practices in Talent Acquisition, presented at the Economic Times HR Excellence Summit 2014. In the previous financial year, your company has also shown an improvement in already high employee engagement scores overall, and significant improvement in areas like training and development and onboarding.

Keeping in view the long term business goals, your company has ensured that the Human Resources strategy is inline and complementary to the business strategy. Your Company will focus on succession planning, building capability in digital space and analytics, and ensuring continued high employee engagement along with effective and efficient talent development and deployment. This strategy has strong alignment with your Company's vision to successfully build and sustain your Company's standing as one of India's most admired and valuable corporations despite unrelenting competitive pressures.

Management Discussion and Analysis

The Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement 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 enshrined in Clause 49 of the Listing Agreement which relates to Corporate Governance. A Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report. A certificate from the Statutory Auditors of the Company, confirming compliance with the conditions of Corporate Governance, as stipulated under Clause 49 forms part of the Annual Report.

Business Responsibility Report

As stipulated under the Listing Agreement, the Business Responsibility Report, describing the initiatives taken by the Company from environmental, social and governance perspective is presented in a separate section forming part of the Annual Report.

Corporate Social Responsibility

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

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

The financial year 2014-15, was a preparatory year for the implementation of CSR policy. Being the initial year, the Company was in the process of evaluating the various focus areas for its CSR activities and conducted number of consultations with organizations working in the area of education, health, sanitation, poverty eradication and livelihood generation.

The Company identified some key projects which will be executed during the current financial year 2015-16. A dedicated team is also in place to look after the CSR related activities.

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

Directors' Responsibility Statement

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

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed, along with proper explanation relating to material departures;

(b) the Directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

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

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

(e) the Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

(f) the Directors had devised proper systems to ensure compliance with the provisions of 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 and Dr. Shridhir Sariputta Hansa Wijayasuriya, retire from office by rotation, and being eligible, offer themselves for re-appointment at the ensuing Annual General Meeting of the Company.

Further, during the year under review, Mr. Biswajit Subramanian and Dr. Rakesh Jain, Non-Executive Director(s) resigned from the Board of your Company with effect from October 20, 2014 and December 15, 2014 respectively. The Board places on record its sincere appreciation for the valuable guidance and contribution made by Mr. Subramanian and Dr. Jain in the deliberations of the Board during their respective tenures.

With coming into the force of the Companies Act, 2013, the Board appointed all the existing Independent Directors viz. Mr. Gian Prakash Gupta, Ms. Tarjani Vakil, Mr. Arun Thiagarajan, Mr. R.C. Bhargava, Mr. P. Murari, Mr. Mohan Gyani and Mrs. Madhabi Puri Buch as Independent Directors under Section 149 of the Companies Act, 2013 for a term of five years upto the conclusion of the Annual General Meeting to be held in calendar year 2019. The Shareholders at their Annual general Meeting held on September 26, 2014 approved their appointment.

The Independent Directors have given the declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

Mr. Himanshu Kapania was appointed as the Managing Director of the Company for a period of 5 years with effect from April 1, 2011. His current term of office as Managing Director is due to expire on March 31, 2016. The Board of Directors at its meeting held on July 21, 2015, on the recommendation of the Nomination & Remuneration Committee, has re-appointed Mr. Himanshu Kapania as the Managing Director of the Company with effect from April 1, 2016 for a further period of five years, subject to approval of the members. The resolution seeking approval of the members for the appointment of Mr. Kapania together with the terms and conditions of appointment, have been incorporated in the notice of the ensuing Annual General Meeting.

Board Evaluation and Familiarization Programme

The Board has carried out the annual performance evaluation of its own performance, Board Committees and Individual Directors pursuant to the provisions of the Companies Act, 2013 and the Clause 49 of the Listing Agreement. The manner in which the evaluation has been carried out has been provided in the Corporate Governance Report.

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

Remuneration Policy

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

Board Meetings

During the year, seven meetings of the Board of Directors were held. The details of the meetings and the attendance of the Directors are provided in the Corporate Governance Report.

Board Committees

During the year, in accordance with the Companies Act, 2013 and provisions of the Listing Agreement, the Board re- constituted some of its Committees. There are currently six 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 held during the year, are provided in the Corporate Governance Report, which forms part of this report.

Audit Committee

The Audit Committee comprises of Mr. Gian Prakash Gupta, Mr. Arun Thiagarajan, Ms. Tarjani Vakil and Dr. Shridhir Sariputta Hansa Wijayasuriya. Further details relating to the Audit Committee are provided in the Corporate Governance Report, which forms part of this report.

Key Managerial Personnel

In terms of the provisions of Section 203 of the Companies Act, 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Mr. Himanshu Kapania, Managing Director; Mr. Akshaya Moondra, Chief Financial Officer; and Mr. Pankaj Kapdeo, Company Secretary were designated as Key Managerial Personnel of the Company.

Contract and Arrangements with Related Parties

All arrangements / transactions entered by the Company during the year with related parties were in the ordinary course of business and on arm's length basis. There are no materially significant related party transactions made by the company with Promoters, Directors or Key Managerial Personnel etc. which may have potential conflict with the interest of the company at large.

The related party transactions which can be considered material during the year is the arrangement with Indus Towers Limited (Indus), a joint venture of the wholly-owned subsidiary of your company which provides Passive Infrastructure services and related operations & maintenance services to various telecom operators in India, including your Company. Indus is currently the world's largest passive infrastructure provider. Your Company had entered into a Master Service Agreement (MSA) with Indus in 2008 for availing passive infrastructure services provided by them in certain service areas. The MSA requires individual tenancy service contracts to be executed for each passive infrastructure site, the terms of which vary depending on the location, type of site, number of existing tenants, etc., and contain lock in periods for ensuring continuity. Such terms are similarly applicable to all other telecom providers having arrangements with Indus. The details of the material related party transaction with Indus for the year ended March 31, 2015 is provided in Form AOC-2, which is attached as Annexure D to this report.

All Related Party Transactions are placed before the Audit Committee for their approval. Omnibus approvals are taken for the transactions which are repetitive in nature. The Company has implemented a Related Party Transaction manual and Standard Operating Procedures for the purpose of identification and monitoring of such transactions. The details of the transactions with Related Parties are provided in the accompanying financial statements as required under Accounting Standard 18.

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

Particulars of Loans, Guarantees and Investments

As your Company is engaged in the business of providing infrastructural facilities, the provisions of Section 186 of the Companies Act, 2013 relating to loans made, guarantees given or securities provided are not applicable to the Company. However, the details of such loans made and guarantees given are provided in the standalone financial statements at Note no. 46. Particulars of investments made by the Company are provided in the standalone financial statements at Note nos. 13 and 15.

Vigil Mechanism

Your Company has in place a vigil mechanism for directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of your Company's Code of Conduct. Adequate safeguards are provided against victimization to those who avail of the mechanism and direct access to the Chairman of the Audit Committee in exceptional cases is provided to them.

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 exchange and outgo as required to be disclosed pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, are given to the extent applicable in Annexure E forming part of this report.

Particulars of Employees

Disclosures pertaining to remuneration and other details as required under section 197(12) read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 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 other particulars of employees are to be set out in the Directors' Report, as an addendum thereto. However, in line with the provisions of Section 136(1) of the Act, the Report and Accounts as set out therein, are being sent to all Members of your Company excluding the aforesaid information about the employees. Any Member, who is interested in obtaining these particulars about employees, may write to the Company Secretary at the Registered Office of your Company.

Statutory Auditors

The members of the Company had at its Annual General Meeting (AGM) held on September 26, 2014, appointed M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, (Firm Registration No. 117366W/W-100018), as the Statutory Auditors of the Company for a period of three years, i.e. till the conclusion of 22nd AGM, subject to ratification of their appointment by members at every AGM.

The Company has received a certificate from the Statutory Auditors to the effect that ratification of their appointment, if made, shall be in compliance with the provisions Section 139 and 141 of the Companies Act, 2013. Accordingly, the Board proposes ratification of their appointment at the ensuing Annual General Meeting.

Auditors' Report and Notes to Financial Statements

The Board has duly reviewed the Statutory Auditors' Report on the Financial Statements including the emphasis of matter relating to the one-time spectrum fee demand raised by the Department of Telecommunications in January 2013. As explained in Significant Development section of this report and also in the Notes to the Financial Statements, the matter remains sub-judice and does not call for any further explanation/clarification under Section 134(3)(f) of the Companies Act, 2013.

Cost Auditors

In conformity with the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Board on the recommendation of the Audit Committee has appointed M/s. Sanjay Gupta & Associates, Cost Accountants, as the Cost Auditors, to conduct the Cost Audit of your Company for the Financial Year ended March 31, 2016 at a remuneration as specified in the notice convening the Annual General Meeting. The Cost Audit Report for the Financial Year 2014-15 has been placed before the Board at their meeting held on July 21, 2015.

As required under the Companies Act, 2013, the remuneration payable to the Cost Auditors is required to be ratified by the shareholders, the Board recommends the same for the approval 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 had appointed M/s. Umesh Ved & Associates, Company Secretaries, Ahmedabad, as the Secretarial Auditor for conducting the Secretarial Audit of your Company for the financial year ended March 31, 2015.

The report of the Secretarial Auditor is annexed to this report as Annexure G. The secretarial audit report does not contain any qualification, reservation or adverse remark.

Extract of Annual Return

In terms of the provisions of Section 92 (3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return in Form MGT 9 for the financial year ended March 31, 2015 is annexed herewith as Annexure H to this report.

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.

* 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 are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company's operations in future

* During the year, your Company has not received any complaints under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

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 and all the business associates 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. The perseverance and unstinting efforts of the employees 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: July 21, 2015 Chairman


Mar 31, 2014

Dear Shareholders,

We have pleasure in presenting the Nineteenth Annual Report, together with the audited financial statements of the Company for the Financial Year ended March 31, 2014.

Company Overview

Your Company is the third largest mobile telecommunications operator in the country, with pan India operations offering voice, data and other value added services (VAS). Your Company provides GSM-based mobile telecommunications services in all 22 service areas in India, and 3G services in 20 service areas. The Company offers 3G services in 10 service areas pursuant to spectrum allocated to the Company and provides 3G services in 10 additional service areas through intra-circle roaming arrangements with other mobile telecommunication service providers.

Financial Results

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP). The standalone and consolidated financial highlights of your Company for the Financial Year ended March 31, 2014 are summarised below:

Rs. Mn

Particular Standalone Consolidated

2013-14 2012-13 2013-14 2012-13

Income from Services 261,104 220,434 264,320 224,075

Other Income 691 435 869 502

Total Revenue 261,795 220,869 265,189 224,577

Operating Expenses 188,562 169,304 181,852 164,531

EBITDA 73,233 51,565 83,337 60,046

Depreciation and

Amortisation 40,932 30,544 45,194 34,778

EBIT 32,301 21,021 38,143 25,268

Interest and Financing charges 6,248 8,135 7,700 9,495

EBT 26,053 12,886 30,443 15,773

Taxes 9,160 4,703 10,765 5,664

Profit after Tax 16,893 8,183 19,678 10,109

Operations Review

Your Company continued its enviable track record of growing faster than the industry with service revenue growth of 18.4% on a standalone basis. The total subscriber base of your Company as on March 31, 2014 was 135.8 Mn, representing an increase of 11.7% over the previous year.

As per TRAI reports, for the nine months ended December 31, 2013, your Company had a Revenue Market

Share of approximately 16.1% of the Indian mobile telecommunication service industry, one of the highest YoY improvement of 1.3%. Your Company''s subscriber market share stood at 14.8% as of February 28, 2014 compared to 14.0% as of March 31, 2013. The percentage of active subscriber base to total subscriber base is highest in the industry.

Your Company continues to invest in network infrastructure both on 2G and 3G front. During the year Company added 14,684 2G sites, taking the 2G site count to 104,778 as of March 31, 2014. 2G services are now available in more than 340,000 towns and villages. On 3G front Company has added 4,241 sites increasing its 3G site count to 21,381. Your Company has also expanded its Optical Fibre Cable transmission network to 82,000 km compared to 74,000 km a year ago.

