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EQUITY - MARKET SCREENER

Bharti Airtel Ltd
Industry :  Telecommunications - Service Provider
BSE Code
ISIN Demat
Book Value()
532454
INE397D01024
150.6013431
NSE Symbol
P/E(TTM)
Mar.Cap( Cr.)
BHARTIARTL
458.84
490639.1
EPS(TTM)
Face Value()
Div & Yield %
1.85
5
0.34
 

As on: Dec 04, 2022 10:57 PM

Dear Members,

Your Directors are pleased to present the 27th Board's Report of the Company's business and operations, together with audited financial statements for the financial year ended March 31, 2022.

Company Overview

Bharti Airtel is one of the world's leading providers of telecommunication services with operations in 17 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 Company also has investments in Tower Infrastructure pertaining to telecom operations through its joint venture entity viz. Indus Towers Limited (‘Indus'). During FY 2021-22, the Company acquired an additional stake of 4.76% and accordingly, its shareholding in Indus stood 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 its standalone and consolidated financial statements as per Indian Accounting Standards (‘Ind AS') for FY 2021-22. The standalone and consolidated financial highlights of 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 706,419 9,500 643,259 8,655
EBITDA before exceptional items 355,984 4,787 286,502 3,855
Cash profit from operations 231,421 3,112 183,387 2,467
Profit / (Loss) before tax (42,342) (569) (184,652) (2,484)
Net income/(loss) (36,250) (487) (251,976) (3,390)

(*1 USD = Rs 74.36 Exchange Rate for financial year ended March 31, 2022) (**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 1,165,469 15,673 1,006,158 13,538
EBITDA before exceptional items 581,103 7,815 461,387 6,208
Particulars

FY 2021-22

FY 2020-21

Rs Mn USD Mn* Rs Mn USD Mn**
Cash profit from operations 423,645 5,697 315,852 4,250
Profit / (Loss) before tax 124,831 1,679 (144,882) (1,949)
Net Income/ (Loss)# 42,549 572 (150,835) (2,029)

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

(*1 USD = Rs 74.36 Exchange Rate for financial year ended March 31, 2022) (**1 USD = Rs 74.32 Exchange Rate for financial year ended March 31, 2021).

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 nature of the business of the Company during the financial year ended on March 31, 2022.

Update on impact of COVID-19

The COVID-19 pandemic, continued to be a global challenge, creating disruption across the world. In the first three months of FY 2022, the second wave of the pandemic overwhelmed India in all aspects. The Company has taken several steps to manage this crisis, which have been detailed in the Management Discussion and Analysis Report forming part of the Annual Report. This situation continues to evolve and is being closely monitored to identify key risks and take immediate actions to minimise any potential disruption from the pandemic to 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. The Company stands in solidarity with the Government of India and all citizens of India. The Company's efforts towards the betterment of one and all will continue unabated.

Share Capital

During FY 2021-22, there was 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 2021-22, the Company has alloted 392,287,662 partly paid-up equity shares of face value of Rs 5/- each (Rs 1.25 per share paid on application) at a premium of Rs 530/- per share (Rs 132.50 per share paid on application) on October 27, 2021, pursuant to Rights Issue.

Consequent to the aforesaid allotment, the paid-up share capital of the Company has increased to Rs 27,950,495,917.50 divided into 5,492,027,268 equity shares of face value of Rs 5/- each fully paid- up and 392,287,662 partly paid-up equity shares of face value of Rs 5/- each (Rs 1.25 per share paid on application).

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 not transferred any amount to General Reserve.

Dividend

Your Directors have recommended a final dividend of Rs 3/- per fully paid-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 Rs 1.25/- each i.e. 60.00% of the paid-up value for FY 2021-22. The proposed final dividend payout will amount to appox. Rs 16,770 Mn. The payment of final dividend is subject to the approval of shareholders at the ensuing Annual General Meeting (AGM).

The record date for the purpose of payment of final dividend for the FY 2021-22, will be Tuesday, August 02, 2022.

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

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 Dividend Distribution Policy is available on the Company's website at https://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 the relevant rules made thereunder, during FY 2021-22, the Company has transferred the unpaid/unclaimed dividend amount of Rs 2.31 Mn, pertaining to final dividend for FY 2013-14 and interim dividend for FY 2014-15, to the Investor Education and Protection Fund ("IEPF") established by the Central Government. The details of unpaid and unclaimed dividend amounts lying with the Company as on August 31, 2021 (date of last Annual General Meeting) are available on the Company's website viz. https:// www.airtel.com.

Pursuant to the provisions of the 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 also transferred 19,146 equity shares to the IEPF during FY 2021-22. The relevant details of equity shares transferred to IEPF are also available on the Company's website https://www.airtel.com.

The shareholders whose unpaid dividend and/or shares have been transferred to IEPF may reach out to the Company/ Registrar and Transfer Agent, to lodge their claim for refund of the unpaid dividend/shares (as applicable) 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.

Debentures

During the year under review, the Company has redeemed 15,000 Series-II, 8.35% Listed, Unsecured, Rated, Redeemable, Non-Convertible Debentures having a face value of Rs 1 Mn per debenture on April 20,2021. Accordingly, the Company does not have any outstanding debenture as on March 31, 2022. Further, the Company has not issued any debentures during the financial year 2021-22.

Significant Developments

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

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

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

The Board of Directors at its meeting held on April 14, 2021, had approved the composite scheme of arrangement between the Company, Nettle Infrastructure Investments Limited (‘Nettle'), Airtel Digital Limited (‘ADL'), Telesonic Networks Limited (‘Telesonic') and Airtel Limited and their respective shareholders and creditors under sections 230 to 232 and other applicable provisions of the Act (‘Scheme'). Keeping in view the seminal telecom sector reforms package announced by the Government of India and consequent simplification of licensing framework, the Board of Directors, at its meeting held on January 4, 2022, decided to withdraw the earlier Scheme and approve a modified one to leverage emerging opportunities offered by Indian digital economy, unlock value and simplify the group structure.

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

As on the date of this report, the Scheme is subject to requisite regulatory/statutory approvals and other closing conditions as specified in the draft scheme.

Shifting of Registered Office

Pursuant to the Order of the Regional Director, New Delhi dated March 18, 2021, the Company shifted its registered office from NCT of Delhi to the State of Haryana w.e.f. April 1, 2021.

Rights Issue

During the financial year, the Company had issued and allotted 392,287,662 partly paid-up equity shares of the Company on rights basis, in the ratio of 1 equity share for every 14 equity shares held, to eligible equity shareholders of the Company at an issue price of Rs 535/- per fully paid-up equity share (including a premium of Rs 530/- per equity share). An amount equivalent to 25% of the issue price viz. Rs 133.75 per equity share was received on application.

The funds raised by the Company through Rights Issue, have been utilised 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 to accelerate the growth of India's digital ecosystem. Together, they will work to bring best-in-class end-to-end products to serve customer needs, provide quality customer experience, and bring their expertise to solve problems of affordability, access, and digital inclusion. As part of this partnership, Google intends to invest up to USD 1 Bn, as part of its Google for India Digitization Fund, which includes equity investment as well as a corpus for potential commercial agreements, to be identified and agreed on mutually agreeable terms over the course of the next five years. This deal is subject to necessary regulatory approvals. The intimation dated January 28, 2022 submitted with the stock exchanges in this regard is available on the Company's website at https://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 rating agencies namely CRISIL and India Ratings & Research Private Limited, and three international 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 rating scale at CRISIL A1+/ IND A1+; and

c) S&P and Moody's revised their outlook to BBB- (Stable) and to 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 ESOP schemes also helps retain talent and experience to optimise the long-term interest for the organisation. 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 and Sweat Equity) Regulations, 2021 (‘ESOP Regulations'), a disclosure with respect to ESOP Schemes of the Company as on March 31, 2022 is available on the Company's website at https://www.airtel.in/about-bharti/eauity/results.

The Board in its meeting held on May 17, 2022, has approved the revision in the ESOP Scheme 2005 inter-alia including increase in ESOP Pool by 27,460,136 options (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 statement in this regard is annexed to the Notice of the ensuing AGM.

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 certificate from Chandrasekaran Associates, Company Secretaries, certifying that the schemes are implemented in accordance with the ESOP Regulations and the resolutions passed by the members, is available for inspection by the members in electronic mode.

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

There were no material changes and commitments affecting the financial position of the Company between the end of financial year and 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, Ms. Chua Sock Koong, Director of the Company, will retire by rotation at the ensuing AGM and being eligible, offers herself for re-appointment. The Board recommends her re-appointment at the ensuing AGM.

Mr. Gopal Vittal, the Managing Director & CEO of the Company, will be completing his present term on January 31, 2023. The Board at its meeting held on May 17, 2022, based on the recommendation of the HR and Nomination Committee and subject to the approval of shareholders, has re-appointed Mr. Gopal Vittal as Managing Director designated as Managing Director & CEO of the Company for a further term of five years w.e.f. February 01, 2023.

Pursuant to the provisions of Sections 149, 161 and other applicable provisions of the Act and applicable provisions of Listing Regulations, the Board at its meeting held on May 17, 2022, based on recommendation of the HR and Nomination Committee and 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 Board they possess requisite qualifications, experience, expertise, proficiency and hold high standards of integrity.

The Company has received requisite notice(s) from a member under Section 160 of the Companies Act, 2013 proposing their appointment as Independent Directors.

Mr. Sunil Bharti Mittal, Chairman was reappointed for a further period of five years w.e.f October 01, 2021, upon approval of the members at their 26th AGM 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 to hold office for a term of five consecutive years i.e. upto August 3, 2026. Her appointment has been approved by the shareholders in the 26th Annual General Meeting of the Company held on August 31, 2021. In the opinion of the Board she possesses requisite qualifications, experience, expertise, proficiency and holds high standards of integrity.

Brief resume, nature of expertise, disclosure of relationship between directors inter-se, details of directorships and committee membership 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.

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. the close 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 his resignation as Independent Director w.e.f. October 31, 2022 (close of business hours) and Mr. Manish Kejriwal will retire on September 25, 2022 (close of business hours), upon completion of his second term as Independent Director of the Company. The Board places on record its sincere appreciation for the valuable contribution made by the outgoing/retiring Directors.

Based on the recommendation of Audit Committee and HR & Nomination Committee, the Board has appointed Mr. Soumen Ray as Chief Financial Officer (India and South Asia) (Key Managerial Personnel under the Act) of the Company w.e.f. December 21, 2021.

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

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 Act, 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 Board of Directors values the significance of diversity and firmly believes that diversity of background gender, geographical region, expertise, knowledge and perspectives, leads to sharper and balanced decision-making and sustainable development. The Company has an eminent, high-performing and diverse board - comprising 27% Woman Directors. In terms of the requirement of Section 178 of the Act and Listing Regulations, the Board of Directors has adopted a ‘Policy on Nomination, Remuneration and Board Diversity' on appointment and remuneration of Directors, Key Managerial Personnel & Senior Management. The Policy includes, inter-alia, criteria for appointment of Directors, KMPs, Senior Management Personnel and other covered employees, their remuneration structure and disclosures in relation thereto.

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

a) total Rewards Package for Managing Director & CEO and relevant members of Senior Management is linked with sustainability targets and long term performance of the Company.

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

The revised policy is available on the Company's website at https://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 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 overall effectiveness. A detailed disclosure on the framework of Board evaluation including outcome and action plan has been provided in the Report on Corporate Governance, which forms a part of the Integrated Annual 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 Act and the Listing Regulations is provided in the Report 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 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.

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

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 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 11 times during the previous 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 2021-22 and attendance of the Directors thereat, is provided in the 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 associates and 6 joint ventures.

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

During the financial year 2021-22, the Company acquired 33.33% stake in Hughes Communications India Private Limited (‘Hughes'). Further, the Company has acquired 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 5 of Companies (Accounts) Rules, 2014, a statement containing salient features of financial statements of subsidiary, associate and joint venture companies in prescribed form AOC-1, is annexed to the Consolidated Financial Statements of the Company which forms part of the Annual Report. The said 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 27th AGM.

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

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 the 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, 2022. The Company is in the process of updating 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 2022.

As regards the comments under para i(c) of the Annexure B to the Independent Auditors' Report regarding no physical verification of customer premises equipment, bandwidth 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. As regards the comments under para i(d) 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. The Company is in the process of getting the title deeds transferred in name of the Company. As regards to the comments under para ix(d) of the Annexure B to the Independent Auditors' Report regarding fund raised on short term basis used for long term purpose, the Company has used such funds as bridge financing and is able to generate sufficient funds from long term sources to meet the working capital requirement.

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 and ANB & Co., Chartered Accountants 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. 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 work of Internal Assurance Partners is coordinated by the internal team lead by Chief Internal Auditor. This combination of our internal team and expertise of reputed independent professional firms (Internal Assurance Partners) ensures independence as well as effective value addition and protection

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

Cost Auditors

The Board, on the recommendation of the Audit Committee had approved the appointment of Sanjay Gupta & Associates, Cost Accountants, as Cost Auditors, for the financial year ending March 31, 2022. The Cost Auditors will submit their report for FY 202122 within the timeframe prescribed under the Companies Act, 2013 and rules made thereunder.

The Board, on the recommendation of Audit Committee, has re-appointed Sanjay Gupta & Associates, Cost Accountants, as Cost Auditors of the Company for FY 2022-23.

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

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 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

Pursuant to the provisions of Section 204 of the Act and rules made thereunder, the Board of Directors had appointed Chandrasekaran Associates, Company Secretaries, as Secretarial Auditors for the financial year ended March 31, 2022. The Secretarial Auditor has submitted their report, confirming, inter-alia, compliance by the Company of all the provisions of applicable corporate laws and does not contain any qualification, reservation, disclaimer or adverse remark.

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

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

Sustainability Journey

During the year, ESG Committee was formed to sharpen focus towards Environmental, Sustainability and Governance (ESG) agenda. The ESG Committee will provide strategic guidance and oversight to the Company's progress on ESG targets, initiatives and best practices. This will also include initiatives to respond to challenges posed by climate change through sustainable business practices.

The Company firmly believes that the Information and Communication Technology (ICT) plays an important role in helping the world move towards low carbon economy, sustainability growth and community development. The Company's services leverage the power of ICT by providing the people quality connectivity required to function in an advancing world. The Company's business model is consistently growing and thereby contributing to create an inclusive and empowered society. To continue to achieve this objective, the Company is adopting best practices to include and integrate sustainable practices in its strategies and operations. Keeping this in mind the Integrated Annual Report presents both material financial and non-financial aspects our performance.

The awareness of ESG priorities has become a necessity. At Airtel, climate change is considered as one of the most critical growing ESG risk. The Company is committed to reach net zero emissions by 2050, which is in line with Science-Based Target Initiatives (SBTi) recommendations. The Company had undertaken the materiality assessment exercise during last reporting year, to understand the environmental, social and governance (ESG) issues that might impact our business.

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

The Company'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

At Airtel, business success is notjust about profits and shareholder returns. As a good corporate citizen, Airtel is committed to nation building through impactful interventions. We have been actively undertaking community development initiatives towards realization of a prosperous society by collaborating with diverse stakeholders. Giving back to the very community that helps our business thrive and sustain has been our priority since inception. Airtel has been an early adopter of CSR initiatives and it established, Bharti Foundation the philanthropic arm of Bharti Enterprises back in 2000, with the objective of transforming the lives of children and youth by proactively implementing and supporting programs in primary, secondary and higher education as well as sanitation. Airtel and its subsidiaries have been working relentlessly with Bharti Foundation and other NGOs since last two decades to pursue wider socio-economic and cultural objectives and have always endeavoured to not just meet, but try and exceed the expectations of the communities in which we operate.

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

While, in terms of applicable provisions of Section 135 of the Companies Act, 2013, the Company was not obligated to contribute towards Corporate Social Responsibility (‘CSR') activities during financial year 2021-22, the Company has made voluntary CSR contribution of Rs 16.43 Mn during the financial year 2021-22 and also contributed Rs 14.68 Mn to various other charitable institutions.

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

The above voluntary and other 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.

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

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 CSR Committee of the Directors is in place in terms of Section 135 of the Companies Act, 2013. The details of CSR Committee including composition, terms of reference etc. are provided in the Report on Corporate Governance, which forms part of this Integrated Annual Report. The CSR Committee has formulated and recommended to the Board, a CSR Policy outlining, inter-alia, CSR philosophy of the Company. The said policy is 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 the Companies Act, 2013 is annexed as Annexure B 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 corporate citizen. This is the Company's fifth 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. The report encompasses both financial and non-financial information to enable the Members to take well informed decisions and have a better understanding of the Company's long term perspective and value creation for all the stakeholders.

Business Responsibility & Sustainability Report

In accordance with the amended Regulation 34(2)(f) of Listing Regulations read with SEBI Circular no. SEBI/HO/CFD/CMD-2/P/ CIR/2021/562 dated May 10, 2021, the Company has voluntary adopted Business Responsibility & Sustainability Reporting (BRSR) for the FY 2021-22, describing the initiatives taken by the Company from environmental, social and governance perspective. In addition, the Company has also prepared the Business Responsibility Report (BRR) for the FY 2021-22, which is available on the website of the Company at www.airtel.com.

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 Annual Report.

Corporate Governance Report

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 during FY 2021-22, as stipulated under the Listing Regulations, is annexed as Annexure C to the Board's Report.

Statement containing additional information as required under Schedule V of the Act

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.

Risk Management

Risk management is embedded in Bharti Airtel's operating framework. The Company believes that risk resilience is key to achieving long term sustainable 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 sharper focus, the Company had constituted a Risk Management Committee to focus on risk management including determination of 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 Annual 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.

Your Board reviews the internal processes, systems and the internal financial controls and accordingly, the Directors' Responsibility Statement contains a confirmation as regards adequacy of the internal financial controls. Assurances on the effectiveness of Internal Financial Controls is obtained through management reviews, self-assessment, continuous monitoring by functional heads as well as testing of the internal financial control systems during the course of audits. We believe that these systems provide reasonable assurance that our internal financial controls are designed effectively and are operating as intended.

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. 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. Additionally, the Company has centralised automated tool in place viz. Notice Management System to regularly monitor and update the legal notices and court cases.

Other Statutory Disclosures

Vigil Mechanism

Bharti Airtel has adopted a Vigil Mechanism/Whistle Blower Policy which forms part of Code of Conduct of the Company. It outlines the method and process for stakeholders to voice genuine concerns about unethical conduct that may be in actual or threatened breach with the Company's Code of Conduct. The Policy is available on the Company'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 and compliance with Code of Conduct including the changes to map it with global best practices is also provided in the Report on Corporate Governance, which forms part of the Integrated Annual Report.

Annual Return

In terms of Section 92(3) read with Section 134(3(a) of the Act and rules thereto, the Annual Return of the Company in Form MGT - 7 for the financial year ended on as on March 31, 2022 in accordance with Section 92(3) of the Act read with the Companies (Management and Administration) Rules, 2014, is available on the Company's website at https://www. airtel.in/about-bharti/equity/results. The Annual Return will be electronically submitted to the Registrar of Companies within the timelines prescribed under the Act.

Prevention of Sexual Harassment at Workplace

In compliance with Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has an Internal Complaints Committee for providing a redressal mechanism pertaining to sexual harassment of employees at workplace and any such incident can be reported to the Internal Complaints Committee. Details regarding the policy, including the details of the complaints received and disposed off, are 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 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 Act 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. 9, 22 and 7 respectively to the standalone financial statements provided in this Integrated Annual Report.

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

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 the Integrated Annual Report.

During the financial year 2021-22, the Company has entered into material related party transaction with Indus Towers Limited (Joint venture entity) as per the amended Listing Regulations, pursuant to the shareholder's approval at the Extra-ordinary General Meeting held on February 26, 2022. Necessary disclosure in form AOC-2 with respect to the aforesaid transactions, is given in Annexure D of the Board's Report. Save and except the above, the Company has not entered into any other 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, during the year under review. Further, all arrangements/transactions entered into by the Company with its related parties during the year under review, were in the ordinary course of business and on an arm's length compliant terms.

In compliance with the requirement of Listing Regulations, 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 Annual Report.

To align the Policy on the Related Party Transactions of the Company with recent amendments in Listing Regulations, the Board at its meeting held on February 8, 2022, on the recommendations of Audit Committee, approved amendments in the said Policy w.e.f. April 1, 2022. The updated Policy on the Related Party Transactions is available on the Company's website at https://assets.airtel.in/teams/simplycms/web/docs/ RPT Policy.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 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 Annual Report. In terms of the provisions of the first proviso to Section 136(1) of the Act, the Integrated Annual 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/eauity/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.

Further, none of the Executive Directors of the Company received any commission from the Company, hence, disclosure under Section 197(14) of the Companies Act, 2013 is not applicable for FY 2021-22.

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) i n 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 at 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, customer relationship, 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 Annual 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.

Compliance of Secretarial Standards

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

Acknowledgements

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

The Directors regret the loss of lives due to COVID-19 pandemic and 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 Bharti Telecom Limited, Singapore Telecommunications Ltd. and other shareholders for their support and contribution. We look forward to their continued support in future.