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Bharti Airtel Ltd(Industry :   Telecommunications - Service Provider)
 
BSE Code:532454NSE Symbol: BHARTIARTLP/E  (TTM): 12.1
ISIN Demat:INE397D01024Div Yield %:1.25EPS   (TTM) :25.38
Book Value (Rs):195.8042728Market Cap (RsCr):122760.15Face Value (Rs) :5
  Change Company 






Notes to the financial statements









for the year ended March 31, 2013

1. Corporate Information

Bharti Airtel Limited (‘the Company’) incorporated in India on July 7, 1995, is a company promoted by Bharti Telecom Limited (‘BTL’), a company incorporated under the laws of India. The Company’s shares are publicly traded on the National Stock Exchange (‘NSE’) and the Bombay Stock Exchange (‘BSE’), India. The Registered office of the Company is situated at Bharti Crescent, 1, Nelson Mandela Road, Vasant Kunj, Phase – II, New Delhi – 110070.

The Company is a leading telecommunication service provider in India providing telecommunication systems and services.

2. Basis of Preparation

The financial statements of the Company have been prepared in accordance with the generally accepted accounting principles in India (Indian GAAP). The financial statements have been prepared to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (‘as amended’) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention and on an accrual basis except in case of assets for which revaluation is carried out and certain derivative financial instruments (Refer note 3.13). The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

These financial statements are presented in Indian Rupees ("Rupees’ or ‘ Rs ’) and all amount are rounded to the nearest Mn, except as stated otherwise.

3. Summary of Significant Accounting Policies

3.1. Use of Estimates

The preparation of the financial statements in conformity with Indian GAAP requires management to make judgement, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting year. Although these estimates are based upon management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets and liabilities in future periods.

3.2. Tangible Assets

Tangible Assets are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Such cost includes the cost of replacing part of the plant and equipment and borrowing costs for long term construction projects if the recognition criteria are met. When significant parts of tangible assets are required to be replaced in intervals, the Company recognises such parts as separate component of assets with specific useful lives and provides depreciation over their useful life. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repair and maintenance costs are recognised in the statement of profit and loss as incurred. Capital work in progress is valued at cost.

Where assets are installed on the premises of customers (commonly called Customer premise equipment –"CPE"), such assets continue to be treated as tangible assets as the associated risks and rewards remain with the Company and management is confident of exercising control over them.

Gains and losses arising from retirement or disposal of the tangible assets are determined as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in statement of profit and loss on the date of retirement and disposal.

Depreciation on tangible assets is provided on the straight line method based on useful lives of respective assets as estimated by the management or at the rates prescribed under Schedule XIV of the Companies Act, 1956, whichever is higher. The assets’ residual values and useful lives are reviewed at each financial year end or whenever there are indicators for review, and adjusted prospectively. Freehold Land is not depreciated.

Estimated useful lives of the assets are as follows:

Years
Leasehold Land Period of lease
Building 20
Building on Leased Land 20
Leasehold Improvements Period of lease or 10 years, whichever is less
Plant & Machinery 3 – 20
Computer 3
Office Equipment 2 - 5
Furniture and Fixtures 5
Vehicles 5

Assets individually costing Rupees five thousand or less are fully depreciated over a period of 12 months from the date placed in service.

3.3. Intangible Assets

Identifiable intangible assets are recognised when the Company controls the asset, it is probable that future economic benefits attributed to the asset will flow to the Company and the cost of the asset can be reliably measured.

At initial recognition, the separately acquired intangible assets are recognised at cost. Following initial recognition, the intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses, if any.

Amortisation is recognised in the statement of profit and loss on a straight-line basis over the estimated useful lives of intangible assets from the date they are available for use. The amortisation period and the amortisation method for an intangible asset are reviewed at least at each financial year end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates.

(i) Software

Software is capitalised at the amounts paid to acquire the respective license for use and is amortised over the period of license, generally not exceeding three years. Software up to Rs 500 thousand is amortised over a period of one year from the date of place in service.

(ii) Licenses

Acquired licenses (including spectrum) are initially recognised at cost. Subsequently, licenses are measured at cost less accumulated amortisation and accumulated impairment loss, if any. Amortisation is recognised in the statement of profit and loss on a straight-line basis over the unexpired period of the license commencing from the date when the related network is available for intended use in the respective jurisdiction.

Intangible assets under development are valued at cost.

(iii)Bandwidth

Payment for bandwidth capacitites are classified as pre-payments in service arrangements or under certain conditions as an acquisition of a right. In the latter case it is accounted for as intangible assets and the cost is amortised over the period of the agreements,which may exceed a period of ten years depending on the tenor of the agreement.

3.4. Leases

(i) Where the Company is the Lessee

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Lease rentals with respect to assets taken on ‘Operating Lease’ are charged to the statement of profit and loss on a straight-line basis over the lease term.

Leases which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item are classified as finance lease. Assets acquired on ‘Finance Lease’,which transfer risk and rewards of ownership to the Company, are capitalised as assets by the Company at the lower of fair value of the leased property or the present value of the minimum lease payments.

Amortisation of capitalised leased assets is computed on the straight line method over the useful life of the assets. Lease rental payable is apportioned between principal and finance charge using the internal rate of return method. The finance charge is allocated over the lease term so as to produce a constant periodic rate of interest on the remaining balance of liability.

(ii) Where the Company is the lessor

Leases in which the Company does not transfer substantially all the risks and benefits of ownership of the asset are classified as operating leases. Lease income in respect of ‘Operating Lease’ is recognised in the statement of profit and loss on a straight-line basis over the lease term. Assets subject to operating leases are included in fixed assets. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as lease term.

Leases in which the Company transfer substantially all the risks and benefits of ownership of the asset are classified as finance leases. Assets leased to others under finance lease are recognised as receivables at an amount equal to the net investment in the leased assets. Finance Income is recognised based on a pattern reflecting a constant periodic rate of return on the net investment of the lessor outstanding in respect of the lease.

Initial direct costs are expensed in the statement of profit and loss at the inception of the lease.

(iii) Indefeasible Right to Use (‘IRU’)

As a part of operations, the Company enters into agreement for leasing assets under "Indefeasible right to use" with third parties. Under the arrangement the assets are given on lease over the substantial part of the asset life. However, the title to the assets and significant risk associated with the operation and maintenance of these assets remain with the lessor. Hence, such arrangements are recognised as operating lease.

The contracted price is received in advance and is recognised as revenue during the tenure of the agreement. Unearned IRU revenue net of the amount recognisable within one year is disclosed as deferred revenue in other long term liabilities and the amount recognisable within one year is disclosed as deferred revenue in current liabilities.

3.5. Borrowing Cost

Borrowing costs consist of interest and other costs that the Company incurs in connection with the borrowing of funds. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. The interest cost incurred for funding a qualifying asset during the construction period is capitalised based on actual investment in the asset at the interest rate for specific borrowings. All other borrowing costs are expensed in the period they occur.

3.6. Impairment of Assets

The carrying amounts of assets are reviewed at each balance sheet date for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. The recoverable amount of an asset is the greater of its fair value less costs to sell and value in use. To calculate value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market rates and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs. Fair value less costs to sell is the best estimate of the amount obtainable from the sale of an asset in an arm’s length transaction between knowledgeable, willing parties, less the costs of disposal. Impairment losses, if any, are recognised in profit or loss as a component of depreciation and amortisation expense.

An impairment loss is only reversed to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined if no impairment loss had previously been recognised.

3.7. Asset Retirement Obligations (ARO)

Asset retirement obligations (ARO) are provided for those operating lease arrangements where the Company has a binding obligation at the end of the lease period to restore the leased premises in a condition similar to inception of lease. The estimated future costs of decommissioning are reviewed annually and adjusted as appropriate. Changes in the estimated future costs are added to or deducted from the cost of the asset and depreciated prospectively over the remaining useful life.

3.8. Investment

Investment, which are readily realisable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as non-current investments.

On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties.

Current Investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis. Non-current investments are valued at cost. Provision is made for diminution in value to recognise a decline, if any, other than that of temporary nature.

On disposal of investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.

3.9. Cash and Cash Equivalents

Cash and cash equivalents comprise cash at bank and on hand, call deposits, and other short term highly liquid investments with an original maturity of three months or less that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

3.10.Inventory

Inventory is valued at the lower of cost and net realisable value. Cost is determined on First in First out basis. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

The Company provides for obsolete and slow-moving inventory based on management estimates of the usability of inventory.

3.11. Revenue Recognition and Receivables

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured at the consideration received/receivable, excluding discounts, rebates, and value added tax (‘VAT’), service tax or duty. The Company assesses its revenue arrangements against specific criteria, i.e., whether it has exposure to the significant risks and rewards associated with the sale of goods or the rendering of services, in order to determine if it is acting as a principal or as an agent.

(i) Service Revenues

Service revenues include amounts invoiced for usage charges, fixed monthly subscription charges and very small aperture terminal (‘VSAT’)/internet usage charges, bandwidth services,roaming charges, activation fees, processing fees and fees for value added services (‘VAS’). Service revenues also include revenues associated with access and interconnection for usage of the telephone network of other operators for local, domestic long distance and international calls and data messaging services.

Service revenues are recognised as the services are rendered and are stated net of discounts, waivers and taxes. Revenues from pre-paid cards are recognised based on actual usage. Processing fees on recharge coupons is being recognised over the estimated customer relationship period or coupon validity period, whichever is lower. Activation revenue and related activation costs, not exceeding the activation revenue, are deferred and amortised over the estimated customer relationship period. The excess of activation costs over activation revenue, if any, are expensed as incurred.

Service revenues from the internet and VSAT business comprise revenues from registration, installation and provision of internet and VSAT services. Registration fee and installation charges are deferred and amortised over the period of agreement with customer. Service revenue is recognised from the date of satisfactory installation of equipment and software at the customer site and provisioning of internet and VSAT services.

Revenues from national and international long distance operations comprise revenue from voice services which are recognised on provision of services while revenue from bandwidth services (including installation) is recognised over the period of arrangement.

Deferred revenue includes amount received in advance from customers which would be recognised over the periods when the related services are expected to be rendered.

(ii) Equipment Sales

Equipment sales consist primarily of revenues from sale of telecommunication equipment and related accessories to customers. Revenue from equipment sales transactions are recognised when the significant risks and rewards of ownership are transferred to the buyer and when no significant uncertainty exists regarding realisation of consideration.

