Your Directors have pleasure in presenting the 22nd Board Report on theCompany's business and operations together with audited financial statements and accountsfor the financial year ended March 31 2017.
Bharti Airtel is among the top three mobile service providers globally with presence in17 countries including India Sri Lanka and 15 countries in the African continent.
The Company's diversified service range includes mobile voice and data solutionsusing 2G 3G and 4G technologies. Its service portfolio comprises Digital TV services anintegrated suite of telecom solutions for its customers besides providing long distanceconnectivity in India Africa and rest of the world. All the services are rendered under aunified brand airtel' either directly or through subsidiary companies. Airtel Money'(known as Airtel Payments Bank' in India) extends product portfolio to further ourfinancial inclusion agenda and offers convenience of payments and money transfers onmobile phones over secure and stable platforms in India and across all 15 countries inAfrica.
The Company also deploys and manages passive infrastructure pertaining to telecomoperations through its subsidiary Bharti Infratel Limited which also owns 42% of IndusTowers Limited. Together Bharti Infratel and Indus Towers are the largest passiveinfrastructure service providers in India.
In compliance with the provisions of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 (Listing Regulations')the Company has prepared its standalone and consolidated financial statements as perIndian Accounting Standards (Ind AS) for the FY 2016-17. The standalone and consolidatedfinancial highlights of the Company's operations are as follows:
Standalone Financial Highlights (Ind AS)
| || |
|Particulars || ||USD || ||USD |
| ||Millions ||Millions* ||Millions ||Millions* |
|Gross revenue ||622763 ||9273 ||603003 ||9209 |
|EBITDA before exceptional items ||242242 ||3607 ||226435 ||3458 |
|Cash profit from operations ||209647 ||3122 ||205096 ||3132 |
|Earnings before taxation ||(85095) ||(1267) ||102544 ||1566 |
|Net Income/ (Loss) ||(99256) ||(1478) ||77803 ||1188 |
*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)
| || |
|Particulars || ||USD || ||USD |
| ||Millions ||Millions* ||Millions ||Millions* |
|Gross revenue ||954683 ||14214 ||965321 ||14742 |
|EBITDA before exceptional items ||356206 ||5304 ||341682 ||5218 |
|Cash profit from operations ||283668 ||4224 ||289083 ||4415 |
|Earnings before taxation ||77233 ||1150 ||128463 ||1962 |
|Net Income/ (Loss) ||37998 ||566 ||60767 ||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 havebeen 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 2015notified the Indian Accounting Standards (Ind AS) applicable to certain class ofcompanies. Ind AS has replaced the existing Indian GAAP prescribed under Section 133 ofthe 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 Companyhas transitioned to Ind AS and the transition date being April 01 2015. The transition iscarried out from accounting principles generally accepted in India being the previous GAAPAccordingly basis the accounting policies and Ind-AS 101 exemptions finalised the impactof transition has been provided in the opening equity as at April 01 2015 and figures forthe previous year have been adjusted accordingly.
The reconciliation and explanation of the effect of transition to Ind AS are given indetail in note 23 and 29 of the standalone and consolidated financial statementsrespectively.
During the year there was no change in the Company's issued subscribed and paid-upequity share capital. On March 31 2017 it stood at ' 19987 Mn divided into3997400102 equity shares of ' 5/- each.
Augere Wireless Broadband India Private Limited a subsidiary company was amalgamatedwith the Company w.e.f. February 15 2017. As per the Scheme of Amalgamation theauthorised share capital of Augere Wireless Broadband India Private Limited wastransferred to the Company and consequently the authorised share capital of the Companywas increased from ' 25000 Mn (divided into 5000 Mn equity shares of ' 5/- each) to '27500 Mn (divided into 5500 Mn equity shares of ' 5/- each).
The Company has not transferred any amount to the General Reserve for the financialyear 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 dividendpayout will amount to ' 3997 Mn excluding tax on dividend. The payment of finaldividend is subject to the approval of shareholders in the Company's ensuing AnnualGeneral Meeting (AGM).
