Bharti Airtel Ltd Directors Report.
Your Directors have pleasure in presenting the 22nd Board Report on the Companys business and operations, together with audited financial statements and accounts for the financial year ended March 31, 2017.
Bharti Airtel is among the top three mobile service providers globally with presence in 17 countries, including India, Sri Lanka and 15 countries in the African continent.
The Companys diversified service range includes mobile, voice and data solutions, using 2G, 3G and 4G technologies. Its service portfolio comprises Digital TV services, an integrated suite of telecom solutions for its customers, besides providing long distance connectivity in India, Africa and rest of the world. All the services are rendered under a unified brand airtel either directly or through subsidiary companies. Airtel Money (known as Airtel Payments Bank in India) extends product portfolio to further our financial inclusion agenda and offers convenience of payments and money transfers on mobile phones over secure and stable platforms in India, and across all 15 countries in Africa.
The Company also deploys and manages passive infrastructure pertaining to telecom operations through its subsidiary Bharti Infratel Limited, which also owns 42% of Indus Towers Limited. Together, Bharti Infratel and Indus Towers are the largest passive infrastructure service providers in India.
In compliance with the provisions of the Companies Act, 2013, and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) the Company has prepared its standalone and consolidated financial statements as per Indian Accounting Standards (Ind AS) for the FY 2016-17. The standalone and consolidated financial highlights of the Companys operations are as follows:
Standalone Financial Highlights (Ind AS)
|EBITDA before exceptional items||242,242||3,607||226,435||3,458|
|Cash profit from operations||209,647||3,122||205,096||3,132|
|Earnings before taxation||(85,095)||(1,267)||102,544||1,566|
|Net Income/ (Loss)||(99,256)||(1,478)||77,803||1,188|
*1 USD = 67.16 Exchange Rate for the financial year ended March 31, 2017. (1 USD = 65.48 Exchange Rate for the financial year ended March 31, 2016).
Consolidated Financial Highlights (Ind AS)
|EBITDA before exceptional items||356,206||5,304||341,682||5,218|
|Cash profit from operations||283,668||4,224||289,083||4,415|
|Earnings before taxation||77,233||1,150||128,463||1,962|
|Net Income/ (Loss)||37,998||566||60,767||928|
*1 USD = 67.16 Exchange Rate for the financial year ended March 31, 2017.
(1 USD = 65.48 Exchange Rate for the financial year ended March 31, 2016).
The financial results and the results of operations, including major developments have been further discussed in detail in the Management Discussion and Analysis section.
Indian Accounting Standards
The Ministry of Corporate Affairs (MCA), vide its notification dated February 16, 2015, notified the Indian Accounting Standards (Ind AS) applicable to certain class of companies. Ind AS has replaced the existing Indian GAAP prescribed under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014.
Pursuant to the aforesaid notification, with effect from April 01, 2016, the Company has transitioned to Ind AS and the transition date being April 01, 2015. The transition is carried out from accounting principles generally accepted in India being the previous GAAP Accordingly, basis the accounting policies and Ind-AS 101 exemptions finalised, the impact of transition has been provided in the opening equity as at April 01, 2015 and figures for the previous year have been adjusted accordingly.
The reconciliation and explanation of the effect of transition to Ind AS are given in detail in note 23 and 29 of the standalone and consolidated financial statements respectively.
During the year, there was no change in the Companys issued, subscribed and paid-up equity share capital. On March 31, 2017, it stood at 19,987 Mn, divided into 3,997,400,102 equity shares of 5/- each.
Augere Wireless Broadband India Private Limited, a subsidiary company was amalgamated with the Company w.e.f. February 15, 2017. As per the Scheme of Amalgamation, the authorised share capital of Augere Wireless Broadband India Private Limited was transferred to the Company and consequently the authorised share capital of the Company was increased from 25,000 Mn (divided into 5,000 Mn equity shares of 5/- each) to 27,500 Mn (divided into 5,500 Mn equity shares of 5/- each).
The Company has not transferred any amount to the General Reserve for the financial year ended March 31, 2017.