(iii) Investing and Other Activities

Income on account of interest and other activities are recognised on an accrual basis.

Dividends are accounted for when the right to receive the payment is established.

(v) Provision for Doubtful Debts

The Company provides for amounts outstanding for more than 90 days in case of active subscribers, roaming receivables, receivables for data services and for entire outstanding from deactivated customers net off security deposits or in specific cases where the management is of the view that the amounts from certain customers are not recoverable.

For receivables due from the other operators on account of their National Long Distance (NLD) and International Long Distance (ILD) traffic for voice and Interconnect Usage charges (IUC), the Company provides for amounts outstanding for more than 120 days from the date of billing, net of any amounts payable to the operators or in specific cases where the management is of the view that the amounts from these operators are not recoverable.

(vi) Unbilled Revenue

Unbilled revenue represent revenue recognised in respect of services provided from the last bill cycle date to the end of the reporting period. These are billed in subsequent periods as per the terms of the billing plans/contractual arrangements.

3.12. License Fees – Revenue Share

The revenue-share fee on license and spectrum is computed as per the licensing agreement at the prescribed rate and is expensed as incurred.

3.13. Foreign Currency Translation, Accounting for Forward Contracts and Derivatives

Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

Conversion

Foreign currency monetary items are retranslated using exchange rates prevailing at the reporting date using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

Exchange Differences

Exchange differences arising on the settlement of monetary items or on restatement of the Company’s monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as income or as expenses in the year in which they arise as mentioned below.

Forward Exchange Contracts covered under AS 11, ‘The Effects of Changes in Foreign Exchange Rates’

Exchange differences on forward exchange contracts and plain vanilla currency options for establishing the amount of reporting currency and not intended for trading & speculation purposes, are recognised in the statement of profit and loss in the year in the which the exchange rate changes. The premium or discount arising at the inception of forward exchange contracts is amortised as expense or income over the life of the contract. Any profit or loss arising on cancellation or renewal of such forward exchange contract is recognised as income or expense for the year.

Exchange difference on forward contracts which are taken to establish the amount other than the reporting currency arising due to the difference between forward rate available at the reporting date for the remaining maturity period and the contracted forward rate (or the forward rate last used to measure a gain or loss on the contract for an earlier period) are recognised in the statement of profit and loss for the year.

Other Derivative Instruments, not in the nature of AS 11, ‘The Effects of Changes in Foreign Exchange Rates’

The Company enters into various foreign currency option contracts and interest rate swap contracts that are not in the nature of forward contracts designated under AS 11 as such and contracts that are not entered to establish the amount of the reporting currency required or available at the settlement date of a transaction; to hedge its risks with respect to foreign currency fluctuations and interest rate exposure arising out of foreign currency loan. In accordance with the ICAI announcement, at every year end, all outstanding derivative contracts are fair valued on a mark-to-market basis and any loss on valuation is recognised in the statement of profit and loss, on each contract basis. Any gain on mark-to-market valuation on respective contracts is not recognised by the Company, keeping in view the principle of prudence as enunciated in AS 1, ‘Disclosure of Accounting Policies’. Any reduction to fair values and any reversals of such reductions are included in statement of profit and loss of the year.

Embedded Derivative Instruments

The Company occasionally enters into contracts, that do not in their entirety meet the definition of a derivative instrument, that may contain "embedded" derivative instruments – implicit or explicit terms that affect some or all of the cash flow or the value of other exchanges required by the contract in a manner similar to a derivative instrument. The Company assesses whether the economic characteristics and risks of the embedded derivative are clearly and closely related to the economic characteristics and risks of the remaining component of the host contract and whether a separate, non-embedded instrument with the same terms as the embedded instrument would meet the definition of a derivative instrument. When it is determined that (1) the embedded derivative possesses economic characteristics and risks that are not clearly and closely related to the economic characteristics and risks of the host contract and (2) a separate, stand-alone instrument with the same terms would qualify as a derivative instrument, the embedded derivative is separated from the host contract, carried at fair value as a trading or non-hedging derivative instrument. At every year end, all outstanding embedded derivative instruments are fair valued on mark-to-market basis and any loss on valuation is recognised in the statement of profit and loss for the year. Any reduction in mark to market valuations and reversals of such reductions are included in statement of profit and loss of the year.

Translation of Integral and Non-Integral Foreign Operation

The financial statements of an integral foreign operation are translated as if the transactions of the foreign operation have been those of the Company itself.

In translating the financial statements of a non-integral foreign operation for incorporation in financial statements, the assets and liabilities, both monetary and non-monetary are translated at the closing rate; income and expense items are translated at average exchange rates prevailing during the year; and all resulting exchange differences are accumulated in a foreign currency translation reserve until the disposal of the net investment.

3.14.Employee Benefits

The Company’s post employment benefits include defined benefit plan and defined contribution plans. The Company also provides other benefits in the form of deferred compensation and compensated absences.

Under the defined benefit retirement plan, the Company provides retirement obligation in the form of Gratuity. Under the plan, a lump sum payment is made to eligible employees at retirement or termination of employment based on respective employee salary and years of experience with the Company.

For defined benefit retirement plans, the difference between the fair value of the plan assets and the present value of the plan liabilities is recognised as an asset or liability in the balance sheet. Scheme liabilities are calculated using the projected unit credit method and applying the principal actuarial assumptions as at the date of balance sheet. Plan assets are assets that are held by a long-term employee benefit fund or qualifying insurance policies.

All expenses in respect of defined benefit plans, including actuarial gains and losses, are recognised in the statement of profit and loss as incurred.

The Company’s contributions to defined contribution plans are recognised in statement of profit and loss as they fall due. The Company has no further obligations under these plans beyond its periodic contributions.

The employees of the Company are entitled to compensated absences based on the unavailed leave balance as well as other long term benefits. The Company records liability based on actuarial valuation computed under projected unit credit method.

The distinction between short-term and long-term employee benefits is based on expected timing of settlement rather than the employee’s entitlement benefits.

3.15. Share Based Compensation

The Company issues equity-settled share-based options to certain employees. Equity-settled share-based options are measured on fair value at the date of grant.

The fair value determined on the grant date of the equity settled share based options is expensed over the vesting period, based on the Company’s estimate of the shares that will eventually vest.

Fair value is measured using Lattice-based option valuation model, Black-Scholes and Monte Carlo Simulation framework and is recognised as an expense, together with a corresponding increase in equity/ liability, as appropriate, over the period in which the options vest using the graded vesting method. The expected life used in the model is adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioral considerations. The expected volatility and forfeiture assumptions are based on historical information.

Where the terms of a share-based compensation are modified,theminimumexpenserecognisedistheexpense as if the terms had not been modified, if the original terms of the award are met. An additional expense is recognised for any modification that increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the employee as measured at the date of modification.

Where an equity-settled award is cancelled, it is treated as if it is vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. This includes any award where non-vesting conditions within the control of either the entity or the employee are not met. However, if a new award is substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new awards are treated as if they were a modification of the original award, as described in the previous paragraph. All cancellations of equity-settled transaction awards are treated equally.

The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.

3.16.Taxes

(i) Current Income Tax

Current Income tax is measured at the amount expected to be paid to the tax authorities in accordance with Indian Income Tax Act, 1961.

(ii) Deferred Tax

Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised and reviewed at each balance sheet date, only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations, where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits. At each balance sheet date, unrecognised deferred tax assets of earlier years are re-assessed and recognised to the extent that it has become reasonably or virtually certain, as the case may be, that future taxable income will be available against which such deferred tax assets can be realised.

(iii) MAT Credit

Minimum Alternative Tax (MAT) credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in Guidance Note issued by the ICAI, the said asset is created by way of a credit to the statement of profit and loss account and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal income tax during the specified period.

3.17. Segment Reporting

(i) Primary Segment

The Company operates in three primary business segments viz. Mobile Services, Telemedia Services and Airtel Business.

(ii) Secondary Segment

The Company has operations serving customers within India as well as in other countries located outside India. The operations in India constitute the major part, which is the only reportable segment, the remaining portion being attributable to others.

3.18. Earnings Per Share

The earnings considered in ascertaining the Company’s Earnings per Share (‘EPS’) comprise the net profit after tax attributable to equity shareholders. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year. The weighted average number of equity shares outstanding during the year are adjusted for events of bonus issue; bonus element in a rights issue to existing shareholders; share split; and reverse share split (consolidation of shares).The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity shares unless impact is anti dilutive.

3.19. Provisions and Contingencies

Provisions are recognised when the Company has a present obligation as a result of past event; it is more likely than not that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These estimates are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that is not recognised because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or the amount of the obligation cannot be measured with sufficient reliability. Information on contingent liabilities is disclosed in the notes to the financial statements, unless the possibility of an outflow of resources embodying economic benefits is remote.

3.20. Multiple Element Contracts with Vendors

The Company enters into multiple element contracts with vendors for supply of goods and rendering of services. The consideration paid is/may be determined independent of the value of supplies received and services availed. Accordingly, the supplies and services are accounted for based on their relative fair values to the overall consideration. The supplies with finite life under such contracts are accounted as Tangible assets or as Intangible assets in view of the substance of these contracts and existence of economic ownership in these assets.

4. Information about Business Segments-Primary

Segment Definitions:

The Company’s operating businesses are organised and managed separately according to the nature of products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets.

Effective April 1, 2012, in line with the changes in the internal reporting, the Broadband Wireless Access (BWA) services reported earlier under "Telemedia Services" , is now reported as part of "Mobile Services". Accordingly, previous year’s segment figures have been regrouped/rearranged.

Mobile Services – These services cover voice and data telecom services provided through wireless technology in India (2G/3G/4G). This includes the captive national long distance networks which primarily provide connectivity to the mobile services business in India

Telemedia Services – These services cover voice and data communications based on fixed network and broadband technology.

Airtel Business – These services cover end-to-end telecom solutions being provided to large Indian and global corporations by serving as a single point of contact for all telecommunication needs across data and voice (domestic as well as international long distance), network integration and managed services.