In the recent spectrum auction held in February 2014, your Company won 5 MHz spectrum in the 900 MHz band for the Delhi Service Area which is intended to be utilised for offering 3G services. The Company also won 60.2 Mhz spectrum in the 1800 MHz band, which includes 45 MHz contiguous spectrum capable of being used for providing 4G High Speed broadband LTE services in eight service areas. The remaining 15.2 MHz spectrum won in other select service areas would be used to cater to the expansion of its existing services in these service areas.

Your Company''s total minutes of usage on the network for the Financial Year 2013-14 were 587.8 billion minutes.

On a standalone basis, your Company clocked revenue of Rs. 261,795 Mn, a growth of 18.5% over the previous year, primarily driven by 10.5% growth in total minutes of use, 112.4% growth in data volume and also increased rate realization as compared to previous year. The EBITDA also increased to Rs. 73,233 Mn, representing a growth of 42.0% over the previous year.

The Profit after Tax stood at Rs. 16,893 Mn, a rise of 106.4% as compared to the previous year, led by an increase in EBITDA and lower finance & treasury charges partially offset by higher depreciation and amortization charge during the year.

On a consolidated basis, the total revenues were Rs. 265,189 Mn, a growth of 18.1% over the previous year. The EBITDA at Rs. 83,337 Mn, reflects a growth of 38.8% as compared to the previous year. The consolidated Profit after Tax stood at Rs. 19,678 Mn, up by 94.7% compared to the previous year.

Dividend

Your Directors are pleased to recommend a dividend of Rs. 0.40 per equity share of Rs. 10/- each (4% of face value) for the year ended March 31, 2014. Based on the outstanding paid-up share capital as at the year end, the total dividend payout will amount to Rs. 1,554 Mn inclusive of Rs. 226 Mn of dividend distribution tax. This payment is subject to your approval at the ensuing Annual General Meeting of the Company.

Transfer to Reserves

Your Company has not transferred any amount to General Reserve out of profits available for appropriation. However, in line with statutory requirements, your Company has transferred Rs. 145 Mn to Debenture Redemption Reserve.

Share Capital

During the year, your Company issued and allotted 5,309,995 Equity Shares of Rs. 10/- each, fully paid-up, to the option grantees pursuant to the exercise of stock options by eligible employees under the Employee Stock Option Scheme, 2006 (ESOS-2006).

Consequently, the issued, subscribed and paid-up equity share capital of your Company as on March 31, 2014 stood at Rs. 33,196,317,610, comprising of 3,319,631,761 equity shares of Rs. 10/- each.

Capital Expenditure

Your Company continues to expand the telecommunication infrastructure through the increase in 2G and 3G sites, fibre cable transmission network (our own and through arrangements with other companies). At standalone level, the capital expenditure (including capital advances) incurred during the year was Rs. 43,117 Mn and at consolidated level, the same was Rs. 46,049 Mn.

In addition to this, your Company participated in the Government conducted global spectrum auction held in February, 2014 and committed Rs. 104,242 Mn, which includes Rs. 37,048 Mn towards 5 MHz spectrum in the 900 MHz band and Rs. 67,194 Mn towards 60.2 MHz spectrum in 1800 MHz band.

Significant Developments:

--- Auction of 900 MHz and 1800 MHz spectrum in February 2014

In February, 2014, the Department of Telecommunications (DoT) auctioned spectrum in 900 MHz band for three Metro Service Areas and in 1800 MHz band for all 22 Service Areas. In the 900 MHz band, the entire 46 MHz spectrum in the Metro Service Area was sold for an aggregate price of Rs. 235,896 Mn as against a reserve price of Rs. 127,580 Mn. Similarly, in the 1800 MHz band, bids were received for 307.2 MHz out of 385.2 MHz quantum of spectrum auctioned across all 22 service areas, which were sold for an aggregate price of Rs. 375,726 Mn as against a reserve price of Rs. 196,050 Mn.

Your Company also enthusiastically participated in the above auction and won 5 MHz of spectrum in the 900 MHz band for the Delhi Metro Service Area and an aggregate of 60.2 MHz of spectrum in 1800 MHz band in 11 service areas at a total cost of Rs. 104,242 Mn. The payment terms included on upfront payment of Rs. 31,436 Mn and the balance payable in 10 annual installments after a moratorium of 2 years, with interest of 10% p.a. inbuilt in the annual installment. The upfront payment was financed from internal accruals and the Government deferred payment obligation is reflected as debt in the Balance Sheet.

--- One Time Spectrum Charge

The Department of Telecommunications (DoT) had issued demand notices of Rs. 21,135 Mn towards levy of one time spectrum charge. The demand includes a retrospective charge of Rs. 3,691 Mn for holding GSM spectrum beyond 6.2 MHz for the period from July 1, 2008 to December 31, 2012 and also a prospective charge of Rs. 17,444 Mn for GSM spectrum held beyond 4.4 MHz for the period from January 1, 2013 till the expiry of the period of the respective licenses. In the opinion of the Company, the above demands, inter-alia, amount to alteration of financial terms of the licenses issued in the past. Your Company has, therefore, filed a petition before the Hon''ble High Court of Bombay, which directed DoT not to take any coercive action until the next date of hearing. The matter is pending for final hearing.

--- Signing of Unified License(s) for services areas where licenses were quashed by Supreme Court Judgement of February, 2012

The Department of Telecommunications (DoT) conducted an auction for the 1800 MHz spectrum in November, 2012 as directed by the Hon''ble Supreme Court''s judgement dated February 2, 2012, which had quashed the licenses and spectrum granted to telecom operators on or after January 10, 2008 pursuant to two press releases issued on January 10, 2008. As your Company was impacted by the said judgement in seven service areas, your Company participated in the spectrum auction held in November 2012 and was successful in winning back the spectrum for all these impacted service areas at a bid amount of Rs. 19,848.8 Mn. The DoT then also set-off Rs. 6,845.9 Mn paid earlier by your Company as entry fee for licenses granted in 2008. The Company chose the deferred payment option facility for the remaining amount as per the deferred payment option available as part of the auction terms.

Post several meetings and discussions, the DoT signed the Unified License for seven quashed service areas in October, 2013. Thereafter, in November, 2013, your Company was allocated the spectrum won in November, 2012 auction. The Company has also taken necessary endorsements for continuing the usage of telecom resources already in use since 2008 viz. MSC codes, SP codes, EMF approvals etc. Our request for validation of microwave spectrum and SACFA approvals is being processed by DoT.

--- Transfer of licenses for Punjab and Karnataka service areas to the Company

In the pending legal matter of transfer of licenses for service areas of Punjab & Karnataka, DoT has transferred these licenses in the name of the Company as directed by Hon''ble Supreme Court pursuant to its order dated January 29, 2014, upon submission of an undertaking. These licences were registered in the name of erstwhile Spice Communications Limited (Spice), which had merged with the Company pursuant to amalgamation order passed by the Hon''ble High Court(s) of Gujarat and Delhi.

In this connection, earlier on November 29, 2013, DoT had issued a demand of Rs. 6,000 Mn for alleged violations of license terms & conditions and merger & acquisition guidelines in connection with amalgamation of Spice and agreeing to take on record the transfer of licenses provided the company pays this demand and other dues, including one time spectrum charge. The Company aggrieved by the said demand, had approached Hon''ble TDSAT as also seeking direction for transfer of licenses. Vide its order dated December 10, 2013, Hon''ble TDSAT had restrained DoT from taking any coercive action in the matter. While the licenses in respect of Punjab and Karnataka service areas have been transferred to the Company pursuant to aforesaid directive given by Hon''ble Supreme Court to DoT upon furnishing of requisite undertaking by the Company to DoT, the matter relating to challenge of aforesaid demand of Rs. 6,000 Mn remains subjudice before Hon''ble TDSAT.

--- 3G Spectrum for Punjab Service Area

In the pending legal matter of commercial usage of 3G Spectrum in respect of Punjab Service Area, the DoT issued Letter of Intent in February, 2014 and subsequent license amendment enabling launch of Idea 3G commercial services. The DoT earmarked the usage of 3G spectrum in March, 2014. Your Company is in the process of launching 3G services shortly in Punjab service area.

--- 3G Services and Intra-Circle Roaming Arrangements

Your Company is presently providing 3G services to its customers in 10 service areas (except Punjab) out of the 11 service areas where it holds spectrum in 2100 MHz band. The Company had also entered into intra-circle roaming arrangements with other leading operators in 10 other service areas where we did not win 3G spectrum to provide 3G services to the customers.

The DoT had issued notices to your Company and other operators to stop providing 3G services in the service areas where the operator had not won 3G spectrum, besides levying a penalty of Rs. 500 Mn in each service area. Out of such notices issued to operators, your Company received notices for six service areas. It had challenged the said notices before the Hon''ble High Court of Delhi. The court had granted interim stay subject to restriction that facilities based on 3G ICR arrangement will not be available to any new subscriber. Subsequently, the matter was withdrawn from Delhi High Court and fresh petition was filed at TDSAT. Your Company implemented the directions of Hon''ble Court for all such service areas where 3G services are provided under intra-circle roaming arrangements. The proceedings in TDSAT are complete and the final Judgment is expected shortly. In this connection, the DoT had also filed contempt of court petition before Hon''ble High Court of Delhi against certain Directors and Officials of the Company for alleged violation of interim order passed by the Hon''ble High Court of Delhi, which is pending adjudication.

Awards and Recognitions

Your Company''s outstanding work in the field of business, advertising and marketing continues to be recognized not only nationally but even at international forums.

- -- At EFFIES 2013 Idea was recognized as 3rd Best Client of the Year with 4 awards as set under:

- Gold in ''Integrated Advertising Campaign'' for Honey-Bunny campaign.

- Gold in ''Services-Telecom & Related Products'' for Telephone Exchange campaign.

- Silver in ''Services-Telecom & Related Products'' for Honey-Bunny campaign.

- Bronze for Best On-going campaign for What an idea! Series of advertising.

- -- Idea''s Pan India coverage campaign ''Honey-Bunny'', won a Silver and a Bronze at the APAC EFFIES and also won a Silver at Emvies, 2013.

- -- Idea won EMMY''s Integrated Campaign Awards 2013 for Honey-Bunny campaign.

- -- Idea has been awarded with the ''Storyboard Brand Campaign of the Year Award'' for Honey-Bunny campaign at CNBC TV18 India Business Leader Awards 2013.

- -- Idea has also won the Citizen Journalist Awards, 2013.

- -- Idea received the Amity Telecom Excellence Award for ''The Best Rural Services Provider of the Year 2013''.

- -- Idea received the Amity Leadership Award 2013 in ''Leveraging IT in Telecommunications Sector''.

--- Idea Ranked No.1 in the Telecommunications sector as a part of India''s Best Company to Work Study in 2013 and 17th overall among 550 participating companies.

--- Idea has been adjudged as the "Best Place to Work" at the Asia Communication Awards 2013.

--- Idea won the ''Most Innovative Service Provider Award'' under ''Enterprise category'' (for Smart Gas Solution) and ''My Favorite Service Provider Award'' at The Economic Times Telecom Awards 2013.

New 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, introducing various innovative products and services. Some of these are:- --- Idea has been torch bearer for innovative advertising and customer engagement activities. Idea launched well timed mass media campaigns throughout the year with a mix of thematic and product campaigns. The theme campaign ''no ullu banaoing'' highlights the power of mobile internet on the Idea network and how it can empower users to evade unscrupulous situations and people in India.

--- To increase 3G device penetration amongst Idea customers, your Company (through its subsidiary) further strengthened ''Idea Smartphone'' brand by launching eight new models in the market in FY 2013-14.

--- In the arena of Value Added Services, many innovative services have been launched. Some of these include Unlimited Music streaming & downloading experience with ''Idea Music Hub'', premium International mobile games like Gameloft Club, Toll free, access to classified information like Idea Yellow Pages etc.

--- Idea launched an online Bollywood destination site this year called ''Idea Popcorn Street'' (www.ideapopcornstreet.com), which is the first of its kind branded content site offering Bollywood fans an array of interesting trivia, videos and updates.

--- Idea led the industry on various product innovations improving customer experience such as:

- Launch of ''Choice Recharge'', which enables customers to choose any one option from five different options on a single recharge which brings customer convenience.

- Launch of ''Choice Number'', giving a new customer an opportunity to choose his or her number of preference, which was first of its kind initiative in the industry.

- Launch of ''!-Plan'' for the postpaid segment, providing customers the flexibility to choose, create and customize their monthly plan from a bouquet of voice and data packs.

