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Bharti Airtel Ltd (BHARTIARTL) -BSE
728.05 1.30 (0.18%) 22-Sep-2021 |11:37
PREV.CLOSE OPEN PRICE HIGH(Rs) LOW(Rs) VOLUME(Rs) 52AVG.RANGE MARKET CAP(Rs.Cr) P/E Div Yield (%) Eps (Rs)
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Directors Report

Dear Members,

Your Directors hereby submit the 26th Board Report of the Company’s business and operations, together with the audited financial statements for the financial year ended March 31, 2021

Company Overview

Bharti Airtel is one of the world’s leading providers of telecommunication services with operations in 18 countries across Asia and Africa. The Company’s diversified service range includes mobile, voice and data solutions, using 2G, 3G and 4G technologies. It provides telecom services under wireless and fixed line technology, national and international long distance connectivity, broadband services, Digital TV; and complete integrated telecom solutions to its enterprise customers. All these services are rendered under a unified brand ‘Airtel’, either directly or through subsidiary companies. Airtel Money (known as ‘Airtel Payments Bank’ in India) extends the Company’s product portfolio to further its financial inclusion agenda and offers convenience of payments and money transfers on mobile phones over secure and stable platforms in India, and across all

14 countries in Africa.

The Hon’ble National Company Law Tribunal, Chandigarh Bench, vide its order dated May 31, 2019 had sanctioned the Scheme of Amalgamation of Bharti Infratel Limited into and with Indus Towers Limited. During the financial year 2020-21, all the requisite approvals from the authorities were received and a certified copy of the Hon’ble National Company Law Tribunal order was filed with the Registrar of Companies on November 19, 2020 i.e. the effective date of merger. Consequently, the Company’s 53.51% shareholding in Bharti Infratel Limited was reduced to 36.73% in Indus Towers Limited (‘merged entity’). On December 2, 2020 and December 28, 2020, the Company acquired an additional stake of 4.93% and 0.06%, respectively, in the merged entity, increasing its equity stake from 36.73% to 41.73%. Accordingly, the Company owns 41.73% stake in Indus Towers Limited as on March 31, 2021.

Financial Results

In compliance with the provisions of the Companies Act, 2013 ("Act"), and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the Company has prepared its standalone and consolidated financial statements as per Indian Accounting Standards ("Ind AS") for FY 2020-21. The standalone and consolidated financial highlights of the Company’s operations are as follows:

Standalone Financial Highlights

FY 2020-21 FY 2019-20
Particulars G Mn USD Mn* Rs. Mn USD Mn*
Gross revenue 643,259 8,655 543,171 7,680
EBITDA before exceptional items 286,502 3,855 206,315 2,917
Cash profit from operations 183,387 2,467 121,502 1,718
Earnings before taxation (184,652) (2,484) (510,209) (7,214)
Net income/(loss) (251,976) (3,390) (360,882) (5,102)

(*1USD=74.32 Exchange rate for the financial year ended March 31, 2021) (*1USD=70.73 Exchange rate for the financial year ended March 31, 2020)

Consolidated Financial Highlights

FY 2020-21

FY 2019-20

Particulars G Mn USD Mn* Rs. Mn USD Mn*
Gross revenue 1,006,158 13,538 846,765 11,972
EBITDA before exceptional items (461,387) 6,208 347,696 4,916
Cash profit from operations 315,852 4,250 227,859 3,222
Earnings before taxation (144,882) (1,949) (461,304) (6,522)
Net income/(loss) # (150,835) (2,029) (321,832) (4,550)

(*1USD=74.32 Exchange rate for the financial year ended March 31, 2021) (*1USD=70.73 Exchange rate for the financial year ended March 31, 2020) # This includes Net income/(loss) for continuing and discontinuing operations.

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

Change in the Nature of Business

There was no change in the nature of business of the Company during the financial year ended on March 31, 2021.

COVID Update

The COVID-19 pandemic continues this year as well, with the second wave registering a much higher rate of transmission and greater intensity on account of infectious and perhaps virulent strain.