Summary of the Segmental Information for the year ended and as of March 31, 2013

( Rs Millions)

Particulars Mobile Services Telemedia Services Airtel Business Unallocated Eliminations Total
Revenue
Revenue from operations 379,506 34,200 39,803 - - 453,509
Inter Segment Revenue 19,648 3,547 9,329 - (32,524) -
Total Revenue 399,154 37,747 49,132 - (32,524) 453,509
Results
Segment Result- Profit/(Loss)* 67,415 6,431 1,977 (2,156) - 73,667
Finance costs * - - - 9,119 - 9,119
Profit/(Loss) before tax 67,415 6,431 1,977 (11,275) - 64,548
Provision for Tax
- Current Tax (including MAT credit) - - - 10,449 - 10,449
- Deferred Tax (Credit)/Charge - - - 3,136 - 3,136
Net Profit/(Loss) after tax 67,415 6,431 1,977 (24,860) - 50,963
Other Information
Capital Expenditure 89,530 8,022 6,256 821 (8,058) 96,571
Depreciation and amortisation 56,610 9,594 5,438 371 (3,746) 68,267
As of March 31, 2013
Segment Assets

409,048

52,937

36,964

344,902

-

843,851

Inter Segment Assets 264,647 53,059 48,652 - (366,358) -
Advance tax (Net of provision for tax) - - - 1,920 - 1,920
MAT Credit - - - 33,061 - 33,061
Total Assets 673,695 105,996 85,616 379,883 (366,358) 878,832
Segment Liabilities** 140,714 10,824 20,808 153,521 - 325,867
Inter Segment Liabilities 24,002 54,347 19,675 268,334 (366,358) -
Deferred Tax Liability (net) - - - 11,503 - 11,503
Total Liabilities 164,716 65,171 40,483 433,358 (366,358) 337,370

*Segment result excludes finance income of Rs 7,404 Mn, which is netted off from finance costs for the purpose of segment reporting.

**Unallocated liabilities includes amount borrowed for the acquisition of 3G & BWA Licenses of Rs 52,225 Mn.

Particulars

Mobile Services

Telemedia Services Airtel Business Unallocated Eliminations Total
Revenue
Revenue from operations 350,982 33,698 31,358 - - 416,038
Inter Segment Revenue 16,173 3,169 9,405 - (28,747) -
Total Revenue 367,155 36,867 40,763 - (28,747) 416,038
Results
Segment Result- Profit/(Loss)* 77,945 7,006 (840) (3,512) - 80,599
Finance Costs * - - - 11,037 - 11,037
Profit/(Loss) before tax 77,945 7,006 (840) (14,549) - 69,562
Provision for Tax
- Current Tax (including MAT credit) - - - 9,171 - 9,171
- Deferred Tax (Credit)/Charge - - - 3,091 - 3,091
Net Profit/(Loss) after tax 77,945 7,006 (840) (26,811) - 57,300
Other Information
Capital Expenditure 51,143 8,703 5,324 445 (7,071) 58,544
Depreciation and amortisation 47,945 8,523 5,502 423 (3,233) 59,160
As of March 31, 2012
Segment Assets

413,823

52,908

38,424

268,176

-

773,331

Inter Segment Assets 164,654 22,991 45,857 - (233,502) -
MAT Credit - - - 29,906 - 29,906
Total Assets 578,477 75,899 84,281 298,082 (233,502) 803,237
Segment Liabilities** 110,671 9,306 16,011 164,278 - 300,266
Inter Segment Liabilities 23,353 32,049 24,248 153,852 (233,502) -
Provision for Tax (Net of Advance Tax) - - - 308 - 308
Deferred Tax Liability (net) - - - 8,367 - 8,367
Total Liabilities 134,024 41,355 40,259 326,805 (233,502) 308,941

* Segment result excludes finance income of Rs 2,925 Mn which is netted off from finance cost for the purpose of segment reporting.

** Unallocated liabilities includes amount borrowed for the acquisiition of 3G & BWA Licenses of Rs 61,117 Mn.

Notes:

1. Segment results represent profit/(loss) before finance costs (net of finance income) and tax.

2. Capital expenditure represents gross additions made to tangible and intangible assets during the year.

3. Segment assets include tangible, intangible, current and other non current assets and excludes non current investments, MAT credit, advance tax.

4. Segment liabilities include current, non current liabilities and excludes provision for tax, deferred tax liabilities.

5. Inter segment assets/liabilities represent the inter segment account balances.

6. Inter segment revenue is accounted for on terms established by the management on arm’s length basis. These transactions have been eliminated at the Company level.

7. Unallocated includes other income, profits/(losses), assets and liabilities of the Company which are not allocated to the individual segments and is primarily related to the corporate headquarter of the Company.

Information about Geographical Segment – Secondary

The Company has operations serving customers within India as well as located in other countries. The information relating to the geographical segments in respect of customers being served and assets within India, which is the only reportable segment, the remaining portion being attributable to others, is presented below: ( Rs Millions)

Particulars For the year ended March 31, 2013 For the year ended March 31, 2012
Segment Revenue from external customers based on geographical location of customers
Within India 425,772 395,990
Others 27,737 20,048
453,509 416,038
Carrying amount of Segment Assets by geographical location of assets
Within India 850,974 774,083
Others 27,858 29,154
878,832 803,237
Cost incurred during the year to acquire Segment Assets by geographical location of assets
Within India 95,974 57,716
Others 597 828
96,571 58,544

Notes:

1. Segment assets include tangible, intangible, current and other non current assets.

2. Cost incurred during the year to acquire segment assets represents gross additions made to tangible and intangible assets during the year.

5. Share Capital

( Rs Millions)

Particulars As of March 31, 2013 As of March 31, 2012
Authorised shares
5,000,000,000 (March 31, 2012 - 5,000,000,000) equity shares of Rs 5 each 25,000 25,000
Issued, Subscribed and fully paid-up shares 3,797,530,096 (March 31, 2012- 3,797,530,096) equity shares of Rs 5 each 18,988 18,988
18,988 18,988

Note: 21,474,527 Equity shares of Rs 10 each are alloted as fully paid-up shares upon the conversion of Foreign Currency Convertible Bonds (FCCBs) (42,949,054 equity shares post share split of one equity share of Rs 10 each into 2 equity shares of Rs 5 each). a. Reconciliation of the equity shares outstanding at the beginning and at the end of the year

Particulars As of March 31, 2013 As of March 31, 2012
No. Rs Mn No. Rs Mn
At the beginning of the year 3,797,530,096 18,988 3,797,530,096 18,988
Issued during the year - - - -
Outstanding at the end of the year 3,797,530,096 18,988 3,797,530,096 18,988

b. Terms/rights attached to equity shares

The Company has only one class of equity shares having par value of Rs 5 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing Annual General Meeting.

During the year ended March 31, 2013, the Board of Directors has proposed dividend of Rs 1 per share of Rs 5 each (March 31, 2012 Rs 1.00). c. Details of shareholders (as per the register of shareholders) holding more than 5% shares in the Company

Particulars As of March 31, 2013 As of March 31, 2012
No. % holding No. % holding
Equity shares of Rs 5 each fully paid up Bharti Telecom Limited 1,737,558,892 45.75% 1,735,453,890 45.70%
Pastel Limited 591,319,300 15.57% 591,319,300 15.57%
Indian Continent Investment Limited 265,860,986 7.00% 265,860,986 7.00%

Shares held by holding/ultimate holding company and/or their subsidiaries/associates

6. Reserves and Surplus

( Rs Millions)

Particulars As of March 31, 2013 As of March 31, 2012
Capital Reserve 51 51
Securities Premium Reserve
Opening balance 40,798 40,641
Additions during the year 98 157
Closing balance 40,896 40,798
Debenture Redemption Reserve
Opening balance - 32
Transferred to statement of profit and loss during the year - (32)
Closing balance - -
Revaluation Reserve 21 21
Employee Stock Options Outstanding
Opening balance 3,391 3,694
Add: Granted during the year 362 369
Less:Forfeiture/Exercise 577 672
3,176 3,391
Less:Deferred stock compentation 335 460
Closing balance 2,841 2,931

 

( Rs Millions)
Particulars As of March 31, 2013 As of March 31, 2012
Reserve for Business Restructuring 24,912 24,912
General Reserve
Opening balance 23,157 18,865
Add: Adjustment on account of forfeiture of employee stock option - 56
Add: Adjustment on account of exercise of stock options through open market purchase (14) (64)
Add: Transferred from surplus balance in statement of profit and loss 3,830 4,300
Closing balance 26,973 23,157
Surplus in the Statement of Profit and Loss
Opening balance 383,438 334,820
Add: Profit for the year 50,963 57,300
Amount available for appropriation 434,401 392,120
Appropriations:
Transferred from Debenture Redemption Reserve - 32
Transferred to General Reserve (3,830) (4,300)
Dividend proposed (3,798) (3,798)
Tax on dividend proposed/paid* 7 (616)
Net surplus in the statement of profit and loss 426,780 383,438
Total 522,474 475,308

* Net of credit of Rs 608 Mn dividend distribution tax on interim dividend from a subsidiary utilised against dividend distribution tax for the year ended March 31, 2012 and Rs 45 Mn dividend distribution tax from a subsidiary to be utilised against dividend distribution tax for the year ended March 31, 2013.

7. Long-term Borrowings

( Rs Millions)

Particulars As of March 31, 2013 As of March 31, 2012
Secured
Others 20 29
Total secured loans 20 29
Unsecured
Term Loans
From Banks 71,059 51,275
From Others 39,714 42,754
Total unsecured loans 110,773 94,029
Less: Current maturities (payable within 1 year)
From Banks 8,294 5,642
From Others 4,091 6,078
98,408 82,338

a. ‘Others’ under secured loans represent vehicle loans from bank which are secured by hypothecation of vehicles of the

Company.

b. Details on analysis of borrowings i.e. Maturity profile, interest rate and currency of borrowings.

( Rs Millions)
Maturity Profile
Currency of borrowings Rate of Interest (Weighted average) As of March 31, 2013 within one year between one and two between two and five years over five years
years
INR 10.68% 92,995 7,588 16,132 65,275 4,000
USD 0.97% 17,798 4,797 3,939 7,718 1,344
Total 8.97% 110,793 12,385 20,071 72,993 5,344

 

( Rs Millions)
Maturity Profile
Currency of borrowings Rate of Interest (Weighted average) As of March 31, 2012 within one year between one and two years between two and five years over five years
INR 10.54% 70,029 2,268 6,760 51,001 10,000
JPY 0.79% 5,026 5,026 - - -
USD 0.78% 19,003 4,426 3,898 8,859 1,820
Total 7.91% 94,058 11,720 10,658 59,860 11,820

c. The borrowings of Rs 110,793 Mn outstanding as of March 31, 2013 is repayable in total 315 half yearly installments (borrowings of Rs 94,058 Mn outstanding as of March 31, 2012 is repayable in total 388 half yearly instalments).

