Bharti Airtel Ltd Directors Report.
Your Directors have pleasure in presenting the 24th Board Report on the Companys business and operations, together with audited financial statements for the financial year ended March 31, 2019.
Bharti Airtel is one of the worlds leading providers of telecommunication services with operations in 18 countries across Asia and Africa. The Companys diversified service range includes mobile, voice and data solutions, using 2G, 3G and 4G technologies. We provide telecom services under wireless and fixed line technology, national and international long distance connectivity and Digital TV; and complete integrated telecom solutions to our enterprise customers. All these services are rendered under a unified brand Airtel either directly or through subsidiary companies. Airtel Money (known as Airtel Payments Bank in India) extends our 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 14 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 (Act), and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) the Company has prepared its standalone and consolidated financial statement as per Indian Accounting Standards (Ind AS) for the FY 2018-19. The standalone and consolidated financial highlights of the Companys operations are as follows:
Standalone Financial Highlights
|Rs. Millions||USD Millions*||Rs. Millions||USD Millions*|
|EBITDA before exceptional items||128,321||1,837||181,529||2,817|
|Cash profit from operations||70,790||1,013||131,674||2,043|
|Rs. Millions||USD Millions*||Rs. Millions||USD Millions*|
|Earnings before taxation||(52,037)||(745)||(6,812)||(106)|
|Net income / (loss)||(18,290)||(262)||792||12|
*1 USD = 69.86 Exchange Rate for the financial year ended March 31, 2019. (1 USD = 64.44 Exchange Rate for the financial year ended March 31, 2018).
Consolidated Financial Highlights
|Rs. Millions||USD Millions*||Rs. Millions||USD Millions*|
|EBITDA before exceptional items||262,937||3,768||304,479||4,725|
|Cash profit from operations||167,777||2,406||227,169||3,525|
|Earnings before taxation||(17,318)||(253)||32,669||507|
|Net Income / (loss)||4,095||59||10,990||171|
*1 USD = 69.86 Exchange Rate for the financial year ended March 31, 2019.
(1 USD = 64.44 Exchange Rate for the financial year ended March 31, 2018).
The financial results and the results of operations, including major developments have been further discussed in detail in the Management Discussion and Analysis Report.
Pursuant to the provisions of Section 118 of the Companies Act, 2013, the Company has complied with the applicable provisions of the Secretarial Standards issued by the Institute of Company Secretaries of India and notified by Ministry of Corporate Affairs.
During the year, the Authorized share capital of the Company has increased to Rs. 147,530 Mn divided into 29,506,000,000 equity shares of face value of Rs. 5/- each pursuant to the amalgamation of Telenor (India) Communications Private Limited with the Company. Further, the Company has allotted 5 (Five) equity shares of face value of Rs. 5/- each, fully paid up to Telenor South Asia Investment Pte.
Ltd. pursuant to the above said amalgamation. Consequent to the said allotment, the paid-up share capital of the Company has increased to 3,997,400,107 equity shares of face value of Rs. 5/- each aggregating to Rs. 19,987 Mn.
During the year, the Company has transferred Rs. 16 Mn into General Reserve from the Share Based Payment Reserve pertaining to gain / loss on exercise / lapse of vested options.
During the year, the Company had paid a final dividend of Rs. 2.50/- per equity share of Rs. 5/- each fully paid up (50% of face value) for FY 2017-18 amounting to Rs. 9,993.50 Mn (excluding tax on dividend).
The Board has also declared and paid an Interim Dividend of Rs. 2.50/- per equity share of Rs. 5/- each fully paid up (50% of face value) for FY 2018-19 amounting to Rs. 9,993.50 Mn (excluding tax on dividend) during the year.
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 had 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 A to the Boards Report and is also available on the Companys website at https://s3-ap-southeast-1.amazonaws. com/bsy/iportal/images/Airtel-Dividend Distribution Policy 35406A496EEC3AB50D0C777F006C6D41.pdf
Transfer of amount to Investor Education and Protection Fund
During the FY 2018-19, the Company has transferred the unpaid / unclaimed dividend pertaining to FY 2010-11 amounting to Rs. 6.4 Mn. to the Investors Education and Protection Fund (IEPF) Account established by the Central Government. The Company has also uploaded the details of unpaid and unclaimed dividend amounts lying with the Company as on August 8, 2018 (date of last Annual General Meeting) on the Companys website www.airtel.com.