The Company has taken several steps to manage this crisis, which have been detailed in the Management Discussion and Analysis Report. This situation continues to evolve and monitoring is being done closely to identify key risks and taking immediate actions to minimise any potential disruption from the pandemic to our business. At the same time, the Company recognises its critical role as a telecom operator in keeping its customers and nation connected in such times.

The Company has constantly engaged with its people with compassion, resilience and focus to ensure that morale is high. Further, the Company has abided by every safety and physical distancing norm and has been consistently communicating the same to both its employees and customers. The Company has encouraged people to work from home to ensure their safety and well-being. Airtel stands in solidarity with the Government of India and all citizens of India, and the Company’s efforts towards the betterment of one and all will continue unabated.

Secretarial Standards

Pursuant to the provisions of Section 118 of the Companies Act, 2013, the Company has complied with the applicable provisions of theSecretarial Standards issued by the Institute of Company Secretaries of India and notified by the Ministry of Corporate Affairs.

Share Capital

During FY 2020-21, there is no change in the authorised share capital of the Company and it stood at Rs.147,780,000,000 divided into 29,555,980,000 equity shares of face value of Rs.5/- each and 1,000 preference shares of Rs.100/- each.

During FY 2020-21, the Company redeemed 497, 10% unlisted, fully paid-up, redeemable, non-participating non-cumulative preference shares of Rs.100/- each at par. Further, the Company issued and allotted 36,469,913 equity shares of face value Rs.5/- each on March 22, 2021 to Lion Meadow Investment Ltd., an affiliate to Warburg Pincus LLC on preferential basis for consideration other than cash at an issue price of Rs.600/- each towards partial consideration for acquisition of 20% additional shareholding in Bharti Telemedia Limited, a subsidiary Company.

Consequent to the aforesaid allotment, the paid-up share capital of the Company has increased to Rs.27,460,136,340 divided into 5,492,027,268 equity shares of face value of Rs.5/- each.

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

Reserves

During the year, the Company has transferred Rs.57 Mn into General Reserve from the Share Based Payment Reserve pertaining to gain/ loss on exercise/ lapse of vested options.

Dividend

Your Directors have not recommended any dividend for FY 2020-21.

Dividend Distribution Policy

As per Regulation 43A of the Listing Regulations, top 1,000 listed companies are required to formulate a dividend distribution policy.

Accordingly, the Company had adopted the dividend distribution policy, which sets out the parameters and circumstances to be considered by the Board in determining the distribution of dividend to its shareholders and/ or retaining profits earned by the Company. The policy is enclosed as Annexure A to the

Board’s Report and is also available on the Company’s website at https://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 FY 2020-21, the Company has transferred the unpaid/ unclaimed dividend pertaining to FY 2012-13, amounting to Rs.1,018,273, to the Investors Education and Protection Fund ("IEPF") Account established by the Central Government. The

Company has also uploaded the details of unpaid and unclaimed dividend amounts lying with the Company as on August 18,

2020 (date of last Annual General Meeting) on the Company’s website https://www.airtel.com.

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

2016, as amended, the shares on which dividend remains unpaid/ unclaimed for seven consecutive years or more shall be transferred to the IEPF after giving due notices to the concerned shareholders. Accordingly, the Company has transferred 17,253 equity shares to the IEPF during FY 2020-21. The details of equity shares transferred are also available on the Company’s website https://www.airtel.com.

The shareholders whose unpaid dividend/ shares are transferred to the IEPF can request the Company/ Registrar and Transfer

Agent, as per the applicable provisions in the prescribed Form No. IEPF-5, for claiming the unpaid dividend/ shares out of the IEPF. The process for claiming the unpaid dividend/ shares out of the IEPF is also available on the Company’s website at https:// www.airtel.in/about-bharti/equity/shares.