Your Directors have recommended a final dividend of 1.00 per equity share of 5 each fully paid-up (20.00 % of face value) for FY 2016-17. The total final dividend payout will amount to 3,997 Mn, excluding tax on dividend. The payment of final dividend is subject to the approval of shareholders in the Companys ensuing Annual General Meeting (AGM).
The Register of Members and Share Transfer Books will remain closed from Saturday, July 15, 2017 to Monday, July 24, 2017 (both days inclusive) for the purpose of payment of final dividend for the FY 2016-17, if declared at the ensuing AGM.
Dividend Distribution Policy
As per Regulation 43A of the Listing Regulations, top 500 listed companies are required to formulate a dividend distribution policy. Accordingly, the Company has adopted the dividend distribution policy which sets out the parameters and circumstances to be considered by the Board in determining the distribution of dividend to its shareholders and / or retaining profits earned by the Company. The Policy is enclosed as Annexure J to the Boards Report and is also available on the Companys website at http:// www.airtel.in/wps/wcm/connect/61c3e71e-2df0-4fe6- 8c46-a99cba57266a/Airtel-Dividend+Distribution+Policy. pdf?MOD=AJPFRFS&Cont.ent.Cache=NONF.
Transfer of amount to Investor Education and Protection Fund
During the financial year 2016-17, the Company has transferred the unpaid/unclaimed dividend amounting to 6.08 Mn to the Investor Education and Protection Fund (IEPF) Account established by the Central Government. The Company has also uploaded the details of unpaid and unclaimed amounts lying with the Company as on August 19, 2016 (date of last Annual General Meeting) on the Companys website www.airtel.com.
According to the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (IEPF Rules), as amended, the shares in respect of which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be credited to the demat account created by the IEPF Authority. The corresponding shares will be transferred as per the requirements of the IEPF Rules, details of which are provided on the Companys website www.airtel.com.
The Company has not accepted any deposits and, as such, no amount of principal or interest was outstanding, as on the balance sheet closure date.
Capital Market Ratings
As on March 31, 2017, the Company was rated by two domestic rating agencies, namely CRISIL and ICRA and three international rating agencies, namely Fitch Ratings, Moodys and S&P
CRISIL and ICRA maintained their long-term ratings of the Company. As on March 31, 2017, they rate the Company at [CRISIL] Aa+/[ICRA] AA+, with a stable outlook. Short-term ratings were maintained at the highest end of the rating scale at [CRISIL] A1+/[ICRA] A1+.
Fitch, S&P and Moodys also maintained the ratings at BBB-/ Stable, BBB-/Stable and Baa3/Stable, respectively.
As on March 31, 2017, the Company was rated Investment Grade with a Stable outlook by all three international credit rating agencies.
Employee Stock Option Plan
At present, the Company has two Employee Stock Options (ESOP) schemes, namely the Employee Stock Option Scheme 2001 and the Employee Stock Option Scheme 2005. Besides attracting talent, the schemes also helped retain talent and experience. The HR and Nomination Committee administers and monitors the Companys ESOP schemes.
Both the ESOP schemes are currently administered through Bharti Airtel Employees Welfare Trust (ESOP Trust), whereby shares held by the Trust are transferred to the employee, upon exercise of stock options as per the terms of the Scheme.
Pursuant to the provisions of SEBI (Share Based Employee Benefits) Regulations, 2014 (FSOP Regulations), a disclosure with respect to ESOP Schemes of the Company as on March 31, 2017, is annexed as Annexure A to this report and has also been uploaded on Companys website at http://www. airtel.in/wps/wcm/connect/c9e25993-5b80-4ebo-9874- 37614225b876.
During the previous year, there were no material changes in the aforesaid ESOP Schemes of the Company and the ESOP Schemes are in compliance with ESOP Regulations. A certificate from S. R. Batliboi & Associates LLP, Chartered Accountants, Statutory Auditors, with respect to the implementation of the Companys ESOP schemes, would be placed before the shareholders at the ensuing AGM. A copy of the same will also be available for inspection at the Companys registered office.