--- Idea continued to strengthen its brand by sustaining its association with high impact media properties like ''Kaun Banega Crorepati'', ''Idea Filmfare Awards'', ''Citizen Journalists Awards'', in addition to several regional media properties. The brand continued its association with the Delhi Daredevils team in IPL 7.

--- Your Company has successfully rolled out one of the most complex and massive Postpaid Customer Relationship Management (CRM) and Billing Solution stack across 21 circles, which will enable your Company to harness the multiple benefits of a singular comprehensive window to the 360 degree understanding and servicing of a customer; with huge operational efficiencies.

--- To enhance customer experience, your Company also launched the "Customer First Program", which involves face to face interactions between your Company''s employees and customer plus engagement with customers over various channels of communication. The inputs gathered through these customer interactions and via various channels are then further analyzed and improvements in processes are done for enhancing customer experience.

--- Your Company has recently launched "Idea Select Matinees" in identified few circles wherein, loyalty customers get tangible rewards in the form of free movie tickets. Premium loyal customers are also gifted with personalized annual calendars and greeted on their birthdays with exclusive gifts.

--- Your Company has a complete program in place for measuring Customer Experience across various segments, geographies and touch-points. Through a pre-determined calendar of multiple surveys encompassing various aspects, your Company is committed to driving customer delight at every step.

Subsidiaries and Joint Venture

As on March 31, 2014, your Company has 5 subsidiary companies and one joint venture, which are as under:

Subsidiaries

--- Aditya Birla Telecom Limited, holds 16% shareholding in Indus Towers Limited and is engaged in the trading of communication devices.

--- Idea Cellular Services Limited, provides manpower services to the Company.

--- Idea Cellular Infrastructure Services Limited, is a tower Company owning towers in Bihar and Orissa service areas and provides passive infrastructure services in these service areas.

--- Idea Mobile Commerce Services Limited, is engaged in the business of Mobile Banking.

--- Idea Telesystems Limited, is engaged in the trading of communication devices.

As required under the Listing Agreement entered into with the Stock Exchanges, consolidated financial statements of the Company and all its subsidiaries is attached. The consolidated financial statements have been prepared in accordance with the relevant accounting standards as prescribed under section 211(3C) of the Companies Act, 1956. The consolidated financial statements disclose the assets, liabilities, income, expenses and other details of the Company and its subsidiaries.

In terms of general exemption granted by the Ministry of Corporate Affairs, Government of India, vide its Circular No. 2/2011 dated February 8, 2011, and in compliance with the conditions enlisted therein, the reports and annual accounts of the aforesaid Subsidiary Companies for the Financial Year ended March 31, 2014 have not been attached to the Company''s Accounts.

The annual accounts and other related information of the Subsidiary Companies shall be available for inspection during business hours by the members at the Registered Office of the Company. The copies of these documents will also be made available to the members of the Company upon request.

Joint Venture

Indus Towers Limited, in which Aditya Birla Telecom Limited (ABTL), a wholly owned subsidiary of the Company holds 16% stake, continues to be a joint venture with the Bharti Group and Vodafone Group that provides passive infrastructure services in 15 service areas.

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.

Enterprise Risk Management

Your Company has a well-established Enterprise-wide Risk Management (ERM) framework in place for identification and management of risks. In line with your Company''s commitment to deliver sustainable value, this framework aims to provide an integrated and organized approach for evaluating and managing risks.

Corporate Governance

Your Company is committed to maintain the highest standards of Corporate Governance. Your Company continues to be compliant with the requirements enshrined in Clause 49 of the Listing Agreement which relates to Corporate Governance. A Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report. A certificate from the Statutory Auditors of the Company, confirming compliance with the conditions of Corporate Governance, as stipulated under Clause 49 forms part of the Annual Report.

Credit Rating

Your Company continues to enjoy credit rating of CARE A1 and CRISIL A1 for its short term debt program and CARE AA rating for its long term debt program.

Employee Stock Option Scheme

Your Company values its employees and is committed to adopt the best HR practices for rewarding them suitably. In this direction your Company had implemented the Employee Stock Option Scheme, 2006 (ESOS-2006) and made grants to eligible employees under ESOS-2006 from time to time.

Further, the Board of Directors of your Company has approved formulation of a new Employee Stock Option Scheme viz. "Idea Cellular Limited Employee Stock Option Scheme – 2013" ("ESOS-2013") in terms of the SEBI guidelines, which has also been approved by you at the Annual General Meeting held on 16th September, 2013. The Board has mandated the existing ESOS Compensation Committee to implement and administer the ESOS-2013. In terms of the ESOS-2013, the ESOS Compensation Committee has granted 1,85,65,428 Options at an exercise price of Rs. 126.45 per option and 81,05,587 Restricted Stock Units (RSU) at an exercise price of Rs. 10/- per RSU. Each Option is convertible into one equity share of the Company upon vesting and would vest in 4 equal annual installments after one year of the grant and shall be exercisable within a period of 5 years from the date of vesting. Further each RSU is convertible into one equity share of the Company upon vesting and all RSUs would vest at the end of 3 years from the date of grant and shall be exercisable within a period of 5 years from the date of vesting.

The relevant disclosure in compliance with Clause 12 of Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999, as amended, is set out in Annexure ''A'' to this Report.

A certificate from M/s. Deloitte Haskins & Sells LLP, Statutory Auditors, with respect to the implementation of the Company''s Employees Stock Option Scheme, would be placed before the shareholders at the ensuing Annual General Meeting and a copy of the same will also be available for inspection at the Registered Office of the Company.

Human Resources

The human resource philosophy and strategy of your Company is to attract and retain the best talent, encourage innovation, and create an engaging and motivating workplace environment. This strategy has strong alignment with your Company''s vision to successfully build and sustain your Company''s standing as one of India''s most admired and valuable corporations despite unrelenting competitive pressures.

Your Company continues its focus on building & developing the leadership pipeline, upgradation of workforce skills, and being an employer of choice. This was reflected by external recognition through "Best Place to Work" at Asia Communication Awards 2013 and No. 1 in Telecom sector in "India''s Best Companies to Work for Study - 2013" conducted by The Economic Times in association with the Great Place to Work Institute.

Your Company''s basic objective is to ensure that a robust talent pipeline and a high-performance culture, centered on accountability is in place. Your Company feels this is critical to enable it to retain its competitive edge.

Management Discussion and Analysis

The Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement is presented in a separate section forming part of the Annual Report.

Business Responsibility Report

SEBI, vide its circular CIR/CFD/DIL/8/2012 dated August 13, 2012, mandated the top 100 listed entities based on market capitalization at BSE and NSE, to include Business Responsibility Report as part of the Annual Report describing the initiatives taken by the Companies from Environmental, Social and Governance perspectives. Accordingly, a Business Responsibility Report, as stipulated under Clause 55 of the Listing Agreement is presented in a separate section forming part of the Annual Report.

Directors

In accordance with the provisions of the Companies Act, 2013, Mr. Kumar Mangalam Birla and Mr. Sanjeev Aga retire from office by rotation, and being eligible, offer themselves for re-appointment at the ensuing Annual General Meeting of the Company.

In addition, in line with the provisions contained in Companies Act, 2013, the Board shall also consider re-appointment of Independent Directors for fixed tenure subject to necessary decision to be taken by the Board at a subsequent board meeting.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings & Outgo

The particulars as required to be disclosed pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988 (as amended), are given to the extent applicable in the Annexure ''B'' forming part of this Report.

Particulars of Employees

In accordance with the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are to be set out in the Directors'' Report, as an addendum thereto. However, in terms of the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the report and accounts, as set out therein, are being sent to all members of your Company excluding the aforesaid information about employees. Any member, who is interested in obtaining such particulars about employees, may write to the Company Secretary at the Registered Office of your Company.

Directors'' Responsibility Statement

Your Directors affirm that the audited accounts containing the financial statements for the Financial Year 2013-14 are in conformity with the requirements of the Companies Act, 1956. They believe that the financial statements reflect fairly the form and substance of transactions carried out during the year and reasonably present the Company''s financial condition and results of operations.

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) the accounting policies have been applied consistently and judgements and estimates made are reasonable and prudent, so as to give a true and fair view of the state of affairs of your Company as at the end of the Financial Year and of the profit of the Company for that period;

c) proper and sufficient care has been taken to the best of their knowledge and belief for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities; and

d) the annual accounts have been prepared on a going concern basis.

Statutory Auditors

The Statutory Auditors of the Company, M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, will retire at the conclusion of the ensuing Annual General Meeting.

The Statutory Auditors have confirmed that their appointment, if made, shall be in accordance with the conditions as prescribed in the Rule 4 of the Companies (Audit and Auditors) Rules, 2014, and that they are not disqualified for appointment within the meaning of Section 139 and 141 of the Companies Act, 2013. The Board proposes their re-appointment.

Auditors'' Report and Notes to Financial Statements

The Board has duly reviewed the Statutory Auditors'' Report on the Financial Statements including matter relating to demand of one-time spectrum fee emphasized in the report. As explained in Significant Development section of this report and also in the Notes to the Financial Statements, the matter remains sub-judice and does not call for any further explanation/clarification under Section 217(3) of the Companies Act, 1956.

Cost Auditors

The Board on the recommendation of the Audit Committee have appointed M/s Sanjay Gupta & Associates, Cost Accountants, as the Cost Auditors, to conduct the Cost Audit of your Company for the Financial Year ended March 31, 2015. The Cost Audit Report for the Financial Year 2013-14 is yet to be placed before the Board.

In accordance with the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, since the remuneration payable to the Cost Auditors is required to be ratified by the Shareholders, the Board recommends the same for the approval by the Shareholders at the ensuing Annual General Meeting.

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 and all the business associates 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. The perseverance and unstinting efforts of the employees have enabled the Company to retain the ''Fastest Growing Indian Telecom Brand'' within the sector.

For and on behalf of the Board

Place: Mumbai Arun Thiagarajan Himanshu Kapania

Date: April 28, 2014 Director Managing Director


Mar 31, 2013

Dear Shareholders,

The Directors are pleased to present the eighteenth Annual Report, together with the audited financial statements of the Company for the financial year ended March 31, 2013.

Financial Results

The standalone and consolidated financial results of your Company for the financial year ended March 31, 2013 are summarised below:

Rs. Mn

Particulars Standalone Consolidated

2012-13 2011-12 2012-13 2011-12

Income from Services 220,434 192,753 224,075 194,887

Other Income 435 470 502 525

Total Revenue 220,869 193,223 224,577 195,412

Operating Expenses 169,304 150,095 164,531 144,489

EBITDA 51,565 43,128 60,046 50,923

Depreciation and Amortisation 30,544 25,628 34,778 29,813

EBIT 21,021 17,501 25,268 21,110

Interest and Financing charges 8,135 9,078 9,495 10,557

EBT 12,886 8,423 15,773 10,553

Taxes 4,703 2,657 5,664 3,323

Profit after Tax 8,183 5,765 10,109 7,230

Operations Review

Your Company maintained its track record of continued superior performance in terms of revenue growth year on year and grew faster than the industry. The revenue market share of your company increased from 15.0% in Q4 FY 11-12 to 15.7% in Q4 FY 12-13.

The total subscriber base of your Company as on March 31, 2013 was 121.6 Mn, representing an increase of 7.9% over the previous year. On a national basis, your Company''s subscriber market share stood at 14.0% as of March 31, 2013 compared to 12.3% as of March 31, 2012. The percentage of active subscriber base to total subscriber base at 98.9% is best in the industry.

Your Company''s 3G investment plans are on track with high speed broad band services now available in 20 service areas (including those with roaming arrangements), with around 5.1 Mn subscribers actively using the Company''s 3G platform and enjoying wireless broadband services.

Your Company''s total minutes of usage on the network for the financial year 2012-13 crossed 532 billion minutes, maintaining its position among the top 10 Telecom Operators in the world.

On a standalone basis, the total revenues of your Company were Rs. 220,869 Mn, representing a growth of 14.3% over the previous year, primarily driven by 17.4% growth in total minutes of use. The EBITDA also increased to Rs. 51,565 Mn, representing a growth of 19.6% over the previous year.

The Profit after Tax stood at Rs. 8,183 Mn, a rise of 42% as compared to the previous year, led by an increase in EBITDA and lower Finance & Treasury charges. As of March 31, 2013, your Company has accumulated Profits of Rs. 17,174 Mn.