Deposits

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

Significant Developments

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

Composite scheme of arrangement between Bharti

Airtel Limited, Bharti Airtel Services Limited, a wholly-owned subsidiary company, Hughes Communications

India Limited (now known as Hughes Communications India Private Limited) and HCIL Comtel Limited (now known as HCIL Comtel Private Limited)

The Hon'ble National Company Law Tribunal, New Delhi, Principal Bench, has, vide its order dated March 23, 2021, sanctioned the Composite Scheme of arrangement between Bharti Airtel Limited, Bharti Airtel Services Limited, Hughes Communications India Private Limited and HCIL Comtel Private Limited and their respective shareholders and creditors under Sections

230 to 232 of the Companies Act, 2013 ('Scheme') providing for the transfer of the VSAT Undertaking (defined under the

Scheme) of the Company and Bharti Airtel Services Limited and vesting of the same with Hughes Communications India Private Limited and HCIL Comtel Private Limited respectively on a going concern basis by way of a slump sale. As on the date of this report, the Scheme is subject to the requisite regulatory/ statutory approvals. The Independent valuation report and fairness opinion obtained by the Company in this regard, are available on website of the Company at https://www.airtel.in/ about-bharti/equity/shares.

Composite scheme of arrangement between Bharti

Airtel Limited, Nettle Infrastructure Investments Limited, Airtel Digital Limited, Telesonic Networks Limited and Airtel Limited

The Company announced a new corporate structure on April 14, 2021 to sharpen its focus on driving the rapidly unfolding digital opportunity in India while enabling it to unlock value.

To give effect to this proposed rearrangement, the Board of Directors of the Company, in its meeting held on April 14, 2021, has approved the composite scheme of arrangement between the Company, Nettle Infrastructure Investments Limited, Airtel Digital Limited, Telesonic Networks Limited and

Airtel Limited and their respective shareholders and creditors under sections 230 to 232 and other applicable provisions of the Companies Act, 2013 (‘Scheme’) for: (a) amalgamation of

Nettle Infrastructure Investments Limited, Airtel Digital Limited and Telesonic Networks Limited, wholly-owned subsidiaries with and into Bharti Airtel Limited; and (b) demerger of the Telecom

Business Undertaking of Bharti Airtel Limited and vesting of the same with Airtel Limited, its wholly-owned subsidiary on a going concern basis. As on the date of this report, the Scheme is subject to applicable statutory/ regulatory approvals. The Independent valuation report and fairness opinion obtained by the Company in this regard, are available on website of the Company at https:// www.airtel.in/about-bharti/equity/shares.

Preferential Allotment

During the financial year 2020-21, the Company issued and allotted 36,469,913 equity shares of face value Rs.5/- each to Lion Meadow Investment Ltd., an affiliate to Warburg Pincus LLC on preferential basis for consideration other than cash at an issue price of Rs.600/- each towards partial consideration for acquisition of 20% additional shareholding in Bharti Telemedia Limited, a subsidiary Company.

Senior Notes

During the year ended March 31, 2021, the Company has issued unsubordinated, direct, unconditional and unsecured senior notes of USD 750 Mn (Rs.54,795) at an issue price of USD 99.908, due on June 3, 2031. The notes bear interest at a rate of 3.25% per annum payable semi-annually in arrears. These senior notes have been classified as debt instruments.

During the year ended March 31, 2021, Network i2i Limited (a wholly-owned subsidiary of the Company) has issued subordinated perpetual securities of USD 500 Mn (Rs.36,358) at an issue price of USD 99.888 which are guaranteed by the Company. The notes bear interest at a rate of 3.975% per annum payable semi-annually in arrears.

Capital Market Ratings

As on March 31, 2021, the Company was rated by two domestic rating agencies, namely CRISIL and ICRA, and three international rating agencies, namely Fitch Ratings, Moody’s and S&P. As on March 31, 2021, CRISIL and ICRA assigned their long-term ratings of the Company to [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 maintained the rating at BBB-/ Stable. S&P and Moody’s revised their outlook and rating to BBB-/ Negative and to Ba1/ Negative, respectively, during the year.

Employee Stock Option Plan

At present, the Company has two Employee Stock Options

(ESOP) schemes, namely the Employee Stock Option Scheme

2001 and the Employee Stock Option Scheme 2005. Beside attracting talent, the schemes also helped retain talent and experience. The HR and Nomination Committee administers and monitors the Company’s ESOP schemes.

