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Bharti Airtel Ltd.

BSE: 532454 Sector: Telecom
NSE: BHARTIARTL ISIN Code: INE397D01024
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OPEN 719.00
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VOLUME 330344
52-Week high 781.90
52-Week low 572.95
P/E
Mkt Cap.(Rs cr) 397,744
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 are pleased to present the 27th Board'sReport of the Company's business and operations together with audited financialstatements for the financial year ended March 31 2022.

Company Overview

Bharti Airtel is one of the world's leading providers oftelecommunication services with operations in 17 countries across Asia and Africa. TheCompany's diversified service range includes mobile voice and data solutions using2G 3G and 4G technologies. It provides telecom services under wireless and fixed linetechnology national and international long-distance connectivity broadband servicesDigital TV and complete integrated telecom solutions to its enterprise customers. Allthese services are rendered under a unified brand ‘Airtel' either directly orthrough subsidiary companies. Airtel Money (known as ‘Airtel Payments Bank' inIndia) extends the Company's product portfolio to further its financial inclusionagenda and offers convenience of payments and money transfers on mobile phones over secureand stable platforms in India and across all 14 countries in Africa. The Company also hasinvestments in Tower Infrastructure pertaining to telecom operations through its jointventure entity viz. Indus Towers Limited (‘Indus'). During FY 2021-22 theCompany acquired an additional stake of 4.76% and accordingly its shareholding in Indusstood at 46.49% as on March 31 2022.

Financial Results

In compliance with the provisions of the Companies Act 2013(‘Act') and the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 (‘Listing Regulations') the Company has prepared itsstandalone and consolidated financial statements as per Indian Accounting Standards(‘Ind AS') for FY 2021-22. The standalone and consolidated financial highlightsof the Company's operations for FY 2021-22 are as follows:

Standalone Financial Highlights

Particulars

FY 2021-22

FY 2020-21

Rs Mn USD Mn* Rs Mn USD Mn**
Gross revenue 706419 9500 643259 8655
EBITDA before exceptional items 355984 4787 286502 3855
Cash profit from operations 231421 3112 183387 2467
Profit / (Loss) before tax (42342) (569) (184652) (2484)
Net income/(loss) (36250) (487) (251976) (3390)

(*1 USD = Rs 74.36 Exchange Rate for financial year ended March 312022) (**1 USD = Rs 74.32 Exchange Rate for financial year ended March 31 2021).

Consolidated Financial Highlights

Particulars FY 2021-22 FY 2020-21
Rs Mn USD Mn* Rs Mn USD Mn**
Gross revenue 1165469 15673 1006158 13538
EBITDA before exceptional items 581103 7815 461387 6208
Particulars

FY 2021-22

FY 2020-21

Rs Mn USD Mn* Rs Mn USD Mn**
Cash profit from operations 423645 5697 315852 4250
Profit / (Loss) before tax 124831 1679 (144882) (1949)
Net Income/ (Loss)# 42549 572 (150835) (2029)

# This includes Net Income/(loss) for continuing and discontinuingoperations.

(*1 USD = Rs 74.36 Exchange Rate for financial year ended March 312022) (**1 USD = Rs 74.32 Exchange Rate for financial year ended March 31 2021).

The financial results and the results of operations including majordevelopments have been further discussed in detail in the Management Discussion andAnalysis Report.

Change in the Nature of Business

There was no change in nature of the business of the Company during thefinancial year ended on March 31 2022.

Update on impact of COVID-19

The COVID-19 pandemic continued to be a global challenge creatingdisruption across the world. In the first three months of FY 2022 the second wave of thepandemic overwhelmed India in all aspects. The Company has taken several steps to managethis crisis which have been detailed in the Management Discussion and Analysis Reportforming part of the Annual Report. This situation continues to evolve and is being closelymonitored to identify key risks and take immediate actions to minimise any potentialdisruption from the pandemic to business. At the same time the Company recognises itscritical role as a telecom operator in keeping its customers and nation connected in suchtimes.

The Company has constantly engaged with its people - with compassionresilience and focus to ensure that morale is high. Further the Company has abided byevery safety and physical distancing norm and has been consistently communicating the sameto both its employees and customers. The Company has encouraged people to work from hometo ensure their safety and well-being. The Company stands in solidarity with theGovernment of India and all citizens of India. The Company's efforts towards thebetterment of one and all will continue unabated.

Share Capital

During FY 2021-22 there was no change in the authorised share capitalof the Company and it stood at Rs 147780000000 divided into 29555980000 equityshares of face value of Rs 5/- each and 1000 preference shares of Rs 100/- each.

During FY 2021-22 the Company has alloted 392287662 partly paid-upequity shares of face value of Rs 5/- each (Rs 1.25 per share paid on application) at apremium of Rs 530/- per share (Rs 132.50 per share paid on application) on October 272021 pursuant to Rights Issue.

Consequent to the aforesaid allotment the paid-up share capital of theCompany has increased to Rs 27950495917.50 divided into 5492027268 equity shares offace value of Rs 5/- each fully paid- up and 392287662 partly paid-up equity shares offace value of Rs 5/- each (Rs 1.25 per share paid on application).

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

Reserves

During the year the Company has not transferred any amount to GeneralReserve.

Dividend

Your Directors have recommended a final dividend of Rs 3/- per fullypaid-up equity share of face value of Rs 5/- each and a pro-rata final dividend of '0.75/-per partly paid-up equity share of face value of Rs 5/- each with paid-up value of Rs1.25/- each i.e. 60.00% of the paid-up value for FY 2021-22. The proposed final dividendpayout will amount to appox. Rs 16770 Mn. The payment of final dividend is subject to theapproval of shareholders at the ensuing Annual General Meeting (AGM).

