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Bharti Airtel Ltd.

BSE: 532454 Sector: Telecom
NSE: BHARTIARTL ISIN Code: INE397D01024
BSE 00:00 | 18 Jun 538.90 10.20
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OPEN 530.05
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VOLUME 779704
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OPEN 530.05
CLOSE 528.70
VOLUME 779704
52-Week high 623.00
52-Week low 394.05
P/E
Mkt Cap.(Rs cr) 295,965
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Bharti Airtel Ltd. (BHARTIARTL) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting the 25th Board Report on the Company'sbusiness and operations together with audited financial statements for the financial yearended March 31 2020.

Company Overview

Bharti Airtel is one of the world's leading providers of telecommunication serviceswith operations in 18 countries across Asia and Africa. The Company's diversified servicerange includes mobile voice and data solutions using 2G 3G and 4G technologies. Weprovide telecom services under wireless and fixed line technology national andinternational long distance connectivity broadband services Digital TV; and completeintegrated telecom solutions to our enterprise customers. All these services are renderedunder a unified brand ‘Airtel' either directly or through subsidiary companies.Airtel Money (known as ‘Airtel Payments Bank‘ in India) extends our productportfolio to further our financial inclusion agenda and offers convenience of payments andmoney transfers on mobile phones over secure and stable platforms in India and across all14 countries in Africa.

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 Limited (‘Infratel') and Indus TowersLimited (‘Indus') are the largest passive infrastructure service providers in India.The Hon'ble National Company Law Tribunal Chandigarh Bench vide its order dated May 312019 had sanctioned the Scheme of Amalgamation of Indus with and into Infratel. Thedecision to implement the Scheme will be taken by Infratel keeping in mind the bestinterest of its stakeholders.

25 years ago the Company started its journey as a telecom service provider and yearafter year deepened its roots to establish a strong foothold in this space. Over theyears Airtel has become synonymous with quality telecom connectivity in India. With aconstant motivation to strengthen its innovative core the Company cemented its positionto lead change in a fast paced and ever evolving digital landscape. Since the first mobileservice launch in New Delhi on September 27 1995 Airtel has transpired transformation inthe wireless telecom sector in the last two and a half decades. The desire to berecognized as the most admired brand helped Airtel to successfully forge a deep emotionalconnect with its customers in India and abroad.

Financial Results

In compliance with the provisions of the Companies Act 2013 (‘Act') and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 (‘ListingRegulations') the

Company has prepared its standalone and consolidated financial statements as per IndianAccounting Standards (‘Ind AS') for the FY 2019-20. The standalone and consolidatedfinancial highlights of the Company's operations are as follows:

Standalone Financial Highlights

Particulars

FY 2019-20

FY 2018-19

J Mn USD Mn* J Mn USD Mn*
Gross revenue 543171 7680 496060 7101
EBITDA before exceptional items 206315 2917 128182 1835
Cash profit from operations 109130 1543 70714 1012
Earnings before taxation (510209) (7214) (52439) (751)
Net income/ (loss) (360882) (5103) (18692) (268)

*1 USD = H 70.73 Exchange Rate for financial year ended March 31 2020 (1 USD = H 69.86Exchange Rate for financial year ended March 31 2019)

(FY 2018-19* has been reclassed to take Tikona Merger impact for Y-o-Y comparison)

Consolidated Financial Highlights

Particulars

FY 2019-20

FY 2018-19

J Mn USD Mn* J Mn USD Mn*
Gross revenue 875390 12377 807802 11567
EBITDA before exceptional items 371053 5246 262937 3768
Cash profit from operations 254951 3605 167777 2406
Earnings before taxation (428466) (6058) (17318) (253)
Net Income / (Loss) (321832) (4550) 4095 59

*1 USD = H 70.73 Exchange Rate for financial year ended March 31 2020 (1 USD = H 69.86Exchange Rate for financial year ended March 31 2019)

Note: With the adoption of IndAS 116 effective April 01 2019 the results of periodscommencing April 01 2019 are not comparable with previous periods.

The financial results and the results of operations including major developments havebeen further discussed in detail in the Management Discussion and Analysis Report.