Both the ESOP schemes are currently administered through

Bharti Airtel Employees Welfare Trust (ESOP Trust), whereby shares held by the ESOP Trust are transferred to the employee upon exercise of stock options as per the terms of the Scheme. Pursuant to the provisions of SEBI (Share Based Employee

Benefits) Regulations, 2014 (the ESOP Regulations), a disclosure with respect to ESOP Scheme of the Company as on March 31, 2021, has been uploaded on the Company’s website at https:// www.airtel.in/about-bharti/equity/results.

During the previous year, there were no material changes in the aforesaid ESOP schemes of the Company and the ESOP schemes are in compliance with ESOP regulations. The Company has received a certificate from Deloitte Haskins & Sells

LLP, Chartered Accountants, Statutory Auditors of the Company, certifying that the schemes are implemented in accordance with SEBI’s Shared Based Employee Benefits (SBEB) Regulations and the resolutions passed by the members. The certificate is available for inspection by members in electronic mode.

Material changes and commitments affecting the financial position between the end of the financial year and date of sheet date

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

Debentures

During the financial year, the Company has not issued any debentures. The following debentures were redeemed after the closure of financial year 2020-21:

15,000 Series II debentures having a face value of Rs.1 Mn per debenture at a coupon rate of 8.35% per annum.

Further, there are no outstanding debenture as on the date of this report.

Directors and Key Managerial Personnel

Inductions, Re-appointments, Retirements and Resignations

Pursuant to the provisions of the Companies Act, 2013, Mr. Rakesh Bharti Mittal, Director of the Company, will retire by rotation at the ensuing AGM and being eligible, has offered himself for re-appointment. The Board recommends his reappointment.

Mr. Sunil Bharti Mittal, Chairman, will be completing his present term as Chairman of the Company on September 30, 2021. The Board in its meeting held on May 17, 2021, based on the recommendation of the HR and Nomination Committee and subject to the approval of shareholders, has re-appointed Mr. Sunil Bharti Mittal as Chairman of the Company for a further term of five years w.e.f. October 1, 2021.

Ms. Tan Yong Choo resigned from the Company’s Board w.e.f. October 27, 2020. The Board places on record its sincere appreciation for the valuable contribution made by the outgoing Director during her tenure on the Board.

Mr. Tao Yih Arthur Lang was appointed as an Additional Non-Executive Director on the Board on October 27, 2020 and will hold office till the date of the ensuing Annual General Meeting (AGM) The Company has received requisite notice from a member under Section 160 of the Companies Act, 2013, proposing the appointment of Tao Yih Arthur Lang as a Director at the AGM.

Accordingly, the Board recommends his appointment.

A brief resume, nature of expertise, details of directorships held in other companies of the Directors proposed to be appointed/ re-appointed, along with their shareholding in the Company, as stipulated under Secretarial Standard 2 and Regulation 36 of the

Listing Regulations, is appended as an Annexure to the Notice of the ensuing AGM.

Declaration by Independent Directors

The Company has received declarations from all Independent Directors of the Company confirming that they continue to meet the criteria of independence, as prescribed under Section

149 of the Companies Act, 2013, rules made thereunder and Regulations 16 & 25 of the Listing Regulations. The Independent Directors have also confirmed that they have complied with the

Company’s Code of Conduct.

Board Diversity and Policy on Director’s Appointment and Remuneration

The Company believes that building a diverse and inclusive culture is integral to its success. A diverse Board will be able to different skills, qualifications, professional experiences, leverage perspectives and backgrounds, which are necessary for achieving sustainable and balanced development. The Board has adopted a policy on ‘Nomination, Remuneration and Board

Diversity’, which sets out the criteria for determining qualifications, positive attributes and independence of a Director. The detailed policy is available on the Company’s website at https://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 the Board’s Report.

Annual Board Evaluation and Familiarisation Programme for Board Members

The HR and Nomination Committee has put in place a robust framework for evaluation of the Board, Board Committees and individual Directors, including Chairman. During the reporting year, customised questionnaires were circulated, responses were analysed and the results were subsequently discussed by the Board. Recommendations arising from this entire process were deliberated upon by the Board for these to be used constructively in order to enhance its effectiveness. A detailed disclosure on the framework of Board evaluation including outcome and action plan has been provided in the Report on Corporate Governance (page no. 210), which forms a part of this Integrated Report.

