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Bharti Airtel Ltd.

Dec 06 BSE 697.10 ( -21.25 -2.96%)
Volume305574
Prev. Close 718.35
Open Price 716.60
Today's Low / High
693.90 721.80
B. Price (Qty.)0.00 (0)
O. Price (Qty.) 0.00 (0)
52 Wk Low / High 483.99
781.90
Dec 06 NSE 697.60( -20.75 -2.89%)
Volume8804487
Prev. Close 718.35
Open Price 718.00
Today's Low / High
693.85 721.90
B. Price (Qty.)0.00 (0)
O. Price (Qty.) 0.00 (0)
52 Wk Low / High
483.81 781.80

You can view full text of the latest Director's Report for the company.

ISIN No INE397D01024 Market Cap. ( in Cr. ) 389965.32 P/BV 4.59 Book Value ( ) 152.04
BSE Code 532454 52 Week High/Low ( ) 782/484 FV/ML 5/1 P/E(X) 0.00
NSE Code BHARTIARTLEQ Book Closure 28/09/2021 EPS ( ) 0.00 Div Yield (%) 0.00
Year End :2021-03 

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, 202

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:

Particulars

FY 2020-21

FY 2019-20

G Mn

USD Mn*

' Mn

USD Mn*

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

Particulars

FY 2020-21

FY 2019-20

G Mn

USD Mn*

' 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.

Particulars

FY 2020-21

FY 2019-20

G Mn

USD Mn*

' 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

Secretarial Standards

Pursuant to the provisions of Section 118 of the Companies Act, 2013, the Company has complied with the applicable provisions of the Secretarial 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 '147,780,000,000 divided into 29,555,980,000 equity shares of face value of '5/- each and 1,000 preference shares of '100/- each.

During FY 2020-21, the Company redeemed 497, 10% unlisted, fully paid-up, redeemable, non-participating non-cumulative preference shares of '100/- each at par. Further, the Company issued and allotted 36,469,913 equity shares of face value '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 '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 '27,460,136,340 divided into 5,492,027,268 equity shares of face value of '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 '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/simplvcms/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 '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 '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 '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 ('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 ('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 longterm 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 report after the balance 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 '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

CORPORATE MANAGEMENT STATUTORY FINANCIAL

OVERVIEW DISCUSSION & REPORTS STATEMENTS

ANALYSIS

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 NonExecutive 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 leverage different skills, qualifications, professional experiences, 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/bsv/iportal/imaaes/Draft-Remuneration-Nomination-and-Board-Diversitv-Policv-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.