In terms of the provisions of ESOP Regulations, approval of shareholders is being sought for modification of the Employee Stock Option Scheme 2005 with the objective to make the same more beneficial and employee friendly Accordingly, a proposal has been included in the Notice of 22nd Annual General Meeting accompanying this report.
Material changes and commitments affecting the financial position between the end of financial year and date of report after the balance sheet date
There were no material changes and commitments affecting the financial position of the Company between the end of financial year and the date of this report.
Directors and Key Managerial Personnel Inductions, Re-appointments, Retirements & Resignations
Pursuant to the provisions of the Companies Act, 2013, Sheikh Faisal Thani Al-Thani, Director of the Company will retire by rotation at the ensuing AGM and being eligible, has offered himself for re-appointment. The Board recommends his re-appointment.
Mr. Gopal Vittal, Managing Director & CFO (India & South Asia) will be completing his present term as Managing Director of the Company on January 31, 2018. On the recommendation of the HR and Nomination Committee, the Board in its meeting held on May 09, 2017 subject to the approval of shareholders, has re-appointed Mr Gopal Vittal as Managing Director & CFO (India & South Asia) of the Company for a further term of five years w.e.f. February 01, 2018.
Mr. Manish Kejriwal, Independent Director will be completing his present term as an Independent Director of the Company on September 25, 2017. On the recommendation of the HR and Nomination Committee, the Board in its meeting held on May 09, 2017 subject to the approval of shareholders by special resolution, has re-appointed Mr. Manish Kejriwal as an Independent Director of the Company for a further term of five years w.e.f. September 26, 2017.
Brief resume, nature of expertise, details of directorships held in other companies of the Directors proposed to be reappointed, along with their shareholding in the Company, as stipulated under Secretarial Standard 2 and Regulation 36 of the Listing Regulations, is appended as an annexure to the Notice of the ensuing AGM.
Mr. Rajendra Chopra resigned from the position of Company Secretary w.e.f. January 24, 2017. The Board placed on record its appreciation for the contribution made by him during his tenure. The Board in its meeting held on January 24, 2017 had appointed Mr. Rohit Krishan Puri as the Deputy Company Secretary and the Compliance Officer of the Company w.e.f. January 25, 2017. The Company is in process of identifying and appointing the Company Secretary of the Company. Since as on the date of approval of the financial statements of the Company for the financial year ended March 31, 2017, there was no Company Secretary on the Board, the financial statements appended to this annual report have been signed by the Chairman, the Managing Director & CEO (India & South Asia) and the Global Chief Financial Officer of the Company.
Declaration by Independent Directors
The Company has received declarations from all Independent Directors of the Company confirming that they continue to meet the criteria of independence, as prescribed under Section 149 of the Companies Act, 2013 and Regulation 25 of the Listing Regulations. The Independent Directors have also confirmed that they have complied with the Companys code of conduct.
Board Diversity and Policy on Directors Appointment and Remuneration
The Company believes that building a diverse and inclusive culture is integral to its success. A diverse Board will be able to leverage different skills, qualifications, professional experiences, perspectives and backgrounds, which is necessary for achieving sustainable and balanced development. The Board has adopted a policy on Nomination, Remuneration and Board Diversity, which sets out the criteria for determining qualifications, positive attributes and independence of a Director. The detailed policy is available on the Companys website at http://www. airtel.in/wps/wcm/connect/92b49e0e-8810-497a-9c3e- 9b80657a3688/Policy-on-Remunerat.ion-Nominat.ion-and- Board-Diversitv.pdf?MOD=AJPERES and is also annexed as Annexure B to this report.
Annual Board Evaluation and Familiarisation Programme for Board Members
A note on the familiarisation programme adopted by the Company for orientation and training of the Directors, and the Board evaluation process undertaken in compliance with the provisions of the Companies Act, 2013 and the Listing Regulations is provided in the Report on Corporate Governance, which forms part of this Report.