The record date for the purpose of payment of final dividend for the FY2021-22 will be Tuesday August 02 2022.

In view of the changes made under the Income Tax Act 1961 by theFinance Act 2020 dividends paid or distributed by the Company shall be taxable in thehands of the shareholders. Your Company shall accordingly make the payment of the finaldividend after deduction of tax at source.

Dividend Distribution Policy

As per Regulation 43A of the Listing Regulations top 1000 listedcompanies are required to formulate a dividend distribution policy. Accordingly theCompany had adopted the dividend distribution policy which sets out the parameters andcircumstances to be considered by the Board in determining the distribution of dividend toits shareholders and/or retaining profits earned by the Company. The Dividend DistributionPolicy is available on the Company's website athttps://assets.airtel.in/teams/simplycms/web/docs/Dividend-Distribution-Policy-18052022.pdf.

Transfer of Amount to Investor Education and Protection Fund

Pursuant to the provisions of Section 124 of the Act read with therelevant rules made thereunder during FY 2021-22 the Company has transferred theunpaid/unclaimed dividend amount of Rs 2.31 Mn pertaining to final dividend for FY2013-14 and interim dividend for FY 2014-15 to the Investor Education and Protection Fund("IEPF") established by the Central Government. The details of unpaid andunclaimed dividend amounts lying with the Company as on August 31 2021 (date of lastAnnual General Meeting) are available on the Company's website viz. https://www.airtel.com.

Pursuant to the provisions of the Investor Education and ProtectionFund Authority (Accounting Audit Transfer and Refund) Rules 2016 as amended theshares on which dividend remains unpaid/ unclaimed for seven consecutive years or moreshall be transferred to the IEPF after giving due notices to the concerned shareholders.Accordingly the Company has also transferred 19146 equity shares to the IEPF during FY2021-22. The relevant details of equity shares transferred to IEPF are also available onthe Company's website https://www.airtel.com.

The shareholders whose unpaid dividend and/or shares have beentransferred to IEPF may reach out to the Company/ Registrar and Transfer Agent to lodgetheir claim for refund of the unpaid dividend/shares (as applicable) out of the IEPF. Theprocess for claiming the unpaid dividend/shares out of the IEPF is also available on theCompany's website at https://www.airtel. in/about-bharti/equity/shares.

Deposits

The Company has not accepted any deposits and as such no amount ofprincipal or interest was outstanding as on the balance sheet closure date.

Debentures

During the year under review the Company has redeemed 15000Series-II 8.35% Listed Unsecured Rated Redeemable Non-Convertible Debentures having aface value of Rs 1 Mn per debenture on April 202021. Accordingly the Company does nothave any outstanding debenture as on March 31 2022. Further the Company has not issuedany debentures during the financial year 2021-22.

Significant Developments

Effectiveness of Composite Scheme of arrangement between the BhartiAirtel Limited Bharti Airtel Services Limited Hughes Communications India PrivateLimited (‘Hughes') and HCIL Comtel Private Limited and their respectiveshareholders and creditors

Upon approval of Hon'ble National Company Law Tribunal and theDepartment of Telecommunications the Composite scheme of arrangement between BhartiAirtel Limited Bharti Airtel Services Limited Hughes and HCIL Comtel Private Limited andtheir respective shareholders and creditors under Sections 230 to 232 and other applicableprovisions of the Companies Act 2013 has become effective on January 04 2022 and VSATUndertaking (as defined under the Scheme) of the Company and Bharti Airtel ServicesLimited stands transferred and vested into Hughes and HCIL Comtel Private Limitedrespectively (on a going concern basis) by way of a slump sale with effect from January04 2022.

Withdrawal of Composite Scheme of Arrangement between Bharti AirtelLimited Nettle Infrastructure Investments Limited (‘Nettle') Airtel DigitalLimited (‘ADL') Telesonic Networks Limited (‘Telesonic') and AirtelLimited and their respective shareholders and creditors and Approval of Composite Schemeof Arrangement between Bharti Airtel Limited Nettle and Telesonic and their respectiveshareholders and creditors

The Board of Directors at its meeting held on April 14 2021 hadapproved the composite scheme of arrangement between the Company Nettle InfrastructureInvestments Limited (‘Nettle') Airtel Digital Limited (‘ADL')Telesonic Networks Limited (‘Telesonic') and Airtel Limited and their respectiveshareholders and creditors under sections 230 to 232 and other applicable provisions ofthe Act (‘Scheme'). Keeping in view the seminal telecom sector reforms packageannounced by the Government of India and consequent simplification of licensing frameworkthe Board of Directors at its meeting held on January 4 2022 decided to withdraw theearlier Scheme and approve a modified one to leverage emerging opportunities offered byIndian digital economy unlock value and simplify the group structure.

Under the revised scheme Nettle and Telesonic wholly-ownedsubsidiaries will amalgamate with and into Bharti Airtel Limited.

As on the date of this report the Scheme is subject to requisiteregulatory/statutory approvals and other closing conditions as specified in the draftscheme.

Shifting of Registered Office

Pursuant to the Order of the Regional Director New Delhi dated March18 2021 the Company shifted its registered office from NCT of Delhi to the State ofHaryana w.e.f. April 1 2021.

Rights Issue

During the financial year the Company had issued and allotted392287662 partly paid-up equity shares of the Company on rights basis in the ratio of 1equity share for every 14 equity shares held to eligible equity shareholders of theCompany at an issue price of Rs 535/- per fully paid-up equity share (including a premiumof Rs 530/- per equity share). An amount equivalent to 25% of the issue price viz. Rs133.75 per equity share was received on application.