Change in the nature of business

There was no change in nature of the business of the Company during the financial yearended on March 31 2020

COVID update

These are unprecedented times as our country and the entire world struggles to containand combat the COVID-19 pandemic. Amidst such rampant uncertainties Airtel has aligneditself with the national priorities of the moment by committing H 100 crores from BhartiGroup to the PM CARES relief fund in an effort to help our country coast through thesetough times. We have abided by every safety and social distancing norm and have beenconsistently communicating the same to both our employees and customers. We stand insolidarity with the Government of India and all our citizens and our efforts towards thebetterment of one and all will continue unabated.

Secretarial Standards

Pursuant to the provisions of Section 118 of the Companies Act 2013 the Company hascomplied with the applicable provisions of the Secretarial Standards issued by theInstitute of Company Secretaries of India and notified by Ministry of Corporate Affairs.

Share Capital

During the FY 2019-20 the Authorized share capital of the Company has been increasedto H 147780000000 divided into 29555980000 equity shares of face value of H 5/- eachand 1000 preference shares of H 100/- each.

During the FY 2019-20 the Company has made the following allotments:

s=_ 1133591075 equity shares of face value of H 5/- each

on May 24 2019 pursuant to Rights Issue aggregating to H 5667955375 /-.

=_ 487 10% fully paid-up redeemable non-participating

non-cumulative preference shares of face value of H 100/- each on July 26 2019pursuant to composite scheme of arrangement among Tata Teleservices Limited (‘TTSL')Bharti Hexacom Limited and the Company and their respective shareholders and creditorsaggregating to H 48700 to equity share holders CCPS holders and OCPS holder of TTSL.

s=_ 970668 equity shares of face value of H 5/- each on July

26 2019 pursuant to scheme of arrangement between Tata Teleservices (Maharashtra)Limited (‘TTML') and the Company and their respective shareholders and creditorsaggregating to H 4853340/- to the equity shareholders of TTML.

10 10% fully paid-up redeemable non-participating noncumulative preference Shares offace value of H 100/- each on July 26 2019 pursuant to scheme of arrangement betweenTata Teleservices (Maharashtra) Limited (‘TTML') aggregating to H 1000/- to thePreference shareholders of TTML.

^ 323595505 equity shares of face value of H 5/- each

on January 15 2020 pursuant to Qualified Institutions Placement aggregating to H1617977525/-.

Consequent to the above mentioned allotments the paid-up share capital of the Companyhas increased to H 27277836475 divided into 5455557355 equity shares of face valueof H 5/- each and 497 preference shares of H 100/- each.

During the year under review the Company has neither issued any shares withdifferential voting rights nor any sweat equity shares.

Reserve

During the year the Company has transferred H 141 Mn into General Reserve from theShare Based Payment Reserve pertaining to gain / loss on exercise / lapse of vestedoptions.

Dividend

Your Directors have recommended a final dividend of H 2.00 per equity share of H 5 eachfully paid-up (40.00 % of face value) for FY 2019-20. The total final dividend payout willamount to H 10911.11 Mn.

The record date for the purpose of payment of final dividend for the FY 2019-20 willbe Friday August 07 2020.

In view of the changes made under the Income-tax Act 1961 by the Finance Act 2020dividends paid or distributed by the Company shall be taxable in the hands of theShareholders. Your Company shall accordingly make the payment of the Final Dividendafter deduction of tax at source.

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 had 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 A tothe Board's Report and is also available on the Company's website athttps://assets.airtel.in/teams/simplycms/web/pdf/Airtel-Dividend_Distribution_Policy-Kick_ Off-14052020.pdf

Transfer of amount to Investor Education and Protection Fund

During the FY 2019-20 the Company has transferred the unpaid/ unclaimed dividendpertaining to FY 2011-12 amounting to H 1.29 Mn. to the Investors Education andProtection Fund (‘IEPF') Account established by the Central Government. The Companyhas also uploaded the details of unpaid and unclaimed dividend amounts lying with theCompany as on August 14 2019 (date of last Annual General Meeting) on the Company'swebsite www.airtel.com.

I Pursuant to the provisions of Investor Education and Protection I Fund Authority(Accounting Audit Transfer and Refund) Rules

I 2016 as amended the shares on which dividend remains unpaid / unclaimed for sevenconsecutive years or more shall be transferred to the Investor's Education and ProtectionFund (‘IEPF') after giving due notices to the concerned shareholders. Accordinglythe Company has transferred 16729 equity shares to the IEPF during the FY 2019-20. Thedetails of equity shares transferred are also available on the Company's websitewww.airtel.com.

The shareholders whose unpaid dividend / shares are transferred to the IEPF can requestthe Company / Registrar and Transfer Agent as per the applicable provisions in theprescribed Form No. IEPF-5 for claiming the unpaid dividend / shares out of the IEPF. Theprocess for claiming the unpaid dividend / shares out of the IEPF is also available on theCompany's website at http://www.airtel.in/about-bharti/ equity/shares.

Deposits

The Company has not accepted any deposits and as such no amount of principal orinterest was outstanding as on the balance sheet closure date.

Significant Developments

Mergers / amalgamations / demergers under Sections 230 to 232 of the Companies Act2013 completed during the year:

==_ Scheme of amalgamation between Bharti Digital Networks Private Limited (formerlyknown as Tikona Digital Networks Private Limited) (‘Bharti Digital') a wholly-ownedsubsidiary company and Bharti Airtel Limited

During the year the scheme of amalgamation between Bharti Digital a wholly-ownedsubsidiary company and the Company has become effective on May 29 2019 pursuant to whichBharti Digital has been amalgamated with the Company.

=_ Composite scheme of arrangement between Tata Teleservices Limited (‘TTSL')Bharti Hexacom Limited (‘Bharti Hexacom') a subsidiary company and Bharti AirtelLimited (‘TTSL Scheme') and Scheme of arrangement between Tata Teleservices(Maharashtra) Limited (‘TTML') and Bharti Airtel Limited (‘TTML Scheme')

During the year the Company completed the acquisition of the consumer mobile businessof TTML and TTSL under the TTML Scheme and TTSL Scheme made effective from July 01 2019.

For details of securities issued under TTML Scheme and TTSL Scheme please refer‘Share Capital' section of this report.

0

=_ Scheme of arrangement between Telesonic Networks Limited (‘Telesonic') asubsidiary company and Bharti Airtel Limited

During the year the scheme of arrangement between the Company and Telesonic asubsidiary company and their respective shareholders and creditors for the transfer ofoptical fibre cable business of the Company to Telesonic has become effective on August03 2019.

Mergers/ amalgamations/ demergers under Sections 230 to 232 of the Companies Act 2013pending sanction of the appropriate authorities:

Composite scheme of arrangement between Bharti Airtel Limited Bharti Airtel ServicesLimited a wholly-owned subsidiary company Hughes Communications India Limited (now knownas Hughes Communications India Private Limited) and HCIL Comtel Limited (now known as HCILComtel Private Limited)

Pursuant to the approval dated May 06 2019 of the Board of Directors of the Companythe Company had entered into the Scheme inter-alia proposing for transfer of the VSATUndertaking (defined under the Scheme) of the Company and vesting of the same with HughesCommunications India Private Limited on a going concern basis by way of a slump sale for alump sum cash consideration of H 663210000 (Indian Rupees Six Hundred Sixty ThreeMillion Two Hundred Ten Thousand). As on the date of this report the Scheme is subject torequisite regulatory/ statutory approvals and other closing conditions.

Rights Issue

During the year the Company has allotted 1133591075 equity shares of face value ofH 5/- each by way of a rights issue at a price of H 220 per rights equity share (includinga premium of H 215 per rights equity share) aggregating to H 249390.04 Mn on a rightsbasis to the eligible equity shareholders on May 24 2019 in the ratio of 19 rights equityshares for every 67 equity shares held by the eligible equity shareholders on the recorddate i.e. April 24 2019.

Qualified Institutions Placement

During the year the Company has allotted 323595505 equity shares offace value of H5/- each by way of a Qualified Institutions Placement at a price of H 445 per equity share(including a premium of H 440 per rights equity share) aggregating to H 144000 Mn to theeligible investors on January 15 2020.