Pursuant to the provisions of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended, the shares on which dividend remains unpaid / unclaimed for seven consecutive years or more shall be transferred to the Investors Education and Protection Fund (IEPF) after giving due notices to the concerned shareholders. Accordingly, the Company has transferred 54,607 equity shares to the IEPF during the FY 2018-19. The details of equity shares transferred are also available on the Companys website www.airtel.com.
The shareholders whose unpaid dividend / shares are transferred to the IEPF can request the Company / Registrar and Transfer Agent as per the applicable provisions in the prescribed Form No. IEPF-5 for claiming the unpaid dividend / shares out of the IEPF. The process for claiming the unpaid dividend / shares out of the IEPF is also available on the Companys website at http://www.airtel.in/about-bharti/equitv/shares.
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.
Mergers / amalgamations / demergers under Sections 230 to 232 of the Companies Act, 2013 completed during the year:
Scheme of amalgamation between Telenor (India) Communications Private Limited (Telenor) and Bharti Airtel Limited
Pursuant to an order dated March 08, 2018 of the Honble National Company Law Tribunal, New Delhi (the NCLT Delhi) sanctioning the scheme of amalgamation and subject to receipt of all regulatory and statutory approvals, Telenor was amalgamated into the Company w.e.f. May 14, 2018. Pursuant to the Scheme of amalgamation, the Company allotted 5 (five) Equity Shares of face value of Rs. 5/- each to Telenor South Asia Investment Pte. Limited, Singapore.
Mergers / amalgamations / demergers under Sections 230 to 232 of the Companies Act, 2013 pending sanction of the appropriate authorities:
Scheme of amalgamation between Bharti Digital Networks Private Limited (earlier known as Tikona Digital Networks Private Limited) (Bharti Digital), a subsidiary company and Bharti Airtel Limited
Pursuant to an order dated July 4, 2018, the NCLT Delhi sanctioned the scheme of amalgamation between Bharti Digital and our Company whereby Bharti Digital is proposed to be amalgamated into our Company. The amalgamation is pending before the Department of Telecommunications (DoT) under the Guidelines for the Transfer / Merger of various categories ofTelecommunication service licenses /authorisation under Unified License (UL) on compromises, arrangements and amalgamation of the companies dated February 20, 2014 issued by the DoT (Transfer-Merger Guidelines).
b. Composite scheme of arrangement between Tata Teleservices Limited (TTSL), Bharti Hexacom Limited (Bharti Hexacom), a subsidiary company and Bharti Airtel Limited
Pursuant to an order dated January 30, 2019, the NCLT Delhi sanctioned the composite scheme of arrangement between TTSL, Bharti Hexacom and the Company for demerger of one part of the entire consumer wireless mobile business of TTSL in its telecom circles (other than Rajasthan) and transferring and vesting it on a going concern basis in the Company and demerger of the other part of the entire consumer wireless mobile business of TTSL in the telecom circles in Rajasthan and transferring and vesting it on a going concern basis in Bharti Hexacom. The demerger is pending before the DoT under the Transfer- Merger Guidelines.
Scheme of arrangement between Tata Teleservices (Maharashtra) Limited (TTML) and Bharti Airtel Limited
Pursuant to Orders dated January 30, 2019 and December 4, 2018, the NCLT Delhi and National Company Law Tribunal, Mumbai, respectively, sanctioned the scheme of arrangement between TTML and the Company for the demerger of the entire consumer wireless mobile business of TTML in its telecom circles in Mumbai and Maharashtra and transferring and vesting it on a going concern basis in the Company. The demerger is pending before the DoT under the Transfer-Merger Guidelines.
Scheme of arrangement between Telesonic Networks Limited (TNL), a subsidiary company and Bharti Airtel Limited
Pursuant to the approval dated October 31, 2017 of the Board of Directors of the Company and consents received from the shareholders of the Company, a petition dated March 12, 2018 had been filed before the NCLT Delhi under Sections 230 to 232 of the Companies Act, for the sanction of a proposed scheme of arrangement whereby the optical fibre cable business undertaking of the Company shall be transferred to and vested in TNL on a going concern basis by way of a slump sale. The order is yet to be pronounced by the NCLT Delhi.
During the year, the Company has approved the issuance of upto 1,133,591,075 Equity Shares of face value of Rs. 5/- each by way of rights issue at a price of Rs. 220 per rights equity share (including a premium of Rs. 215 per rights equity share) aggregating up to Rs. 249,390.04 million on a rights basis to the eligible equity shareholders in the ratio of 19 rights equity shares for every 67 equity shares held by the eligible equity shareholders on the record date, that is, April 24, 2019. The issue opened on May 03, 2019 and is scheduled to be closed on May 17, 2019.