The Register of Members and Share Transfer Books will remain closed from Saturday July15 2017 to Monday July 24 2017 (both days inclusive) for the purpose of payment offinal 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 requiredto formulate a dividend distribution policy. Accordingly the Company has adopted thedividend distribution policy which sets out the parameters and circumstances to beconsidered by the Board in determining the distribution of dividend to its shareholdersand / or retaining profits earned by the Company. The Policy is enclosed as Annexure J tothe Board's Report and is also available on the Company's 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/unclaimeddividend amounting to ' 6.08 Mn to the Investor Education and Protection Fund(IEPF) Account established by the Central Government. The Company has also uploaded thedetails of unpaid and unclaimed amounts lying with the Company as on August 19 2016 (dateof last Annual General Meeting) on the Company's website www.airtel.com.
According to the Investor Education and Protection Fund Authority (Accounting AuditTransfer and Refund) Rules 2016 (IEPF Rules) as amended the shares in respect of whichdividend has not been paid or claimed by the shareholders for seven consecutive years ormore shall also be credited to the demat account created by the IEPF Authority. Thecorresponding shares will be transferred as per the requirements of the IEPF Rulesdetails of which are provided on the Company's website www.airtel.com.
The Company has not accepted any deposits and as such no amount of principal orinterest 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 namelyCRISIL and ICRA and three international rating agencies namely Fitch Ratings Moody's andS&P
CRISIL and ICRA maintained their long-term ratings of the Company. As on March 312017 they rate the Company at [CRISIL] Aa+/[ICRA] AA+ with a stable outlook. Short-termratings were maintained at the highest end of the rating scale at [CRISIL] A1+/[ICRA] A1+.
Fitch S&P and Moody's also maintained the ratings at BBB-/ Stable BBB-/Stable andBaa3/Stable respectively.
As on March 31 2017 the Company was rated Investment Grade' with aStable' outlook by all three international credit rating agencies.
Employee Stock Option Plan
At present the Company has two Employee Stock Options (ESOP) schemes namely theEmployee Stock Option Scheme 2001 and the Employee Stock Option Scheme 2005. Besidesattracting talent the schemes also helped retain talent and experience. The HR andNomination Committee administers and monitors the Company's ESOP schemes.
Both the ESOP schemes are currently administered through Bharti Airtel EmployeesWelfare Trust (ESOP Trust) whereby shares held by the Trust are transferred to theemployee 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 March31 2017 is annexed as Annexure A to this report and has also been uploaded on Company'swebsite 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 Schemesof the Company and the ESOP Schemes are in compliance with ESOP Regulations. A certificatefrom S. R. Batliboi & Associates LLP Chartered Accountants Statutory Auditors withrespect to the implementation of the Company's ESOP schemes would be placed before theshareholders at the ensuing AGM. A copy of the same will also be available for inspectionat the Company's registered office.
In terms of the provisions of ESOP Regulations approval of shareholders is beingsought for modification of the Employee Stock Option Scheme 2005 with the objective tomake the same more beneficial and employee friendly Accordingly a proposal has beenincluded in the Notice of 22nd Annual General Meeting accompanying this report.
Material changes and commitments affecting the financial position between the end offinancial year and date of report after the balance sheet date
There were no material changes and commitments affecting the financial position of theCompany 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-ThaniDirector of the Company will retire by rotation at the ensuing AGM and being eligible hasoffered himself for re-appointment. The Board recommends his re-appointment.
Mr. Gopal Vittal Managing Director & CFO (India & South Asia) will becompleting his present term as Managing Director of the Company on January 31 2018. Onthe recommendation of the HR and Nomination Committee the Board in its meeting held onMay 09 2017 subject to the approval of shareholders has re-appointed Mr Gopal Vittal asManaging Director & CFO (India & South Asia) of the Company for a further term offive years w.e.f. February 01 2018.
Mr. Manish Kejriwal Independent Director will be completing his present term as anIndependent Director of the Company on September 25 2017. On the recommendation of the HRand Nomination Committee the Board in its meeting held on May 09 2017 subject to theapproval of shareholders by special resolution has re-appointed Mr. Manish Kejriwal as anIndependent Director of the Company for a further term of five years w.e.f. September 262017.