A note on the familiarisation programme adopted by the Company for orientation and training of the Directors and the Board evaluation process undertaken in compliance with the provisions of the Companies Act, 2013 and the Listing

Regulations is provided in the Report on Corporate Governance, which forms a part of this Integrated Report.

Board Committees and Meetings of the Board and Board-Committees

In compliance with the statutory requirements, the Company has mandatory Committees viz. Audit Committee, HR and Nomination Committee, Corporate Social Responsibility

Committee, Risk Management Committee and Stakeholders’

Relationship Committee. The Company has also established Operating Committees viz. Committee of Directors and Airtel Corporate Council.

In addition to the above, there are other Committees constituted for special purposes / transactions in the areas of fund raising and restructuring like Special Committee of Directors for

De-consolidation of International Operations, Special Committee of Directors for Debt Fund Raising, Special Committee of

Directors for evaluation of stake in Indus Towers Limited, Special Committee of Directors to evaluate re-organization of Business and Shareholding Structure etc.

All the recommendations made by the Committees of the Board, including the Audit Committee, were accepted by the Board. The Board of Directors met seven (7) times during the previous financial year. A detailed update on the Board, its composition, governance of committees including detailed charter, terms and reference of various Board Committees, number of Board and

Committee meetings held during FY 2020-21 and attendance of the Directors at each meeting is provided in the Report on

Corporate Governance, which forms part of this integrated report.

Subsidiary, Associate and Joint Venture Companies

As on March 31, 2021, Company has 108 subsidiaries, 7 associates and 8 joint ventures.

During FY 2020-21, Airtel Limited, Airtel Mobile Commerce DRC B.V., Airtel Mobile Commerce Gabon B.V., Airtel Mobile Commerce Niger B.V., Airtel Money Kenya Limited, Network i2i (UK) Limited, The Airtel Africa Employee Benefit Trust, Airtel Digital Services Holdings B.V., Airtel Africa Services (UK) Limited became subsidiaries of the Company and Indus Towers Limited (formerly known as Bharti Infratel Limited) and SmarTx Services

Limited became Joint Ventures of the Company.

During FY 2020-21, Africa Towers N.V., Indus Towers Limited (formerly known as Bharti Infratel Limited) and SmarTx Services

Limited ceased to be subsidiaries and Seynse Technologies Private Limited ceased to be associate of the Company.

Pursuant to Section 129(3) of the Companies Act, 2013, read with Rule 5 of Companies (Accounts) Rules, 2014, a statement containing salient features of financial statements of subsidiary, associate and joint venture companies forms part of this Integrated report. The statement also provides the details of performance and financial position of each subsidiary, associate and joint venture and their contribution to the overall performance of the Company.

The audited financial statements of each subsidiary, associate and joint venture companies are available for inspection at the Company’s registered office and at registered offices of the respective companies. The financial statements of each of the subsidiary companies are also available on the Company’s website at https://www.airtel.com. A copy of the same will also be available electronically for inspection by the members during the AGM.

The physical copies of annual financial statements of the subsidiary, associate and joint venture companies will also be made available to the investors of the Company 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, 2013, Deloitte Haskins & Sells LLP were appointed as the Company’s Statutory Auditors by the shareholders in the

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

The Board has duly examined the Statutory Auditors’ Report to the financial statements, which is self-explanatory. Clarifications, wherever necessary, have been included in the Notes to Financial

Statements section of this Integrated 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 fixed assets, the Company as per the program of physical verification of fixed assets to cover all the items over a period of three years, conducted physical verification of fixed assets during the quarter ended March 31, 2020. The Company is in the process to update quantitative and situation details relating to certain fixed assets which were identified during the physical verification exercise. This same is expected to be completed by December 2021.

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 certain assets due to their nature or location; the customer premises equipment are located at subscriber’s premises and physical check of the equipment is generally not possible. In such 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 these properties 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 to COVID-19. The same is expected to be completed by December 2021. 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 led by the Chief Internal Auditor and ably supported by reputed independent firms i.e. Ernst & Young LLP, Chartered Accountants, Gurugram and ANB & Co., Chartered Accountants, Mumbai as the Internal Assurance Partners.