On a consolidated basis, the total revenues were Rs. 224,577 Mn, representing a growth of 14.9% over the previous year. The EBITDA at Rs. 60,046 Mn, reflects a growth of 17.9% as compared to the previous year. The consolidated Profit after Tax stood at Rs. 10,109 Mn, up by 39.8% compared to the previous year.

Dividend

Your Directors are pleased to recommend a maiden dividend of Rs. 0.30 per equity share of Rs. 10/- each (3% of face value) for the year ended March 31, 2013. The total dividend payout will amount to Rs. 1,163 Mn inclusive of Rs. 169 Mn of dividend distribution tax. This payment is subject to your approval at the ensuing Annual General Meeting of the Company.

Transfer to Reserves

Out of the profit earned Rs. 93 Mn has been transferred to Debenture Redemption Reserve. Further, the balance of Rs. 169 Mn, lying unutilized in the Business Restructuring Reserve, created pursuant to a Scheme of Amalgamation of the erstwhile Spice Communications Limited was transferred to the General Reserve.

Share Capital

Your Company issued and allotted 5,476,656 Equity Shares of Rs. 10/- each, fully paid-up, to the option grantees pursuant to the exercise of stock options by eligible employees under the Employee Stock Option Scheme, 2006 (ESOS-2006) during the year.

Consequently, the issued, subscribed and paid-up equity share capital of your Company as on March 31, 2013 stood at Rs. 33,143,217,660/-, comprising of 3,314,321,766 Equity Shares of Rs. 10/- each.

Credit Rating

Your Company continues to enjoy credit rating of CARE A1 and CRISIL A1 for its short term debt program and CARE AA rating for its long term debt program.

Capital Expenditure

Your Company continues to expand its reach to tap the un- penetrated areas and enhance the quality of its network. During the year your Company added 6,904 2G cell sites and 4,315 3G cell sites, thereby expanding its network to 90,094 2G cell sites and 17,140 3G cell sites.

At a consolidated level, the capital expenditure (including capital advances) incurred during the year was Rs. 41,441 Mn.

In addition to this, your Company also incurred Rs. 20,313 Mn towards spectrum in the 1800 MHz band (Rs. 19,849 Mn to win back spectrum in the seven service areas where its operational licenses were cancelled and Rs. 464 Mn for one additional block of spectrum for Bihar service area) and also incurred Rs. 60 Mn for acquiring fresh licenses for these seven service areas.

Employee Stock Option Scheme

Your Company values its employees and is committed to adopt the best HR practices for rewarding them suitably. In this direction your Company had implemented the Employee Stock Option Scheme, 2006 (ESOS-2006) and made grants to eligible employees under ESOS-2006 from time to time.

The relevant disclosure in compliance with clause 12 of Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999, as amended, is set out in Annexure ''A'' to this Report.

A certificate from M/s. Deloitte Haskins & Sells, Statutory Auditors, with respect to the implementation of the Company''s Employees Stock Option Scheme, would be placed before the shareholders at the ensuing Annual General Meeting and a copy of the same will also be available for inspection at the registered office of the Company.

Further, the Board of Directors of your Company has vide resolution dated May 10, 2013 approved formulation of a new Employee Stock Option Scheme viz. "Idea Cellular Limited Employee Stock Option Scheme - 2013" ("ESOS-2013") in terms of the SEBI guidelines. The Board has mandated the existing ESOS Compensation Committee to implement and administer the ESOS-2013.

Items seeking your approval for introduction and implementation of ESOS-2013 and granting such number of Stock Options exercisable into not more than 3,55,49,000 equity shares of Rs. 10/- each to permanent employees, including any Managing or Whole-time Director(s) of your Company and its holding and / or subsidiary companies are included in the Notice convening the Annual General Meeting together with the Explanatory Statement.

Human Resources

The human resource philosophy and strategy of your Company is structured to attract and retain the best talent, encourage innovation and create an engaging and motivating workplace environment. This strategy has, through strong alignment with your Company''s vision, successfully built and sustained your Company''s standing as one of India''s most admired and valuable corporations despite unrelenting competitive pressures, and will continue to be a source of competitive advantage in the future.

The Aditya Birla Group Human Resources function has played and continues to play an integral role in your Company''s Talent Management Process.

Several innovative people-focused initiatives have been instituted at the Group level, and these are translated into action at all of the Group Companies. Your Company''s basic objective is to ensure that a robust talent pipeline and a high-performance culture, centered around accountability is in place. Your Company feels this is critical to enable us to maintain our competitive edge.

Significant Developments:

- One Time Spectrum Charges

The Department of Telecommunications (DoT) had issued demand notices towards one time spectrum charges for spectrum held beyond 6.2 MHz in respect of certain service areas for the retrospective period from July 1, 2008 to December 31, 2012, amounting to Rs. 3,691.3 Mn, and for spectrum held beyond 4.4 MHz in respective service areas effective January 1, 2013 untill the expiry of the period as per respective licenses amounting to Rs. 17,443.7 Mn. As the above demands amount to alteration of financial terms of the licenses issued in the past, your Company therefore, filed a petition before the Hon''ble High Court of Bombay, which granted stay and directed DoT to respond and not to take any coercive action until the next date of hearing. The matter is pending for further hearing.

- Supreme Court Judgment on quashing of licenses granted in January, 2008 and subsequent Auction of Spectrum

The Department of Telecommunications (DoT) conducted an auction for the 1800 MHz spectrum in November 2012 as required by the Hon''ble Supreme Court''s judgment dated February 2, 2012 which quashed the licenses and spectrum granted to telecom operators on or after January 10, 2008 pursuant to two press releases issued on January 10, 2008. As your Company was impacted by the said judgment in seven service areas, we participated in the said auction and were successful in winning back the spectrum for these impacted service areas at a price of Rs. 19,848.8 Mn. DoT then set-off Rs. 6,845.9 Mn earlier paid by your Company as entry fee for licenses granted in 2008 and as per the payment option available as part of the auction, we have chosen the deferred payment option for the balance amount. DoT has issued Letter of Intent(s) (LoI) earmarking the spectrum won in these seven service areas and also for award of Unified Licenses. Your Company has applied to DoT for issue of new licenses in these seven service areas and paid the license fee aggregating to Rs. 60 Mn. Pending conversion of LoI''s into unified licenses, the ongoing operations continue in these service areas.

- 3G Services and Intra Circle Roaming Arrangements Your Company is providing 3G services to its customers in 10 service areas out of the 11 service areas (except Punjab), where it had won 3G spectrum during the May 2010 auction. The DoT has not yet allowed commercial usage of the earmarked 3G spectrum for Punjab service area to your Company. We have also entered into intra circle roaming arrangements with other leading operators in 10 other service areas where we did not win 3G spectrum to provide 3G services to the customers.

The DoT issued notices to your Company and other operators to stop providing 3G services in the service areas where the operator had not won 3G spectrum, besides levying a penalty of Rs. 50 crore in each service area. Out of such notices issued to operators, your Company received notices for six service areas. It has challenged the said notices before the Hon''ble High Court of Delhi. The court has granted interim stay subject to restriction that facilities based on 3G ICR arrangement will not be available to any new subscriber.

Your Company has implemented the directions of Hon''ble Court for all such service areas where 3G services are provided under intra circle roaming arrangements and awaits the final decision on the matter.

- Transfer of licenses to the Company consequent to merger of erstwhile Spice Communications Limited

The Division bench of the Hon''ble High Court of Delhi vide its order dated July 13, 2012, has re-affirmed the High Court Order dated February 5, 2010 and July 4, 2011 sanctioning the amalgamation of erstwhile Spice Communications Limited (Spice) with your Company. The said order also re-vested unto your Company the operating licenses held by erstwhile Spice in respect of Punjab and Karnataka service areas, which were transferred to and vested unto Department of Telecommunications (DoT) pursuant to order dated July 4, 2011, passed by single Judge of Hon''ble Delhi High Court. Further the Division Bench of the Hon''ble High Court of Delhi has also pronounced that DoT has to take a decision regarding the transfer of licenses held by erstwhile Spice to your Company arising out of the amalgamation within a period of three months (which had been extended to January 5, 2013 vide order dated December 11, 2012). The final decision of the DoT in the matter is still awaited.

- 3G Spectrum for Punjab Service Area

The DoT had earmarked 3G spectrum in respect of Punjab service area, which was won by your Company in the 3G spectrum auction conducted by DoT in May, 2010, but the DoT is yet to allow commercial use of the same to your Company.

Your Company had approached Hon''ble TDSAT and filed a petition for necessary direction to the DoT to allow the commercial usage of allocated 3G Spectrum for Punjab service area. The TDSAT had dismissed the said petition in view of order passed by Delhi High Court in July 2011 concerning amalgamation of erstwhile Spice Communications Limited with your Company, which was holding the operative 2G license in respect of Punjab service area. Your Company has since filed an appeal against the order of TDSAT in the Supreme Court, where the matter remains sub judice.

- Tax demand

During the year under review, the Income Tax department has issued a demand of Rs. 15,177 Mn, arising out of assessment of tax return filed for Assessment Year 2010-11. Your Company is contesting the said demand at appropriate forums.

Awards and Recognitions

Your Company''s outstanding work in the field of business, advertising and marketing continues to be recognized not only nationally but even at international forums.

- ''Population'' campaign (India busy on Idea 3G)won the Gold at APPIES 2012, Singapore.

- ''Population'' campaign was rated Best Brand Campaign at World Communication Awards, London, which is second year in a row.

- The much talked about ''Idea Rings All India'' (''honey-bunny'') campaign was awarded Best Brand Campaign by tele.net.

- ''Honey-bunny'' won the Gold ABBY''S for best original score film under the category Film Craft. (Jamic Films won this for their work on Honey-bunny campaign).

- MNP campaign (No Idea, Get Idea) won the award for ''Excellence in Marketing'' at the ET Telecom Awards, 2012.

- Won Gold in Golden Mikes award, 2012 for best on ground promotion by a network of Radio station (Club FM won for their work on Idea Magic recharge campaign in Kerala).

- Voice & Data Awards 2012, in the category ''CTO of the Year Award''.

- Yahoo Big Idea Chair 2012, for ''Best Online Advertising''.

- Digital Media Awards 2012, for ''Best use of Online Banner Advertising''.

- Aegis Graham Bell Awards 2012, in the ''Innovative Telecom Business Model'' category.

- Won 3 Awards at the ET Telecom Awards 2012, in the categories of Customer Experience Enhancement, Excellence in Marketing and Innovative products.

- Won ''The Best Rural Service Provider of the Year - 2012'' by Amity Telecom Excellence Award.

- Tele.Net Awards 2013, in the categories ''Telecom CEO of the Year''.

- ''NDTV Business Leadership Award'' in the telecom category for 2012.

New 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, introducing various innovative products and services. Some of these are -

- To increase 3G device penetration amongst Idea customers, your Company (through its subsidiary) further strengthened "Idea Smartfone" brand by launching five new models in the market in FY 12-13.

- To grow data usage adoption in its base, the Company took multiple initiatives by introducing innovative pricing, changing systems and processes to ensure ease of internet access. This has resulted in the addition of more than 10 Mn data users taking the data penetration from 14.1% in March 2012 to 21.6% on entire subscriber base in March 2013.

- Idea launched Wi-Fi services on a pilot basis in the cities of Pune and Ahmedabad.

- Idea (through its subsidiary) launched M-Banking services commercially in UP (East) and Mumbai.

- Idea maintained high impact visibility on national media throughout the year. After having regained licenses, Idea reinforced its all India presence through ''Idea Rings All India'' campaign. The campaign song "honey-bunny" became a viral rage. The jingle was heard by 4.8 million unique users on digital media and was downloaded more than 2.7 million times. 5 million Dialer- Tones were activated. The song got more than 2.5 million views on Youtube as well making it one of the top 10 viral videos of 2012.

- Idea revived one of its most successful ground events - Idea Jalsa.

- One of the major consumer passions - Bollywood Music has been used through Idea Rocks India which is a mega 16 city tour across metros and towns. It engaged 16 to 30 years old urban youth and also projected Idea as a tech savvy brand by using digital media as the main touchpoint for Talent Hunt, webcerts and all other promotions.