The funds raised by the Company through Rights Issue have beenutilised for the objects stated in the Letter of Offer dated September 22 2021.

Investment by Google International LLC

Airtel entered into a long-term multi-year agreement with google toaccelerate the growth of India's digital ecosystem. Together they will work to bringbest-in-class end-to-end products to serve customer needs provide quality customerexperience and bring their expertise to solve problems of affordability access anddigital inclusion. As part of this partnership Google intends to invest up to USD 1 Bnas part of its Google for India Digitization Fund which includes equity investment aswell as a corpus for potential commercial agreements to be identified and agreed onmutually agreeable terms over the course of the next five years. This deal is subject tonecessary regulatory approvals. The intimation dated January 28 2022 submitted with thestock exchanges in this regard is available on the Company's website athttps://assets.airtel.in/teams/simplvcms/web/docs/Outcome- Jan28BMfinal.pdf.

Capital Market Ratings

As on March 31 2022 the Company was rated by two domestic ratingagencies namely CRISIL and India Ratings & Research Private Limited and threeinternational rating agencies namely Fitch Ratings Moody's and S&P.

During the year ended March 31 2022:

a) CRISIL upgraded its long term ratings of the Company from CRISIL AA(Stable) to CRISIL AA+(Stable);

b) Short-term ratings were maintained at the highest end of the ratingscale at CRISIL A1+/ IND A1+; and

c) S&P and Moody's revised their outlook to BBB- (Stable) andto Ba1 (Positive) respectively.

d) Fitch Ratings maintained the rating at BBB- (Negative).

Employee Stock Option Plan

As on March 31 2022 the Company has two Employee Stock Options(‘ESOP') schemes namely ‘Employee Stock Option Scheme - 2001' and‘Employee Stock Option Scheme - 2005'. Besides attracting talent the ESOPschemes also helps retain talent and experience to optimise the long-term interest for theorganisation. The HR and Nomination Committee administers and monitors the Company'sESOP schemes.

Both the ESOP schemes are currently administered through Bharti AirtelEmployees Welfare Trust (ESOP Trust) whereby shares held by the ESOP Trust aretransferred to the employee upon exercise of stock options as per the terms of theScheme.

Pursuant to the provisions of SEBI (Share Based Employee Benefits andSweat Equity) Regulations 2021 (‘ESOP Regulations') a disclosure with respectto ESOP Schemes of the Company as on March 31 2022 is available on the Company'swebsite at https://www.airtel.in/about-bharti/eauity/results.

The Board in its meeting held on May 17 2022 has approved therevision in the ESOP Scheme 2005 inter-alia including increase in ESOP Pool by 27460136options (i.e. upto 0.50% of the paid-up capital of the Company as on March 31 2022)subject to the approval of the shareholders in the AGM. The detailed explanatory statementin this regard is annexed to the Notice of the ensuing AGM.

During the previous year there were no material changes in theaforesaid ESOP Schemes of the Company and the ESOP Schemes are in compliance with ESOPRegulations. The certificate from Chandrasekaran Associates Company Secretariescertifying that the schemes are implemented in accordance with the ESOP Regulations andthe resolutions passed by the members is available for inspection by the members inelectronic mode.

Material changes and commitments affecting the financial positionbetween the end of financial year and date of report after the balance sheet date

There were no material changes and commitments affecting the financialposition of the Company between the end of financial year and the date of this report.

Directors and Key Managerial Personnel Inductions Re-appointmentsRetirements and Resignations

Pursuant to the provisions of the Companies Act 2013 Ms. Chua SockKoong Director of the Company will retire by rotation at the ensuing AGM and beingeligible offers herself for re-appointment. The Board recommends her re-appointment atthe ensuing AGM.

Mr. Gopal Vittal the Managing Director & CEO of the Company willbe completing his present term on January 31 2023. The Board at its meeting held on May17 2022 based on the recommendation of the HR and Nomination Committee and subject tothe approval of shareholders has re-appointed Mr. Gopal Vittal as Managing Directordesignated as Managing Director & CEO of the Company for a further term of five yearsw.e.f. February 01 2023.

Pursuant to the provisions of Sections 149 161 and other applicableprovisions of the Act and applicable provisions of Listing Regulations the Board at itsmeeting held on May 17 2022 based on recommendation of the HR and Nomination Committeeand subject to the approval of the shareholders has appointed Mr. Pradeep Kumar Sinha(DIN: 00145126) and Mr. Shyamal Mukherjee (DIN: 03024803) as Independent Directors w.e.f.May 18 2022 to hold office for a term of five consecutive years i.e. upto May 17 2027.The Board recommends their appointment at the ensuing AGM. In the opinion of the Boardthey possess requisite qualifications experience expertise proficiency and hold highstandards of integrity.

The Company has received requisite notice(s) from a member underSection 160 of the Companies Act 2013 proposing their appointment as IndependentDirectors.

Mr. Sunil Bharti Mittal Chairman was reappointed for a further periodof five years w.e.f October 01 2021 upon approval of the members at their 26thAGM held on August 31 2021.

During the financial year 2021-22 Ms. Nisaba Godrej (DIN: 00591503)was appointed as an Independent Director on the Board with effect from August 4 2021 tohold office for a term of five consecutive years i.e. upto August 3 2026. Her appointmenthas been approved by the shareholders in the 26th Annual General Meeting of theCompany held on August 31 2021. In the opinion of the Board she possesses requisitequalifications experience expertise proficiency and holds high standards of integrity.