The audit conducted by the Chief Internal Auditor and Internal

Assurance Partners is based on an internal audit plan, which is reviewed each year by the Audit Committee in consultation with the IAG and the Audit Committee. These audits are based on risk based methodology and, inter-alia, involve the review of internal controls and governance processes, adherence to management policies and review of statutory compliances. The Internal Assurance Partners share their findings on an ongoing basis 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, Mumbai as the Internal Assurance Partners for FY 2021-22.

Cost Auditors

The Board, on the recommendation of the Audit Committee, has approved the appointment of Sanjay Gupta & Associates, Cost Accountants, as Cost Auditors, for the financial year ending March 31, 2021. The Cost Auditors will submit their report for FY 2020-21 on or before the due date.

In accordance with the provisions of Section 148 of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, since the remuneration payable to the Cost Auditors has to be ratified by the shareholders, the Board recommends the same for approval by shareholders at the ensuing AGM.

Cost Audit report for FY 2019-20 does not contain any qualification, reservation, disclaimer or adverse remark.

Cost Records

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

Secretarial Auditors

The Company had appointed Chandrasekaran Associates, Company Secretaries, to conduct its Secretarial Audit for the financial year ended March 31, 2021. The Secretarial Auditors have submitted their report, confirming compliance by the

Company of all the provisions of applicable corporate laws. The Report does not contain any qualification, reservation, disclaimer or adverse remark.

The Secretarial Audit Report is annexed as Annexure C to the Board’s report.

The Board, on the recommendation of Audit Committee, has reappointed Chandrasekaran Associates, Company Secretaries,

New Delhi, as Secretarial Auditors of the Company for FY 2021-22.

Sustainability Journey

The Company strongly believes that Information and Communications Technology (ICT) is playing a pivotal role in shaping the future by helping the world advance towards a low carbon economy, sustainable growth and community development. As a leading global communication solution provider, the Company’s services leverage the power of ICT to help elevate the quality of life for people by providing them with the connectivity they need to function in a dynamically advancing world. The Company’s business model is evolving to consistently innovate and thereby, contribute to creating an inclusive and empowered society. To continue progressing towards this objective, the Company is striving to adopt best practices in order to better integrate sustainability into its strategies and operations. With this in mind, we moved to ‘Integrated Reporting’ in line with global IIRC framework during FY 2017-18. The Integrated Reporting has enabled Company to present both material financial and non-financial aspects of performance against the backdrop of a stringent governance framework and robust business model.

The growing awareness of ESG priorities are no longer a choice but a necessity. At Airtel, we consider climate change as one of the most critical emerging ESG risk. During FY 2020-21, we have taken a public goal to reach net-zero emissions (aligned with 1.5oC emission scenarios) by 2050 in line with Science-Based Target Initiatives

(SBTi) recommendations. We also undertook a comprehensive materiality assessment exercise during the year for determining material issues to gather insights on emerging environmental, social and governance (ESG) issues that may impact our business.

The Company relentlessly strives to provide long-term sustainable value to all its stakeholders including customers, investors, suppliers, employees, channel partners, network partners, government & regulatory bodies and communities/ NGOs. While we do this, we stay customer-obsessed and innovation-driven reimagining impactful possibilities in this digital world.

Airtel’s sustainability initiatives towards topics that are material to its stakeholders and to the Company, have also been reported on its website at https://www.airtel.in/sustainability.

Corporate Social Responsibility ("CSR")

The Company did not have profits (average net profits for last three financial years), and accordingly, it was not obligated to contribute towards CSR activities during financial year 2020-21

Despite the unprecedented challenges and pressure on the telecom industry, the Company has made voluntary CSR contribution of Rs.86.10 Mn during the -21.

Further, the Company has also contributed Rs.0.25 Mn to various other charitable institutions.

The above voluntary contribution reflects the Company’s commitment to pursue socio economic and cultural objectives for benefit of society at large. The Company is committed to build its CSR capabilities on a sustainable basis and undertake

CSR activities as and when the opportunity arises.