- Idea strengthened its brand through number of high impact media properties like Kaun Banega Crorepati, Idea Filmfare Awards, Citizen Journalist Awards, in addition to several regional media properties. The brand continues its association with the Delhi Daredevils team in IPL 6.

Subsidiaries and Joint Ventures

Your Company has the following subsidiaries and joint ventures: Subsidiaries

- Aditya Birla Telecom Limited, holds 16% shareholding in Indus Towers Limited and 100% shareholding in Idea Cellular Towers Infrastructure Limited and is engaged in the trading of communication devices.

- Idea Cellular Services Limited, provides manpower services to the Company.

- Idea Cellular Infrastructure Services Limited, is a tower Company owning towers in Bihar and Orissa service areas and provides passive infrastructure services in these service areas.

- Idea Cellular Towers Infrastructure Limited (ICTIL), holds towers de-merged from your Company. A scheme of amalgamation for merger of ICTIL and certain other companies with Indus Towers Limited with an appointed date of April 1, 2009 has been approved by the Hon''ble High Court of Delhi on April 18, 2013. The Scheme will be effective only upon the filing of the certified copy of the judgment with all the respective RoC''s.

- Idea Mobile Commerce Services Limited, is engaged in the business of Mobile Banking.

- Idea Telesystems Limited, is engaged in the trading of communication devices.

In terms of general exemption granted by the Ministry of Corporate Affairs, Government of India, vide its Circular No. 2/2011 dated February 8, 2011, and in compliance with the conditions enlisted therein, the reports and annual accounts of the Subsidiary Companies for the Financial Year ended March 31, 2013 have not been attached to the Company''s Accounts.

The annual accounts and other related information of the Subsidiary Companies shall be available for inspection during business hours by the members at the Registered Office of the Company. The copies of these documents will also be made available to the members upon request.

Joint Ventures

Indus Towers Limited, in which Aditya Birla Telecom Limited (ABTL) holds a 16% stake, is a joint venture with the Bharti Group and Vodafone Group and provides passive infrastructure services in 15 service areas.

Fixed Deposits

Your Company does not accept or hold any deposits from public under Section 58A of the Companies Act, 1956 and as such, no amount of principal or interest on fixed deposits was outstanding on the date of the Balance Sheet.

Non-Convertible Debentures

During the year under review, your Company raised Rs. 10,000 Mn through issuance of 1,000 Secured Redeemable Non- Convertible Debentures (NCDs) of Rs. 10 Mn each on private placement basis, of which NCDs worth Rs. 3,740 Mn have been re-purchased at par. These NCDs are rated "CARE AA".

Enterprise Risk Management

Your Company has established an Enterprise-wide Risk Management (ERM) framework to optimise the identification and management of risks, as well as to comply with clause 49 of the Listing Agreement with stock exchanges. In line with your Company''s commitment to delivering sustainable value, this framework aims to provide an integrated and organised approach for evaluating and managing risks.

Corporate Governance

Your Company is committed to maintain the highest standards of Corporate Governance. Your Company continues to be compliant with the requirements enshrined in clause 49 of the Listing Agreement which relates to Corporate Governance.

A Report on Corporate Governance as stipulated under clause 49 of the Listing Agreement forms part of the Annual Report. A certificate from the Statutory Auditors of the Company, confirming compliance with the conditions of Corporate Governance, as stipulated under clause 49 forms part of the Annual Report.

Management Discussion and Analysis

The Management Discussion and Analysis Report for the year under review, as stipulated under clause 49 of the Listing Agreement is presented in a separate section forming part of the Annual Report.

Business Responsibility Reporting

SEBI, vide its circular CIR/CFD/DIL/8/2012 dated August 13, 2012, mandated the top 100 listed entities based on market capitalization at BSE and NSE, to include Business Responsibility Report as part of the Annual Report describing the initiatives taken by the Companies from Environmental, Social and Governance perspectives.

Accordingly, a Business Responsibility Report, as stipulated under clause 55 of the Listing Agreement is presented in a separate section forming part of the Annual Report.

Directors

Consequent upon the change in nomination by Axiata Group Berhad, Mr. Juan Villalonga Navarro ceased to be a Director on the Board of your Company with effect from January 29, 2013 and in his place Dr. Shridhir Sariputta Hansa Wijayasuriya has been nominated as an Additional Director on the Board of your Company with effect from January 29, 2013. As per the provisions of Section 260 of the Companies Act, 1956, he will hold office upto the date of the ensuing Annual General Meeting of the Company.

Your Company has received a Notice under Section 257 of the Companies Act 1956, together with the requisite deposit, from a member proposing the appointment of Dr. Wijayasuriya as a Director on the Board of the Company. Resolution seeking approval of the Members for the appointment of Dr. Wijayasuriya as a Director of the Company has been incorporated in the Notice of the ensuing Annual General Meeting together with a brief resume.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Smt. Rajashree Birla, Ms. Tarjani Vakil, Dr. Rakesh Jain and Mr. Biswajit A. Subramanian retire from office by rotation, and being eligible, offer themselves for re-appointment at the ensuing Annual General Meeting of the Company.

Brief profile of the Directors proposed to be appointed/ re-appointed as required under clause 49 of the Listing Agreement are annexed to the Notice convening the 18th Annual General Meeting forming part of this Annual Report.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings & Outgo

The particulars as required to be disclosed pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988, are given to the extent applicable in the Annexure ''B'' forming part of this Report.

Particulars of Employees

In accordance with the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees have been set out in the annexure to this report. However, in terms of the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the report and accounts, as therein set out, are being sent to all the members of the Company excluding the aforesaid information about employees. Any member, who is interested in obtaining such particulars about employees, may write to the Company Secretary at the Registered Office of the Company.

Directors'' Responsibility Statement

Your Directors affirm that the audited accounts containing the financial statements for the Financial Year 2012-13 are in conformity with the requirements of the Companies Act, 1956. They believe that the financial statements reflect fairly the form and substance of transactions carried out during the year and reasonably present the Company''s financial condition and results of operations.

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) the accounting policies have been applied consistently and judgments and estimates made are reasonable and prudent, so as to give a true and fair view of the state of affairs of your Company as at the end of the financial year and of the profit of the Company for that period;

c) proper and sufficient care has been taken to the best of their knowledge and belief for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

d) the annual accounts have been prepared on a going concern basis.

Auditors

The Statutory Auditors of the Company, M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai, retire at the conclusion of the ensuing Annual General Meeting. The Statutory Auditors have confirmed their eligibility and willingness to accept the office on re-appointment. The Board recommends their re-appointment for the next term.

Auditors'' Report and Notes to Accounts

The Board has duly reviewed the Statutory Auditors'' Report on the Accounts including emphasized matters relating to transfer of licenses of erstwhile Spice Communication Limited to the Company and one time spectrum demands.

As explained in Significant Development section of this report, the matters remain sub-judice and do not call for any further explanation/clarification under Section 217(3) of the Companies Act, 1956.

Cost Audit

The Ministry of Corporate Affairs (MCA) has issued Telecom Industry specific Cost Audit Order dated May 2, 2011, making appointment of Cost Auditor mandatory, inter-alia, for the Companies to whom the Cost Accounting Records (Telecommunications) Rules, 2002 apply.

Accordingly, in terms of the above order and pursuant to the provisions of Section 233B of the Act, your Directors have re- appointed M/s. Sanjay Gupta & Associates, Cost Accountants, as the Cost Auditors of your Company to audit the cost records/ accounts maintained as per the Cost Accounting Records (Telecommunications) Rules, 2002 for the Financial Year ended March 31, 2013. The Cost Audit Report for the Financial Year 2012-13 is yet to be placed before the Board.

Acknowledgements

Your Directors wish to express their sincere appreciation to the Department of Telecommunications, the Central Government, the State Governments, bankers and all the business associates for their support and look forward to continued support in future. Your Directors also wish to place on record their appreciation to the employees for their commitment in the progress of your Company.

For and on behalf of the Board

Place: Mumbai Kumar Mangalam Birla

Date: June 8, 2013 Chairman


Mar 31, 2012

The Directors are pleased to present the seventeenth Annual Report, together with the audited financial statements of the Company for the financial year ended March 31, 2012.

Financial Results

The standalone and consolidated financial results of your Company for the financial year ended March 31, 2012 are summarised below:

Rs Mn

Particulars Standalone Consolidated 2011-12 2010-11 2011-12 2010-11

Income from Services 192,753 153,328 194,887 154,384

Other Income 470 562 525 648

Total Revenue 193,223 153,890 195,412 155,032

Operating Expenses 150,095 122,609 144,489 117,124

EBITDA 43,128 31,281 50,923 37,908

Depreciation and Amortisation 25,628 19,730 29,813 23,973

EBIT 17,501 11,551 21,110 13,935

Interest and Financing Charges 9,078 2,487 10,557 3,966

EBT 8,423 9,063 10,553 9,969

Taxes 2,657 617 3,323 982

Net Profit after Tax 5,765 8,446 7,230 8,987

Balance brought forward from Previous year 4,482 (3,964) 3,949 (5,038)

Cumulative Profit 10,248 4,482 11,179 3,949

Operations Review

Your Company continues its enviable four year track record of being the fastest growing major Indian mobile operator in terms of revenue growth. The Company's revenue market share increased from 13.3% at the beginning of the calendar year 2011 to 14.4% at the end of the calendar year 2011.

Your Company's total subscriber base as on March 31, 2012 stood at 112.7 Mn, an increase of 25.9% over the previous year. On a national basis, your Company's subscriber market share stood at 12.3% as of end March, 2012. The subscriber base of your Company is among the best in terms of percentage of active subscribers to total subscribers. As on March 31, 2012, your Company had around 93.4% of total subscribers as active subscribers, which is highest in the Industry.

Your Company's 3G investment plans are on track with high speed broad band services now available in more than 3,000 towns and 10,000 villages in 20 service areas (including those with roaming arrangements), with around 2.6 Mn subscribers actively using the Company's 3G platform and enjoying services whose time has come.

Your Company's total minutes of usage on the network for the financial year 2011-12 crossed 453 billion minutes, strengthening the Company's position among the top 10 Telecom Operators in the world.

During the financial year 2011-12, on a standalone basis, the total revenues of the Company were Rs 193,223 Mn, representing a growth of 25.6% over the Previous year, primarily driven by 25% growth in total Minutes of Usage. The EBITDA also increased to Rs 43,128 Mn, a growth of 37.9% compared to the previous year.

The Profit after Tax was lower at Rs 5,765 Mn, a decrease of 31.7% as compared to the previous year, primarily on account of higher depreciation & amortisation and interest charges due to 3G investments. As of March 31, 2012, your Company has accumulated Profits of Rs 10,248 Mn.

On a consolidated basis, the total revenues were Rs 195,412 Mn, representing a growth of 26% over the previous year. The EBITDA also increased to Rs 50,923 Mn, a growth of 34.3% as compared to previous year. The consolidated Profit after Tax stood at Rs 7,230 Mn, a decrease of 19.6% compared to the previous year.

Dividend

The Company is in the telecommunication sector which continues to see tremendous growth and significant new investments. Keeping in view the future requirement of funds and emerging regulatory challenges, your Directors have decided not to recommend any Dividend for the financial year ended on March 31, 2012.

Share Capital

During the year under review, your Company issued and allotted 5,573,605 Equity Shares of Rs 10/- each, fully paid-up, to the option grantees pursuant to the exercise of stock options by eligible employees under the Employee Stock Option Scheme, 2006 (ESOS-2006).

Consequently, the issued, subscribed and paid-up equity share capital of your Company as on March 31, 2012 stood at Rs 33,088,451,100/-, comprising of 3,308,845,110 Equity Shares of Rs 10/- each.

Credit Rating

Your Company continues to enjoy credit rating of CARE A1 and CRISIL A1 for its short term debt program and CARE AA rating for its long term debt program.

Capital Expenditure

Your Company continues to expand its reach to tap the uncovered population and enhance the quality of its network, including investments towards roll out of 3G services. During the year your Company added 9,522 2G cell sites and expanded its 3G network to 12,825 3G cell sites. On consolidated level, the capital expenditure (including capital advances) stands at Rs 45,447 Mn during the financial year 2011-12.

Your Company also made significant progress in rolling out its Long Distance network. As at end March, 2012, it carried over 93% of its captive NLD and ILD outgoing traffic.