8. Taxes

a. Deferred Tax Liabilities (Net)

( Rs Millions)

Particulars As of March 31, 2013 As of March 31, 2012
Deferred Tax Assets
Provision for doubtful debts/advances charged in the statement of profit and loss but allowed as deduction under the Income Tax Act in future years (to the extent considered realisable) 4,995 4,264
Lease Rent Equalisation charged in the statement of profit and loss but allowed as deduction under the Income Tax Act in future years on actual payment basis 4,003 3,163
Foreign exchange fluctuation and mark to market losses charged in the statement of profit and loss but allowed as deduction under the Income Tax Act in future years (by way of depreciation and actual realisation) 2,940 2,123
Other expenses claimed as deduction in the statement of profit and loss but allowed as deduction under Income Tax Act in future year on actual payment (Net) 1,705 1,230
Gross Deferred Tax Assets 13,643 10,780
Deferred Tax Liabilities
Depreciation claimed as deduction under Income Tax Act but chargeable in the statement of profit and loss in future years (25,146) (19,147)
Gross Deferred Tax Liabilities (25,146) (19,147)
Deferred Tax Assets/(Liabilities) (Net) (11,503) (8,367)

b. MAT credit includes expense of Rs 1,481 Mn (March 31, 2012 – income of Rs 206 Mn), current tax includes expense of Rs 65 Mn (March 31, 2012 – income of Rs 109 Mn) and deferred tax includes income of Rs 291 Mn (March 31, 2012 – Rs 81 Mn) relating to earlier years.

c. During the year ended March 31, 2013 and March 31, 2012, the Company has changed the trigger plan date for earlier years for certain business units enjoying Income tax holiday under the Indian Income tax laws. Accordingly, tax charge of Rs 410 Mn pertaining to earlier years has been recognised during the year ended March 31, 2013 and tax credit of Rs 903 Mn pertaining to earlier years has been recognised during the year ended March 31, 2012.

d. During the year ended March 31, 2013, the Company has recognised additional tax charge of Rs 545 Mn on account of changes in tax rate from 32.445% to 33.99%, as proposed in the Finance Bill, 2013.

9. Other Long-term Liabilities

( Rs Millions)

Particulars As of March 31, 2013 As of March 31, 2012
Security deposit received 5,024 5,091
Equipment supply payable 1,737 4,475
Deferred revenue 11,641 4,730
Lease rent equalisation 12,994 10,692
Others 312 196
31,708 25,184

Security deposit Rs 5,024 Mn (March 31, 2012 Rs 5, 091) included under ‘Security deposit received’, represents refundable security deposits received from subscribers on activation of connections granted thereto and are repayable on disconnection, net of outstanding, if any and security deposits received from channel partners. Trade receivables are secured to the extent of the amount outstanding against individual subscribers by way of security deposit received from them.

10. Long-term Provisions

( Rs Millions)

Particulars As of March 31, 2013 As of March 31, 2012
Provision for employee benefits (refer note 38) Provision for gratuity 988 847
Provision for deferred bonus & long term service award 66 119
Other provisions 1,054 966
Provision for asset retirement obligation 440 439
1,494 1,405

The Company uses various premises on lease to install the equipment. A provision is recognised for the costs to be incurred for the restoration of these premises at the end of the lease period. It is expected that this provision will be utilised at the end of the lease period of the respective sites as per the respective lease agreements. The movement of provision in accordance with AS–29 Provisions, Contingent liabilities and Contingent Assets’ notified under the Companies (Accounting Standards) Rules, 2006 (‘as amended’), is given below:

( Rs Millions)

Particulars For the year ended March 31, 2013 For the year ended March 31, 2012
Opening balance 439 165
Addition during the year 1 274
Closing balance 440 439

11. Short-term Borrowings

( Rs Millions)

Particulars As of March 31, 2013 As of March 31, 2012
(Unsecured unless stated otherwise)
Loans
From banks 8,395 43,383
From others - 2,000
Loans repayable on demand
Cash Credit 5 314
Loans from related parties (refer note 46) 22,990 13,259
31,390 58,956

a. Details on analysis of borrowings i.e. interest rate and currency of borrowings

( Rs Millions)

Currency of Borrowings As of March 31, 2013 As of March 31, 2012
Rate of Interest (Weighted average) Amount outstanding Rate of Interest (Weighted average) Amount outstanding
INR 10.30% 3,500 10.72% 28,400
USD 3.28% 4,895 3.64% 16,983
Total 8.49% 8,395 8.20% 45,383

b. The borrowings of Rs 8,395 Mn outstanding as of March 31, 2013 is repayable in 4 bullet instalments (borrowings of

Rs 45,383 Mn outstanding as of March 31, 2012 is repayable in 12 bullet instalments).

12. Trade Payables

( Rs Millions)

Particulars As of March 31, 2013 As of March 31, 2012
Dues to Micro and Small Enterprises * 16 50
Trade payables other than dues to Micro and Small Enterprises ** 51,356 45,071
51,372 45,121

* refer note 45 for details of dues to micro and small enterprises.

** amount payable to related parties Rs 6,146 Mn (March 31, 2012 Rs 4,914 Mn).

13. Other Current Liabilities

( Rs Millions)

Particulars As of March 31, 2013 As of March 31, 2012
Deferred revenue 20,584 24,079
Equipment supply payables 38,938 21,365
Payable to others 22,406 18,343
Advance received from customers 1,347 1,356
Current maturities of long term debt 12,385 11,720
Interest accrued but not due on borrowings 675 685
Other taxes payable 3,940 3,456
Unpaid dividends 27 20
Other liabilities* 5,732 976
106,034 82,000

Payable to others and Other liabilities include provision of Rs 17,900 Mn as of March 31, 2013 and Rs 14,608 Mn as of March 31, 2012 towards sub judice matters. *Includes payable to related party Rs 4,793 Mn (March 31, 2012 Nil).

14. Short-term Provisions

( Rs Millions)

Particulars As of March 31, 2013 As of March 31, 2012
Provision for employee benefits (refer note 38)
Provision for Gratuity 318 196
Provision for Leave Encashment 744 652
Total 1,062 848
Others
Provision for Income Tax (net of advance tax of Rs NIL (March 31, 2012 Rs 77,304 Mn)) - 308
Proposed Dividend 3,798 3,798
Tax on Dividend 601 616
Total 4,399 4,722
5,461 5,570

15. Tangible Assets

( Rs Millions)

Particulars Leasehold Land Freehold Land Building Plant and Equipment Furniture and Fixtures Vehicles Office Equipment Computer* Leasehold improvements Total
Cost
As of April 1, 2011 383 1,474 5,122 423,440 1,380 272 2,613 24,046 3,618 462,348
Additions - 25 291 35,822 20 24 122 1,854 105 38,263
Disposals - - (11) (2,157) (32) (22) (9) (41) (111) (2,383)
Reclassification/ adjustment (31) - - 240 - - (5) (204) - -
As of March 31, 2012 352 1,499 5,402 457,345 1,368 274 2,721 25,655 3,612 498,228
Additions - 17 423 53,238 77 16 493 2,036 699 56,999
Disposals - - - (2,290) (1) (14) (13) (1,219) (41) (3,578)
Reclassification/ adjustment 62 (214) 106 91 (4) - 2 5 (43) 5
As of March 31, 2013 414 1,302 5,931 508,384 1,440 276 3,203 26,477 4,227 551,654
Accumulated Depreciation
As of April 1, 2011 15 - 1,149 161,717 948 162 1,742 20,011 1,828 187,572
Charge for the year 4 - 276 44,660 140 40 354 2,619 407 48,500
Disposals - - (3) (1,476) (27) (9) (6) (41) (64) (1,626)
Reclassification/ adjustment - - - 14 - - (5) (9) - -
As of March 31, 2012 19 - 1,422 204,915 1,061 193 2,085 22,580 2,171 234,446
Charge for the year 9 - 324 52,261 90 27 299 2,244 321 55,575
Disposals - - - (1,527) (1) (7) (10) (1,126) (21) (2,692)
Reclassification/ adjustment - - (55) (5) 28 1 (2) (2) (2) (37)
As of March 31, 2013 28 - 1,691 255,644 1,178 214 2,372 23,696 2,469 287,292
Net Carrying Amount
As of April 1, 2011 368 1,474 3,973 261,723 432 110 871 4,035 1,790 274,776
As of March 31, 2012 333 1,499 3,980 252,430 307 81 636 3,075 1,441 263,782
As of March 31, 2013 386 1,302 4,240 252,740 262 62 831 2,781 1,758 264,362

* With respect to assets where the Company has economic ownership, refer note 3.20.

a. Freehold Land and Building includes Rs 4 Mn (March 31, 2012 Rs 226 Mn) and Rs 13 Mn (March 31, 2012 Rs 13 Mn) respectively, in respect of which registration of title in favour of the Company is pending.

b. Building includes building on leashold land:

( Rs Millions)

Gross Block Depreciation Net Block
Particulars As of April 1, 2012 Additions Disposals Reclassification/ adjustment As of March 31, 2013 As of April 1, 2012 Charge for the year Disposals Reclassification/ adjustment As of March 31, 2013 As of March 31, 2013 As of March 31, 2012
Building includes building on leasehold land 2,490 43 - 152 2,685 414 156 - - 570 2,115 2,076

 

( Rs Millions)

Gross Block Depreciation Net Block
Particulars As of April 1, 2011 Additions Disposals Reclassification/ adjustment As of March 31, 2012 As of April 1, 2011 Charge for the year Disposals Reclassification/ adjustment As of March 31, 2012 As of March 31, 2012 As of March 31, 2011
Building includes building on leasehold land 2,360 130 - - 2,490 261 153 - - 414 2,076 2,099

c. Reclassification/Adjustment includes reclass of assets between category of assets.During the year ended March 31, 2013, Rs 5 Mn and Rs (37) Mn gross block and accumulated deprecation respectively, has been reclassified from tangible assets to intangible assets.

d. Capital work in progress includes goods in transit Rs 1,107 Mn (March 31, 2012 Rs 785 Mn).

e. Refer note 10, 39 and 47 for ARO, jointly owned assets and assets given on operating lease respectively.

