Indus Towers Ltd

India's dynamic and resilient economy is among the fastest-growing major economies, globally.

The Government's commitment towards digitalization has transformed the behavioral trends of individuals and businesses, driving efficiency and accessibility. The telecom sector acts as a backbone, facilitating connectivity and enabling the seamless integration of digital platforms. This in turn fosters economic growth, enhances governance, and promotes the private sector as a key partner in India's development trajectory. The role of telecommunication is recognized worldwide as a powerful tool of socio- economic development. In fact, it is one of the key elements of the Sustainable Development Goals (SDGs) of the United Nations' Agenda for Sustainable Development for 2030. In addition, the telecom sector plays a crucial role in empowering various other sectors, bridging the digital divide, and therefore contributing to India's economic progress.

The telecom industry in India has fortified its position as the second largest in the world, with a subscriber base of 1.17 billion as of March 2023. By March 2023, the number of broadband subscribers in India reached 847 million, with India's internet user base being amongst the largest in the world. The data consumption story in the nation also continues to play out well, with the average monthly data traffic per user growing at a 5-year CAGR of 19% to 19.5 GB in December 2022. This growth in data consumption is also expected to be supplemented by the rollout of 5G services. The auction of spectrum for 5G in July-August saw active participation from the TSPs, with the acquisition of a total of 51,226 MHz of spectrum across bands, out of a total of 72,098 MHz put up for auction.

Subsequently, the operators' 5G rollouts, which began in October 2022, have been progressing at a rapid pace. India is poised to record one of the fastest 5G rollouts in the world as the operators are planning a pan India rollout by the end of March 2024. At Indus, the loading of 5G equipment on our towers, has started to add to our revenues and should increase. We expect the 5G opportunity to continue to build in the form of requirement of additional sites as the penetration of 5G services increases. Additionally, there is a substantial opportunity for us, given the gap in the existing network of operators.

One of our major customers is adding a large number of sites to bridge this gap, especially in rural areas, and we expect this momentum to continue in the near term. The rising data consumption requires additional capacity resulting in the need for network densification. This presents itself as an opportunity for Indus in terms of building more sites. The Government continues to do its part to simplify and accelerate the deployment of telecom infrastructure in the country.

The launch of GatiShakti Sanchar portal has eased the Right of Way (RoW) application process through a single window. This significantly eases the site acquisition process and leads to a much faster creation of 5G infrastructure in the country.

The Government is also working with cross sectors such as National Highway Authority of India, Ministry of Road Transport and Highways, Indian Railways to align their RoW policy with the central notified policy for faster utilization of land and building available with them. Indian Railways have amended their policy and allowed IP1 infrastructure players to deploy telecom infrastructure on their land/ property. The amended RoW rules now also allow licensees to deploy telecom infrastructure over a private property without requiring approval from the concerned Government authority.

Indus Towers is fostering connectivity across India's remotest regions, having installed hundreds of towers in difficult terrains. These include four new mobile towers at Kashmir's Gurez Valley located at an altitude of 8,460 feet and 6 towers along the Kedarnath Trek in Rudraprayag, one of the most popular pilgrimages in India. The towers in Rudraprayag enable communication from Gaurikund to Kedarnath Temple at an altitude of 12,000 ft in Uttarakhand. Enabling connectivity in these regions benefits residents, businesses, students, tourists.

Earlier this year, a transition of leadership took place at Indus Towers. Mr. Prachur Sah assumed the role of Managing Director and CEO in January 2023, succeeding Mr. Bimal Dayal. I am delighted to share that the transition has been smooth, ensuring a seamless continuity of operations. Under Prachur's leadership, Indus Towers is poised for continued growth.

In terms of financial performance, gross revenue grew 2.4% year-on-year to H283.8 billion. Within that, our core revenues declined 1.0% year-on-year to H174.3 billion. During the year, we adopted a stringent Expected Credit Loss (ECL) computation relating to one of our major customers in order to de-risk our balance sheet. As a result, we had a negative impact of H53.8 billion from provision for doubtful debts. Adjusted for this and other non-recurring items, gross revenue and core revenues were up 2.1% and 2.0% year-on-year, respectively. On a reported basis, EBITDA declined by 34.6% to H97.7 billion and profit after tax declined by 68.0% to H20.4 billion. Again, adjusted for one offs and provisions, EBITDA and profit after tax were up by 0.5% and down by 0.6% year-on-year, respectively.

The collections from the said customer remained stressed although we saw an improvement in the last quarter of the financial year. We remain in active discussions to improve the same and continue to monitor the situation closely.

Being a leading corporate entity in India, Indus Towers is serious about its Corporate Social Responsibility initiatives. We are pleased to have touched 9.85 million lives through our CSR projects and programs. Amongst our newer initiatives, the SmartAgri Project is transforming conventional agricultural practices across 35 districts in various states. Indus also installed

20 Digital Health Kiosks in Lucknow,

Uttar Pradesh. Each kiosk can check for over 60 invasive and non-invasive health parameters instantly, followed immediately by telemedicine and assessments.

Indus Towers is actively participating in the global telecom industry's collective endeavors to address climate change by pledging to achieve net-zero greenhouse gas emissions by 2050, aligning with the Science-Based Targets initiative (SBTi). Demonstrating our commitment to sustainability, the Company has set medium- to long-term ESG commitments across three fundamental pillars– Environmental Stewardship, Social Responsibility, and Robust Governance. In conclusion, with 5G initiative growing, Indus Towers is focused towards facilitating the adoption and implementation of this and contributing to India's digital transformation.

Accelerated rollouts by our customers to expand their network and the continued network densification present a substantial opportunity for Indus. We are well placed to capitalise on this opportunity and remain committed to adding value for our shareholders, employees, and the communities we serve.

Lastly, I would like to extend my heartfelt gratitude to all out stakeholders for their firm support and trust in our company. Our continued partnership is vital to our success, and we remain committed to creating value.