Brief resume nature of expertise disclosure of relationship betweendirectors inter-se details of directorships and committee membership held in othercompanies of the Directors proposed to be appointed/re-appointed along with theirshareholding in the Company as stipulated under Secretarial Standard 2 and Regulation 36of the Listing Regulations is appended as an Annexure to the Notice of the ensuing AGM.

The details of Directors Key Managerial Personnel (KMPs)resigned/retired during the financial year 2021-22 are as under:

a) Mr. Craig Edward Ehrlich Independent Director resigned w.e.f. theclose of business hours on August 03 2021; and

b) Mr. Badal Bagri Chief Financial Officer (India and South Asia)resigned w.e.f. October 08 2021.

In addition to the above Mr. Shishir Priyadarshi tendered hisresignation as Independent Director w.e.f. October 31 2022 (close of business hours) andMr. Manish Kejriwal will retire on September 25 2022 (close of business hours) uponcompletion of his second term as Independent Director of the Company. The Board places onrecord its sincere appreciation for the valuable contribution made by theoutgoing/retiring Directors.

Based on the recommendation of Audit Committee and HR & NominationCommittee the Board has appointed Mr. Soumen Ray as Chief Financial Officer (India andSouth Asia) (Key Managerial Personnel under the Act) of the Company w.e.f. December 212021.

Save and except the above there was no change in the Directors or KMPsof the Company during the year under review.

Declaration by Independent Directors

The Company has received declarations from all Independent Directors ofthe Company confirming that they continue to meet the criteria of independence asprescribed under Section 149 of the Act rules made thereunder 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 andRemuneration

The Board of Directors values the significance of diversity and firmlybelieves that diversity of background gender geographical region expertise knowledgeand perspectives leads to sharper and balanced decision-making and sustainabledevelopment. The Company has an eminent high-performing and diverse board - comprising27% Woman Directors. In terms of the requirement of Section 178 of the Act and ListingRegulations the Board of Directors has adopted a ‘Policy on Nomination Remunerationand Board Diversity' on appointment and remuneration of Directors Key ManagerialPersonnel & Senior Management. The Policy includes inter-alia criteria forappointment of Directors KMPs Senior Management Personnel and other covered employeestheir remuneration structure and disclosures in relation thereto.

Based on the recommendations of the of HR and Nomination Committee theBoard of Directors at its meeting held on May 17 2022 reviewed and updated the aforesaidPolicy. The policy is aligned with global best practices & international standards andincludes the following features:

a) total Rewards Package for Managing Director & CEO and relevantmembers of Senior Management is linked with sustainability targets and long termperformance of the Company.

b) deferred/variable remuneration (including Long Term incentive) ofDirectors KMPs and members of Senior Management is subject to malus/clawback arrangementsin the manner as specified in the Policy.

The revised policy is available on the Company's website athttps://assets.airtel.in/teams/simplycms/web/docs/BAL-policy-on-nomination-remuneration-and-board-diversity.pdf.

Annual Board Evaluation and Familiarisation Programme for Board Members

The HR and Nomination Committee has put in place a robust framework forevaluation of the Board Board Committees and individual Directors including Chairman.During the reporting year customised questionnaires were circulated responses wereanalysed and the results were subsequently discussed by the Board. Recommendations arisingfrom this entire process were deliberated upon by the Board for these to be usedconstructively in order to enhance its overall effectiveness. A detailed disclosure on theframework of Board evaluation including outcome and action plan has been provided in theReport on Corporate Governance which forms a part of the Integrated Annual Report.

A note on the familiarisation programme adopted by the Company fororientation and training of the Directors and the Board evaluation process undertaken incompliance with the provisions of the Act and the Listing Regulations is provided in theReport on Corporate Governance which forms a part of the Integrated Annual Report.

Board Committees and Meetings of the Board and Board-Committees

In compliance with the statutory requirements the Company hasmandatory Committees viz. Audit Committee HR and Nomination Committee Corporate SocialResponsibility Committee Risk Management Committee and Stakeholders' RelationshipCommittee. The Company has also established Operating Committees viz. Committee ofDirectors and Airtel Corporate Council.

To sharpen Company's focus on Environmental Social and Governanceagenda and long term stakeholder value creation the Company constituted EnvironmentalSocial and Governance (ESG) Committee during the financial year.

In addition to the above there are other Committees constituted forspecial purposes/transactions in the areas of fund raising and restructuring like SpecialCommittee of Directors for Debt Fund Raising Special Committee of Directors forevaluation of stake in Indus Towers Limited Special Committee of Directors to evaluatere-organization of Business and Shareholding Structure etc.

All the recommendations made by the Committees of the Board includingthe Audit Committee were accepted by the Board.

The Board of Directors met 11 times during the previous year. Adetailed update on the Board its composition governance of committees including detailedcharter terms and reference of various Board Committees number of Board and Committeemeetings held during FY 2021-22 and attendance of the Directors thereat is provided inthe Report on Corporate Governance which forms part of the Integrated Annual Report.

Subsidiary Associate and Joint Venture Companies

As on March 31 2022 your Company has 108 subsidiaries 7 associatesand 6 joint ventures.

During the year under review Bharti Airtel Ghana Holdings B.V. LimitedAirtel Ghana Limited Airtel Mobile Commerce (Ghana) Limited ceased to be Joint VentureCompanies and Tanzania Towers Limited Madagascar Towers S.A. Malawi Towers Limitedceased to be subsidiaries of the Company.

During the financial year 2021-22 the Company acquired 33.33% stake inHughes Communications India Private Limited (‘Hughes'). Further the Company hasacquired 25% equity shares of Lavelle Networks Private Limited (‘Lavelle')pursuant to the Investment Agreement entered into between the Company and Lavelle.Accordingly Hughes and Lavelle became associate companies during the financial year.