Capital Market Ratings
As on March 31, 2019, 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
As on March 31, 2019, CRISIL and ICRA revised their long-term ratings of the Company to [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 maintained the rating at BBB- / Stable. S&P and Moody revised its outlook and rating to BBB- / Negative and to Ba1 / Negative respectively during the year.
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 ESOP 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 (the ESOP Regulations), a disclosure with respect to ESOP Scheme of the Company as on March 31, 2019, has been uploaded on Companys website at https://www.airtel.in/about-bharti/equitv/results.
During the previous year, there were no changes in the aforesaid ESOP Schemes of the Company and the ESOP Schemes are in compliance with ESOP regulations. A certificate from Deloitte Haskins & Sells 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 upto the date of AGM.
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.
During the financial year, the Company has not issued any debentures. The details of outstanding debentures are as under:
15,000 Series I debentures having a face value of Rs. 1 Mn
per debenture at a coupon rate of 8.25% per annum.
15,000 Series II debentures having a face value of Rs. 1 Mn
per debenture at a coupon rate of 8.35% per annum.
The aforesaid debentures are listed on National Stock Exchange of India Limited.
Directors and Key Managerial Personnel
Inductions, Re-appointments, Retirements & Resignations
In line with the Companys policy on Independent Directors, Mr. Ben Verwaayen, upon completion of his tenure retired from the Board w.e.f. December 26, 2018. The Directors place on record their appreciation for the help, guidance and contribution made by him during his tenure on the Board.
Pursuant to the provisions of Sections 149, 161 and other applicable provisions of the Companies Act, 2013 and applicable provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) and as recommended by the HR and Nomination Committee and subject to the approval of the shareholders, the Board, on March 30, 2019, had appointed Ms. Kimsuka Narasimhan as an Additional Independent Director w.e.f. March 30, 2019 to hold office for a term of five consecutive years i.e. upto March 29, 2024. The Company has received requisite notice from a member under Section 160 of the Companies Act, 2013 proposing the appointment of Ms. Kimsuka Narasinham as an Independent Director.
Mr. V. K. Viswanathan and Mr. D. K. Mittal had completed their present term as Independent Directors of the Company on January 13, 2019 and March 12, 2019 respectively. On the recommendation of the HR and Nomination Committee, the Board, subject to the approval of the shareholders, has reappointed them as Independent Directors for a further term of five consecutive years i.e. upto January 13, 2024 and March 12, 2024 respectively.
In the opinion of the Board, Mr. V. K. Viswanathan, Mr. D. K. Mittal and Ms. Kimsuka Narasimhan fulfil the conditions specified in the Companies Act, 2013 and the rules made thereunder and under Listing Regulations and are independent to the management and accordingly, the Board recommends their appointment / re-appointment.
Pursuant to the provisions of the Companies Act, 2013, Ms. Chua Sock Koong, Director of the Company will retire by rotation at the ensuing AGM and being eligible, has offered herself for re-appointment. The Board recommends her re-appointment.
Brief resume, nature of expertise, details of directorships held in other companies of Ms. Chua Sock Koong proposed to be re-appointed, along with her 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. Nilanjan Roy, Global Chief Financial Officer has resigned w.e.f. February 28, 2019. The Directors placed on record their appreciation for the contribution made by him during his tenure. The Board on the recommendation of Audit Committee and HR & Nomination Committee, had appointed Mr. Badal Bagri as Chief Financial Officer (India and South Asia) and Key Managerial Personnel of the Company w.e.f. March 01, 2019.
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 Regulations 16 & 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 https://s3-ap- southeast-1.ama7onaws.com/bsv/iport.al/images/Policv-on- Nominat.ion-Remunerat.ion-and-Roard-Diversit.v_38F11FC9AA4 BC8FAD0B12B51CA0F39BC_1 554095379321.pdf and is also annexed as Annexure B to this report.
Annual Board Evaluation and Familiarisation Programme for Board Members
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 were subsequently discussed by the Board. Recommendations arising from the evaluation process was considered by the Board to optimize its effectiveness. A detailed update on the Board Evaluation is provided in the report on Corporate Governance which forms part of this report.
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.
Committees of Board, Number of Meetings of the Board and Board Committees
The Board of Directors met six (6) times during the previous financial year. As on March 31, 2019, the Board has ten committees, namely, the Audit Committee, the 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 Monetization of stake in Bharti Infratel Limited), the Special Committee of Directors (for Restructuring of overseas holding structure) and Special Committee of Directors (for fund raising).