The HR and Nomination Committee has put in place a robust framework for evaluation of the Board, Board-Committees and Individual Directors. Customised questionnaires were circulated, responses were analyzed and the results of evaluation were subsequently discussed by the Board. Recommendations arising from the evaluation process will be considered by the Board to optimise its effectiveness.
Committees of Board, Number of Meetings of the Board and Board Committees
The Board of Directors met eight (8) times during the previous financial year. As on March 31, 2017, the Board has eight committees, namely, the Audit & Risk Management Committee, the HR and Nomination Committee, the Corporate Social Responsibility (CSR) Committee, the Stakeholders Relationship Committee, the Committee of Directors, the Airtel Corporate Council, the Special Committee of Directors (for Monetisation of stake in Bharti Infratel Limited) and the Special Committee of Directors (for Restructuring of overseas holding structure).
All the recommendations made by committees of the Board including the Audit & Risk Management Committee were accepted by the Board. A detailed update on the Board, its composition, detailed charter including terms and reference of various Board Committees, number of Board and Committee meetings held during FY 2016-17 and attendance of the Directors at each meeting is provided in the Report on Corporate Governance, which forms part of this Report.
Subsidiary, Associate and Joint Venture Companies
As on March 31, 2017, your Company has 96 subsidiaries, 5 associates and 3 joint ventures, as set out in note 32 of the full version Annual Report (for Abridged Annual Report, please refer note 21).
During FY 2016-17, Robi Axiata Limited, Seynse Technologies Private Limited, Aban Green Power Private Limited and Greenenergy Wind Corporation Private Limited became Associates of the Company and Tanzania Telecommunications Limited ceased to be an Associate of the Company.
During FY 2016-17, Airtel Money Tanzania Limited became a subsidiary of the Company. Augure Wireless Broadband India Private Limited was amalgamated with the Company, Airtel Bangladesh Limited was amalgamated with Robi Axiata Limited, Bharti Airtel Holdings (Singapore) Pte. Ltd was amalgamated with Bharti International (Singapore) Pte. Ltd and Warid Telecom Uganda Limited was amalgamated with Airtel Uganda Limited. Airtel (SL) Limited, Airtel Burkina Faso S.A., Airtel DTH Services (SL) Limited, Airtel Mobile Commerce (SL) Limited, Airtel Mobile Commerce Burkina Faso S.A., Bharti Airtel Sierra Leone Holdings B.V., Airtel Towers (Ghana) Limited, Airtel Towers (S.L.) Company Limited, Congo Towers S.A. and Tchad Towers S.A. ceased to be subsidiaries of the Company. During the financial year the Company has transferred its entire shareholding in Bharti Airtel International (Mauritius) Limited, a subsidiary company to Network i2i Limited, another subsidiary company and has also transferred its 908,443,918 shares in Bharti Airtel International (Netherlands) B.V., a subsidiary company to Network i2i Limited, another subsidiary company.
Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of Companies (Accounts) Rules, 2014, a statement containing salient features of financial statements of subsidiary, associate and joint venture companies is annexed to the Abridged and full version Annual Report. The statement also provides the details of performance and financial position of each of the subsidiary, associate and joint venture.
The audited financial statements of each of its subsidiary, associate and joint venture companies are available for inspection at the Companys registered office and also at registered offices of the respective companies and pursuant to the provisions of Section 136 of the Companies Act, 2013, the financial statements of each of its subsidiary companies are also available on the Companys website www.airtel.com.
Copies of the annual accounts of the subsidiary, associate and joint venture companies will also be made available to the investors of Bharti Airtel and those of the respective companies upon request.
Abridged Annual Report
In terms of the provision of Section 136(1) of the Companies Act, 2013, Rule 10 of Companies (Accounts) Rules, 2014 and Regulation 36 of the Listing Regulations, the Board of Directors has decided to circulate the Abridged Annual Report containing salient features of the balance sheet and statement of profit and loss and other documents to the shareholders for FY 2016-17, who have not registered their e-mail id. The Abridged Annual Report is being circulated to the members excluding Annexures to the Boards Report viz. the disclosure on ESOPs, Policy on Nomination, Remuneration and Board Diversity, Secretarial Audit Report, Annual Report on Corporate Social Responsibility u/s 135 of the Companies Act, 2013, Dividend Distribution Policy, Business Responsibility Report, Report on Corporate Governance and Auditors Certificate on compliance of conditions of Corporate Governance, Extract of Annual Return, Note on Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo and Disclosures relating to remuneration u/s 197(12) read with Rule 5(1) and Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel), Rules, 2014.