16. Intangible Assets

( Rs Millions)

Particulars Software* Bandwith Licences Total
Cost
As of April 1, 2011 6,111 18,393 127,522 152,026
Additions 2,263 1,418 16,600 20,281
Disposals - (87) - (87)
Reclassification/adjustment - (1,380) - (1,380)
As of March 31, 2012 8,374 18,344 144,122 170,840
Additions 2,332 1,415 35,825 39,572
Reclassification/adjustment (5) - - (5)
As of March 31, 2013 10,701 19,759 179,947 210,407
Accumulated Amortisation
As of April 1, 2011 2,583 3,868 13,344 19,795
Charge for the year 2,021 1,198 7,441 10,660
Reclassification/adjustment - (241) - (241)
As of March 31, 2012 4,604 4,825 20,785 30,214
Charge for the year 2,535 1,304 8,853 12,692
Reclassification/adjustment 20 17 - 37
As of March 31, 2013 7,159 6,146 29,638 42,943
Net Carrying Amount
As of April 1, 2011 3,528 14,525 114,178 132,231
As of March 31, 2012 3,770 13,519 123,337 140,626
As of March 31, 2013 3,542 13,613 150,309 167,464

* With respect to assets where the Company has economic ownership, refer note 3.20.

a. The remaining amortisation period of licence fees as of March 31, 2013 ranges between 2 to 12 years for Unified Access Service Licences, 9 years for Long Distance Licences, 17.4 years for 3G spectrum fees and 17.4 years for BWA licence fees.

b. Licences includes Net Block of 3G and 4G spectrum fees of Rs 144,135 Mn as of March 31, 2013 (March 31, 2012 Rs 116,106 Mn)

c. Capitalised borrowing costs

The borrowing cost capitalised during the year ended March 31, 2013 was Rs 298 Mn (March 31, 2012 Rs 1,565

Mn). The Company capitalised this borrowing cost in the Intangible assets under development. The additions to licences includes borrowing cost of Rs 2,591 Mn (March 31, 2012 Rs 541 Mn) transferred from Intanginble assets under development.The amount of borrowing cost included in Intangible assets under development is Rs Nil Mn (March 31, 2012 Rs 2,293 Mn).

d. Reclassification/Adjustment includes reclass of assets between category of assets.During the year ended March 31, 2013, Rs 5 Mn and Rs (37) Mn gross block and accumulated deprecation respectively, has been reclassified from tangible assets to intangible assets.

17. Non-current Investments

( Rs Millions)

Particulars As of March 31, 2013 As of March 31, 2012
Trade investments (at cost)
Investment in Equity Instruments (Un-quoted)
Investment in Subsidiaries
1) Bharti Hexacom Limited: 175,000,000 (March 31, 2012 - 175,000,000) Equity shares of Rs 10 each fully paid up 5,718 5,718
2) Bharti Airtel Services Limited: 100,000 (March 31, 2012 - 100,000) Equity shares of Rs 10 each fully paid up 1 1
3) Bharti Airtel (USA) Limited: 300 (March 31, 2012 - 300) Equity shares of USD .0001 each fully paid up 509 509
4) Bharti Airtel (UK) Limited:123,663 (March 31, 2012 - 123,663) Equity shares of GBP 1 each fully paid up 101 101
5) Bharti Airtel (Hongkong) Limited: 4,959,480 (March 31, 2012 - 4,959,480) Equity shares of HKD 1 each fully paid up 26 26
6) Bharti Airtel (Canada) Limited: 75,100 (March 31, 2012 - 75,100) 3 3
Equity shares of Canadian Dollar (CAD) 1 each fully paid up
7) Network i2i Limited: 9,000,000 (March 31, 2012 - 9,000,000) Equity shares of USD 1 each fully paid up 5,316 5,316
8) Bharti Infratel Limited: 1,500,000,000 (March 31, 2012 - 500,000,000) 82,182 82,182
Equity shares of Rs 10 each fully paid up. (refer note 36 (vii))
9) Bharti Telemedia Limited: 9,690,000 (March 31, 2012 - 9,690,000) Equity shares of Rs 10 each fully paid up 115 115
10) Bharti Airtel Lanka (Private) Limited: 525,596,420 (March 31, 2012 - 2,049 2,049
525,596,420) Equity shares of SLR 10 each fully paid up
11) Bharti Airtel Holdings (Singapore) Pte Limited: 1 (March 31, 2012 - 1) Equity share of Singapore Dollar (SGD) 1 each fully paid up and 338,642,771 (March 31, 2012 - 338,642,771) Equity shares of USD 1 each fully paid up 15,475 15,475
12) Bharti Airtel International (Mauritius) Ltd: 889,970,000 (March 31, 2012 - 104,970,000) Equity shares of USD 1 each fully paid up (refer note 36 (iii) and 36 (v)) 48,121 4,847
13) Airtel M Commerce Services Limited: 156,000,000 (March 31, 2012 - 50,000,000) Equity shares of Rs 10 each fully paid up (refer note 36 (iv))

1,560

500

14) Bharti International (Singapore) Pte. Ltd: 593,739,000 (March 31, 2012 - 18,739,000) Equity shares of USD 1 each fully paid up (refer note 36 (v)) 33,035 851
15) Bharti Airtel International (Netherlands) B.V.: 908,443,919 (March 31, 2012 - 18,735) Equity shares of EURO 1 each fully paid up (refer note 36 (v)) 67,354 1
16) Telesonic Networks Limited (earlier known as Alcatel-Lucent Network Management Service India Ltd): 89,230,796 (March 31, 2012 - 9,000,004) Equity shares of Rs 10 each fully paid up.

91

-

( Rs Millions)

Particulars As of March 31, 2013 As of March 31, 2012
Investment in Joint Ventures
1) Bridge Mobile PTE Limited: 2,200,000 (March 31, 2012- 2,200,000) Equity shares of USD 1 each fully paid up. 92 92
2) Wireless Broadband Business Services (Delhi) Private Limited: 348,560,439 (March 31, 2012- NIL) Equity shares of Rs 10 each fully paid up. (refer note 36 (i)) 4,225 -
3) Wireless Broadband Business Services (Haryana) Private Limited: 19,563,359 (March 31, 2012 NIL) Equity shares of Rs 10 each fully paid up. (refer note 36 (i)) 237 -
4) Wireless Broadband Business Services (Kerala) Private Limited: 40,974,544 (March 31, 2012 NIL) Equity shares of Rs 10 each fully paid up. (refer note 36 (i)) 497 -
5) Wireless Business Services Private Limited: 356,572,850 (March 31, 2012 NIL) Equity shares of Rs 10 each fully paid up. (refer note 36 (i)) Investment in Associates 4,322 -
1) Bharti Teleport Limited: 11,270,000 (March 31, 2012- 11,270,000) Equity shares of Rs 10 each fully paid up 113 113
2) Telesonic Networks Limited (earlier known as Alcatel- Lucent Network Management Service India Ltd): NIL (March 31, 2012 - 9,000,004) Equity shares of Rs 10 each fully paid up - 90
Investment in other Equity Instrument
1) IFFCO Kissan Sanchar Limited: 100,000 (March 31, 2012- 100,000) Equity shares of Rs 10 each fully paid up. 50 50
271,192 118,039
Other Investments (at cost)
Investment in Government Securities - National Savings Certificate 2 2
(Un-quoted) : 18 units (March 31, 2012 - 18 units)
Less: Provision for diminution in value of investments 3 -
271,191 118,041
Aggregate value of Unquoted Investments 271,191 118,041
Aggregate value of Quoted Investments - -
Aggregate Market value of Quoted Investments - -
Aggregate provision for diminution in value of investments 3 -

18. Long-term Loans and Advances

( Rs Millions)

Particulars As of March 31, 2013 As of March 31, 2012
Unsecured, considered good unless stated otherwise
Capital Advances
Considered good 1,195 1,495
Considered doubtful 140 127
Less: Provision for doubtful advances (140) (127)
1,195 1,495
Security Deposit
Considered good 1,585 1,502
Considered doubtful 541 372
Less: Provision for doubtful deposit (541) (372)
1,585 1,502
Loans and advances to related parties (refer note 46) * 53,517 51,855
MAT Credit Entitlement 33,061 29,906
Others - 59
89,358 84,817

* Includes security deposit with related parties of Rs 7,119 Mn (March 31, 2012 Rs 9,755 Mn).

19. Other Non-current Assets

( Rs Millions)

Particulars As of March 31, 2013 As of March 31, 2012
Unsecured, considered good, unless stated otherwise
Non-current bank balances (refer note 23) 10 6
Advances * 13,061 10,426
Unamortised upfront fees and Deferred Premium 1,040 492
14,111 10,924

* Advances represent payments made to various Government authorities under protest and are disclosed net of provision of Rs 15,263 Mn (March 31, 2012 Rs 10,670 Mn).

20. Current Investments

( Rs Millions)

Particulars As of March 31, 2013 As of March 31, 2012
Current investments (at lower of cost and fair market value)
Investment in Mutual Funds 10,765 5,307
Investment in Deposits and Bonds 35 30
10,800 5,337
Aggregate value of Unquoted Investments 35 30
Aggregate value of Quoted Investments 10,765 5,307
Aggregate Market Value of Quoted Investments 10,841 5,334
Aggregate provision for diminution in value of investments - -

Details of investments are provided below:

( Rs Millions, except as stated otherwise)

As of March 31, 2013 As of March 31, 2012
Particulars (No. of Units) Amount (No. of Units) Amount
Investment in mutual funds (Quoted)
Tata Liquid Super High Inv. Fund - Appreciation 692,590 1,482 73,050 144
UTI Liquid Cash Plan Institutional - Growth Option - - 227,432 400
Axis Liquid Fund 32,545 42 90,627 107
Birla Sun Life Cash Plus - Instl. Prem. - Growth 4,684,442 872 3,344,423 572
L&T (DBS Chola) Liquid Fund - Super IP - - 523,248 762
ICICI Prudential Institutional Liquid Plan - Super 3,460,250 594 5,695,150 901
Institutional Growth
IDBI Liquid Fund - - 47,104 54
JM High Liquidity Fund - Super Institutional Plan - - - 46,527,132 776
Growth
JP Morgan India Liquid Fund - - 61,389,483 848
Peerless Liquid Fund Super IP - - 56,848,440 665
Religare Liquid Fund - Super Institutional Growth 577,406 924 52,837 78
Kotak Liquid (Institutional Premium Plan) - Growth 590,854 1,396 - -
Reliance Liquidity Fund-Growth Option 720,786 1,264 - -
DWS Insta Cash Plus Fund - Super Institutional Plan 4,726,818 715 - -
- Growth
DBS Chola Liq Sup Inst. Plan - Cumulative 174,694 276 - -
UTI Money Market Fund - Institutional Growth Plan - - - -
JP Morgan India Liquid Fund- Super Inst. Growth Plan 86,125,530 1,300 - -
IDFC Ultra Short Term Fund 116,730,561 1,900 - -
Total 218,516,476 10,765 174,818,926 5,307
Investment in Deposits and Bonds (Unquoted)
India Innovation Fund 10 5 1 2
7.30% REC Secured Bonds 30 30 30 28
Total 40 35 31 30

21. Inventories (valued at lower of cost and net realisable value)

( Rs Millions)

Particulars As of March 31, 2013 As of March 31, 2012
Stock-In-Trade* 21 321
21 321

* Net of provision for diminution in value Rs 512 Mn (March 31, 2012 Rs 219 Mn).