Pursuant to Section 129(3) of the Companies Act 2013 read with Rule 5of Companies (Accounts) Rules 2014 a statement containing salient features of financialstatements of subsidiary associate and joint venture companies in prescribed form AOC-1is annexed to the Consolidated Financial Statements of the Company which forms part of theAnnual Report. The said statement also provides the details of performance and financialposition of each subsidiary associate and joint venture and their contribution to theoverall performance of the Company.

The audited financial statements of each subsidiary associate andjoint venture companies are available for inspection at the Company's registeredoffice and at registered offices of the respective companies. The financial statements ofeach of the subsidiary companies are also available on the Company's website athttps://www.airtel.com. A copy of the same will also be available electronically forinspection by the members during the AGM.

The physical copies of annual financial statements of the subsidiaryassociate and joint venture companies will also be made available to the investors of theCompany and those of the respective companies upon request.

Auditors and Auditors' Report Statutory Auditors

In terms of the provisions of Section 139 of the Companies Act 2013Deloitte Haskins & Sells LLP were appointed as the Company's Statutory Auditorsby the shareholders in the AGM held on July 24 2017 for a period of five years i.e. tillthe conclusion of 27th AGM.

On the recommendation of the Audit Committee the Board in its meetingheld on May 17 2022 subject to the approval of the shareholders has recommended there-appointment of Deloitte Haskins & Sells LLP Chartered Accountants (firmregistration number 117366W-W100018) (‘Deloitte') as the Statutory Auditors ofthe Company to hold office for a term of further five consecutive years i.e. from theconclusion of ensuing 27th AGM till the conclusion of 32nd AGM.Accordingly the re-appointment of Deloitte as the Company's Statutory Auditors isplaced for approval of the members at the ensuing AGM. The Company has received acertificate from Deloitte to the effect that their reappointment if made shall be inaccordance with the provisions of Section 141 of the Act.

The Board has duly examined the Statutory Auditors' Report to thefinancial statements which is self-explanatory. Clarifications wherever necessary havebeen included in the Notes to financial statements section of the Integrated Report.

As regards the comments under para i(a) of the Annexure B to theIndependent Auditors' Report regarding updation of quantitative and situation detailsrelating to certain fixed assets the Company as per the program of physical verificationof fixed assets to cover all the items over a period of three years conducted physicalverification of fixed assets during the quarter ended March 31 2022. The Company is inthe process of updating quantitative and situation details relating to certain fixedassets which were identified during the physical verification exercise. This same isexpected to be completed by December 2022.

As regards the comments under para i(c) of the Annexure B to theIndependent Auditors' Report regarding no physical verification of customer premisesequipment bandwidth and certain assets due to their nature or location; the customerpremises equipment are located at subscriber's premises and physical check of theequipment is generally not possible. As regards the comments under para i(d) of theAnnexure B to the Independent Auditors' Report regarding transfer of title deed inthe name of the Company the ownership of these properties is transferred and vested inthe name of the Company through merger scheme. The Company is in the process of gettingthe title deeds transferred in name of the Company. As regards to the comments under paraix(d) of the Annexure B to the Independent Auditors' Report regarding fund raised onshort term basis used for long term purpose the Company has used such funds as bridgefinancing and is able to generate sufficient funds from long term sources to meet theworking capital requirement.

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

Internal Auditors and Internal Assurance Partners

The Company has in place a robust Internal Assurance Group (IAG) whichis led by the Chief Internal Auditor and ably supported by reputed independent firms i.e.Ernst & Young LLP Chartered Accountants and ANB & Co. Chartered Accountants asthe Internal Assurance Partners. The audit conducted by the Chief Internal Auditor andInternal Assurance Partners is based on an internal audit plan which is reviewed eachyear by the Audit Committee in consultation with the IAG. These audits are based on riskbased methodology and inter-alia involve the review of internal controls and governanceprocesses adherence to management policies and review of statutory compliances. TheInternal Assurance Partners share their findings on an ongoing basis for correctiveaction.

The work of Internal Assurance Partners is coordinated by the internalteam lead by Chief Internal Auditor. This combination of our internal team and expertiseof reputed independent professional firms (Internal Assurance Partners) ensuresindependence as well as effective value addition and protection

The Board on the recommendation of the Audit Committee hasre-appointed Ernst & Young LLP Chartered Accountants and ANB & Co. CharteredAccountants as the Internal Assurance Partners for FY 2022-23.

Cost Auditors

The Board on the recommendation of the Audit Committee had approvedthe appointment of Sanjay Gupta & Associates Cost Accountants as Cost Auditors forthe financial year ending March 31 2022. The Cost Auditors will submit their report forFY 202122 within the timeframe prescribed under the Companies Act 2013 and rules madethereunder.

The Board on the recommendation of Audit Committee has re-appointedSanjay Gupta & Associates Cost Accountants as Cost Auditors of the Company for FY2022-23.

Cost Audit report for the FY 2020-21 did not contain any qualificationreservation disclaimer or adverse remark.

In accordance with the provisions of Section 148 of the Companies Act2013 read with the Companies (Audit and Auditors) Rules 2014 since the remunerationpayable to the Cost Auditors has to be ratified by the shareholders the Board recommendsthe same for approval by shareholders at the ensuing AGM.

Cost Records

Maintenance of cost records has been specified by the CentralGovernment under section 148(1) of the Companies Act 2013 and the prescribed cost recordshave been made and maintained by the Company.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act and rules madethereunder the Board of Directors had appointed Chandrasekaran Associates CompanySecretaries as Secretarial Auditors for the financial year ended March 31 2022. TheSecretarial Auditor has submitted their report confirming inter-alia compliance by theCompany of all the provisions of applicable corporate laws and does not contain anyqualification reservation disclaimer or adverse remark.