Employee Stock Option Scheme

Your Company values its employees and is committed to adopt the best HR practices for rewarding them suitably. In this direction your Company had implemented the Employee Stock Option Scheme, 2006 (ESOS-2006) and made grants to eligible employees under the said Scheme from time to time.

The relevant disclosure in compliance with clause 12 of Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999, as amended, is set out in Annexure 'A' to this Report.

A certificate from M/s. Deloitte Haskins & Sells, Statutory Auditors, with respect to the implementation of the Company's Employees Stock Option Scheme, would be placed before the shareholders at the ensuing Annual General Meeting and a copy of the same will also be available for inspection at the registered office of the Company.

Human Resources

The human resource philosophy and strategy of your Company is structured to attract and retain the best talent that encourages innovation and creates engaging and motivating workplace environment. This strategy has, through strong alignment with your Company's vision, successfully built and sustained your Company's standing as one of India's most admired and valuable corporations despite unrelenting competitive pressures.

Significant Developments:

- Supreme Court Judgment on quashing of licenses granted in January, 2008

The Hon'ble Supreme Court, on petitions filed by the Centre for Public Interest Litigation and others, has quashed all the telecom licenses granted by the DoT, to various Telecom Operators in January, 2008 pursuant to two Press Releases dated January 10, 2008, issued by the DoT. These licenses included seven operating licenses held by the Company in respect of the Tamilnadu (including Chennai), Kolkata, West Bengal, Orissa, Assam, North East and Jammu & Kashmir service areas and two non-operating licenses in respect of Punjab and Karnataka service areas. Besides, the Company was also holding non-operative telecom licenses for four service areas granted by the DoT in January, 2008 to erstwhile Spice Communications Limited (Spice), which has since been merged with the Company. These four licenses pertained to Andhra Pradesh, Maharashtra, Delhi and Haryana service areas. The judgment has also cancelled the allocation of start- up spectrum which was earmarked pursuant to grant of these licenses. Through the said judgment, as modified by a further order dated April 24, 2012, the TRAI has been directed to make fresh recommendations for grant of licenses and allocation of spectrum in 2G band by auction, as was done for allocation of spectrum in 3G band and the DoT has been directed to complete the auction by August 31, 2012.

The shareholders may note that your Company is committed to take all necessary steps to safeguard its interest in the matter. As the impact, if any, on the operations in the said seven service areas and on the carrying values of these licenses as on March 31, 2012 amounting to Rs 2,777.8 Mn is dependent upon the steps that the DoT may take and on the outcome of the auction to be conducted as per directive of the Hon'ble Supreme Court, operations in these seven service areas currently continue as usual and accordingly the financial statements include the operational results of these service areas on a going concern basis.

- 3G Services

Your Company during the period March, 11 to October, 11, launched 3G services in 10 out of the 11 service areas (except Punjab) where it had won 3G spectrum. The DoT has not allowed commercial usage of the earmarked 3G spectrum for Punjab service area to the Company. The Company has also entered into bilateral roaming arrangements with other leading operators in 10 other service areas except Orissa.

The DoT had, vide its order dated December 23, 2011, ordered Telecom Operators to stop provision of services under 3G Intra Circle Roaming Agreements in service areas where it has not won 3G Spectrum. The Company alongwith other Telecom Operators has challenged the said order and Hon'ble Telecom Dispute Settlement Appellate Tribunal (TDSAT) has passed a "no coercive action" order till the time the dispute is decided. The final hearing in the matter has concluded and judgement is reserved.

- Merger of Spice Communications Limited

The Hon'ble High Court of Delhi vide its order dated July 04, 2011, pursuant to an application filed by the DoT, while re-affirmed the amalgamation of erstwhile Spice Communications Limited (Spice) with the Company, has transferred unto DoT, inter alia, the operating licenses held by erstwhile Spice in respect of Punjab and Karnataka service areas. Your Company has challenged the said order before appellate bench of the Hon'ble Delhi High Court, which through interim orders has directed DoT to continue to accept the payment of the License Fee from your Company as was being done before the said order dated July 04, 2011 and has directed DoT not to enforce any demand in respect of non- operative licenses. Meanwhile the hearing in the said matter is complete and judgment reserved.

- Notices from DoT for alleged violation of terms and conditions of License Agreement

Due to the DoT's alleged contention that the acquisition of erstwhile Spice Communications Limited and its subsequent amalgamation violates certain license conditions/guidelines, the Company had received various Show Cause/Demand Notices from the DoT in respect of the operational and non- operational licenses and also on certain other alleged violations of license agreement. Your Company is contesting the same before the Hon'ble TDSAT.

- 3G Spectrum for Punjab Service Area

The DoT, though, has earmarked the 3G spectrum in respect of Punjab service area, which was won by the Company in the 3G spectrum auction conducted by DoT in May, 2010, has not yet allowed commercial use of the same to your Company, due to, inter alia, alleged violation of certain license conditions.

The Company had approached the Hon'ble TDSAT and filed a Petition for necessary direction to the DoT to allow the commercial usage of allocated 3G Spectrum for Punjab service area. The TDSAT has dismissed the said petition in view of order passed by Delhi High Court in July, 2011 concerning amalgamation of erstwhile Spice Communications Limited with the Company, which was holding the operative 2G license in respect of Punjab service area. The Company has since filed an appeal against the order of TDSAT in the Supreme Court, where the matter remains sub judice.

Awards and Recognitions

Your Company's brand initiatives have been recognized and appreciated across forums, and we have won many awards, both nationally and internationally.

- Idea won prestigious Gold EFFIE for 'no idea-get Idea' (number portability) campaign and Silver EFFIE for 'Break the Language Barrier' campaign.

- 'No Idea-Get Idea' and 'Break the Language Barrier' campaigns transcended national boundaries to be ranked globally as the Best Brand Campaign, 2011 by World Communication Awards, London.

- The "Most Trusted Brands Survey" by Brand Equity ranked Idea as 28th amongst all Products and Services Brands climbing 117 ranks over last year. The same survey ranked Idea 4th amongst all Service Brands.

- In radio, Idea won 6 awards at the Golden Mikes Awards 2011 and was adjudged the 'Advertiser of the Year'.

- Idea won a number of awards for interesting and innovative work on the Digital medium:

- A Gold at The Yahoo Big Chair.

- At the WAT Awards: Silver for Social Media Campaign of the Year and Digital Media Campaign of the Year.

- At exchange 4media Indian Digital Media Awards (IDMA): A Silver for the Best Video Creative made for Internet/Mobile Media

New Initiatives

During the year under review, your Company made extensive progress on the marketing and customer care front by entering into various alliances, introducing various innovative products and services. Some of these are -

- The Company launched some interesting enterprise solutions for large scale businesses. One such significantly big solution is the first of its kind IVR based LPG gas booking for IOCL & HPCL across 15 circles which is touching lives of about 30 million IOCL/HPCL consumers and generates about 20 million gas refills every month. The product has enabled customers to book their gas cylinder by dialing an IVR number on a 24x7 basis and to receive SMS confirmations for the booking and the dispatch.

- The Company's large array of Value Added Services has added many more innovative and customer friendly services. One such significant one is Text Subscription services in 9 vernacular/local languages which has significant relevance for the non-metro and rural customers.

- The Company also introduced the 'Complaint Availability Status' on web for its prepaid and postpaid customers, wherein customers can avail the status of their complaint, by simply logging on to the Idea web portal.

- The Company launched a unique first of its kind loyalty program that rewards customers with free instant talk time.

- To facilitate higher adoption of 3G services by customers and to provide better face-to-face interaction, 3G Experience Zones have been established at the Service Centers across various cities. The 3G Experience Zones are managed by trained Data Specialists equipped with TV's, Netbook's, 3G compatible handset's, NetSetter's and device simulators for demonstration and query handling.

- Idea's continued focus on communicating 3G through its blockbuster media campaigns have resulted in Idea having the strongest brand association with '3G'

- Idea strengthened its brand through number of high impact media properties like Kaun Banega Crorepati, Idea Filmfare Awards, Citizen Journalist Awards, in addition to several regional media properties. The brand continues its association with the Delhi Daredevils team in IPL 5.

Subsidiaries and Joint Ventures

Your Company has the following subsidiaries and joint ventures:

Subsidiaries

- Aditya Birla Telecom Limited, holds 16% shareholding in Indus Towers Limited and 100% shareholding in Idea Cellular Towers Infrastructure Limited and is engaged in the trading of communication devices.

- Idea Cellular Services Limited, provides manpower services to the Company.

- Idea Cellular Infrastructure Services Limited, is a tower company owning towers in Bihar and Orissa service areas and provides passive infrastructure services in these service areas.

- Idea Cellular Towers Infrastructure Limited (ICTIL), holds towers de-merged from the Company. ICTIL has filed a scheme of arrangement in the Hon'ble High Court of Delhi which provides for its merger into Indus Towers Limited.

- Idea Mobile Commerce Services Limited, is engaged in the business of Mobile Banking.

- Idea Telesystems Limited (formerly Swinder Singh Satara and Company Limited), is engaged in the trading of communication devices.

In terms of general exemption granted by the Ministry of Corporate Affairs, Government of India, vide its Circular No. 2/2011 dated February 8, 2011, and in compliance with the conditions enlisted therein, the reports and annual accounts of the subsidiary companies for the financial year ended March 31, 2012 have not been attached to the Company's Accounts.

The annual accounts and other related information of the Subsidiary Companies shall be available for inspection during business hours by the members at the Registered Office of the Company. The copies of these documents will also be made available to the members upon request.

Joint Ventures

Indus Towers Limited, in which Aditya Birla Telecom Limited (ABTL) holds a 16% stake, is a joint venture with the Bharti Infratel and Vodafone Essar and provides passive infrastructure services in 15 service areas.

Fixed Deposits

Your Company does not accept or hold any deposits and as such, no amount of principal or interest on fixed deposits was outstanding on the date of the Balance Sheet.

Corporate Governance

The Company is committed to maintain the highest standards of Corporate Governance. Company continues to be compliant with the requirements enshrined in clause 49 of the Listing Agreement which relates to Corporate Governance.

A Report on Corporate Governance as stipulated under clause 49 of the Listing Agreement forms part of the Annual Report. A certificate from the Statutory Auditors of the Company, confirming compliance with the conditions of Corporate Governance, as stipulated under clause 49 forms part of this Report.

Management Discussion and Analysis

The Management Discussion and Analysis Report for the year under review, as stipulated under clause 49 of the Listing Agreement is presented in a separate section forming part of the Annual Report.

Directors

During the year under review, Ms. Madhabi Puri Buch was appointed as an Additional Independent Director on the Board of your Company with effect from December 22, 2011. As per the provisions of Section 260 of the Companies Act, 1956, she holds office upto the date of the ensuing Annual General Meeting of the Company.

Your Company has received a notice under Section 257 of the Act 1956, together with the requisite deposit, from a member proposing the appointment of Ms. Buch as a Director on the Board of the Company. Resolution seeking approval of the Members for the appointment of Ms. Buch as a Director of the Company has been incorporated in the Notice of the ensuing Annual General Meeting together with a brief resume.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Mohan Gyani, Mr. Arun Thiagarajan, Mr. R.C. Bhargava and Mr. P. Murari retire from office by rotation, and being eligible, offer themselves for re-appointment at the ensuing Annual General Meeting of the Company.

Brief profile of the Directors proposed to be appointed/re- appointed as required under clause 49 of the Listing Agreement are annexed to the Notice convening the 17th Annual General Meeting forming part of this Annual Report.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings & Outgo

The particulars as required to be disclosed pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988, are given to the extent applicable in the Annexure 'B' forming part of this Report.

Particulars of Employees

In accordance with the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees have been set out in the annexure to this report. However, in terms of the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the report and accounts, as therein set out, are being sent to all the members of the Company excluding the aforesaid information about employees. Any member, who is interested in obtaining such particulars about employees, may write to the Company Secretary at the Registered Office of the Company.

Directors' Responsibility Statement

Your Directors affirm that the audited accounts containing the financial statements for the financial year 2011-12 are in conformity with the requirements of the Companies Act, 1956. They believe that the financial statements reflect fairly the form and substance of transactions carried out during the year and reasonably present the Company's financial condition and results of operations.

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) the accounting policies have been applied consistently and judgments and estimates made are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Company for that period;

c) proper and sufficient care has been taken to the best of their knowledge and belief for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the annual accounts have been prepared on a going concern basis.

