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Bharti Airtel Ltd Telecommunications - Service Provider
BSE Code
532454
ISIN Demat
INE397D01024
Book Value
251.2197863
NSE Symbol
BHARTIARTL
Div & Yield %
1.68
Market Cap (Rs Cr.)
127437.12
P/E
0
EPS
0
Face Value
5

Dear Members,

Your Directors have pleasure in presenting the 23rd Board Report on the Company’s business and operations, together with audited financial statements and accounts for the financial year ended March 31, 2018.

Company Overview

Bharti Airtel is one of the world’s leading providers of telecommunication services with significant presence in 16 countries, representing India, Sri Lanka and 14 countries in Africa.

The Company’s 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.

Financial Results

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 2017-18. The standalone and consolidated financial highlights of the Company’s operations are as follows:

Standalone Financial Highlights (Ind AS)

Particulars FY 2017-18 FY 2016-17
J USD J USD
Millions Millions* Millions Millions*
Gross revenue 536,630 8,327 622,763 9,273
EBITDA before exceptional items 181,529 2,817 242,242 3,607
Cash profit from operations 131,674 2,043 211,891 3,155

 

Particulars FY 2017-18 FY 2016-17
J USD J USD
Millions Millions* Millions Millions*
Earnings before taxation (6,812) (106) (85,095) (1,267)
Net Income / (Loss) 792 12 (99,256) (1,478)

*1 USD = H 64.44 Exchange Rate for the financial year ended March 31, 2018. (1 USD = H 67.16 Exchange Rate for the financial year ended March 31, 2017).

Consolidated Financial Highlights (Ind AS)

Particulars

FY 2017-18

FY 2016-17

J USD J USD
Millions Millions* Millions Millions*
Gross revenue 836,879 12,986 954,683 14,214
EBITDA before 304,479 4,725 356,206 5,304
exceptional
items
Cash profit from 227,169 3,525 283,668 4,224
operations
Earnings before 32,669 507 77,233 1,150
taxation
Net Income / 10,989 171 37,998 566
(Loss)

*1 USD = H 64.44 Exchange Rate for the financial year ended March 31, 2018. (1 USD = H 67.16 Exchange Rate for the financial year ended March 31, 2017)

The financial results and the results of operations, including major developments have been further discussed in detail in the Management Discussion and Analysis section.

Secretarial Standards

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 Companies Secretaries of India.

Share Capital

During the year, there was no change in the Company’s issued, subscribed and paid-up equity share capital. On March 31, 2018, it stood at H 19,987 Mn, divided into 3,997,400,102 equity shares of H 5/- each.

General Reserve

During the year, the Company has transferred H 3,510 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 has created Debenture Redemption Reserve and transferred H 7,500 Mn out of the General Reserve representing 25% of the value of unsecured redeemable non-convertible debentures issued by the Company.

Dividend

Your Directors have recommended a final dividend of H 2.50 per equity share of H 5 each fully paid-up (50.00 % of face value) for FY 2017-18. The total final dividend payout will amount to H 9,993.50 Mn, excluding tax on dividend. The payment of final dividend is subject to the approval of shareholders in the Company’s ensuing Annual General Meeting (AGM).

The Register of Members and Share Transfer Books will remain closed from Saturday, August 04, 2018 to Wednesday, August 08, 2018 (both days inclusive) for the purpose of payment of final dividend for the FY 2017-18, 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 A to the Board’s Report and is also available on the Company’s 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 FY 2017-18, the Company has transferred the unpaid / unclaimed dividend amounting to H 7.42 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 amounts lying with the Company as on July 24, 2017 (date of last Annual General Meeting) on the Company’s 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 Investor’s Education and Protection Fund (IEPF). Accordingly, during the year Company has transferred 49,273 equity shares to the IEPF. The details of equity shares transferred are available on the Company’s 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 for claiming the unpaid dividend / shares from IEPF. The process for claiming the unpaid dividend / shares out of the IEPF is also available on the Company’s website at https://www.airtel. in/about-bharti/equity/shares.

Deposits

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, 2018, the Company was rated by two domestic rating agencies, namely CRISIL and ICRA and three international rating agencies, namely Fitch Ratings, Moody’s and S&P.

CRISIL and ICRA maintained their long-term ratings of the Company. As on March 31, 2018, 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 Moody’s rate the Company at BBB-/ Stable, BBB-/Stable and Baa3/Negative, respectively.

As on March 31, 2018, the Company was rated ‘Investment Grade’ by all three international 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 Company’s 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 (the ESOP Regulations), a disclosure with respect to ESOP Schemes of the Company as on March 31, 2018, is available on Company’s website at http:// www.airtel.in/wps/wcm/connect/c9e25993-5b80-4ebo-9874-37614225b876.