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

The Annual Report on Corporate Social Responsibility u/s 135 of the Companies Act, 2013 is annexed as Annexure D to the Board’s 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 adoption of ‘Integrated Reporting’ (IR) from 2017-18 by the top 500 listed companies in India. Airtel continues with its integrated reporting journey in the current fiscal, aligning with its philosophy of being a highly transparent and responsible company. This is the Company’s fourth Integrated Report, wherein it is guided by the principles of International Integrated Reporting Framework developed by the International Integrated Reporting Council ("IIRC"). The Board acknowledges its responsibility for the integrity of the report and the information contained therein.

Business Responsibility Report

As stipulated under the Listing Regulations, the Business Responsibility Report, describing the initiatives taken by the Company from environmental, social and governance perspective form a part of this Integrated Report.

Management Discussion and Analysis Report

Pursuant to Regulation 34 of the Listing Regulations, the Management Discussion and Analysis Report for the year under review is presented in a separate section forming part of this

Integrated Report.

Corporate Governance

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

A certificate from Deloitte Haskins & Sells LLP, Chartered Accountants, the Statutory Auditors of the Company, confirming compliance of conditions of Corporate Governance, as stipulated under the Listing Regulations, is annexed as Annexure G to the Board’s report.

A statement containing additional information as required under

Clause IV of Section II of Part II of Schedule V of the Companies

Act, 2013 is provided in the Report on Corporate Governance, which forms part of this Integrated Annual Report.

Statement containing additional information as required under Schedule V of the Companies Act, 2013. year2020

A statement containing additional information, as required under

Clause IV of Section II of Part II of Schedule V of the Companies

Act, 2013, is provided in the Report on Corporate Governance, which forms part of this Integrated Report.

Risk Management

Risk management is embedded in Bharti Airtel’s operating framework. The Company believes that risk resilience is key to achieving higher growth. To this effect, there is a process in place to identify key risks across the group and prioritise relevant action plans to mitigate these risks.

To have a more robust process, the Company had constituted a Risk Management Committee to focus on risk management, including determination of the Company’s risk appetite, risk tolerance and regular risk assessments (risk identification, risk quantification and risk evaluation) etc.

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

The Company has duly approved Risk Management Policy. The objective of this policy is to have a well-defined approach to risk.

The policy lays down broad guidelines for timely identification, assessment, and prioritisation of risks affecting the Company in the short term and in the foreseeable future. The policy suggests framing an appropriate response action for the key risks identified, so as to make sure that the risks are adequately addressed or mitigated.

The Chief Risk Officer is responsible for assisting the Risk

Management Committee on an independent basis with a complete review of the risk assessments and associated management action plans.

Operationally, risk is being managed at the top level by the

Management Boards in India and South Asia and at the operating level by Executive Committees of circles in India and operating companies in the international operations.

Detailed discussion on risk management forms part of the

Management Discussion and Analysis under the section ‘Risks and Concerns’, which forms part of this Integrated Report. At present, in the opinion of the Board of Directors, there are no risks which may threaten the existence of the Company.

Internal Financial Controls and their Adequacy

The Company has established a robust framework for internal financial controls. It has in place adequate controls, procedures and policies, ensuring orderly and efficient conduct of its business, including adherence to the Company’s policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information. During the year, such controls were assessed and no reportable material weaknesses in the design or operation were observed. Accordingly, the Board is of the opinion that the Company’s internal financial controls were adequate and effective during FY 2020-21.

Compliance management

The Company has in place a robust automated Compliance

Framework based on the global inventory of all applicable laws and compliance obligations, which are regularly monitored and updated basis the changing requirements of law. Proactive automated alerts are sent to compliance owners to ensure compliance within stipulated timelines. The compliance owners certify the compliance status which is reviewed by compliance approvers and a consolidated dashboard is presented to the respective Business Leaders and the Managing Director & CEO (India & South Asia). A certificate of compliance of all applicable laws and regulations along with exceptions report and mitigation-plan, if any, is placed before the Audit Committee and Board of

Directors on a quarterly basis.

Other Statutory Disclosures

Vigil Mechanism

The Code of Conduct and vigil mechanism applicable to

Directors and the Senior Management of 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 of Conduct is also provided in the Report on Corporate Governance, which forms part of this

Integrated Report.