The Secretarial Audit Report is annexed as Annexure A to theBoard's Report.

The Board on the recommendation of Audit Committee has re-appointedChandrasekaran Associates Company Secretaries New Delhi as Secretarial Auditors of theCompany for FY 2022-23.

Sustainability Journey

During the year ESG Committee was formed to sharpen focus towardsEnvironmental Sustainability and Governance (ESG) agenda. The ESG Committee will providestrategic guidance and oversight to the Company's progress on ESG targetsinitiatives and best practices. This will also include initiatives to respond tochallenges posed by climate change through sustainable business practices.

The Company firmly believes that the Information and CommunicationTechnology (ICT) plays an important role in helping the world move towards low carboneconomy sustainability growth and community development. The Company's servicesleverage the power of ICT by providing the people quality connectivity required tofunction in an advancing world. The Company's business model is consistently growingand thereby contributing to create an inclusive and empowered society. To continue toachieve this objective the Company is adopting best practices to include and integratesustainable practices in its strategies and operations. Keeping this in mind theIntegrated Annual Report presents both material financial and non-financial aspects ourperformance.

The awareness of ESG priorities has become a necessity. At Airtelclimate change is considered as one of the most critical growing ESG risk. The Company iscommitted to reach net zero emissions by 2050 which is in line with Science-Based TargetInitiatives (SBTi) recommendations. The Company had undertaken the materiality assessmentexercise during last reporting year to understand the environmental social andgovernance (ESG) issues that might impact our business.

The Company strives to provide long-term sustainable value to all itsstakeholders including customers investors employees suppliers network partnerschannel partners government & regulatory bodies communities and NGOs. Apart fromthis we stay customer-obsessed and innovation driven in this digital world.

The Company's sustainability initiatives towards topics that arematerial to its stakeholders and to the Company have also been reported on its website athttps://www.airtel.in/sustainability.

Corporate Social Responsibility

At Airtel business success is notjust about profits and shareholderreturns. As a good corporate citizen Airtel is committed to nation building throughimpactful interventions. We have been actively undertaking community developmentinitiatives towards realization of a prosperous society by collaborating with diversestakeholders. Giving back to the very community that helps our business thrive and sustainhas been our priority since inception. Airtel has been an early adopter of CSR initiativesand it established Bharti Foundation the philanthropic arm of Bharti Enterprises back in2000 with the objective of transforming the lives of children and youth by proactivelyimplementing and supporting programs in primary secondary and higher education as well assanitation. Airtel and its subsidiaries have been working relentlessly with BhartiFoundation and other NGOs since last two decades to pursue wider socio-economic andcultural objectives and have always endeavoured to not just meet but try and exceed theexpectations of the communities in which we operate.

Our subsidiaries in Africa are also committed in making a distinctiveand positive impact in the Continent with focus on education health and wellbeing anddisaster relief by partnering with governments and non-governmental organizations (NGOs)and also by reaching out directly to individuals and communities to address theirsocio-economic and environmental challenges.

While in terms of applicable provisions of Section 135 of theCompanies Act 2013 the Company was not obligated to contribute towards Corporate SocialResponsibility (‘CSR') activities during financial year 2021-22 the Company hasmade voluntary CSR contribution of Rs 16.43 Mn during the financial year 2021-22 and alsocontributed Rs 14.68 Mn to various other charitable institutions.

The direct subsidiaries of the Company have contributed Rs 324.38 Mnand associates / joint venture entities have contributed Rs 356.29 Mn towards various CSRactivities which is in addition to the voluntary CSR contribution of the Company underSection 135 of Companies Act 2013. In line with its commitment to address socio-economicand environmental challenges our subsidiaries in Africa spent approx. USD 2.2 Mn in theprevious financial year.

The above voluntary and other contribution reflects the Company'scommitment to pursue socio economic and cultural objectives for benefit of society atlarge. The Company is committed to build its CSR capabilities on a sustainable basis andundertake CSR activities as and when the opportunity arises.

As a good corporate citizen Airtel is committed to nation buildingthrough impactful interventions. Bharti Foundation the philanthropic arm of Airtel is astrong and well governed institution which undertakes programs towards upliftingcommunities by supporting holistic education programs at multiple level. The funding toBharti Foundation is based on assessment of its requirements.

A detailed update on the CSR initiatives of the Company is provided inthe Corporate Social Responsibility Report which forms part of this Integrated Report.

The CSR Committee of the Directors is in place in terms of Section 135of the Companies Act 2013. The details of CSR Committee including composition terms ofreference etc. are provided in the Report on Corporate Governance which forms part ofthis Integrated Annual Report. The CSR Committee has formulated and recommended to theBoard a CSR Policy outlining inter-alia CSR philosophy of the Company. The said policyis available on the Company's website at https://assets.airtel.in/teams/simplycms/web/docs/Bharti Airtel-Updated CSR Policy June2021.pdf.

The annual report on Corporate Social Responsibility u/s 135 of theCompanies Act 2013 is annexed as Annexure B to the Board's Report.

Integrated Reporting

The Securities and Exchange Board of India ("SEBI") videcircular no: SEBI/HO/CFD/CMD/CIR/P/2017/10 dated February 06 2017 had recommendedvoluntary adoption of ‘Integrated Reporting' (IR) from 2017-18 by the top 500listed companies in India. Airtel continues with its integrated reporting journey in thecurrent fiscal aligning with its philosophy of being a highly transparent and responsiblecorporate citizen. This is the Company's fifth Integrated Report wherein it isguided by the principles of International Integrated Reporting Framework developed by theInternational Integrated Reporting Council ("IIRC"). The Board acknowledges itsresponsibility for the integrity of the report and the information contained therein. Thereport encompasses both financial and non-financial information to enable the Members totake well informed decisions and have a better understanding of the Company's longterm perspective and value creation for all the stakeholders.