All the recommendations made by committees of the Board including the Audit 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 2018-19 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, 2019, your Company has 101 subsidiaries, 7 associates and 8 joint ventures, as set out in note 34 of the standalone financial statements (for Abridged Annual Report please refer note 17).
During FY 2018-19, Bharti Airtel Holding (Mauritius) Limited, Airtel Africa Mauritius Limited, Bharti Airtel Overseas (Mauritius) Limited, Airtel Africa Limited, Airtel Mobile Commerce Nigeria B.V., Airtel Mobile Commerce Congo B.V., Airtel Mobile Commerce (Seychelles) B.V., Airtel Mobile Commerce Madagascar B.V., Airtel Mobile Commerce Kenya B.V., Airtel Mobile Commerce Rwanda B.V., Airtel Mobile Commerce Malawi B.V., Airtel Mobile Commerce Uganda B.V., Airtel Mobile Commerce Tchad B.V, Airtel Mobile Commerce Zambia B.V. became Subsidiaries of the Company.
During FY 2018-19, Bharti Airtel Burkina Faso Holdings B.V., Africa Towers Services Limited, Tigo Rwanda Limited ceased to be subsidiaries of the 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 of the Annual Report. The statement also provides the details of performance and financial position of each of the subsidiary, associate and joint venture and their contribution to the overall performance of the Company.
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 financial statements of the subsidiary, associate and joint venture companies will also be made available to the investors of the Company 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 2018-19, 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 Dividend Distribution Policy, Nomination, Remuneration and Board Diversity Policy, Secretarial Audit Report, Annual Report on Corporate Social Responsibility (CSR) Activities, Extract of Annual Return, Particulars of Energy Conservation, Technology Absorption and Foreign Exchange Earning and Outgo, Disclosure relating to remuneration u/s 197(12) of Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel), Rules, 2014, Report on Corporate Governance and Auditors Certificate on compliance of conditions of Corporate Governance and Business Responsibility Report.
Members who desire to obtain the full version of the report may write to the Corporate Secretarial Department at the registered office address of the Company or Karvy Fintech Private Limited (formerly known as Karvy Computershare Private Limited), Registrar and Share Transfer Agent of the Company 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
In terms of the provisions of Section 139 of the Companies Act, 2013, Deloitte Haskins & Sells LLP were appointed as the Companys Statutory Auditors by the shareholders in the AGM held on July 24, 2017, for a period of five years i.e. till the conclusion of 27th AGM.
The Board has duly examined the Statutory Auditors Report to the financial statements, which is self-explanatory. Clarifications, wherever necessary, have been included in the Notes to financial statements section of the Annual Report
As regards the comments under para i(a) of the Annexure B 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.
Further, the auditors have not reported any fraud u/s 143(12) of the Act.
Internal Auditors and Internal Assurance Partners
The Board had appointed Head Internal Assurance as the Internal Auditor of the Company and Ernst & Young LLP and ANB & Co., Chartered Accountants, Mumbai as the Internal Assurance Partners to conduct the internal audit basis a detailed internal audit plan which is reviewed each year in consultation with the Internal Audit Group and the Audit Committee.
The Board, on the recommendation of the Audit Committee, has re-appointed Ernst & Young LLP and ANB & Co. Chartered Accountants, Mumbai as the internal assurance partners for the FY 2019-20.
During the year under review, R. J. Goel & Co., Cost Accountants, resigned as Cost Auditors of the Company.
The Board, on the recommendation of the Audit Committee, has approved the appointment of Sanjay Gupta & Associates, Cost Accountants, as Cost Auditors, for the financial year ending March 31, 2019 in casual vacancy and also for the financial year ending March 31, 2020. The Cost Auditors will submit their report for FY 2018-19 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, 2019. 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 2019-20.
We, at Bharti Airtel, strongly believe that power of communication can bring in multi-dimensional transformations, ensuring smooth functioning of life and businesses, and helping society to become sustainable and inclusive. We recognize our role in this sustainable approach in the way we conduct our business by integrating sustainability in our strategies and operations.
Our Vision defines what we aim to do, whereas our Core Values - Alive, Inclusive and Respectful - expound how we aim to embrace the responsible business practices. As the stakeholders have played a crucial role in Airtels sustained success over the years, Airtels sustainability approach has been carefully developed through systematic engagement with its stakeholders worldwide. We continuously strive to provide long-term sustainable value to all our stakeholders including investors, customers, employees, business partners and suppliers, government and regulators and communities. This is performed through systematic stakeholder dialogue to gauge their expectations, share information and sustainability priorities, practices and performance and explore avenues of partnerships to achieve the goals. Our sustainability initiatives towards topics that are material to our stakeholders and to the company, have been reported in our Integrated Report, as well as on our website http://www.airtel.in/sustainabilitv.