During the year, to make the aforesaid ESOP Schemes more employee friendly, the shareholder’s in its meeting dated July 24, 2017 had approved the reduction in the period for transfer of vested / unvested options in the name of legal heir / nominees of deceased employee from 3 months to 1 month. Apart from the aforesaid change, there were no other changes in the ESOP Schemes of the Company.

Further, ESOP Schemes are in compliance with ESOP Regulations. A certificate from Deloitte Haskins & Sells LLP, Chartered Accountants, Statutory Auditors of the Company with respect to the implementation of the Company’s 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 Company’s registered office.

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.

Debentures

During the financial year, your Company raised H 30,000 Mn through issuance of unsecured, listed, rated, non-convertible debentures at face value of H 1 Mn each on private placement basis as per the following details:

> 15,000 Series I debentures at a coupon rate of 8.25% per annum [Tenor: 2 years, 1 month and 7 days];

> 15,000 Series II debentures at a coupon rate of 8.35% per annum. [Tenor: 3 years, 1 month and 7 days].

The aforesaid debentures are listed on National Stock Exchange of India Limited.

Directors and Key Managerial Personnel

Inductions, Re-appointments, Retirements & Resignations

Pursuant to the provisions of the Companies Act, 2013, Mr. Rakesh Bharti Mittal and Ms. Tan Yong Choo, Directors of the Company will retire by rotation at the ensuing AGM and being eligible, have offered themselves for re-appointment. The Board recommends their re-appointment.

Sheikh Faisal Thani Al-Thani, Non-Executive Director resigned from the Company’s Board w.e.f. July 25, 2017. Mr. Rashid Fahad O J Al-Noaimi was appointed as a Non-Executive Director on the Board w.e.f. July 25, 2017 and resigned from the Company’s Board w.e.f. November 22, 2017.

Mr. Craig Ehrlich, Independent Director will be completing his present term as an independent director of the Company on April 28, 2018. On the recommendation of HR and Nomination Committee, the Board in its meeting held on April 24, 2018, subject to the approval of shareholders by special resolution, has re-appointed Mr. Craig as an Independent Director of the Company for a further term of five years w.e.f. April 29, 2018 to April 28, 2023.

On the recommendation of the HR and Nomination Committee, the Board in its meeting held on April 24, 2018 subject to the amendment in the Articles of Association, had changed the nature of directorship of Mr. Gopal Vittal, Managing Director & CEO (India & South Asia) from director not liable to retire by rotation to a director liable to retire by rotation.

Brief resume, nature of expertise, details of directorships held in other companies of the Directors proposed to be re-appointed, 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.

The Board in its meeting held on July 18, 2017 has appointed Mr. Pankaj Tewari as the Company Secretary 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 Company’s code of conduct.

Board Diversity and Policy on Director’s 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 sustainableandbalanceddevelopment.Thepolicyon‘Nomination, Remuneration and Board Diversity’ adopted by the Board sets out the criteria for determining qualifications, positive attributes and independence while evaluating a person for appointment / re-appointment as Director or as KMP, with no discrimination on the grounds of gender, race or ethnicity, nationality or country of origin. The detailed policy is available on the Company’s website at http://www.airtel.in/wps/wcm/connect/92b49e0e-8810-497a-9c3e-9b80657a3688/Policy-on-Remuneration-Nomination-and Board-Diversity.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 were subsequently discussed by the Board. Recommendations arising from the evaluation process were 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.

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, 2018, the Board has nine 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) and the Special Committee of Directors (for Restructuring of overseas holding structure).

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 2017-18 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, 2018, your Company has 89 subsidiaries, 6 associates and 8 joint ventures, as set out in note 34 of the Annual Report (for Abridged Annual Report please refer note 17).

During FY 2017-18, Juggernaut Books Private Limited became associate of the Company. Bharti Airtel Ghana Holdings B.V., Airtel Ghana Limited, Airtel Mobile Commerce (Ghana) Limited,

Milicom Ghana Company Limited, Mobile Financial Services Limited became joint ventures of the Company.

During FY 2017-18, Bharti Digital Networks Private Limited (formerly known as Tikona Digital Networks Private Limited), Bharti Airtel International (Mauritius) Investments Limited, Airtel Mobile Commerce Nigeria Limited and Tigo Rwanda Limited became subsidiaries of the Company. Bangladesh Infratel Networks Limited, Bharti Infratel Lanka (Private) Limited, Airtel (Ghana) Limited, Airtel Mobile Commerce Ghana Limited, Bharti Airtel DTH Holdings B.V., Bharti Airtel Ghana Holdings B.V., Airtel DTH Services Nigeria Limited, Bharti Airtel Nigeria Holdings B.V., MSI-Celtel Nigeria Limited, Towers Support Nigeria Limited and Zap Trust Company Nigeria 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 Annual Report. The statement also provides the details of performance and financial position of each of the subsidiary, associate and joint venture companies 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 Company’s 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 Company’s 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 2017-18, who have not registered their e-mail id. The Abridged Annual Report is being circulated to the members excluding Annexures to the Board’s Report viz. ‘Dividend Distribution Policy’, ‘Nomination, Remuneration and Board Diversity Policy’, ‘Secretarial Audit Report’, ‘Annual Report on Corporate Social Responsibility u/s 135 of the Companies Act, 2013’, ‘Extract of Annual Return’, ‘Particulars of Energy

Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo’, ‘Statement of Disclosure of Remuneration under Section 197(12) of Companies Act, 2013 read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014’, ‘Auditors’ Certificate on Corporate Governance’.