Members who desire to obtain the full version of the report may write to the Corporate Secretarial Department at the registered office address and will be provided with a copy of the same. Full version of the Annual Report will also be available on the Companys website www.airtel.com.
Auditors and Auditors Report Statutory Auditors
Under Section 139 of the Companies Act, 2013, and the rules made thereunder, it is mandatory to rotate the Statutory Auditors on completion of the maximum term permitted under the said section. S. R. Batliboi & Associates LLP, Chartered Accountants, shall be completing their tenure as the Companys Statutory Auditors and shall hold office till the conclusion of ensuing 22nd AGM.
On the recommendation of the Audit & Risk Management Committee, the Board, in its meeting held on May 09, 2017, subject to the approval of the shareholders, has recommended the appointment of Deloitte Haskins & Sells LLP, Chartered Accountants, (firm registration number 117366W-W100018) (Deloitte) as the Statutory Auditors of the Company. Deloitte will hold office for a term of five consecutive years i.e. from the conclusion of ensuing 22nd AGM till the conclusion of 27th AGM, subject to ratification by the members at every AGM. Accordingly, the appointment of Deloitte as the Companys Statutory Auditors, is placed for approval of the members. The Company has received a certificate from Deloitte to the effect that their appointment, if made, shall be in accordance with the provisions of Section 141 of the Companies Act, 2013. The first year of audit will be of the financial statements for the year ending March 31, 2018, which will include the audit of the quarterly financial statements for the year.
The Board has duly examined the Statutory Auditors Report to the accounts, which is self-explanatory. Clarifications, wherever necessary, have been included in the Notes to Accounts section of the Annual Report.
As regards the comments under para i(a) of the Annexure 1 to the Independent Auditors Report regarding updation of quantitative and situation details relating to certain fixed assets, the Company is in the process of executing a comprehensive project with the involvement of technical experts, for deploying automated tools and processes which will enable near real-time tracking of fixed assets and reconciliation thereto. This project is expected to be completed by next year.
The Board, on the recommendation of the Audit & Risk Management Committee, has approved the appointment of R.J. Goel & Co., Cost Accountants, as Cost Auditors, for the financial year ending March 31, 2018. The Cost Auditors will submit their report for the FY 2016-17 on or before the due date.
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 approval by shareholders at the ensuing AGM.
The Company had appointed Chandrasekaran Associates, Company Secretaries, to conduct its Secretarial Audit for the financial year ended March 31, 2017. The Secretarial Auditors have submitted their report, confirming compliance by the Company of all the provisions of applicable corporate laws. The Report does not contain any qualification, reservation, disclaimer or adverse remark. The Secretarial Audit Report is annexed as Annexure C to this report.
The Board has re-appointed Chandrasekaran Associates, Company Secretaries, New Delhi, as Secretarial Auditors of the Company for FY 2017-18.
Over the past few years, sustainability has not only been an integral part but also invariably complimentary to Airtels business agenda. Airtels sustainability journey endeavours to contribute further to its society and environment. The Company made social inclusion as a cornerstone of its sustainably of its programme in order to create value across its entire value chain. To drive this Agenda, Airtel has an undivided focus on bridging the digital divide and ensuring that millions more are empowered through sustainable social and economic development. It has been pushing boundaries and changing the business paradigms across industries by enabling the growth of sectors like finance and banking, education, health, agriculture, and put in place innovative ways to reduce the carbon footprint. Airtel has been strengthening its efforts to reiterate its commitments towards bringing a positive transformation by enabling digital inclusion, well-being of communities and enriching their lives through its core competencies. It is passionate to actively support Bharti Foundation and its educational and other initiatives.