Business Responsibility & Sustainability Report

In accordance with the amended Regulation 34(2)(f) of ListingRegulations read with SEBI Circular no. SEBI/HO/CFD/CMD-2/P/ CIR/2021/562 dated May 102021 the Company has voluntary adopted Business Responsibility & SustainabilityReporting (BRSR) for the FY 2021-22 describing the initiatives taken by the Company fromenvironmental social and governance perspective. In addition the Company has alsoprepared the Business Responsibility Report (BRR) for the FY 2021-22 which is availableon the website of the Company at www.airtel.com.

Management Discussion and Analysis Report

Pursuant to Regulation 34 of the Listing Regulations the ManagementDiscussion and Analysis Report for the year under review is presented in a separatesection forming part of this Integrated Annual Report.

Corporate Governance Report

A detailed report on Corporate Governance pursuant to the requirementsof Regulation 34 of the Listing Regulations forms part of this Integrated Report.

A certificate from Deloitte Haskins & Sells LLP CharteredAccountants the Statutory Auditors of the Company confirming compliance of conditions ofCorporate Governance during FY 2021-22 as stipulated under the Listing Regulations isannexed as Annexure C to the Board's Report.

Statement containing additional information as required under ScheduleV of the Act

A statement containing additional information as required under ClauseIV of Section II of Part II of Schedule V of the Companies Act 2013 is provided in theReport on Corporate Governance which forms part of this Integrated Annual Report.

Risk Management

Risk management is embedded in Bharti Airtel's operatingframework. The Company believes that risk resilience is key to achieving long termsustainable growth. To this effect there is a process in place to identify key risksacross the group and prioritise relevant action plans to mitigate these risks.

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

The Risk Management Framework is reviewed periodically by the RiskManagement Committee which includes discussing the Management submissions on risksprioritising key risks and approving action plans to mitigate such risks.

The Company has duly approved Risk Management Policy. The objective ofthis policy is to have a well-defined approach to risk. The policy lays down broadguidelines for timely identification assessment and prioritisation of risks affectingthe Company in the short term and in the foreseeable future. The policy suggests framingan appropriate response action for the key risks identified so as to make sure that therisks are adequately addressed or mitigated.

The Chief Risk Officer is responsible for assisting the 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 the ManagementBoards in India and South Asia and at the operating level by Executive Committees ofcircles in India and operating companies in the international operations.

Detailed discussion on risk management forms part of the ManagementDiscussion and Analysis under the section ‘Risks and Concerns' which forms partof this Integrated Annual Report. At present in the opinion of the Board of Directorsthere are no risks which may threaten the existence of the Company.

Internal Financial Controls and their Adequacy

The Company has established a robust framework for internal financialcontrols. It 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.

Your Board reviews the internal processes systems and the internalfinancial controls and accordingly the Directors' Responsibility Statement containsa confirmation as regards adequacy of the internal financial controls. Assurances on theeffectiveness of Internal Financial Controls is obtained through management reviewsself-assessment continuous monitoring by functional heads as well as testing of theinternal financial control systems during the course of audits. We believe that thesesystems provide reasonable assurance that our internal financial controls are designedeffectively and are operating as intended.

Compliance Management

The Company has in place a robust automated Compliance Framework basedon the global inventory of all applicable laws and compliance obligations which areregularly monitored and updated basis the changing requirements of law. Proactiveautomated alerts are sent to compliance owners to ensure compliance within stipulatedtimelines. The compliance owners certify the compliance status which is reviewed bycompliance approvers and a consolidated dashboard is presented to the respective BusinessLeaders and the Managing Director & CEO. A certificate of compliance of all applicablelaws and regulations along with exceptions report and mitigation plan if any is placedbefore the Audit Committee and Board of Directors on a quarterly basis. Additionally theCompany has centralised automated tool in place viz. Notice Management System to regularlymonitor and update the legal notices and court cases.

Other Statutory Disclosures

Vigil Mechanism

Bharti Airtel has adopted a Vigil Mechanism/Whistle Blower Policy whichforms part of Code of Conduct of the Company. It outlines the method and process forstakeholders to voice genuine concerns about unethical conduct that may be in actual orthreatened breach with the Company's Code of Conduct. The Policy is available on theCompany's website at https://assets.airtel.in/teams/simplycms/web/docs/Code-of-Conduct-2022. pdf.

A brief note on the highlights of the Whistle Blower Policy andcompliance with Code of Conduct including the changes to map it with global best practicesis also provided in the Report on Corporate Governance which forms part of the IntegratedAnnual Report.

Annual Return

In terms of Section 92(3) read with Section 134(3(a) of the Act andrules thereto the Annual Return of the Company in Form MGT - 7 for the financial yearended on as on March 31 2022 in accordance with Section 92(3) of the Act read with theCompanies (Management and Administration) Rules 2014 is available on the Company'swebsite at https://www. airtel.in/about-bharti/equity/results. The Annual Return will beelectronically submitted to the Registrar of Companies within the timelines prescribedunder the Act.

Prevention of Sexual Harassment at Workplace

In compliance with Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 the Company has an Internal Complaints Committee forproviding a redressal mechanism pertaining to sexual harassment of employees at workplaceand any such incident can be reported to the Internal Complaints Committee. Detailsregarding the policy including the details of the complaints received and disposed offare provided in the Report on Corporate Governance and Business Responsibility &Sustainability Reporting which form part of this Integrated Annual Report.