Brief resume nature of expertise details of directorships held in other companies ofthe Directors proposed to be reappointed along with their shareholding in the Company asstipulated under Secretarial Standard 2 and Regulation 36 of the Listing Regulations isappended as an annexure to the Notice of the ensuing AGM.
Mr. Rajendra Chopra resigned from the position of Company Secretary w.e.f. January 242017. The Board placed on record its appreciation for the contribution made by him duringhis tenure. The Board in its meeting held on January 24 2017 had appointed Mr. RohitKrishan Puri as the Deputy Company Secretary and the Compliance Officer of the Companyw.e.f. January 25 2017. The Company is in process of identifying and appointing theCompany Secretary of the Company. Since as on the date of approval of the financialstatements of the Company for the financial year ended March 31 2017 there was noCompany Secretary on the Board the financial statements appended to this annual reporthave 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 Companyconfirming that they continue to meet the criteria of independence as prescribed underSection 149 of the Companies Act 2013 and Regulation 25 of the Listing Regulations. TheIndependent Directors have also confirmed that they have complied with the Company's codeof conduct.
Board Diversity and Policy on Director's Appointment and Remuneration
The Company believes that building a diverse and inclusive culture is integral to itssuccess. A diverse Board will be able to leverage different skills qualificationsprofessional experiences perspectives and backgrounds which is necessary for achievingsustainable and balanced development. The Board has adopted a policy on NominationRemuneration and Board Diversity' which sets out the criteria for determiningqualifications positive attributes and independence of a Director. The detailed policy isavailable on the Company's 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 andis 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 andtraining of the Directors and the Board evaluation process undertaken in compliance withthe provisions of the Companies Act 2013 and the Listing Regulations is provided in theReport on Corporate Governance which forms part of this Report.
The HR and Nomination Committee has put in place a robust framework for evaluation ofthe Board Board-Committees and Individual Directors. Customised questionnaires werecirculated responses were analyzed and the results of evaluation were subsequentlydiscussed by the Board. Recommendations arising from the evaluation process will beconsidered 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 onMarch 31 2017 the Board has eight committees namely the Audit & Risk ManagementCommittee the HR and Nomination Committee the Corporate Social Responsibility(CSR') Committee the Stakeholders' Relationship Committee the Committee ofDirectors the Airtel Corporate Council the Special Committee of Directors (forMonetisation 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 & RiskManagement Committee were accepted by the Board. A detailed update on the Board itscomposition detailed charter including terms and reference of various Board Committeesnumber of Board and Committee meetings held during FY 2016-17 and attendance of theDirectors at each meeting is provided in the Report on Corporate Governance which formspart of this Report.
Subsidiary Associate and Joint Venture Companies
As on March 31 2017 your Company has 96 subsidiaries 5 associates and 3 jointventures as set out in note 32 of the full version Annual Report (for Abridged AnnualReport please refer note 21).
During FY 2016-17 Robi Axiata Limited Seynse Technologies Private Limited Aban GreenPower Private Limited and Greenenergy Wind Corporation Private Limited became Associatesof the Company and Tanzania Telecommunications Limited ceased to be an Associate of theCompany.
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 AirtelBangladesh Limited was amalgamated with Robi Axiata Limited Bharti Airtel Holdings(Singapore) Pte. Ltd was amalgamated with Bharti International (Singapore) Pte. Ltd andWarid Telecom Uganda Limited was amalgamated with Airtel Uganda Limited. Airtel (SL)Limited Airtel Burkina Faso S.A. Airtel DTH Services (SL) Limited Airtel MobileCommerce (SL) Limited Airtel Mobile Commerce Burkina Faso S.A. Bharti Airtel SierraLeone Holdings B.V. Airtel Towers (Ghana) Limited Airtel Towers (S.L.) Company LimitedCongo Towers S.A. and Tchad Towers S.A. ceased to be subsidiaries of the Company. Duringthe financial year the Company has transferred its entire shareholding in Bharti AirtelInternational (Mauritius) Limited a subsidiary company to Network i2i Limited anothersubsidiary company and has also transferred its 908443918 shares in Bharti AirtelInternational (Netherlands) B.V. a subsidiary company to Network i2i Limited anothersubsidiary 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 ofsubsidiary associate and joint venture companies is annexed to the Abridged and fullversion Annual Report. The statement also provides the details of performance andfinancial position of each of the subsidiary associate and joint venture.