Extract of Annual Return

The Annual Return of the Company as on March 31, 2021 in Form MGT - 7 in accordance with Section 92(3) of the Act read with the Companies (Management and Administration) Rules, 2014, is available on the website of the Company at https://www. airtel.in/about-bharti/equity/results.

Prevention of Sexual Harassment at Workplace

The Company has an Internal Complaints Committee for providing a redressal mechanism pertaining to sexual harassment of employees at the workplace and any such incident can be reported to the Internal Complaints Committee as per the process defined under the policy. Details regarding the policy, including the details of the complaints received and disposed of, are provided in the Report on Corporate Governance and Business Responsibility Report, which form part of this

Integrated Report.

Significant and Material Orders

During the financial year 2020-21, there are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company’s operations in the future.

Particulars of Loans, Guarantees and Investments

In compliance with the provisions of the Companies Act, 2013 and Listing Regulations, the 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 to promoter or promoter group entities which has been written off during last 3 years.

Particulars of loans, guarantees and investments form part of

Note no. 7, 9 and 22 respectively to the financial statements provided in this Integrated Report.

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

The Chairman or the Managing Director & CEO (India and South

Asia) does not receive any such remuneration or commission from the Company or its holding company or subsidiary company 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 and arrangements with related parties is provided in the Report on Corporate Governance, which forms part of this Integrated Report.

All arrangements/ transactions entered into by the Company with its related parties during the year were in the ordinary course of business and on an arm’s length basis. During the year, the Company has not entered into any arrangement/ transaction with related parties which could be considered material in accordance with the Company’s Policy on Related Party Transactions, read with the Listing Regulations and, accordingly, the disclosure of related party transactions in Form

AOC-2 is not applicable. However, names of related parties and details of transactions with them have been included in Note no. 33 to the financial statements provided in this Integrated Report under Indian Accounting Standards 24.

The Policy on the Related Party Transactions is available on the

Company’s website at https://s3-ap-southeast-1.amazonaws. com/bsy/iportal/images/Policy-on-Related-Party-Transactions_ 2E9BFE0648B2C56BAC33CAF5676D6BC1_1566305301148. pdf.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo

The details of energy conservation, technology absorption and foreign exchange earnings and outgo as required under Section 134(3) of the Companies Act, 2013, read with the Rule 8 of Companies (Accounts of Companies) Rules, 2014 is annexed as

Annexure E to the Board’s report.

Particulars of Employees

Disclosures relating to remuneration of Directors u/s 197(12) of the Companies Act, 2013 ("the Act"), read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) 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 and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Integrated report. In terms of the provisions of the first proviso to Section 136(1) of the Act, the Integrated Report is being sent to the shareholders, excluding the aforementioned information. The information will be available on the Company’s website at https://www. airtel.in/about-bharti/equity/results and will also be available for inspection 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 be available electronically for inspection by the members during the AGM. Any member interested in obtaining such information may write to the Company Secretary 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 their knowledge and belief, confirm that:

a) in preparation of the annual accounts, the applicable accounting standards had been followed, along with proper explanation relating to material departures;

b) the Directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company the end of the financial year and of the profit and loss of the Company for that period;

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

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

e) the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

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

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 stakeholder relationship, customer relationship, environment, sustainability, health and safety are provided separately under various Capitals in this Integrated Report.

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

Acknowledgements

The Board wishes to place on record its appreciation of the Department of Telecommunications ("DoT"), the Central Government, the State Governments in India, Government of Bangladesh, Government of Sri Lanka and Governments of the 14 countries in Africa, Company’s bankers and business associates, for the assistance, cooperation and encouragement extended to the Company.

The Directors also extend their deep appreciation to the employees for their continuing support and unstinting efforts in ensuring an excellent all-round operational performance, despite the unprecedented challenges posed by the pandemic.

The Directors would like to thank various partners, viz., Bharti

Telecom Limited, Singapore Telecommunications Ltd. and other shareholders for their support and contribution. We look forward to their continued support in future.

For and on behalf of the Board
Sunil Bharti Mittal
Place: New Delhi Chairman
Date: May 17, 2021 DIN: 00042491

   

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