Airtels sustainability and business responsibility initiatives have been detailed in its sustainability Reports, which can be downloaded from the Companys website http://www.airtel. in/sustainability-file/home.html.
Corporate Social Responsibility (CSR)
At Bharti Airtel, Corporate Social Responsibility (CSR) encompasses much more than social outreach programmes. It lies at the heart of the Companys business operations. Over the years, the Company has aligned its business processes and goals to make a more deep-rooted impact on the societys sustainable development.
In accordance with the requirements of Section 135 of the Companies Act, 2013, the Company has constituted a CSR Committee. The composition and terms of reference of the CSR Committee is provided in the Report on Corporate Governance, which forms part of this Report.
The Company has also formulated a Corporate Social Responsibility Policy, which is available on the Companys website at http://www.airtel.in/wps/wcm/connect/fd7b3172-02e5-4e25-af7e-51d64cc17534/CSR+Policy. pdf?MOD=AJPERES&ContentCache=NONE
During FY 2016-17, the Company has contributed 55.84 Mn under Section 135 of Companies Act, 2013. Further, the Company has also contributed 899.42 Mn to Bharti Foundation for promotion of education of underprivileged children under Section 35AC of the Income Tax Act, 1961 and has also contributed 20.33 Mn to various other charitable institutions. The consolidated contribution of the Company towards various CSR activities during the FY 2016-17 was 975.59 Mn (i.e. 0.94% of net profit of last three years). The Company has increased/scaled up its CSR intervention in the areas prescribed in the Companys CSR policy and there was an increase of approx. 69.67% in the total CSR spend vis-a-vis last year i.e. from 575 Mn in FY 2015-16 to 975.59 Mn this year.
As a socially responsible Company, your Company is committed to increase its CSR impact and spend over the coming years, with its aim of playing a larger role in Indias sustainable development by embedding wider economic, social and environmental objectives. Being the initial years, the Company was in the process of evaluating the focus areas/locations of intervention for CSR activities to cater to the present needs of the society and deliver optimal impact.
A detailed update on the CSR initiatives of the Company is provided in the Corporate Social Responsibility and Sustainability Report, which forms part of the Annual Report.
The Annual Report on Corporate Social Responsibility u/s 135 of the Companies Act, 2013 is annexed as Annexure D to this Report.
Business Responsibility Report
As stipulated under the Listing Regulations, the Business Responsibility Report, describing the initiatives taken by the Company from environmental, social and governance perspective forms a part of the Annual Report.
Management Discussion and Analysis Report
Pursuant to Regulation 34 of the Listing Regulations, the Management Discussion and Analysis Report for the year under review, is presented in a separate section, forming part of the Annual Report.
A detailed report on Corporate Governance, pursuant to the requirements of Regulation 34 of the Listing Regulations, forms part of the Annual Report.
A certificate from S. R. Batliboi & Associates LLP, Chartered Accountants, the Statutory Auditors of the Company, confirming compliance of conditions of Corporate Governance, as stipulated under the Listing Regulations, is annexed as Annexure I to this report.
Risk management is embedded in Bharti Airtels operating framework. The Company believes that risk resilience is key to achieving higher growth. To this effect, there is a robust process in place to identify key risks across the Group and prioritise relevant action plans to mitigate these risks. Risk Management framework is reviewed periodically by the Board and the Audit & Risk Management Committee, which includes discussing the management submissions on risks, prioritising key risks and approving action plans to mitigate such risks.
The Company has duly approved a Risk Management Policy. The objective of this Policy is to have a well-defined approach to risk. The policy lays down broad guidelines for timely identification, assessment, and prioritisation of risks affecting the Company in the short and foreseeable future. The Policy suggests framing an appropriate response action for the key risks identified, so as to make sure that risks are adequately addressed or mitigated.
The Internal Audit function is responsible to assist the Audit & Risk Management Committee on an independent basis with a complete review of the risk assessments and associated management action plans.