22. Trade Receivables

( Rs Millions)

Particulars As of March 31, 2013 As of March 31, 2012
Unsecured, unless stated otherwise
Receivables outstanding for a period exceeding six months Considered good 1,081 1,065
Considered doubtful 9,649 8,289
Less: Provision for doubtful receivables (9,649) (8,289)
1,081 1,065
Other receivables
Considered good 21,387 20,280
Considered doubtful 1,721 1,856
Less: Provision for doubtful receivables (1,721) (1,856)
21,387 20,280
22,468 21,345

Refer note 9 on security deposit.

23. Cash and Bank Balances

( Rs Millions)

Particulars As of March 31, 2013 As of March 31, 2012
Cash and cash equivalents
Balances with banks
- On current accounts 1,615 1,120
- Deposits with original maturity of 3 months or less 1,375 1,950
Cheques on hand 189 341
Cash on hand 73 123
On unpaid dividend account 27 14
3,279 3,548
Other bank balances
Deposits with original maturity of more than 3 months but less than 12 month 348 1,264
Deposits with original maturity of more than 12 months 5 2
Margin money deposit 5 4
358 1,270
Less: Amount disclosed under non-current assets (refer note 19) 10 6
3,627 4,812

24. Short-term Loans and Advances

( Rs Millions)

Particulars As of March 31, 2013 As of March 31, 2012
Unsecured, considered good unless stated otherwise
Loans and advances to related parties (refer note 46) 1,242 85,211
Advances recoverable in cash or kind
Considered good 5,925 9,695
Considered doubtful 1,134 1,140
Less: Provision for doubtful advances (1,134) (1,140)
5,925 9,695
Balances with customs, excise and other authorities 5,046 3,141
Advance Tax [net of provision for tax of Rs 91,216 Mn (March 31, 2012 Rs NIL Mn)] net off Rs 269 Mn TDS receivable provided for March 31, 2012 Rs NIL Mn)] 1,920 -
14,133 98,047

25. Other Current Assets

( Rs Millions)

Particulars As of March 31, 2013 As of March 31, 2012
Unsecured, considered good, unless stated otherwise
Unbilled Revenue 9,919 8,866
Interest accured on loan given to related parties 471 1,324
Unamortised upfront fees and Deferred Premium 266 254
Others 333 76
10,989 10,520

26. Contingent Liabilities

(i) Total Guarantees outstanding as of March 31, 2013 amounting to Rs 29,714 Mn (March 31, 2012 –

Rs 27,158 Mn) have been issued by banks and financial institutions on behalf of the Company. These guarantees include of certain financial bank guarantees which have been given for subjidice matters and in compliance with licensing conditions, the amount with respect to these have been disclosed under contingencies and liabilities, as applicable in compliance with the applicable Accounting standards.

Corporate Guarantees outstanding as of March 31, 2013 amounting to Rs 537,606 Mn (March 31, 2012 - Rs 481,376 Mn) have been given to banks, financial institutions and third parties on behalf of Group Companies at no cost to the latter.

(ii) Claims against the Company not acknowledged as debt: (Excluding cases where the possibility of any outflow in settlement is remote): a) Claims against the Company not acknowledged as debt

( Rs Millions)

Particulars As of March 31, 2013 As of March 31, 2012
(i) Taxes, Duties and Other demands (under adjudication/appeal/dispute)
-Sales Tax (see 26 (ii) (b) below) 555 552
-Service Tax (see 26 (ii) (c) below) 6,094 4,503
-Income Tax (see 26 (ii) (d) below) 15,032 14,224
-Customs Duty (see 26 (ii) (e) below) 4,463 2,198
-Stamp Duty 351 353
-Entry Tax (see 26 (ii) (f) below) 3,408 2,624
-Municipal Taxes 111 1
-Access Charges/Port Charges (see 26(ii) (g) below) 4,616 4,519
-DoT demands (including 26 (ii) (h) below)* 2,362 3,369
-Other miscellaneous demands (including 26 (ii) (i) below) 118 114
(ii) Claims under legal cases including arbitration matters (including 26(ii) (i) below) 570 450
37,680 32,907

* in addition, refer note (h) (v),(h) (vi) & (h) (vii) below for DoT matters not included above.

Unless otherwise stated below, the management believes that, based on legal advice, the outcome of these contingencies will be favorable and that a loss is not probable.

b) Sales Tax

The claims for sales tax as of March 31, 2013 comprised the cases relating to: i. the appropriateness of the declarations made by the Company under the relevant sales tax legislations which was primarily procedural in nature; ii. the applicable sales tax on disposals of certain property and equipment items; iii. lease circuit/broadband connectivity services; iv. the applicability of sales tax on sale of SIM cards, SIM replacements, VAS, Handsets and Modem rentals; v. In the State of J&K, the Company has disputed the levy of General Sales Tax on its telecom services and towards which the Company has received a stay from the Hon’ble J&K High Court. The demands received to date have been disclosed under contingent liabilities. Based on the Company’s evaluation, it believes that it is not probable that the claim will materialise and therefore, no provision has been recognised.

c) Service Tax

The service tax demands as of March 31, 2013 relate to: i. cenvat claimed on tower and related material, ii. levy of service tax on SIM cards, iii. cenvat credit disallowed for procedural lapses and inadmissibility of credit and iv. disallowance of cenvat credit used in excess of 20% limit. v. employee talk time d) Income Tax

Income tax demands under appeal mainly included the appeals filed by the Company before various appellate authorities against the disallowance of certain expenses being claimed under tax by income tax authorities, non-deduction of tax at source with respect to dealers/ distributor’s margin and non-deduction of tax on payments to international operators for access charges, etc. Based on the Company’s evaluation and legal advice, it believes that it is not probable that the claim will materialise and therefore, no provision has been recognised.

e) Custom Duty

The custom authorities, in some states, demanded Rs 4,463 Mn as of March 31, 2013 (March 31, 2012 - Rs 2,198 Mn) for the imports of special software on the ground that this would form part of the hardware on which it was pre-loaded at the time of import. The view of the Company is that such imports should not be subject to any custom duty as it would be an operating software exempt from any custom duty. In response to the application filed by the Company, the Hon’ble CESAT has passed an order in favour of the custom authorities. The Company has filed an appeal with Hon’ble Supreme Court against the CESTAT order. Based on the Company’s evaluation, it believes that it is not probable that the claim will materialise and therefore, no provision has been recognised. f) Entry Tax

In certain states an entry tax is levied on receipt of material from outside the state. This position has been challenged by the Company in the respective states, on the grounds that the specific entry tax is ultra vires the Constitution. Classification issues have also been raised whereby, in view of the Company, the material proposed to be taxed is not covered under the specific category. The amount under dispute as of March 31, 2013 was Rs 3,408 Mn (March 31, 2012 - Rs 2,624 Mn). g) Access Charges (Interconnect Usage Charges)/Port Charges

Interconnect charges are based on the Interconnect Usage Charges (IUC) agreements between the operators although the IUC rates are governed by the IUC guidelines issued by TRAI. BSNL has raised a demand requiring the Company to pay the interconnect charges at the rates contrary to the regulations issued by TRAI. The Company filed a petition against that demand with the Telecom Disputes Settlement and Appellate Tribunal (‘TDSAT’) which passed a status quo order, stating that only the admitted amounts based on the regulations would need to be paid by the Company. The final order was also passed in our favour. BSNL has challenged the same in Supreme court. However, no stay has been granted.

The management believes that, based on legal advice, the outcome of these contingencies will be favorable and that a loss is not probable. Accordingly, no amounts have been accrued although some have been paid under protest.

In another proceeding with respect to Distance Based Carriage Charges, the Hon’ble TDSAT in its order dated May 21, 2010, allowed BSNL appeal praying to recover distance based carriage charges. On filing of appeal by the Telecom Operators, Hon’ble Supreme Court asked the Telecom Operators to furnish details of distance-based carriage charges owed by them to BSNL. Further, in a subsequent hearing held on Aug 30, 2010 Hon’ble Supreme Court sought the quantum of amount in dispute from all the operators as well as BSNL and directed both BSNL and Private telecom operators to furnish CDRs to TRAI. The CDRs have been furnished to TRAI. The management believes that, based on legal advice, the outcome of these contingencies will be favourable and that a loss is not probable.

In another issue with respect to Port Charges, in 2001, TRAI had prescribed slab based rate of port charges payable by private operators which were subsequently reduced in the year 2007 by TRAI. On BSNL’s appeal, TDSAT passed it’s judgment in favour of BSNL, and held that the pre-2007 rates shall be applicable prospectively from May 29, 2010. The management believes that, based on legal advice, the outcome of these contingencies will be favourable and that a loss is not probable.

h) DoT Demands i) The Company has not been able to meet its roll out obligations fully due to certain non-controllable factors like Telecommunication Engineering Center testing, Standing Advisory Committee of Radio Frequency Allocations clearance, non availability of spectrum, etc. The Company has received show cause notices from DoT for 14 of its circles for non-fulfillment of its roll out obligations and these have been replied to. DoT has reviewed and revised the criteria and there has been no further development on this matter since then.

ii) DoT demands include demands raised for contentious matters relating to computation of license fees and spectrum charges.

iii) DoT demands include alleged short payment of license fee for FY 2006-07 and FY 2007-08 due to difference of interpretation of Adjusted Gross Revenue (AGR) between the Company and DoT and interest thereon, against which the Company has obtained stay from appropriate Hon’ble High Court. iv) DoT demands also include the contentious matters in respect of subscriber verification norms and regulations including validity of certain documents allowed as Proof of Address/Identity in a mobility circle.