Significant and Material Orders

During the financial year 2021-22 there are no significant andmaterial orders passed by the regulators or courts or tribunals impacting the goingconcern status and the Company's operations in the future.

Particulars of Loans Guarantees and Investments

In compliance with the provisions of the Act and Listing Regulationsthe Company extends financial assistance in the form of investment loan guarantee etc.to its subsidiaries from time to time in order to meet their business requirements.Further the Company or any of its subsidiary has not extended any financial assistance topromoter or promoter group entities which has been written off during last 3 years.

Particulars of loans guarantees and investments form part of Note no.9 22 and 7 respectively to the standalone financial statements provided in thisIntegrated Annual Report.

The Company is in the business of providing telecom services (wirelesstelecommunications activities) and accordingly is covered under the definition of‘infrastructure facilities' in terms of Section 186 read with Schedule VI of theAct.

Related Party Transactions

A detailed note on the procedure adopted by the Company in dealing withcontracts and arrangements with related parties is provided in the Report on CorporateGovernance which forms part of the Integrated Annual Report.

During the financial year 2021-22 the Company has entered intomaterial related party transaction with Indus Towers Limited (Joint venture entity) as perthe amended Listing Regulations pursuant to the shareholder's approval at theExtra-ordinary General Meeting held on February 26 2022. Necessary disclosure in formAOC-2 with respect to the aforesaid transactions is given in Annexure D of theBoard's Report. Save and except the above the Company has not entered into any otherarrangement/ transaction with related parties which could be considered material inaccordance with the Company's Policy on Related Party Transactions read with theListing Regulations during the year under review. Further all arrangements/transactionsentered into by the Company with its related parties during the year under review were inthe ordinary course of business and on an arm's length compliant terms.

In compliance with the requirement of Listing Regulations names ofrelated parties and details of transactions with them have been included in Note no. 33 tothe financial statements provided in this Integrated Annual Report.

To align the Policy on the Related Party Transactions of the Companywith recent amendments in Listing Regulations the Board at its meeting held on February8 2022 on the recommendations of Audit Committee approved amendments in the said Policyw.e.f. April 1 2022. The updated Policy on the Related Party Transactions is available onthe Company's website at https://assets.airtel.in/teams/simplycms/web/docs/ RPTPolicy.pdf.

Energy Conservation Technology Absorption and Foreign ExchangeEarnings and Outgo

The details of energy conservation technology absorption and foreignexchange earnings and outgo as required under Section 134(3) of the Companies Act 2013read with the Rule 8 of Companies (Accounts of Companies) Rules 2014 is annexed asAnnexure E to the Board's report.

Particulars of Employees

Disclosures relating to remuneration of Directors u/s 197(12) of theAct read with Rule 5(1) of Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is annexed as Annexure F to the Board's Report.

Particulars of employee remuneration as required under Section 197(12)of the Act and read with Rule 5(2) and Rule 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 forms part of this Integrated AnnualReport. In terms of the provisions of the first proviso to Section 136(1) of the Act theIntegrated Annual Report is being sent to the shareholders excluding the aforementionedinformation. The information will be available on the Company's website athttps://www.airtel.in/about-bharti/eauity/results and will also be available forinspection at the registered office of the Company on all working days (Monday to Friday)between 11.00 a.m. and 1.00 p.m. upto the date of AGM and a copy of the same will also beavailable electronically for inspection by the members during the AGM. Any memberinterested in obtaining such information may write to the Company Secretary at theRegistered Office of the Company.

Further none of the Executive Directors of the Company received anycommission from the Company hence disclosure under Section 197(14) of the Companies Act2013 is not applicable for FY 2021-22.

Directors' Responsibility Statement

Pursuant to Section 134 of the Companies Act 2013 the Directors tothe best of their knowledge and belief confirm that:

a) i n preparation of the annual accounts the applicable accountingstandards had been followed along with proper explanation relating to materialdepartures;

b) the Directors had selected such accounting policies and applied themconsistently and made judgements and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit and loss of the Company for that period;

c) the Directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

d) the Directors had prepared the annual accounts on a going concernbasis;

e) the Directors had laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively;

f) the Directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.

Key initiatives with respect to stakeholder relationship customerrelationship environment sustainability health safety and welfare of employees

The key initiatives taken by the Company with respect to stakeholderrelationship customer relationship environment sustainability health and safety areprovided separately under various Capitals in this Integrated Annual Report.

The Environment Health and Safety Policy and Human Rights Policy areavailable on the website of the Company at https://www.airtel.in/sustainability-file/embedding-sustainability.

Compliance of Secretarial Standards

Pursuant to the provisions of Section 118 of the Act during FY 2021-22the Company has complied with the applicable provisions of the Secretarial Standards (SS-1and SS-2) relating to ‘Meetings of the Board of Directors' and ‘GeneralMeetings' issued by the Institute of Company Secretaries of India and notified byMinistry of Corporate Affairs.

Acknowledgements

The Board wishes to place on record their appreciation to theDepartment of Telecommunications (‘DoT') the Central Government and StateGovernments in India Government of Bangladesh Government of Sri Lanka and Governments inthe 14 countries in Africa Company's bankers and business associates for theassistance co-operation and encouragement extended to the Company.

The Directors regret the loss of lives due to COVID-19 pandemic andextend their deep appreciation to the employees for their continuing support andunstinting efforts in ensuring an excellent all-round operational performance despite theunprecedented challenges posed by the pandemic. The Directors would like to thank BhartiTelecom Limited Singapore Telecommunications Ltd. and other shareholders for theirsupport and contribution. We look forward to their continued support in future.

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