Vodafone Idea Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Mar 2021
Auditor and Management Disclosures and Notes for the annual results dated 31 Mar 2021
Notes¬
1. The above audited financial results, as reviewed by the Audit Committee of the Board, were approved and taken on record by the Board of Directors at their meeting held on 30th June, 2021.
2. The Hon’ble Supreme Court on 24th October, 2019 delivered its judgment on the cross appeals against the Hon’ble TDSAT judgment dated 23rd April, 2015, relating to the definition of Adjusted Gross Revenue (AGR Judgment). The order upheld the principal demand, levy of interest, penalty and interest on penalty. On 1st September, 2020, vide its judgment, the Hon’ble Supreme Court has inter-alia directed that for the demand raised by the Department of Telecom in respect of the AGR dues based on the judgment of this Court, there shall not be any dispute raised by any of the Telecom Operators and that there shall not be any reassessment; the Telecom Operators shall at the first instance, make the payment of 10% of the total dues as demanded by DoT by 31st March, 2021 and thereafter, Telecom Operators to make payment in yearly instalments commencing from 1st April, 2021 to 31st March, 2031 payable by 31st March of every succeeding financial year. As the cumulative amount paid by the Company till date exceeds 10% of the total liability, which the Company believes is as demanded by DoT for the period upto the date of judgment, the next instalment would be payable only by 31st March, 2022. Accordingly, the Company has informed DoT that it has paid more than 10 % of the total dues and has complied with Hon’ble Supreme Court order. The Company has also filed affidavit with Hon’ble Supreme Court confirming payment of 10% of the total dues with an undertaking to pay the arrears as per the Court judgement.
On 7th January, 2021, the Company has filed a modification application with the Hon’ble Supreme Court requesting them to allow DoT to correct manifest/clerical/arithmetic errors in the computation of AGR demands and carry out the corrections in accordance with law within a reasonable period of time. The matter is yet to be heard. Further, during the quarter, DoT issued additional demands for which the company has written to the DoT requesting corrections of certain computational errors, admissible pass-through not considered based on the principles laid down in the AGR judgement. The Company is awaiting response from DoT on the same. Accordingly, during the quarter, the Company has continued to recognize its AGR obligations based on the AGR judgment of the Hon’ble Supreme Court, License Agreement, etc.
3. The Company has incurred losses of ` 462,937 Mn for the year ended 31st March, 2021 and the networth is negative ` 377,076 Mn. As at 31st March, 2021, the total debt (including interest accrued but not due and AGR liability) of the Company stands at ` 1,867,790 Mn. The Company has classified ` 85,472 Mn (net of waiver received) from non-current borrowings to current maturities of long-term debt for not meeting certain covenant clauses under the financial agreements for specified financial ratios as at 31st March, 2021. Further, as a result of the rating downgrade, certain lenders had asked for increase of interest rates and additional margin money/security against existing facilities. The Company has exchanged correspondences and continues to be in discussion with the lenders for the next steps/waivers. The existing debt (excluding deferred spectrum obligation of ` 20,941 Mn for which additional Bank Guarantees of ` 9,757 Mn is to be given to avail additional 1 year moratorium) of ` 81,184 Mn and the next instalment of the AGR Judgement matter (as mentioned in Note 2 above) are payable by 31st March, 2022. Guarantees amounting to ` 70,399 Mn are due to expire during the next twelve months. The Company has also written to DoT for deferment of the spectrum payment installment of ` 82,117 Mn payable as at 9th April, 2022.
The Board of Directors of the Company, at its meeting held on 4th September, 2020 had approved the fund-raising plan of up to ` 250,000 Mn.
There exists material uncertainty relating to the Company’s ability to continue as a going concern which is dependent on its ability to raise additional funds as required, successful negotiations with lenders on continued support, refinancing of debts, monetisation of certain assets, outcome of the modification application filed with the Hon’ble Supreme Court and clarity of the next instalment amount, acceptance of its deferment request by DoT and generation of cash flow from operations that it needs to settle / renew its liabilities / guarantees as they fall due. As of date, the Company has met all its debt obligations. Pending the outcome of the above matters, these financial results have been prepared on a going concern basis.
4.The Company operates only in one reportable segment i.e. Mobility and hence no separate disclosure is required for Segments.
5.The Department of Telecommunications (DoT) conducted auctions for frequency blocks in the 900 and 1800 MHz spectrum bands in March 2021. The Company successfully bid for its spectrum requirements at a total cost of ` 19,934 Mn as under:
5.8 MHz of 900 MHz spectrum in 2 service areas of Tamilnadu and West Bengal
6 MHz of 1800 MHz spectrum in 3 service areas of Karnataka, Uttar Pradesh (East) and Uttar Pradesh (West)
The validity of the above spectrum is for a 20 year period starting from the effective date as mentioned in the Frequency Assignment Letter for respective service areas. As on 31st March, 2021, the Company had not received the frequency assignment letter from DoT. As per the payment options available, the Company has chosen the deferred payment option. The upfront payment amount of ` 5,747 Mn under the deferred payment option was paid on 18th March, 2021 and recognised as Capital Advances.
6. The outbreak of Coronavirus (COVID-19) pandemic globally and in India is causing significant disturbance and slow down of economic activity. The Ministry of Home Affairs vide order No.40-3/2020 dated 24th March, 2020 notified telecommunication services amongst the essential services which continued to operate during the lockdown period. While the customer’s ability to recharge, availability of physical recharge, acquisition of new customers as well as network rollout have been somewhat adversely impacted due to the lockdown in most parts of the country, the services to our customers continue without any material disruption. As on the date of these results, the Company¬ based on the internal and external information available and the current indicators, believes that there is no material impact of the pandemic on its overall performance, except as mentioned hereinbefore. However, given the uncertainties associated with the nature and duration of COVID-19, the Company continues to monitor the situation closely and shall take appropriate actions based on material changes (if any).
7. The financial results for the quarters ended 31st March, 2021 and 31st March, 2020 respectively are balancing figures between audited results for the full financial year and the published year to date figures upto the third quarter of the respective financial years.
8. Previous period figures have been regrouped and rearranged wherever necessary.