Auditors

The Statutory Auditors of the Company, M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai, retire at the conclusion of the ensuing Annual General Meeting. The Statutory Auditors have confirmed their eligibility and willingness to accept the office on re-appointment. The Board recommends their re-appointment for the next term.

Auditors' Report and Notes to Accounts

The Board has duly reviewed the Statutory Auditors' Report on the Accounts. The observations appearing in the Auditors' Report, including the sub-judice matter are self-explanatory and do not call for any further explanation/clarification by the Board of Directors under Section 217(3) of the Companies Act, 1956.

Cost Audit

During the year under review, the Ministry of Corporate Affairs (MCA) has issued Telecom Industry specific Cost Audit Order dated May 2, 2011, making appointment of Cost Auditor mandatory, inter-alia, for the Companies to whom the Cost Accounting Records (Telecommunications) Rules, 2002 apply.

Accordingly, in terms of the above order and pursuant to the provisions of Section 233B of the Act, your Directors have appointed M/s. Sanjay Gupta & Associates, Cost Accountants, as the Cost Auditors of the Company to audit the cost records/ accounts maintained as per the Cost Accounting Records (Telecommunications) Rules, 2002 for the financial year ending March 31, 2012. The Cost Audit Report for the financial year 2011-12 is yet to be placed before the Board.

Acknowledgements

Your Directors wish to express their sincere appreciation to the Department of Telecommunications, the Central Government, the State Governments, bankers and all the business associates for their support and look forward to continued support in future. Your Directors also wish to place on record their appreciation to the employees for their commitment in the progress of the Company.



For and on behalf of the Board

Place: Mumbai Kumar Mangalam Birla

Date: April 26, 2012 Chairman


Mar 31, 2011

Dear Shareholders,

The Directors are pleased to present the sixteenth Annual Report, together with the audited financial statements of the Company for the financial year ended March 31, 2011.

Financial Results

The standalone and consolidated financial results of your Company for the financial year ended March 31, 2011 are summarised below:

Rs. Mn

Particulars Standalone Consolidated

2010-11 2009-10 2010-11 2009-10

Income from Services 153,328 118,502 154,384 123,979

Other Income 562 801 648 1,011

Total Revenue 153,890 119,303 155,032 124,990

Operating Expenses 122,609 90,358 117,126 90,399

EBITDA 31,281 28,945 37,906 34,591

Depreciation and Amortisation 19,730 15,512 23,973 20,149

EBIT 11,551 13,433 13,933 14,442

Interest and Financing charges 2,487 2,063 3,964 4,005

Surplus from prepayment of loan - 317 - 317

EBT 9,063 11,687 9,969 10,754

Taxes 617 1150 982 1,215

Net Profit after Tax 8,446 10,537 8,987 9,539

Balance brought forward from previous year (3,964) (4,053) (5,038) (5,263)

Accumulated Losses acquired on Amalgamation of Spice Communications Limited (net of withdrawals from General Reserve & Deferred Tax effects) - (10,448) - (9,314)

Cumulative Profit / (Losses) 4,482 (3,964) 3,949 (5,038)

Operations Review

Your Company's total subscriber base as on March 31, 2011 stood at 89.5 million, an increase of 40.2% over the previous year. On a national basis, your Company's subscriber market share stood at 11.0% as of end March, 2011. Further, the Company's revenue market share increased to 13.2% for the year ended March, 2011 from 12.4% in the previous year.

During the financial year, your Company's total minutes of usage on the network crossed the daily one billion minutes mark in terms of daily voice traffic, placing the Company amongst the largest 10 telecom operators in the world. The Company grew its Optic Fibre network by ~ 7,000 route kilometers during the financial year to cater to almost all of its captive National Long Distance traffic.

As a result of the above, on a standalone basis, the total revenues for the financial year were Rs. 153,890 Mn representing a growth of 29.0% over the previous year.

During the last financial year (FY 10), your Company had launched 7 new service areas, which, in FY 11 operated for the first full financial year and are yet to generate cash from operations. The Profit after tax was lower at Rs. 8,446 Mn, a decrease of 19.8% as compared to the previous year. However, the brought forward losses from the previous years (including those acquired on amalgamation of Spice Communications Limited in March 2010) have been completely wiped off during this financial year. As of March 31, 2011, your company has carried the accumulated Profit and Loss balance of Rs. 4,482 Mn to Reserves and Surplus.

On a consolidated basis, the total revenues were higher by 24.0% at Rs. 155,032 Mn over the previous year. The consolidated Net Profit after tax stood at Rs. 8,987 Mn, a decrease of 5.8% compared to the previous year.

Dividend

The Company is in the telecommunication sector which continues to see tremendous growth and significant new investments. The Company's capex requirements are presently higher than the cash profits and hence the company currently does not have free cash flows. Hence, your Directors do not recommend any dividend for the year ended March 31, 2011.

Share Capital

During the year under review, your Company issued and allotted 3,433,713 Equity Shares of Rs. 10/- each, fully paid-up, to the option grantees pursuant to the exercise of stock options under Employee Stock Option Scheme, 2006 (ESOS-2006).

Consequently, the issued, subscribed and paid-up equity share capital of your Company as on March 31, 2011 stood at 3,303,271,505 equity shares of Rs. 10/- each.

Credit Rating

Your Company continues to have credit rating of CARE A1 and CRISIL A1 for its short term debt program and CARE AA credit rating for its long term debt program.

Capital Expenditure

Your Company continues to expand network for enhanced coverage and quality. Your Company incurred a capex of Rs. 99,107 Mn (including Rs. 57,686 Mn and Rs. 4,097 Mn, being payout for 3G spectrum fee and interest capilatised thereon) during the financial year 2010-11.

The Company also made significant progress in rolling out its National Long Distance (NLD) network, and augmenting the International Long Distance (ILD) network. As at end March, 2011, it carried about 90% of its captive NLD and ILD outgoing traffic.

Employee Stock Option Scheme

During the year, the ESOS Compensation Committee granted 2,524,500 options as fourth tranche under the Employee Stock Option Scheme, 2006 (ESOS - 2006) to the eligible employees of the Company. Each option is convertible into one Equity

Share of the Company upon vesting. These options will vest in 4 equal annual installments after one year of the grant and shall be exercisable within a period of 5 years from the date of the vesting.

The disclosures in compliance with clause 12 of Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999, as amended, are set out in Annexure 'A' to this Report.

Human Resources

Your company continues to invest in building a strong performance culture through alignment, shared agreement, robust measurement and constructive performance conversations. Implementation of sophisticated management processes and continued investment in people have helped the Company set high standards of performance.

Significant Developments:

- Launch of 3G Services

The Company was winner of 3G spectrum in 11 services areas. During the period March'11 to July'11, the Company has launched 3G services in 9 out of these 11 service areas. The Company is in the process of launching 3G services in Jammu and Kashmir service area. The 3G spectrum for Punjab service area has not been earmarked by DoT to the Company for commercial usage as yet, and hence Company has not been able to launch 3G service there until now.

Besides providing 3G services in the service areas where the Company has won spectrum, the Company has also entered into bilateral roaming arrangements with other leading operators. Consequent to these arrangements, the Company is providing 3G services in 6 service areas through roaming arrangements, and is in talks to launch its 3G services in the remaining service areas.

- ISO 9001:2008 Certification

The Service Delivery function of the Company is ISO 9001:2008 certified. The ISO 9001:2008 certification (by TUV-Nord) ensures a unified platform for providing consistent services to all the customers the Company serves across the markets and hence the processes that are implemented are customer centric, best in class and in line with the international quality management systems.

- Change in Leadership

Mr. Sanjeev Aga relinquished the office of the Managing Director of the Company from the close of business hours on March 31, 2011. Mr. Aga continues to be on the Board as a Non-Executive Director of the Company. Mr. Himanshu Kapania assumed the role of the Managing Director with effect from April 1, 2011. Mr. Kapania has over 26 years of experience and has indepth knowledge of the Telecom Industry including the current competitive landscape in India. Before taking over this current role, in the position as Director Operations, he has successfully led the numerous new service area roll outs in the last four years and also has led several Company-wide strategic initiatives contributing to the growth of the Company.

- Merger of Spice Communications Limited

The Department of Telecommunications (DoT) had obtained an

ex-parte stay on March 30, 2011 from the Hon'ble High Court of Delhi against its order dated February 5, 2010 sanctioning the Scheme of Amalgamation of Spice Communications Limited (Spice) with the Company. The Hon'ble High Court of Delhi while pronouncing its judgment on July 4, 2011, reaffirmed the amalgamation of Spice with the Company. However, the said judgment transferred and vested unto the DoT, the six licenses granted to erstwhile Spice along with the spectrum (including the two operational licenses for Punjab & Karnataka service areas), till the time permission of DoT is obtained. Upon an appeal filed by the Company before the Appellate Bench, challenging the above judgment of July 4, 2011, the Appellate Bench through interim orders, has directed DoT to:- (i) Accept the License Fee from the Company without prejudice, as the Company is continuing to operate the licenses for Punjab & Karnataka service areas granted to erstwhile Spice;

(ii) Maintain status quo in relation to the aforesaid two operating licenses and not to take any coercive steps in relation to any demand pertaining to the four non operating licenses till the next date of hearing.

The matter remains sub-judice.

- 3G Spectrum for Punjab Service Area

The Company had participated in the 3G auction conducted by the Department of Telecommunications (DoT), basis the 2G licenses held by it for various service areas and was declared winner for the allotment of 3G spectrum in 11 service areas on May 21, 2010, including Punjab service area. The DoT accordingly issued Letters of Intent for earmarking of 3G spectrum, inter-alia, for Punjab service area. Thereafter the Company approached DoT for carrying out license amendment, enabling the Company for commercial usage of 3G spectrum. Though DoT carried the requisite amendments to 2G licenses for 10 service areas, it, however, is yet to carry license amendment and allow commercial usage of earmarked 3G spectrum in respect of Punjab service area.

As the Company did not receive any response to repeated requests made to DoT, it approached Telecom Disputes Settlement and Appellate Tribunal (TDSAT) and filed Petition for necessary direction to the DoT to allow the commercial usage of allocated 3G Spectrum for Punjab service area. The TDSAT has dismissed the said petition in view of order passed by Delhi High Court in July, 2011 concerning amalgamation of erstwhile Spice Communications Limited with the Company, which was holding the operative 2G license in respect of Punjab service area. The Company has filed necessary appeal before the Appellate Bench of Delhi High Court against the July, 2011 order passed by the single judge and would decide the next course of action at an appropriate time, basis the outcome of appeal.

- Notices from DoT for alleged violation of terms and conditions of License Agreement

Due to the DoTs alleged contention that the acquisition of erstwhile Spice Communications Limited and its subsequent amalgamation violates certain license conditions / guidelines, the Company had received various Show Cause / Demand Notices from the DoT in respect of the operational and non- operational licenses including for alleged failure to meet roll- out obligations. Your Company is contesting the same before the appropriate forums. More details are provided in Note B4 of Schedule 22 – Notes to Accounts.

Corporate Sustainability

Your Company, part of the Aditya Birla Group which is India's first truly global conglomerate, is one of the oldest players in the Indian telecom industry and has played a key role in the development of mobile telephony, particularly in rural India. As part of a socially responsible corporate group, your Company has and continues to adopt policies, and business strategies to effectively integrate emerging environmental, social and economic considerations.

Whether it's through conserving energy, recycling, or finding innovative solutions to environmental and social challenges, your Company is committed to being a respectful, responsible and positive influence on the environment and the society in which it operates. Efficient power management, infrastructure sharing, use of eco-friendly renewable energy sources, leveraging the latest in technology to reach out to a large audience in most energy efficient manner such as video and teleconferencing, smart logistics, etc. are some of the best practices in our network infrastructure and day-to-day business operations, to ensure a clean and green environment.

Network Infrastructure Initiatives

In our effort to give back to the environment and reduce the collective carbon foot print of the telecom sector in India, your Company pioneered the concept of 'Shared Telecom Infrastructure' services, along with a few other industry leaders in the wireless space. This initiative is committed towards continuous innovation endeavors; optimization of future tower rollouts; and enhanced operational efficiencies leading to a substantial reduction of carbon foot print.