The above stated matters are being contested by the Company and the Company, based on legal advice, believes that it has complied with all license related regulations as and when prescribed and does not expect any loss relating to these matters.

In addition to the amount disclosed in the above table, the contingent liability on DOT matters includes the following: v) Post the Hon’ble Supreme Court Judgment on October 11, 2011 on components of Adjusted Gross Revenue for computation of License fee, based on the legal advice, the Company believes that the realised and unrealised foreign exchange gain should not be included in Adjusted Gross Revenue (AGR) for computation of license fee thereon. Accordingly, the license fee on such foreign exchange gain has not been provided in these financial statements. Also, due to ambiguity of interpretation of ‘foreign exchange differences, the license fee impact on such exchange differences is not quantifiable and has not been included in the table above. Further, as per the Order dated June 18, 2012 of the Kerala High Court, stay has been obtained, wherein the licensee can continue making the payment as was being done throughout the period of license on telecom activities.

vi) On January 8, 2013, the Department of Telecommunications (‘DoT’) issued a demand on the Company for Rs 51,353 Mn towards levy of one time spectrum charge. The demand includes a retrospective charge of Rs 8,940 Mn for holding GSM Spectrum beyond 6.2 Mhz for the period from July 1, 2008 to December 31, 2012 and also a prospective charge of Rs 42,413 Mn for GSM spectrum held beyond 4.4 Mhz for the period from January 1, 2013, till the expiry of the initial terms of the respective licenses. In the opinion of the Company, inter-alia, the above demand amounts to alteration of financial terms of the licenses issued in the past. Based on a petition filed by the Company, the Hon’ble High Court of Bombay, through its order dated January 28, 2013, has directed the DoT to respond and not to take any coercive action until the next date of hearing, scheduled for May 6, 2013. The Company believes, based on independent legal opinions and its evaluation, that it is not probable that the claim will materialise and therefore, pending outcome of this matter, no provision has been recognised.

vii) Based upon the scope of Service under UAS License and the NIA for 3G/BWA with its clarifications, in 7 such circles where the Company has not been allocated 3G spectrum, the Company has been providing 3G service under a commercial arrangement .i.e " 3G Intra Circle Roaming Agreements with other operators".

The Department of Telecommunications issued notice to the Company dated December 23, 2011 along with other Telecom Operators to stop provision of services under 3G Intra Circle Roaming Agreements where it has not won 3G Spectrum which was challenged by the Company in TDSAT wherein stay was granted against the said order by TDSAT. TDSAT on July 3, 2012 gave a split verdict on the legality of telecom operators providing 3G services to its customers in circles, where they have not been allotted the 3G spectrum.

The Department of Telecommunications (DoT) vide its letter dated March 15, 2013 has directed the Company to stop providing 3G services in these 7 circles (under Intra Circle Roaming arrangements) and has also levied a financial penalty of Rs 3,500 Mn. The same has been challenged by the Company before Hon’ble Delhi High Court which had granted a stay vide its order dated March 18, 2013. Subsequently, one of the operators (not being a party to the litigation) approached the Division Bench of Delhi High Court and, allowing its appeal, the Division Bench vacated the stay. The Company filed a Special Leave Petition before the Supreme Court, challenging the order of the Division Bench. The Supreme Court, vide its interim order dated April 11, 2013, restrained DoT from taking any coercive action and while adjourning the matter for final hearing to May 9, 2013, also directed the Company not to extend the facilities to any new customer on the basis of the Intra Circle Roaming Arrangements in the meantime . Pending further orders from the Court, the Company continues to provide such services to existing customers under the said commercial arrangement.

i) Others

Others mainly include disputed demands for consumption tax, disputes before consumer forum and with respect to labour cases and a potential claim for liquidated damages.

The management believes that, based on legal advice, the outcome of these contingencies will be favourable and that a loss is not probable. No amounts have been paid or accrued towards these demands.

j) Bharti Mobinet Limited (‘BMNL’) Litigation

Bharti Airtel is in litigation in various proceedings at various stages and in various forums with DSS  Enterprises Private Limited (DSS) (which had 0.34% equity interest in erstwhile Bharti Cellular Limited (BCL)) on claims of specific performance in respect of alleged agreements to sell the equity interest of DSS in erstwhile BMNL to Bharti Airtel. In respect of one of the transactions with respect to purchase of 10.5% share of DSS in Skycell by Bharti, Crystal Technologies Private Limited (‘Crystal’), an intermediary, initiated arbitration proceedings against the Company demanding

Rs 195 Mn regarding termination of its appointment as a consultant to negotiate with DSS for the sale of DSS stake in erstwhile BMNL to Bharti Airtel. The Ld. Arbitrator partly allowed the award for a sum of Rs 31 Mn, 9% interest from period October 3, 2001 till date of award (i.e. May 28, 2009) and a further 18% interest from date of award to date of payment. The Company appealed against the award. The Single Judge while dismissing the appeal reduced the rate of interest from 18% to 12%. The matter was appealed thereafter to Division Bench and finally to Supreme Court wherein the matter has been admitted on the condition that the amount as per Single Judge Order shall be secured in the SC, which has been done. The matter will now come up in due course.

DSS has also filed a suit against a previous shareholder of BMNL and Bharti Airtel challenging the transfer of shares by that shareholder to Bharti Airtel. The matter is to be reheard.

DSS has also initiated arbitration proceedings seeking direction for restoration of the cellular license and the entire business associated with it including all assets of BCL/BMNL to DSS or alternatively, an award for damages. An interim stay was granted by the Delhi High Court with respect to the commencement of arbitration proceedings. The stay was made absolute.

The liability, if any, of Bharti Airtel arising out of above litigation cannot be currently estimated. Since the amalgamation of BCL and erstwhile Bharti Infotel Limited (BIL) with Bharti Airtel, DSS, a minority shareholder in BCL, had been issued 2,722,125 equity shares of Rs 10 each (5,444,250 equity shares of Rs 5 each post split) bringing the share of DSS in Bharti Airtel down to 0.14% as of March 31, 2013.

The management believes that, based on legal advice, the outcome of these contingencies will be favorable and that a loss is not probable. Accordingly, no amounts have been accrued or paid in regard to this dispute.

27. Capital and Other Commitments

a) Estimated amount of contracts to be executed on capital account and not provided for (net of advances) Rs 17,041 Mn as of March 31, 2013 (March 31, 2012 - Rs 32,252 Mn).

b) Under the IT Outsourcing Agreement, the Company has estimated commitments to pay Rs 8,245 Mn as of March 31, 2013 (March 31, 2012 - Rs 17,452 Mn) comprising of assets and service charges. The amount represents total minimum commitment over the unexpired period of the contracts i.e. between 1-5 years, since it is not possible for the Company to determine the extent of assets and services under the contract over the unexpired period. However, the actual charges/payments may exceed the above mentioned minimum commitment based on the terms of contract.

28. The Company has undertaken to provide financial support, to its subsidiaries and associates,namely, Bharti Airtel Services Limited, Bharti Airtel (USA) Limited, Bharti Airtel (UK) Limited, Bharti Airtel (Hongkong) Limited,Bharti International (Singapore) Pte Limited, Bharti Airtel (Japan) Limited, Bharti Airtel (France) Limited, Bharti Telemedia Limited, Airtel M Commerce Services Limited, Bharti Airtel Lanka (Pvt) Limited, Airtel Bangladesh Limited, Bharti Airtel Holdings (Singapore) Pte Limited, Bharti Airtel International (Netherlands) B.V.including its subsidiaries and associates,Telesonic Networks Limited (earlier known as Alcatel-Lucent Network Management Services India Limited) and Bharti Teleports Limited.

29. Revenue from Operations

( Rs Millions)

Particulars For the year ended March 31, 2013 For the year ended March 31, 2012
Service Revenue
- Voice revenue 357,425 323,312
- Others 96,061 92,513
Sale of products 23 213
453,509 416,038

Note: Voice Revenue includes revenue from home network subscribers, roaming revenues and interconnect revenues.

30. Other Income

( Rs Millions)

Particulars For the year ended March 31, 2013 For the year ended March 31, 2012
Interest income on bank deposits 984 43
Interest income on loan given to related parties 1,112 1,604
Dividend income on investments in subsidiaries 4,100 263
Net gain on sale of investments 1,208 1,015
Net foreign exchange gain 6,597 2,601
Other non-operating income
Lease rentals 6 4
Liabilities/Provision written back 144 175
Miscellaneous income 480 542
14,631 6,247

31. Cost of Goods Sold

( Rs Millions)

Particulars For the year ended March 31, 2013 For the year ended March 31, 2012
Cost of material consumed (including internal consumption) (1,817) (2,182)
Cost of goods sold Purchase of Stock-in-Trade 1,836 2,365
19 183

32. Employee Benefit Expenses

( Rs Millions)

Particulars For the year ended March 31, 2013 For the year ended March 31, 2012
Salaries and wages 13,094 11,893
Contribution to provident and other funds 612 552
Expenses on employee stock option plan 242 536
Staff welfare expenses 622 519
Others 543 415
15,113 13,915

33. Power and Fuel, Rent and Other Expenses

( Rs Millions)

Particulars For the year ended March 31, 2013 For the year ended March 31, 2012
Power and fuel
Network 34,615 28,834
Others 1,084 893
35,699 29,727
Rent
Network 51,129 46,431
Others 1,096 1,283
52,225 47,714
Other expenses
Interconnect and Port charges 1,074 1,359
Insurance
Network 501 313
Others 36 41
Installation 35 34
Repairs and Maintenance
Plant and Machinery 20,507 16,630
Building 194 142
Others - Network 634 174
Others - Administrative 936 746
Leased Line and Gateway charges 1,323 1,357
Internet access and bandwidth charges 5,715 4,689
Advertisement and Marketing 5,993 5,586
Sales Commission, Customer verification and Content cost 21,108 20,643
Indirect Selling and Distribution

3,190

2,704

Sim card utilisation 1,920 1,915
Legal and Professional 2,141 1,615
Rates and Taxes 407 595
IT and Call Center Outsourcing 10,842 10,972
Traveling and Conveyance 1,243 997
Bad debts written off 1,881 2,745
Provision for doubtful debts and advances (refer note 51) 1,742 1,379
Provision for diminution in stock/capital work in progress 542 335
Collection and Recovery Expenses 4,482 3,470
Loss on sale of Fixed Assets (net) 481 473
Printing and Stationery 728 638
Miscellaneous Expenses
Network 825 1,027
Sales and Marketing 3,209 1,256
Administrative 735 867
92,424 82,702

Note: Miscellaneous Expenses (Sales and Marketing) above includes goodwill waivers which are other than trade discount, of Rs 392 Mn (for the year ended March 31, 2012 Rs 252 Mn).