Foreign Currency Convertible Bonds

During the year the Company has issued 1.50% foreign currency convertible bonds due2025 (‘FCCBs') of USD 1000 Mn at par convertible into fully paid-up equity sharesof face value of H 5/- each of the Company at an initial conversion price of H 534/- perequity share on or after February 27 2020 and

up to the close of business hours February 07 2025 at the option of the FCCB holders.As per the terms and conditions of the issue the initial conversion ratio and initialconversion price are subject to certain adjustments. FCCBs which are not converted toequity shares during such specified period will be redeemable at 102.66% of theirprincipal amount on February 17 2025.

Capital Market Ratings

As on March 31 2020 the Company was rated by two domestic rating agencies namelyCRISIL and ICRA and three international rating agencies namely Fitch Ratings Moody's andS&P.

As on March 31 2020 CRISIL and ICRA rated their long-term ratings of the Company to[CRISIL] AA / [ICRA] AA- with a stable outlook. Short-term ratings were maintained at thehighest end of the rating scale at [CRISIL] A1+ / [ICRA] A1+. Fitch maintained the ratingat BBB-/ Stable. S&P and Moody revised its outlook and rating to BBB-/ Negative and toBa1/ Negative respectively during the year.

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 ESOP 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(the ESOP Regulations) a disclosure with respect to ESOP Scheme of the Company as onMarch 31 2020 has been uploaded on Company's website athttps://www.airtel.in/about-bharti/equity/results.

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. The Companyhas received a certificate from Deloitte Haskins & Sells LLP Chartered AccountantsStatutory Auditors of the Company certifying that the schemes are implemented inaccordance with the SBEB Regulations and the resolutions passed by the members. Thecertificate is available for inspection by members in electronic mode.

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.

Debentures

During the financial year the Company has not issued any debentures. The details ofoutstanding debentures as on the date of this report are as under:

=_ 15000 Series II debentures having a face value of H 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.

Further the following debentures were redeemed after the closure of financial year2019-20:

=_ 15000 Series I debentures having a face value of H 1 Mn

per debenture at a coupon rate of 8.25% per annum.

Directors and Key Managerial Personnel

Inductions Re-appointments Retirements & Resignations

Pursuant to the provisions of the Companies Act 2013 Mr. Gopal Vittal ManagingDirector & CEO of the Company will retire by rotation at the ensuing AGM and beingeligible has offered himself for re-appointment. The Board recommends his re-appointment.

Mr. Shishir Priyadarshi had completed his present term as Independent Director of theCompany on February 03 2020. On the recommendation ofthe HR and Nomination Committee theBoard subject to the approval of the shareholders has reappointed him as IndependentDirector for a further term of five consecutive years i.e. upto February 03 2025.

In the opinion of the Board Mr. Shishir Priyadarshi fulfils the conditions specifiedin the Companies Act 2013 and the rules made thereunder and under Listing Regulations andis independent to the management and accordingly the Board recommends his re-appointment.

Brief resume nature of expertise details of directorships held in other companies ofthe Directors proposed to be re-appointed along with their shareholding in the Companyas stipulated under Secretarial Standard 2 and Regulation 36 of the Listing Regulationsis appended as an Annexure to the Notice of the ensuing AGM.

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 rules made there under and Regulations 16 & 25of the Listing Regulations. The Independent Directors have also confirmed that they havecomplied 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 itssuccess. A diverse Board will be able to leverage different skills qualificationsprofessional experiences perspectives and backgrounds which

I is necessary for achieving sustainable and balanced I development. The Board hasadopted a policy on ‘Nomination I Remuneration and Board Diversity' which sets outthe criteria for determining qualifications positive attributes and independence of aDirector. The detailed policy is available on the Company's website athttps://s3-ap-southeast-1. amazonaws.com/bsy/iportal/images/Draft-Remuneration-Nomination-and-Board-Diversity-Policy-4-0-Aug-01-2019_B8BCCA328A3ABAEDC2A5FF6E747B0D8D.pdf and is also annexed as Annexure B to thisreport.

Annual Board Evaluation and Familiarisation Programme for Board Members

The HR and Nomination Committee has put in place a robust framework for evaluation ofthe Board Board Committees and individual Directors including Chairman. Customisedquestionnaires were circulated responses were analyzed and the results were subsequentlydiscussed by the Board. Recommendations arising from this entire process were deliberatedupon by the Board to be used constructively to further enhance its effectiveness. Adetailed update on the Board Evaluation is provided in the report on Corporate Governancewhich forms part of this report.

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.

Committees of Board Number of Meetings of the Board and Board Committees

The Board of Directors met seven (7) times during the previous financial year. As onMarch 31 2020 the Board has ten committees namely the Audit Committee the Riskmanagement Committee 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 (forMonetization of stake in Bharti Infratel Limited) the Special Committee of Directors (forRestructuring of overseas holding structure) and Special Committee of Directors (for fundraising).

All the recommendations made by committees of the Board including the Audit Committeewere accepted by the Board. A detailed update on the Board its composition detailedcharter including terms and reference of various Board Committees number of Board andCommittee meetings held during FY 2019-20 and attendance of the Directors at each meetingis provided in the Report on Corporate Governance which forms part of this Report.

Subsidiary Associate and Joint Venture Companies

As on March 31 2020 your Company has 101 subsidiaries 8 associates and 7 jointventures.

During FY 2019-20 Network i2i (Kenya) Limited became subsidiary of the Company andRedDot Digital Limited became associate of the Company.

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During FY 2019-20 Bharti Digital Networks Private Limited merged with the Company andMobile Financial Services Limited ceased to be joint venture 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 ofsubsidiary associate and joint venture companies forms part of the Annual Report. Thestatement also provides the details of performance and financial position of each of thesubsidiary associate and joint venture and their contribution to the overall performanceof the Company.

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. A copy of the samewill also be available electronically for inspection by the members during the AGM.

The copies of annual financial statements of the subsidiary associate and jointventure companies will also be made available to the investors of the Company and those ofthe respective companies upon request.

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 inthe AGM held on July 24 2017 for a period of five years i.e. till the conclusion of 27thAGM.

The Board has duly examined the Statutory Auditors' Report to the financial statementswhich is self-explanatory. Clarifications wherever necessary have been included in theNotes 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 fixedassets the Company as per the program of physical verification of fixed assets to coverall the items over a period of three years conducted physical verification of fixedassets during the quarter ended March 31 2020. The Company is in the process to updatequantitative and situation details relating to certain fixed assets which were identifiedduring the physical verification exercise. This same is expected to be completed byDecember 2020.

As regards the comments under para i(b) of the Annexure B to the Independent Auditors'Report regarding no physical verification of customer premises equipment and certainassets due to their nature or location; the customer premises equipment are located atsubscriber's premises and physical check of the equipment is generally not possible. Insuch cases the Company uses indirect evidences to check existence of the assets.

As regards the comments under para i(c) of the Annexure B to the Independent Auditors'Report regarding transfer of title deed in the name of the Company the ownership of theseproperties is transferred and vested in the name of the Company through merger scheme.Company is in the process of getting the title deeds transferred in name of the Company.The entire process is getting delayed on account of lock-down in various areas due toCOVID-19. The same is expected to be completed by December 2020.

Further the auditors have not reported any fraud u/s 143(12) of the Act.

Internal Auditors and Internal Assurance Partners

The Company has in place a robust Internal Assurance Group (IAG) which is headed by theChief Internal Auditor and ably supported by reputed independent firms i.e. Ernst &Young LLP Chartered Accountants Gurugram and ANB & Co. Chartered AccountantsMumbai as the internal assurance partners. The audit conducted by the Chief InternalAuditor and Internal Assurance Partners is based on an internal audit plan which isreviewed each year in consultation with the IAG and the Audit Committee. These audits arebased on risk based methodology and inter-alia involve the review of internal controls andgovernance processes adherence to management policies and review of statutorycompliances. The Internal Assurance Partners share their findings on an ongoing basisduring the year for corrective action.