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 Company’s website www.airtel.com.

Auditors and Auditors’ Report

Statutory Auditors

In terms of the provisions of Section 139 of the Companies Act, 2013, Deloitte Haskins & Sells LLP were appointed as the Company’s 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 said appointment is subject to ratification by the members at every AGM. Accordingly, the appointment of Deloitte Haskins & Sells LLP, Chartered Accountants, as the Company’s Statutory Auditors, is placed for ratification by the members. The Company has received certificate from the Statutory Auditors to the effect that ratification of their appointment, if made, shall be in accordance with the provisions of Section 141 of the Companies Act, 2013. The annual ratification of auditors at the next AGM (to be held in calendar year 2019) for their remaining term, shall be done, if required by the statutory provisions.

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.

Internal Auditors and Internal Assurance Partners

The Board had appointed Group Director - 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 FY 2018-19.

Cost Auditors

The Board, on the recommendation of the Audit Committee has approved the appointment of R. J. Goel & Co., Cost Accountants, as Cost Auditors, for FY 2018-19. The Cost Auditors will submit their report for FY 2017-18 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.

Secretarial Auditors

The Board had appointed Chandrasekaran Associates, Company Secretaries, to conduct its Secretarial Audit for the financial year ended March 31, 2018. 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 2018-19.

Sustainability Journey

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 Airtel’s sustained success over the years, Airtel’s 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. The Company publishes an annual Sustainability Report in accordance with the Global Reporting Initiative (GRI) framework which can be downloaded from the Company’s website www.airtel.in/sustainability.

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. from H 55.84 Mn in FY 2016-17 to H 245.37 Mn in FY 2017-18. Additionally, the Company has also contributed H 32.59 Mn towards various other charitable causes. The consolidated contribution of the Company towards various CSR activities during the financial year 2017-18 is H 277.96 Mn (i.e. 0.26% of net profit of last three years).

Company is committed to build its CSR capabilities on a sustainable basis and is also committed to gradually increase its CSR contribution in the coming years. The CSR spending is guided by the vision of creating long-term benefit to the society. The Company through its Board and CSR Committee is determined to beef up its efforts to meet the targeted CSR expenditure. With the strong foundation which has been established during the year along with the proposed scaling up of a number of its CSR Projects, the Company believes that it has made meaningful progress towards reaching the target in the coming financial years.

Further, during the year, Bharti Family has pledged a significant amount towards philanthropy, which will step-up scope and reach of Bharti Foundation’s initiatives to create opportunities for the underprivileged and contribute to nation building. Plan is to set up a world-class University namely Satya Bharti University, to offer free education to deserving youth from economically weaker sections of society. During the previous year, Mr. Sunil Bharti Mittal, Chairman had also contributed H 50 Mn towards CSR in his personal capacity.

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.

Integrated Reporting

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. In line with its philosophy of being a highly transparent and responsible company and considering IR as a journey, your Company adopts its first ‘Integrated Report’ in accordance with the framework of the International Integrated Reporting Council (IIRC). The Integrated Report covers capital approach of IIRC Framework as well as the value that your Company creates for its stakeholders. 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.

Risk Management

Risk management is embedded in Bharti Airtel’s 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 prioritize relevant action plans to mitigate these risks.

To have more robust process, the Company during the year, constituted separate Risk Management Committee which shall focus on the risk management including determination of Company’s 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 Audit & Risk Management Committee / Risk Management Committee, which includes discussing the management submissions on risks, prioritizing 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 prioritization 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 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 Company’s 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 Company’s internal financial controls were adequate and effective during FY 2017-18.

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 Company’s 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 extracts 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 Company’s operations in future.

Particulars of loans, guarantees and investments

Particulars of loans, guarantees and investments form part of note 10, 23 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 arm’s 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 Company’s 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 34 of the financial statements provided in the full version of the Annual Report and note 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 Company’s website at http://www.airtel.in/wps/ wcm/connect/36a5305d-f0ba-490c-9eff-152ef6811917/ BALPolicy-on-Related-Party Transactions.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.

Corporate Governance

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 I 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.

Acknowledgements

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 Sri Lanka and Governments in the 14 countries in Africa, Company’s 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: April 24, 2018 Chairman

   

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