Corporate Social Responsibility (CSR)
Building upon and scaling up on various interventions initiated in areas as prescribed in our CSR policy, the Company has increased its CSR spending during the previous financial year
i.e. Rs. 245.37 Mn in FY 2017-18 to Rs. 458.40 in FY 2018-19. Additionally, the Company has also contributed Rs. 37.25 Mn towards various other charitable causes. The consolidated contribution of the Company towards various CSR activities during the financial year 2018-19 is Rs. 495.65 Mn.
The Company is building its CSR capabilities on a sustainable basis and is committed to gradually increase its CSR spend in the coming years. The CSR spending is guided by the vision of creating long-term benefit to the society. With the strong foundations that we laid towards this end of the year, and the proposed scaling up of a number of our CSR Projects, we believe that we have made meaningful progress towards reaching the target in the coming financial year.
A detailed update on the CSR initiatives of the Company is provided in the Corporate Social Responsibility 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.
The Securities and Exchange Board of India (SEBI) vide circular no: SEBI/HO/CFD/CMD/CIR/P/2017/10 dated February 06, 2017 has recommended voluntary adoption of Integrated Reporting (IR) from 2017 - 2018 by the top 500 listed companies in India. We continue with our integrated reporting journey in the current fiscal aligning with our philosophy of being a highly transparent and responsible company. This is our second Integrated Report wherein we are guided by the principles of International Integrated Reporting Framework developed by the International Integrated Reporting Council (IIRC). The Board acknowledges its responsibility for the integrity of report and information contained therein.
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 Deloitte Haskins & Sells 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 Rs. to this report.
A statement containing additional information as required under Clause IV of Section II of Part II of Schedule V of the Companies Act, 2013 is provided in the Report on Corporate Governance, which forms part of this Annual 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 process in place to identify key risks across the Group and prioritise relevant action plans to mitigate these risks.
To have more robust process, the Company had constituted a separate Risk Management Committee to focus on the risk management including determination of companys risk appetite, risk tolerance and regular risk assessments (risk identification, risk quantification and risk evaluation) etc.
Risk Management framework is reviewed periodically by the Board and 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 Committee (erstwhile Audit & Risk Management Committee) / 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 Control 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 2018-19.
Other Statutory Disclosures
The Code of Conduct and vigil mechanism applicable to Directors and Senior Management of the Company is available on the Companys website at https://s3-ap-southeast-1. amazonaws.com/bsv/iportal/images/Code-of-Conduct- applicable-to-Directors-and-Senior-Management-of-the-com B30F70736F8A8DEE6203908A7988580D.pdf
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.
Sexual Harassment of Women at Workplace
The Company has an Internal Complaints Committee for providing a redressal mechanism pertaining to sexual harassment of women employees at work place. Details of the same including the details of the complaints received is provided in the Report on Corporate Governance, which forms part of this Integrated 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 other than the orders passed by tribunal w.r.t. various scheme of arrangements mentioned earler in this report.
Particulars of loans, guarantees and investments
Particulars of loans, guarantees and investments form part of Note no. 10, 23 & 8 respectively to the financial statements provided in the full version of the Annual Report.
Disclosure under Section 197(14) of Act
Neither the Managing Director & CEO nor the Chairman of the Company receive any remuneration or commission from its holding or subsidiary company.
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 read with the Listing Regulations 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 no. 34 to the financial statements provided in the full version of the Annual Report and Note no. 17 of the financial statements provided in abridged version of the Annual Report under Indian Accounting Standards 24.
The Policy on the Related Party Transactions is available on the Companys website at https://s3-ap-southeast-1.amazonaws. com/bsv/iportal/images/BAL-Policv-on-Related-Partv- Transactions CAF52027123589504F21514722AAF1A5.pdf
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) of the Companies Act, 2013 (the Act) read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure G to this report.
Particulars of employee remuneration as required under Section 197(12) of the Act read with Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this report. In terms of the provisions of the first proviso to Section 136(1) of the Act, the Annual Report is being sent to the shareholders excluding the aforementioned information. The information will be available on the Companys website at https://www.airtel.in/about-bharti/ equity/results and is also available for inspection at the registered office of the Company on all working days (Monday to Friday) between 11.00 a.m. and 1.00 p.m. upto the date of AGM and will also be available for inspection at the venue of the AGM. Any member interested in obtaining such information may write to the Company Secretary at the Registered Office of the Company.
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 14 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 6, 2019||Chairman|