The Indian telecom industry's first collaborative, cross-industry consortium to encourage the development of environmentally sustainable mobile networks was also led by your Company, which was supported by the GSMA. The pilot, aimed at developing biofuels as a source of power for wireless networks in rural India which are located beyond the reach of the national electricity grid, was conducted in parts of Andhra Pradesh and Maharashtra. The learnings of the research were later handed to the infrastructure company which owns the towers, to explore broad basing of the program.

In a bid to reduce energy consumption by our BTS, your Company chose OD BTS (outdoor BTS) as our preferred BTS type in 2007. Currently, over 40% of our total BTS portfolio comprises of OD BTS, which has resulted in reducing our conventional energy consumption by about 25% as compared to the ID BTS (indoor BTS). Efforts are also on to re-deploy ID BTS to OD BTS sites, in some locations, which will further reduce energy consumption at these sites by 25%.

Your Company has explored a Solar Hybrid Solution for running our BTS in parts of rural Bihar. This will reduce the fuel consumption of power generator from running for 15-16 hours to less than 5 hours a day in these locations.

Your Company is also part of the Fuel Cell project, initiated by

our Group. The project aims at exploring the usage of hydrogen as an alternate energy source to power mobile base stations. Currently, at trial stage, if successful, this program has the potential of reducing the usage of a regular power generator to Zero.

Communication Initiatives

With a current subscriber base of nearly 10 crore, there is an opportunity to influence a large mass of people by promoting green initiatives through our various communication programs and customer service initiatives.

Your Company germinated the thought of 'Use Mobile, Save Paper' in the minds of millions of mobile users in India, with its aggressive yet thought provoking campaign. The campaign was designed to highlight numerous ways of saving paper, and thereby saving the green cover necessary for the health of the planet, by using a range of mobile based value added services in day-to-day activities to replace paper.

Your Company was amongst the first mobile operators in India to promote V-Top up recharges for prepaid users, in a major way, which led to virtual phasing out of paper-based recharge vouchers, ultimately resulting in saving tonnes of paper.

Another recent and ongoing initiative is e-Bill, which is being consistently promoted to ensure that more and more users opt for this service, and contribute towards saving paper.

Breaking all conventions, your Company has conceived another innovative program which is aimed at reducing plastic consumption on a large scale. In a major overhaul of its logistics management, it introduced the 'PICO' card, which is a half- size plastic card that bears the SIM card. Your Company is one of the first operators, globally, to introduce the new PICO card which is expected to save over 90% of plastic used in manufacturing regular cards.

Employee Based Initiatives

Your Company's HR operations have all been enabled online for its over 7,000 employees, to ensure that there is minimal paper documentation. This will save tonnes of paper and help maintain otherwise fragile eco-balance.

The Company uses smart ICT solutions such as teleconferencing, videoconferencing, web chats etc. for internal communication amongst employees to minimize travel.

Driven by its socially conscious parent Group, your Company stays committed to the cause of giving back to the environment and will continue to drive the efforts towards environment sustainability by reducing carbon foot print and energy consumption.

Awards and Recognitions

Your Company's contribution and efforts is being recognised through prestigious awards and recognitions in various fora. Some of them are listed below:

- Your company has been ranked 1st in the Telecommunications sector and ranked 12th in the country under India's Best Companies to Work for – 2011 Study conducted by Great Place to Work® Institute, India, in partnership with The Economic Times.

- Your Company has also been adjudged amongst the Top 3 companies in Telecommunications sector in the "Best Companies to Work For" Study conducted by Business Today.

- Your Company has been ranked 3rd in Best Investor Relations category for Telecommunications sector (Nominated by Sell Side) in 2011 All-Asia Executive Team rankings by Institutional Investor magazine in a sector based survey, which had a participation of 522 portfolio managers and investors, as well as 348 sell-side analysts.

- Brand Idea has been ranked the 4th Buzziest Brand by Agencyfaqs for second consecutive year.

- Outdoor Innovation for "Break the Language Barrier campaign" won two Silver Awards at the OAC (Outdoor Advertising Convention) Awards 2011 for Telecom Category for Multiple Executions and Best New Media Format Innovation.

- The 'Use Mobile Save Paper' campaign was one of the most awarded campaigns with over 7 awards in various media awards like the EMVIES 2010, EFFIES 2010, Digital Media Awards 10-11 and Yahoo big Chair Awards 10-11. The campaign was also creditably nominated at the Asian Marketing Effectiveness Awards and it also won us the Olive Crown Gold Award for the Green Brand of the Year at Goafest 2011.

- The Company also received the award for 'Most outstanding use of Radio in an Ad campaign' at the India Radio Forum 2011, Best Televised Event - EEMAX Awards 2010 for 'Idea Rocks India' and an award for Rural Marketing Programme at the WOW Awards.

New Initiatives and Alliances

During the year under review, your Company made extensive progress on the marketing and customer care front by introducing various innovative products and services and also entered into various alliances. Some of these are:

- "IMAGINE" promotions management system won the Prepaid Excellence Awards 2011 for Best Product Innovation category. This system enables the Company to launch targeted promotions for the prepaid subscribers and ensures enhancement in take rate of the promotions.

- Matrix, the number and SIM management system is being rolled out to enable seamless provisioning of numbers and starter packs in the various network elements.

- Siebel CRM (Christened as Crystal) was successfully rolled out in the Company. This is the largest Implementation of Siebel in a single instance in the world. Crystal implementation has ensured, reduced cost, increased customer satisfaction through better customer service.

- To facilitate higher adoption of 3G services by customers and to provide better face-to-face service, 3G Experience Zones have been established at the Service Centers across various cities. The 3G Experience Zones are managed by trained Data Specialist equipped with TV, Netbook, 3G compatible handset, NetSetter and device simulators for demonstration and query handling.

- The Company launched a unique Interactive Voice Response rural service called 'Behtar Zindagi' in 16 regional languages, which provides information on key requirements of the rural segment like mandi rates, livestock, weather information, agriculture etc.

- Classified Services have been launched as a new VAS service, offering access to Jobs, Real Estate, Matrimony, Best Deals etc.

- Idea continued on its 'What an Idea Sirji' campaign and launched the much appreciated 'Break the Language Barrier' campaign. It was supported with a unique service of 'Idea Language Helpline' offering instant translations in 15 Indian languages.

- The Idea 3G media campaign was launched to support Idea's 3G rollout.

- Idea strengthened its brand through a series of media properties with associations with Kaun Banega Crorepati, Koffee With Karan, Mission Army and Grammy Awards on VH1, in addition to existing marquee properties like Idea Filmfare Awards, Idea Present Citizens Journalist and other regional media properties. The brand continued its association with the Delhi Daredevils team in IPL4.

- Idea launched a unique National Inter School Skill fest called "Kaho Whats Your Idea" in association with renowned Quizmaster Derek O Brien. The program was very well received as it became one of the largest National School Connect Programs in the country touching 2.5 Lakh students across 3000 schools in 100 cities.

Subsidiaries and Joint Ventures

Your Company has the following subsidiaries and joint ventures:

Subsidiaries

- Aditya Birla Telecom Limited, holds 16% shareholding in Indus Towers Limited and 100% shareholding in Idea Cellular Towers Infrastructure Limited.

- Idea Cellular Services Limited, provides manpower services to the Company.

- Idea Cellular Infrastructure Services Limited, is a tower company owning towers in Bihar and Orissa service areas and provides passive infrastructure services in these service areas.

- Idea Cellular Towers Infrastructure Limited (ICTIL), holds towers de-merged from the Company. ICTIL has filed a scheme of arrangement in the Hon'ble High Court of Delhi which provides for its merger into Indus Towers Limited.

- Idea Mobile Commerce Services Limited (Formerly Carlos Towers Limited), is engaged in the business of Mobile Banking, though it is yet to commence commercial operations.

- Swinder Singh Satara and Company Limited, is engaged in the trading of Data Cards, mobile handsets and Fixed Wireless Phones.

In terms of general exemption granted by the Ministry of Corporate Affairs, Government of India, vide its circular

no. 2/2011 dated February 8, 2011, and in compliance with the conditions enlisted therein, the reports and annual accounts of the subsidiary companies for the financial year ended March 31, 2011 have not been attached to the Company's accounts.

The annual accounts and other related information of the Subsidiary Companies shall be available for inspection during business hours by the members at the Registered Office of the Company. The copies of these documents will also be made available to the members upon request.

Joint Ventures

Indus Towers Limited, in which Aditya Birla Telecom Limited (ABTL) holds a 16% stake, is a joint venture between the Bharti group, Vodafone Essar group and the Company (through ABTL), and provides passive infrastructure services in 16 service areas.

Fixed Deposits

Your Company does not accept or hold any deposits and as such, no amount of principal or interest on fixed deposits was outstanding on the date of the Balance Sheet.

Corporate Governance

The Company is committed to maintain the highest standards of Corporate Governance. Your Directors adhere to all the requirements as provided in clause 49 of the Listing Agreement which relates to Corporate Governance.

A Report on Corporate Governance as stipulated under clause 49 of the Listing Agreement forms part of the Annual Report. A certificate from the statutory auditors of the Company, confirming compliance with the conditions of Corporate Governance, as stipulated under clause 49 forms part of this report.

Management Discussion and Analysis

The Management Discussion and Analysis Report for the year under review, as stipulated under clause 49 of the Listing Agreement is presented in a separate section forming part of the Annual Report.

Board of Directors

Mr. Sanjeev Aga relinquished the office of the Managing Director of the Company from the close of business hours on March 31, 2011. Taking into account the significant contribution made by Mr. Aga during his tenure as the Managing Director, in the growth of the Company, the Board decided to avail his services as a Non-Executive Director on the Board of the Company with effect from April 1, 2011.

Mr. Himanshu Kapania has been appointed as the Managing Director of the Company for a period of 5 years with effect from April 1, 2011. An abstract of the terms and conditions of his appointment and memorandum of interest under Section 302 of the Act have been sent to the Members of the Company in February, 2011.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Kumar Mangalam Birla, Mr. Gian Prakash Gupta, Mr. Sanjeev Aga, and Dr. Rakesh Jain retire from office by rotation, and being eligible, offer themselves for re-appointment at the ensuing Annual General Meeting of the Company.

Brief profile of the Directors proposed to be appointed / re- appointed as required under Clause 49 of the Listing Agreement are annexed to the Notice convening the 16th Annual General Meeting forming part of this Annual Report.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings & Outgo

The particulars as required to be disclosed pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988, are given to the extent applicable in the Annexure 'B' forming part of this Report.

Particulars of Employees

In accordance with the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees have been set out in the annexure to this report. However, in terms of the provisions of Section 219(1)(b)(iv) of the Act, the report and accounts, as therein set out, are being sent to all the members of the Company excluding the aforesaid information about employees. Any member, who is interested in obtaining such particulars about employees, may write to the Company Secretary at the Registered Office of the Company.

Directors' Responsibility Statement

Your Directors affirm that the audited accounts containing the financial statements for the Financial Year 2010-11 are in conformity with the requirements of the Companies Act, 1956. They believe that the financial statements reflect fairly the form and substance of transactions carried out during the year and reasonably present the Company's financial condition and results of operations.

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) the accounting policies have been applied consistently and judgments and estimates made are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Company for that period;

c) proper and sufficient care has been taken to the best of their knowledge and belief for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the annual accounts have been prepared on a going concern basis.

Auditors

The Statutory Auditors of the Company, M/s. Deloitte Haskins & Sells, Chartered Accountants, Mumbai, retire at the conclusion of the ensuing Annual General Meeting. The Statutory Auditors have confirmed their eligibility and willingness to accept the office on re-appointment. The Board recommends their re-appointment for the next term.

Auditors' Report and Notes to Accounts

The Board has duly reviewed the Statutory Auditors' Report on the Accounts. The observations appearing in the Auditors' Report, including on the sub-judice matter, does not call for any further explanation/clarification by the Board of Directors under Section 217(3) of the Companies Act, 1956.

Acknowledgements

Your Directors wish to express their sincere appreciation to the Department of Telecommunications, the Central Government, the State Governments, bankers and all the business associates for their support and look forward to continued support in future. Your Directors also wish to place on record their appreciation to the employees for their commitment in the progress of the Company.

For and on behalf of the Board

Place: Mumbai Kumar Mangalam Birla

Date: July 29, 2011 Chairman

Find IFSC