34. Finance Costs

( Rs Millions)

Particulars For the year ended March 31, 2013 For the year ended March 31, 2012
Interest expense 14,885 11,086
Other borrowing cost 607 474
Loss from swap arrangements (net) 190 433
Applicable net (gain)/loss on foreign currency transactions 841 1,969
16,523 13,962

35. Depreciation and Amortisation Expense

( Rs Millions)

Particulars For the year ended March 31, 2013 For the year ended March 31, 2012
Depreciation of tangible assets (refer note 15) 55,575 48,500
Amortisation of intangible assets (refer note 16) 12,692 10,660
68,267 59,160

36. Acquisitions/Additional Investments/New Developments

(i) Pursuant to a definitive agreement dated May 24, 2012, Bharti Airtel Limited has acquired 49% stake for a consideration of Rs 9,281 Mn (USD 165 Mn) in Qualcomm Asia Pacific’s (Qualcomm AP) 4 Indian subsidiaries ("BWA entities"),

(i) Wireless Business Services Private Limited- that holds Category ‘A’ ISP licenses and broadband wireless spectrum in the frequencies of 2327.5 - 2347.5 for the Service Area of Mumbai, 2327.5 - 2347.5 for the Service Area of Delhi, 2325.0 - 2345.0 for the Service Area of Kerala and 2362.5 - 2382.5 for the Service Area of Haryana,

(ii) Wireless Broadband Business Services (Delhi) Private Limited

(iii) Wireless Broadband Business Services (Kerala) Private Limited and

(iv) Wireless Broadband Business Services (Haryana) Private Limited, partly by way of acquisition of 26% equity interest from its existing shareholders and balance 23% by way of subscription of fresh equity in the referred entities. The agreement contemplates that once commercial operations are launched, subject to certain terms and conditions, Bharti has the option to assume complete ownership and financial responsibility for the BWA entities by the end of 2014.

(ii) The Company has completed the launch of BWA services in Karnataka, Kolkata, Maharashtra and Punjab circles.

(iii) The Company has made equity investment of

Rs 33,367 Mn (USD 608 Mn) during the year in Bharti Airtel International (Mauritius) Limited and holds 100% shareholding.

(iv) The Company has made equity investment of

Rs 1,060 Mn in Airtel M Commerce Services Limited and holds 100% shareholding.

(v) The Company has increased its equity investment in the following subsidiaries by way of conversion of loan into equity: by Rs 67,353 Mn (USD 1203.30 Mn) in Bharti Airtel International (Netherlands) B.V. (refer note 41(c)) by Rs 9,907 Mn (USD 177 Mn) in Bharti Airtel International (Mauritius) Limited (refer note 41(f)) by Rs 32,184 Mn (USD 575 Mn) in Bharti International (Singapore) Pte Limited (refer note 41(g))

(vi) On August 23, 2012, Bharti Infratel Limited (‘BIL’) allotted 1,000,000,000 equity shares as fully paid bonus shares.

37. Earnings Per Share

( Rs Millions, except per share data and as stated otherwise)

Particulars For the year ended March 31, 2013 For the year ended March 31, 2012
Basic and Diluted Earnings per Share:
Nominal value of equity shares ( Rs ) 5 5
Profit attributable to equity shareholders (A) 50,963 57,300
Weighted average number of equity shares outstanding during the year (Nos. in Mn) (B) 3,798 3,798
Basic/Diluted earnings per Share ( Rs ) (A/B) 13.42 15.09

38. Employee Benefits

a) During the year, the Company has recognised the following amounts in the Statement of Profit and Loss:

i. Defined Contribution Plans

( Rs Millions)

Particulars For the year ended March 31, 2013 For the year ended March 31, 2012
Employer’s Contribution to Provident Fund *@ 608 552
Employer’s Contribution to ESI * 4 -

* Included in Contribution to Provident and Other Funds (Refer note 32)

@ Includes contribution to Defined Contribution Plan for Key Managerial Personnel.

ii. Defined Benefit Plans

For the year ended March 31, 2013

( Rs Millions)

Particulars Gratuity # Leave Encashment #
Current service cost 221 152
Interest cost 95 55
Expected return on plan assets (6) -
Actuarial (gain)/loss 44 (70)
Total * 354 137

 

For the year ended March 31, 2012 Rs ( Millions)
Particulars Gratuity # Leave Encashment #
Current service cost 199 146
Interest cost 80 49
Expected return on plan assets (6) -
Actuarial (gain)/loss 52 (41)
Total * 325 154

# Included in Salaries and Wages (Refer note 32).

* Included in above is the charge towards Defined Benefit Plan for Key Managerial Personnel for Gratuity and Leave Encashment as these are provided on an actuarial basis for the Company as a whole.

b) The assumptions used to determine the benefit obligations are as follows:

For the year ended March 31, 2013

Particulars Gratuity Leave Encashment
Discount rate 8.50% 8.50%
Expected rate of increase in compensation levels 10.00% 10.00%
Expected rate of return on plan assets 8.00% N.A.
Expected average remaining working lives of employees (years) 24.81 24.81

For the year ended March 31, 2012

Particulars Gratuity Leave Encashment
Discount rate 8.00% 8.00%
Expected rate of increase in compensation levels 9.00% 9.00%
Expected rate of return on plan assets 8.00% N.A.
Expected average remaining working lives of employees (years) 23.80 23.80

c) Reconciliation of opening and closing balances of benefit obligations and plan assets is as follows:

For the year ended March 31, 2013

( Rs Millions)

Particulars Gratuity Leave Encashment
Change in Projected Benefit Obligation (PBO)
Projected benefit obligation at beginning of year 1,119 652
Current service cost 221 152
Interest cost 95 55
Benefits paid (91) (45)
Actuarial (gain)/loss 38 (70)
Projected benefit obligation at year end 1,382 744
Change in plan assets:
Fair value of plan assets at beginning of year 76 -
Expected return on plan assets 6 -
Actuarial gain/(loss) (6) -
Fair value of plan assets at year end 76 -
Net funded status of the plan

1,306

744

Current Liabilities

318

744

Non-Current Liabilities 988 -

For the year ended March 31, 2012

( Rs Millions)

Particulars Gratuity Leave Encashment
Change in Projected Benefit Obligation (PBO)
Projected benefit obligation at beginning of year 995 606
Current service cost 199 146
Interest cost 80 49
Benefits paid (201) (108)
Actuarial (gain)/loss 46 (41)
Projected benefit obligation at year end 1,119 652

For the year ended March 31, 2012

( Rs Millions)

Particulars Gratuity Leave Encashment
Change in plan assets:
Fair value of plan assets at beginning of year 76 -
Expected return on plan assets 6 -
Actuarial gain/(loss) (6) -
Fair value of plan assets at year end 76 -
Net funded status of the plan

1,043

652

Current Liabilities

196

652

Non-Current Liabilities 847 -

d) The expected rate of return on plan assets was based on the average long-term rate of return expected to prevail over the next 15 to 20 years on the investments made by LIC. This was based on the historical returns suitably adjusted for movements in long-term government bond interest rates. The discount rate is based on the average yield on government bonds of 20 years.

e) The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

f) History of experience adjustment is as follows:

( Rs Millions)

Gratuity

Particulars As of March 31, 2013 As of March 31, 2012 As of March 31, 2011 As of March 31, 2010 As of March 31, 2009
Defined benefit obligation 1,382 1,119 995 800 658
Plan assets 76 76 76 76 76
Surplus/(deficit) (1,306) (1,043) (919) (724) (582)
Experience adjustments on plan liabilities (31) (57) (87) (130) (82)
Experience adjustments on plan assets (6) (6) (6) (6) (5)

( Rs Millions)

Leave Encashment
Particulars As of March 31, 2013 As of March 31, 2012 As of March 31, 2011 As of March 31, 2010 As of March 31, 2009
Defined benefit obligation 744 652 607 534 478
Plan assets - - - - -
Surplus/(deficit) (744) (652) (606) (534) (478)
Experience adjustments on plan liabilities 79 51 (97) (106) (16)
Experience adjustments on plan assets - - - - -

g) Movement in other long term employee benefits: i) Movement in provision for Deferred Incentive Plan

( Rs Millions)

Particulars For the year ended March 31, 2013 For the year ended March 31, 2012
Opening Balance - 74
Addition during the year - 40
Less: Utilised during the year - (114)
Closing Balance - -

ii) Long term service award provided by the Company as of March 31, 2013 is Rs 67 Mn (March 31, 2012 Rs 119 Mn).

39. Investment in Joint Ventures/Jointly Owned Assets

Jointly owned assets a) The Company has participated in various consortiums towards supply, construction, maintenance and providing long term technical support with regards to following Cable Systems. The details of the same are as follows:

As of March 31, 2013

( Rs Millions, except as stated otherwise)

Cable Project Total Contribution Capital Work In Progress Net block as of March 31, 2013 Share %
SMW-4 3,284 - 2,080 13.12%
AAG - Project 1,843 - 1,435 7.06%
EASSY - Project 119 - 102 1.01%
EIG - Project 2,412 - 2,074 7.09%
IMEWE- Project 3,132 - 2,687 12.77%
Unity - Project - Common & Others 1,317 - 1,107 10.00%
Unity - Project - Light Up 149 - 125 13.91%

 

As of March 31, 2012

( Rs Millions, except as stated otherwise)

Cable Project Total Contribution Capital Work In Progress Net block as of March 31, 2012 Share %
SMW-4 3,284 642 1,686 11.19%
AAG - Project 1,804 - 1,517 7.08%
EASSY - Project 119 - 108 1.00%
EIG - