Your Directors have pleasure in presenting the 23rd Board Report on the Companysbusiness and operations together with audited financial statements and accounts for thefinancial year ended March 31 2018.
Bharti Airtel is one of the worlds leading providers of telecommunicationservices with significant presence in 16 countries representing India Sri Lanka and 14countries in Africa.
The Companys diversified service range includes mobile voice and data solutionsusing 2G 3G and 4G technologies. We provide telecom services under wireless and fixedline technology national and international long distance connectivity and Digital TV; andcomplete integrated telecom solutions to our enterprise customers. All these services arerendered under a unified brand Airtel either directly or through subsidiarycompanies. Airtel Money (known as Airtel Payments Bank in India) extends ourproduct portfolio to further our financial inclusion agenda and offers convenience ofpayments and money transfers on mobile phones over secure and stable platforms in Indiaand across all 14 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 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 (ListingRegulations) the Company has prepared its standalone and consolidated financialstatements as per Indian Accounting Standards (Ind AS) for the FY 2017-18. The standaloneand consolidated financial highlights of the Companys 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 ||536630 ||8327 ||622763 ||9273 |
|EBITDA before exceptional items ||181529 ||2817 ||242242 ||3607 |
|Cash profit from operations ||131674 ||2043 ||211891 ||3155 |
|Particulars ||FY 2017-18 ||FY 2016-17 |
| ||J ||USD ||J ||USD |
| ||Millions ||Millions* ||Millions ||Millions* |
|Earnings before taxation ||(6812) ||(106) ||(85095) ||(1267) |
|Net Income / (Loss) ||792 ||12 ||(99256) ||(1478) |
*1 USD = H 64.44 Exchange Rate for the financial year ended March 31 2018. (1 USD = H67.16 Exchange Rate for the financial year ended March 31 2017).
Consolidated Financial Highlights (Ind AS)
|Particulars || |
| ||J ||USD ||J ||USD |
| ||Millions ||Millions* ||Millions ||Millions* |
|Gross revenue ||836879 ||12986 ||954683 ||14214 |
|EBITDA before ||304479 ||4725 ||356206 ||5304 |
|exceptional || || || || |
|items || || || || |
|Cash profit from ||227169 ||3525 ||283668 ||4224 |
|operations || || || || |
|Earnings before ||32669 ||507 ||77233 ||1150 |
|taxation || || || || |
|Net Income / ||10989 ||171 ||37998 ||566 |
|(Loss) || || || || |
*1 USD = H 64.44 Exchange Rate for the financial year ended March 31 2018. (1 USD = H67.16 Exchange Rate for the financial year ended March 31 2017)
The financial results and the results of operations including major developments havebeen further discussed in detail in the Management Discussion and Analysis section.
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 Companies Secretaries of India.
During the year there was no change in the Companys issued subscribed andpaid-up equity share capital. On March 31 2018 it stood at H 19987 Mn divided into3997400102 equity shares of H 5/- each.
During the year the Company has transferred H 3510 Mn into General Reserve from theShare Based Payment Reserve pertaining to gain / loss on exercise / lapse of vestedoptions.
During the year the Company has created Debenture Redemption Reserve and transferred H7500 Mn out of the General Reserve representing 25% of the value of unsecured redeemablenon-convertible debentures issued by the Company.
Your Directors have recommended a final dividend of H 2.50 per equity share of H 5 eachfully paid-up (50.00 % of face value) for FY 2017-18. The total final dividend payout willamount to H 9993.50 Mn excluding tax on dividend. The payment of final dividend issubject to the approval of shareholders in the Companys ensuing Annual GeneralMeeting (AGM).
The Register of Members and Share Transfer Books will remain closed from SaturdayAugust 04 2018 to Wednesday August 08 2018 (both days inclusive) for the purpose ofpayment 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 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 A tothe Boards Report and is also available on the Companys website athttps://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 dividendamounting to H 7.42 Mn to the Investors Education and Protection Fund (IEPF) Accountestablished by the Central Government. The Company has also uploaded the details of unpaidand unclaimed amounts lying with the Company as on July 24 2017 (date of last AnnualGeneral Meeting) on the Companys website www.airtel.com.
Pursuant to the provisions of Investor Education and Protection Fund Authority(Accounting Audit Transfer and Refund) Rules
2016 as amended the shares on which dividend remains unpaid / unclaimed for sevenconsecutive years or more shall be transferred to the Investors Education andProtection Fund (IEPF). Accordingly during the year Company has transferred 49273 equityshares to the IEPF. The details of equity shares transferred are available on theCompanys website www.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 for claiming the unpaid dividend / shares from IEPF. The process forclaiming the unpaid dividend / shares out of the IEPF is also available on theCompanys website at https://www.airtel. in/about-bharti/equity/shares.
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 2018 the Company was rated by two domestic rating agencies namelyCRISIL and ICRA and three international rating agencies namely Fitch RatingsMoodys and S&P.
CRISIL and ICRA maintained their long-term ratings of the Company. As on March 312018 they rate the Company at [CRISIL] AA+ / [ICRA] AA+ with a stable outlook.Short-term ratings were maintained at the highest end of the rating scale at [CRISIL] A1+/ [ICRA] A1+. Fitch S&P and Moodys rate the Company at BBB-/ StableBBB-/Stable and Baa3/Negative respectively.
As on March 31 2018 the Company was rated Investment Grade by all threeinternational 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 Companys 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(the ESOP Regulations) a disclosure with respect to ESOP Schemes of the Company as onMarch 31 2018 is available on Companys 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 theshareholders in its meeting dated July 24 2017 had approved the reduction in theperiod for transfer of vested / unvested options in the name of legal heir / nominees ofdeceased employee from 3 months to 1 month. Apart from the aforesaid change there were noother changes in the ESOP Schemes of the Company.
Further ESOP Schemes are in compliance with ESOP Regulations. A certificate fromDeloitte Haskins & Sells LLP Chartered Accountants Statutory Auditors of the Companywith respect to the implementation of the Companys ESOP schemes would be placedbefore the shareholders at the ensuing AGM. A copy of the same will also be available forinspection at the Companys registered office.
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.
During the financial year your Company raised H 30000 Mn through issuance ofunsecured listed rated non-convertible debentures at face value of H 1 Mn each onprivate placement basis as per the following details:
> 15000 Series I debentures at a coupon rate of 8.25% per annum [Tenor: 2 years 1month and 7 days];
> 15000 Series II debentures at a coupon rate of 8.35% per annum. [Tenor: 3 years1 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 andbeing eligible have offered themselves for re-appointment. The Board recommends theirre-appointment.
Sheikh Faisal Thani Al-Thani Non-Executive Director resigned from the CompanysBoard w.e.f. July 25 2017. Mr. Rashid Fahad O J Al-Noaimi was appointed as aNon-Executive Director on the Board w.e.f. July 25 2017 and resigned from theCompanys Board w.e.f. November 22 2017.
Mr. Craig Ehrlich Independent Director will be completing his present term as anindependent director of the Company on April 28 2018. On the recommendation of HR andNomination Committee the Board in its meeting held on April 24 2018 subject to theapproval of shareholders by special resolution has re-appointed Mr. Craig as anIndependent Director of the Company for a further term of five years w.e.f. April 29 2018to April 28 2023.
On the recommendation of the HR and Nomination Committee the Board in its meeting heldon April 24 2018 subject to the amendment in the Articles of Association had changed thenature of directorship of Mr. Gopal Vittal Managing Director & CEO (India & SouthAsia) from director not liable to retire by rotation to a director liable to retire byrotation.
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.
The Board in its meeting held on July 18 2017 has appointed Mr. Pankaj Tewari as theCompany Secretary 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 Companyscode of conduct.
Board Diversity and Policy on Directors 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 achievingsustainableandbalanceddevelopment.ThepolicyonNomination Remuneration and BoardDiversity adopted by the Board sets out the criteria for determining qualificationspositive attributes and independence while evaluating a person for appointment /re-appointment as Director or as KMP with no discrimination on the grounds of genderrace or ethnicity nationality or country of origin. The detailed policy is available onthe Companys website athttp://www.airtel.in/wps/wcm/connect/92b49e0e-8810-497a-9c3e-9b80657a3688/Policy-on-Remuneration-Nomination-andBoard-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 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 were subsequently discussed by theBoard. Recommendations arising from the evaluation process were considered by the Board tooptimize its effectiveness. A detailed update on the Board Evaluation 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 eight (8) times during the previous financial year. As onMarch 31 2018 the Board has nine committees namely the Audit Committee the RiskManagement Committee the HR and Nomination Committee the Corporate Social Responsibility(CSR) Committee the Stakeholders Relationship Committee the Committeeof Directors the Airtel Corporate Council the Special Committee of Directors (forMonetization 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 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 2017-18 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 2018 your Company has 89 subsidiaries 6 associates and 8 jointventures as set out in note 34 of the Annual Report (for Abridged Annual Report pleaserefer 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 venturesof the Company.
During FY 2017-18 Bharti Digital Networks Private Limited (formerly known as TikonaDigital Networks Private Limited) Bharti Airtel International (Mauritius) InvestmentsLimited Airtel Mobile Commerce Nigeria Limited and Tigo Rwanda Limited becamesubsidiaries of the Company. Bangladesh Infratel Networks Limited Bharti Infratel Lanka(Private) Limited Airtel (Ghana) Limited Airtel Mobile Commerce Ghana Limited BhartiAirtel DTH Holdings B.V. Bharti Airtel Ghana Holdings B.V. Airtel DTH Services NigeriaLimited Bharti Airtel Nigeria Holdings B.V. MSI-Celtel Nigeria Limited Towers SupportNigeria Limited and Zap Trust Company Nigeria Limited ceased to be subsidiaries of theCompany.
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 companies andtheir contribution to the overall performance of the Company.
The audited financial statements of each of its subsidiary associate and joint venturecompanies are available for inspection at the Companys 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 Companys 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 2017-18 who have not registered their e-mail id. The AbridgedAnnual Report is being circulated to the members excluding Annexures to the BoardsReport viz. Dividend Distribution Policy Nomination Remuneration andBoard Diversity Policy Secretarial Audit Report Annual Report onCorporate Social Responsibility u/s 135 of the Companies Act 2013 Extract ofAnnual Return Particulars of Energy
Conservation Technology Absorption and Foreign Exchange Earnings and OutgoStatement of Disclosure of Remuneration under Section 197(12) of Companies Act 2013read 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 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 theCompanys website www.airtel.com.
Auditors and Auditors Report
In terms of the provisions of Section 139 of the Companies Act 2013 Deloitte Haskins& Sells LLP were appointed as the Companys Statutory Auditors by theshareholders in the AGM held on July 24 2017 for a period of five years i.e. till theconclusion 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 Accountantsas the Companys Statutory Auditors is placed for ratification by the members. TheCompany has received certificate from the Statutory Auditors to the effect thatratification of their appointment if made shall be in accordance with the provisions ofSection 141 of the Companies Act 2013. The annual ratification of auditors at the nextAGM (to be held in calendar year 2019) for their remaining term shall be done ifrequired by the statutory provisions.
The Board has duly examined the Statutory Auditors Report to the accounts whichis self-explanatory. Clarifications wherever necessary have been included in the Notesto Accounts section of the Annual Report.
As regards the comments under para i(a) of the Annexure 1 to the IndependentAuditors Report regarding updation of quantitative and situation details relating tocertain fixed assets the Company is in the process of executing a comprehensive projectwith the involvement of technical experts for deploying automated tools and processeswhich 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 ofthe Company and Ernst & Young LLP and ANB & Co. Chartered Accountants Mumbai asthe Internal Assurance Partners to conduct the internal audit basis a detailed internalaudit plan which is reviewed each year in consultation with the Internal Audit Group andthe 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 AssurancePartners for FY 2018-19.
The Board on the recommendation of the Audit Committee has approved the appointment ofR. J. Goel & Co. Cost Accountants as Cost Auditors for FY 2018-19. The CostAuditors 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 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 Board had appointed Chandrasekaran Associates Company Secretaries to conduct itsSecretarial Audit for the financial year ended March 31 2018. The Secretarial Auditorshave submitted their report confirming compliance by the Company of all the provisions ofapplicable corporate laws. The Report does not contain any qualification reservationdisclaimer or adverse remark. The Secretarial Audit Report is annexed as Annexure C tothis report.
The Board has re-appointed Chandrasekaran Associates Company Secretaries New Delhias Secretarial Auditors of the Company for FY 2018-19.
We at Bharti Airtel strongly believe that power of communication can bring inmulti-dimensional transformations ensuring smooth functioning of life and businesses andhelping society to become sustainable and inclusive. We recognize our role in thissustainable approach in the way we conduct our business by integrating sustainability inour strategies and operations.
Our Vision defines what we aim to do whereas our Core Values - Alive Inclusive andRespectful - expound how we aim to embrace the responsible business practices. As thestakeholders have played a crucial role in Airtels sustained success over the yearsAirtels sustainability approach has been carefully developed through systematicengagement with its stakeholders worldwide. We continuously strive to provide long-termsustainable value to all our stakeholders including investors customers employeesbusiness partners and suppliers government and regulators and communities. This isperformed through systematic stakeholder dialogue to gauge their expectations shareinformation and sustainability priorities practices and performance and explore avenuesof partnerships to achieve the goals. The Company publishes an annual SustainabilityReport in accordance with the Global Reporting Initiative (GRI) framework which can bedownloaded from the Companys website www.airtel.in/sustainability.
Corporate Social Responsibility (CSR)
Building upon and scaling up on various interventions initiated in areas as prescribedin our CSR policy the Company has increased its CSR spending during the previousfinancial year i.e. from H 55.84 Mn in FY 2016-17 to H 245.37 Mn in FY 2017-18. Additionallythe Company has also contributed H 32.59 Mn towards various other charitable causes. Theconsolidated contribution of the Company towards various CSR activities during thefinancial 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 alsocommitted to gradually increase its CSR contribution in the coming years. The CSR spendingis guided by the vision of creating long-term benefit to the society. The Company throughits Board and CSR Committee is determined to beef up its efforts to meet the targeted CSRexpenditure. With the strong foundation which has been established during the year alongwith the proposed scaling up of a number of its CSR Projects the Company believes that ithas made meaningful progress towards reaching the target in the coming financial years.
Further during the year Bharti Family has pledged a significant amount towardsphilanthropy which will step-up scope and reach of Bharti Foundations initiativesto create opportunities for the underprivileged and contribute to nation building. Plan isto set up a world-class University namely Satya Bharti University to offer free educationto deserving youth from economically weaker sections of society. During the previous yearMr. Sunil Bharti Mittal Chairman had also contributed H 50 Mn towards CSR in his personalcapacity.
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.
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) from2017 - 2018 by the top 500 listed companies in India. In line with its philosophy of beinga highly transparent and responsible company and considering IR as a journey your Companyadopts its first Integrated Report in accordance with the framework of theInternational Integrated Reporting Council (IIRC). The Integrated Report covers capitalapproach of IIRC Framework as well as the value that your Company creates for itsstakeholders. 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 formingpart of the Annual Report.
Risk management is embedded in Bharti Airtels 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 prioritize relevant actionplans to mitigate these risks.
To have more robust process the Company during the year constituted separate RiskManagement Committee which shall focus on the risk management including determination ofCompanys risk appetite risk tolerance and regular risk assessments (riskidentification risk quantification and risk evaluation) etc. Risk Management framework isreviewed periodically by the Board and Audit & Risk Management Committee / RiskManagement Committee which includes discussing the management submissions on risksprioritizing key risks 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 prioritization 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 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 Companys 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 Companys internal financial controls were adequate and effectiveduring FY 2017-18.
Other Statutory Disclosures
The Code of Conduct and vigil mechanism applicable to Directors and Senior Managementof the Company is available on the Companys website athttp://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 extracts of AnnualReturn of the Company in form MGT-9 is annexed herewith as Annexure E to thisreport.
Significant and material orders
There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Companys operations in future.
Particulars of loans guarantees and investments
Particulars of loans guarantees and investments form part of note 10 23 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 arms 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 CompanysPolicy on Related Party Transactions and accordingly the disclosure of Related PartyTransactions in Form AOC - 2 is not applicable. However names of Related Parties anddetails of transactions with them have been included in note 34 of the financialstatements provided in the full version of the Annual Report and note 17 of the financialstatements provided in abridged version of the Annual Report under Indian AccountingStandards 24.
The Policy on the Related Party Transactions is available on the Companys websiteat 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 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.
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 I to thisreport.
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 Sri Lanka and Governments in the 14 countries in Africa Companysbankers and business associates for the assistance co-operation and encouragementextended 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: April 24 2018 ||Chairman |