Operationally, risk is being managed at the top level by Management Boards in India and South Asia and in Africa (AMB and Africa Exco) and at operating level by Executive Committees of Circles in India and Operating Companies in the international operations.
Detailed discussion on Risk Management forms part of Management Discussion & Analysis under the section Risks and Concerns, which forms part of this Annual Report. At present, in the opinion of the Board of Directors, there are no risks which may threaten the existence of the Company.
Internal Financial Controls and their adequacy
The Company has established a robust framework for internal financial controls. The Company has in place adequate controls, procedures and policies, ensuring orderly and efficient conduct of its business, including adherence to the Companys policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records, and timely preparation of reliable financial information. During the year, such controls were assessed and no reportable material weaknesses in the design or operation were observed. Accordingly, the Board is of the opinion that the Companys internal financial controls were adequate and effective during FY 2016-17.
Other Statutory Disclosures Vigil Mechanism
The Code of Conduct and vigil mechanism applicable to Directors and Senior Management of the Company is available on the Companys website at http://www.airtel.in/ about-bharti/investor-relations/corporate-governance.
A brief note on the highlights of the Whistle Blower Policy and compliance with Code of Conduct is also provided in the Report on Corporate Governance, which forms part of this Annual Report.
Extract of Annual Return
In terms of provisions of Section 92, 134(3)(a) of the Companies Act, 2013 read with Rule 12 of Companies (Management and Administration) Rules, 2014, the extract of Annual Return of the Company in form MGT-9 is annexed herewith as Annexure E to this report.
Significant and material orders
There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Companys operations in future.
Particulars of loans, guarantees and investments
Particulars of loans, guarantees and investments form part of note 10, 22 and 8 respectively to the financial statements provided in the full version of the Annual Report.
Related Party Transactions
A detailed note on the procedure adopted by the Company in dealing with contracts and arrangements with Related Parties is provided in the Report on Corporate Governance, which forms part of this Annual Report.
All arrangements / transactions entered into by the Company with its related parties during the year were in the ordinary course of business and on an arms length basis. During the year, the Company has not entered into any arrangement/transaction with related parties which could be considered material in accordance with the Companys Policy on Related Party Transactions and accordingly, the disclosure of Related Party Transactions in Form AOC-2 is not applicable. However, names of Related Parties and details of transactions with them have been included in note 32 of the financial statements provided in the full version of the Annual Report and note 21 of the financial statements provided in abridged version of the Annual Report under Indian Accounting Standard 24.
The Policy on the Related Party Transactions is available on the Companys website at http://www.airtel.in/wps/wcm/connect/3 6a5305d- f0ba-490c-9eff-152ef6811917/BALPolicy-on-Related- PartvTransactions.pdf?MOD=AJPERES
Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo
The details of energy conservation, technology absorption and foreign exchange earnings and outgo as required under Section 134(3) of the Companies Act, 2013, read with the Rule 8 of Companies (Accounts of Companies) Rules, 2014 is annexed as Annexure F to this report.
Particulars of Employees
Disclosures relating to remuneration of Directors u/s 197(12) read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure G to this report.
The information, as required to be provided in terms of Section 197(12) of the Companies Act, 2013, read with Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as Annexure H to this report.
Directors Responsibility Statement
Pursuant to Section 134 of the Companies Act, 2013, 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 and loss 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.
The Board wishes to place on record their appreciation to the Department of Telecommunications (DoT), the Central Government, the State Governments in India, Government of Bangladesh, Government of Sri Lanka and Governments in the 15 countries in Africa, Companys bankers and business associates, for the assistance, co-operation and encouragement extended to the Company.
The Directors also extend their appreciation to the employees for their continuing support and unstinting efforts in ensuring an excellent all-round operational performance. The Directors would like to thank various partners, viz., Bharti Telecom Limited, Singapore Telecommunications Ltd. and other shareholders for their support and contribution. We look forward to their continued support in future.
|For and on behalf of the Board|
|Place: New Delhi||Sunil Bharti Mittal|
|Date: May 9, 2017||Chairman|