The Board on the recommendation of the Audit Committee has re-appointed Ernst &Young LLP Chartered Accountants Gurugram and ANB & Co. Chartered Accountants Mumbaias the internal assurance partners for the FY 2020-21.

Report of the Internal Auditors and Internal Assurance Partners for the FY 2019-20 doesnot contain any qualification reservation disclaimer or adverse remark.

Cost Auditors

The Board on the recommendation of the Audit Committee has approved the appointment ofSanjay Gupta & Associates Cost Accountants as Cost Auditors for the financial yearending March 31 2020. The Cost Auditors will submit their report for FY 2019-20 on orbefore 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.

Cost Audit report for the FY 2018-19 does not contain any qualification reservationdisclaimer or adverse remark.

Cost records

Maintenance of cost records has been specified by the Central Government under section148(1) of the Companies Act 2013 and the prescribed cost records have been made andmaintained by the Company.

Secretarial Auditors

The Company had appointed Chandrasekaran Associates Company Secretaries to conductits Secretarial Audit for the financial year ended March 31 2020. 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 as Annexure C to this report.

The Board has re-appointed Chandrasekaran Associates Company Secretaries New Delhias Secretarial Auditors of the Company for FY 2020-21.

Sustainability Journey

We at Bharti Airtel strongly believe that the Information and CommunicationsTechnology (ICT) is playing a pivotal role in shaping the future by helping to advancetowards a low carbon economy sustainable growth and community development. As one of theleading global telecommunication services company our services leverage the power of ICTto help elevate the quality of lives for people by providing them with the connectivitythey need to function in a dynamically advancing world. Our business model is evolving toconsistently innovate and thereby contribute in creating an inclusive and empoweredsociety. To continue progressing towards this objective we are striving to adopt bestpractices in order to better integrate sustainability in our strategies and operations.

Our Vision defines what we aim to do whereas our Core Values - Alive Inclusive andRespectful - expound how we aim to embrace these responsible business practices. We oweour sustained business growth to our stakeholders and hence continue to improve andstrengthen our sustainability approach through systematic engagement with our stakeholdersworldwide. We relentlessly strive to provide long-term sustainable value to all ourstakeholders including investors customers employees business partners and suppliersgovernment and regulators and communities. This is ensured through ongoing engagement withour stakeholders through multiple channels to gauge their expectations understand theirconcerns and apprise them of our sustainability priorities practices and performanceall the while seeking to collaborate with them for creating sustainable and shared value.Our sustainability initiatives towards topics that are material to our stakeholders and tothe company have been reported in our Integrated Report as well as on our websitehttp://www.airtel.in/sustainability.

Corporate Social Responsibility (‘CSR')

Since the Company did not have profits (average net profits for the last threefinancial years) it was not obligated to contribute towards CSR activities during FY2019-20. However the Company is committed to build its CSR capabilities on a sustainablebasis and undertake CSR activities as and when the opportunity arises.

Accordingly despite the unprecedented challenges and pressure on the telecom industrythe Company has made voluntary CSR contribution of H 316.19 Mn. during the financial year2019-20. Additionally the Company has also contributed H 2.35 Mn. towards various othercharitable causes which are not covered within the ambit of the provisions of Section 135of the Companies Act 2013. The aggregate CSR spending of the Company for FY 2019-20(including other contributions) is H 318.54 Mn.

A detailed update on the CSR initiatives of the Company is provided in the CorporateSocial Responsibility 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.

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 had recommended voluntary adoptionof ‘Integrated Reporting' (IR) from 2017 - 2018 by the top 500 listed companies inIndia. We continue with our integrated reporting journey in the current fiscal aligningwith our philosophy of being a highly transparent and responsible company. This is ourthird Integrated Report wherein we are guided by the principles of InternationalIntegrated Reporting Framework developed by the International Integrated Reporting Council(‘IIRC'). The Board acknowledges its responsibility for the integrity of report andinformation contained therein.

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 forming partof the Annual Report.

Corporate Governance

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 Deloitte Haskins & Sells LLP Chartered Accountants theStatutory Auditors of the Company confirming compliance of conditions of CorporateGovernance as stipulated under the Listing Regulations is annexed as Annexure H tothis report.

Statement containing additional information as required under Schedule V of theCompanies Act 2013

A statement containing additional information as required under Clause IV of Section IIof Part II of Schedule V of the Companies Act 2013 is provided in the Report on CorporateGovernance which forms part of this Annual Report.

Risk Management

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 process in place to identify key risks across the group and prioritise relevant actionplans to mitigate these risks.

To have more robust process the Company had constituted a separate Risk ManagementCommittee to focus on the risk management including determination of company's riskappetite risk tolerance and regular risk assessments (risk identification riskquantification and risk evaluation) etc.

Risk management framework is reviewed periodically by the Board and Risk ManagementCommittee which includes discussing the management submissions on risks prioritising keyrisks and approving action plans to mitigate 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 Committee (erstwhileAudit & Risk Management Committee) / Risk Management Committee on an independent basiswith 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 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 Control 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 and efficient conduct of itsbusiness including adherence to the Company's policies safeguarding of its assetsprevention and detection of frauds and errors accuracy and completeness of accountingrecords and timely preparation of reliable financial information. During the year suchcontrols were assessed and no reportable material weaknesses in the design or operationwere observed. Accordingly the Board is of the opinion that the Company's internalfinancial controls were adequate and effective during FY 2019-20.

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 https://s3-ap-southeast-1.amazonaws.com/bsy/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 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) ofthe 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 thisreport.

The extract of Annual Return is available on the Company's website athttps://www.airtel.in/about-bharti/equity/results.

Prevention of Sexual Harassment of Women at Workplace

The Company has an Internal Complaints Committee for providing a redressal mechanismpertaining to sexual harassment of women employees at work place. Details of the sameincluding the details of the complaints received and disposed off are provided in theReport 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 ortribunals impacting the going concern status and Company's operations in future other thanthe orders passed by tribunal w.r.t. various scheme of merger/ arrangements mentionedearlier in this report and the judgement of Honorable Supreme Court of India dt. October24 2019 in relation to a long outstanding industry wide case upholding the view of theDepartment of Telecommunications Union of India in respect of the definition of AdjustedGross Revenue (‘AGR').

Particulars of loans guarantees and investments

Particulars of loans guarantees and investments form part of Note no. 7 9 and 22respectively to the financial statements provided in the full version of the AnnualReport.

Disclosure under Section 197(14) of the Companies Act 2013

The Chairman or the Managing Director & CEO (India and South Asia) does not receiveany such remuneration or commission from the Company or its holding company or subsidiarycompany which requires disclosure under Section 197(14) of the Companies Act 2013.

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 withrelated parties which could be considered material in accordance with the Company's Policyon Related Party Transactions read with the Listing Regulations and accordingly thedisclosure of related party transactions in Form AOC - 2 is not applicable. However namesof related parties and details of transactions with them have been included in Note no. 33to the financial statements provided in the Annual Report under Indian AccountingStandards 24.

The Policy on the related party transactions is available on the Company's website athttps://s3-ap-southeast-1. amazonaws.com/bsy/iportal/images/Policy-on-Related-Party-Transactions_2E9BFE0648B2C56BAC33CAF5676D6 BC1_1566305301148.pdf.

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) of the Companies Act2013 (‘the Act') read with Rule 5(1) of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is annexed as Annexure G to this report.

Particulars of employee remuneration as required under Section 197(12) of the Act readwith 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 provisionsof the first proviso to Section 136(1) of the Act the Annual Report is being sent to theshareholders excluding the aforementioned information. The information will be availableon the Company's website at https://www. airtel.in/about-bharti/equity/results and willalso be available for inspection at the registered office of the Company on all workingdays (Monday to Friday) between 11.00 a.m. and 1.00 p.m. upto the date of AGM and a copyof the same will also be available electronically for inspection by the members during theAGM. Any member interested in obtaining such information may write to the CompanySecretary 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 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.

Acknowledgements

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 14 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
Sunil Bharti Mittal
Date: May 18 2020 Chairman
Place: New Delhi DIN: 00042491