The audited financial statements of each of its subsidiary associate and joint venturecompanies are available for inspection at the Company's registered office and also atregistered offices of the respective companies and pursuant to the provisions of Section136 of the Companies Act 2013 the financial statements of each of its subsidiarycompanies are also available on the Company's website www.airtel.com.
Copies of the annual accounts of the subsidiary associate and joint venture companieswill also be made available to the investors of Bharti Airtel and those of the respectivecompanies upon request.
Abridged Annual Report
In terms of the provision of Section 136(1) of the Companies Act 2013 Rule 10 ofCompanies (Accounts) Rules 2014 and Regulation 36 of the Listing Regulations the Boardof Directors has decided to circulate the Abridged Annual Report containing salientfeatures of the balance sheet and statement of profit and loss and other documents to theshareholders for FY 2016-17 who have not registered their e-mail id. The Abridged AnnualReport is being circulated to the members excluding Annexures to the Board's Report viz.the disclosure on ESOPs' Policy on Nomination Remuneration and BoardDiversity' Secretarial Audit Report' Annual Report on Corporate SocialResponsibility 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 AnnualReturn' Note on Energy Conservation Technology Absorption and Foreign ExchangeEarnings and Outgo' and Disclosures relating to remuneration u/s 197(12) read withRule 5(1) and Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014'.
Members who desire to obtain the full version of the report may write to the CorporateSecretarial Department at the registered office address and will be provided with a copyof the same. Full version of the Annual Report will also be available on the Company'swebsite www.airtel.com.
Auditors and Auditors' Report Statutory Auditors
Under Section 139 of the Companies Act 2013 and the rules made thereunder it ismandatory to rotate the Statutory Auditors on completion of the maximum term permittedunder the said section. S. R. Batliboi & Associates LLP Chartered Accountants shallbe completing their tenure as the Company's Statutory Auditors and shall hold office tillthe conclusion of ensuing 22nd AGM.
On the recommendation of the Audit & Risk Management Committee the Board in itsmeeting held on May 09 2017 subject to the approval of the shareholders has recommendedthe appointment of Deloitte Haskins & Sells LLP Chartered Accountants (firmregistration number 117366W-W100018) (Deloitte') as the Statutory Auditors of theCompany. Deloitte will hold office for a term of five consecutive years i.e. from theconclusion of ensuing 22nd AGM till the conclusion of 27th AGMsubject to ratification by the members at every AGM. Accordingly the appointment ofDeloitte as the Company's Statutory Auditors is placed for approval of the members. TheCompany has received a certificate from Deloitte to the effect that their appointment ifmade shall be in accordance with the provisions of Section 141 of the Companies Act2013. The first year of audit will be of the financial statements for the year endingMarch 31 2018 which will include the audit of the quarterly financial statements for theyear.
The Board has duly examined the Statutory Auditors' Report to the accounts which isself-explanatory. Clarifications wherever necessary have been included in the Notes toAccounts 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 fixedassets the Company is in the process of executing a comprehensive project with theinvolvement of technical experts for deploying automated tools and processes which willenable near real-time tracking of fixed assets and reconciliation thereto. This project isexpected to be completed by next year.
The Board on the recommendation of the Audit & Risk Management Committee hasapproved the appointment of R.J. Goel & Co. Cost Accountants as Cost Auditors forthe financial year ending March 31 2018. The Cost Auditors will submit their report forthe FY 2016-17 on or before the due date.
In accordance with the provisions of Section 148 of the Companies Act 2013 read withthe Companies (Audit and Auditors) Rules 2014 since the remuneration payable to the CostAuditors is required to be ratified by the shareholders the Board recommends the same forapproval by shareholders at the ensuing AGM.
The Company had appointed Chandrasekaran Associates Company Secretaries to conductits Secretarial Audit for the financial year ended March 31 2017. The SecretarialAuditors have submitted their report confirming compliance by the Company of all theprovisions of applicable corporate laws. The Report does not contain any qualificationreservation disclaimer or adverse remark. The Secretarial Audit Report is annexed asAnnexure C to this report.
The Board has re-appointed Chandrasekaran Associates Company Secretaries New Delhias Secretarial Auditors of the Company for FY 2017-18.
Over the past few years sustainability has not only been an integral part but alsoinvariably complimentary to Airtel's business agenda. Airtel's sustainability journeyendeavours to contribute further to its society and environment. The Company made socialinclusion as a cornerstone of its sustainably of its programme in order to create valueacross its entire value chain. To drive this Agenda Airtel has an undivided focus onbridging the digital divide and ensuring that millions more are empowered throughsustainable social and economic development. It has been pushing boundaries and changingthe business paradigms across industries by enabling the growth of sectors like financeand banking education health agriculture and put in place innovative ways to reducethe carbon footprint. Airtel has been strengthening its efforts to reiterate itscommitments towards bringing a positive transformation by enabling digital inclusionwell-being of communities and enriching their lives through its core competencies. It ispassionate to actively support Bharti Foundation and its educational and otherinitiatives.
Airtel's sustainability and business responsibility initiatives have been detailed inits sustainability Reports which can be downloaded from the Company's websitehttp://www.airtel. in/sustainability-file/home.html.
Corporate Social Responsibility (CSR)
At Bharti Airtel Corporate Social Responsibility (CSR) encompasses much more thansocial outreach programmes. It lies at the heart of the Company's business operations.Over the years the Company has aligned its business processes and goals to make a moredeep-rooted impact on the society's sustainable development.
In accordance with the requirements of Section 135 of the Companies Act 2013 theCompany has constituted a CSR Committee. The composition and terms of reference of the CSRCommittee is provided in the Report on Corporate Governance which forms part of thisReport.
The Company has also formulated a Corporate Social Responsibility Policy which isavailable on the Company's website athttp://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 ofCompanies Act 2013. Further the Company has also contributed ' 899.42 Mn toBharti Foundation for promotion of education of underprivileged children under Section35AC of the Income Tax Act 1961 and has also contributed ' 20.33 Mn to variousother charitable institutions. The consolidated contribution of the Company towardsvarious CSR activities during the FY 2016-17 was ' 975.59 Mn (i.e. 0.94% of netprofit of last three years). The Company has increased/scaled up its CSR intervention inthe areas prescribed in the Company's 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 2015-16to ' 975.59 Mn this year.
As a socially responsible Company your Company is committed to increase its CSR impactand spend over the coming years with its aim of playing a larger role in India'ssustainable development by embedding wider economic social and environmental objectives.Being the initial years the Company was in the process of evaluating the focusareas/locations of intervention for CSR activities to cater to the present needs of thesociety and deliver optimal impact.
A detailed update on the CSR initiatives of the Company is provided in the CorporateSocial 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 2013is annexed as Annexure D to this Report.
Business Responsibility Report
As stipulated under the Listing Regulations the Business Responsibility Reportdescribing the initiatives taken by the Company from environmental social and governanceperspective forms a part of the Annual Report.
Management Discussion and Analysis Report
Pursuant to Regulation 34 of the Listing Regulations the Management Discussion andAnalysis Report for the year under review is presented in a separate section formingpart of the Annual Report.
A detailed report on Corporate Governance pursuant to the requirements of Regulation34 of the Listing Regulations forms part of the Annual Report.
A certificate from S. R. Batliboi & Associates LLP Chartered Accountants theStatutory Auditors of the Company confirming compliance of conditions of CorporateGovernance as stipulated under the Listing Regulations is annexed as Annexure I to thisreport.
Risk management is embedded in Bharti Airtel's operating framework. The Companybelieves that risk resilience is key to achieving higher growth. To this effect there isa robust process in place to identify key risks across the Group and prioritise relevantaction plans to mitigate these risks. Risk Management framework is reviewed periodicallyby the Board and the Audit & Risk Management Committee which includes discussing themanagement submissions on risks prioritising key risks and approving action plans tomitigate such risks.
The Company has duly approved a Risk Management Policy. The objective of this Policy isto have a well-defined approach to risk. The policy lays down broad guidelines for timelyidentification assessment and prioritisation of risks affecting the Company in the shortand foreseeable future. The Policy suggests framing an appropriate response action for thekey 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 ManagementCommittee on an independent basis with a complete review of the risk assessments andassociated management action plans.
Operationally risk is being managed at the top level by Management Boards in India andSouth Asia and in Africa (AMB and Africa Exco) and at operating level by ExecutiveCommittees 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 AnnualReport. At present in the opinion of the Board of Directors there are no risks which maythreaten the existence of the Company.
Internal Financial Controls and their adequacy
The Company has established a robust framework for internal financial controls. TheCompany has in place adequate controls procedures and policies ensuring orderly andefficient conduct of its business including adherence to the Company's policiessafeguarding of its assets prevention and detection of frauds and errors accuracy andcompleteness of accounting records and timely preparation of reliable financialinformation. During the year such controls were assessed and no reportable materialweaknesses in the design or operation were observed. Accordingly the Board is of theopinion that the Company's internal financial controls were adequate and effective duringFY 2016-17.
Other Statutory Disclosures Vigil Mechanism
The Code of Conduct and vigil mechanism applicable to Directors and Senior Managementof 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 ofConduct is also provided in the Report on Corporate Governance which forms part of thisAnnual Report.
Extract of Annual Return
In terms of provisions of Section 92 134(3)(a) of the Companies Act 2013 read withRule 12 of Companies (Management and Administration) Rules 2014 the extract of AnnualReturn 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 ortribunals 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 22 and 8respectively to the financial statements provided in the full version of the AnnualReport.
Related Party Transactions
A detailed note on the procedure adopted by the Company in dealing with contracts andarrangements with Related Parties is provided in the Report on Corporate Governance whichforms part of this Annual Report.
All arrangements / transactions entered into by the Company with its related partiesduring 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 relatedparties which could be considered material in accordance with the Company's Policy onRelated Party Transactions and accordingly the disclosure of Related Party Transactionsin Form AOC-2 is not applicable. However names of Related Parties and details oftransactions with them have been included in note 32 of the financial statements providedin the full version of the Annual Report and note 21 of the financial statements providedin abridged version of the Annual Report under Indian Accounting Standard 24.
The Policy on the Related Party Transactions is available on the Company's website athttp://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 earningsand outgo as required under Section 134(3) of the Companies Act 2013 read with the Rule8 of Companies (Accounts of Companies) Rules 2014 is annexed as Annexure F to thisreport.
Particulars of Employees
Disclosures relating to remuneration of Directors u/s 197(12) read with Rule 5(1) ofCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexed asAnnexure G to this report.
The information as required to be provided in terms of Section 197(12) of theCompanies Act 2013 read with Rule 5(2) of Companies (Appointment and Remuneration ofManagerial 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 theirknowledge and belief confirm that:
a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
b) the Directors had selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a trueand fair view of the state of affairs of the Company at the end of the financial year andof the profit and loss of the Company for that period;
c) the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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 theCompany and that such internal financial controls are adequate and were operatingeffectively;
f) the Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
The Board wishes to place on record their appreciation to the Department ofTelecommunications (DoT) the Central Government the State Governments in IndiaGovernment of Bangladesh Government of Sri Lanka and Governments in the 15 countries inAfrica Company's bankers and business associates for the assistance co-operation andencouragement extended to the Company.
The Directors also extend their appreciation to the employees for their continuingsupport and unstinting efforts in ensuring an excellent all-round operational performance.The Directors would like to thank various partners viz. Bharti Telecom LimitedSingapore Telecommunications Ltd. and other shareholders for their support andcontribution. 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 |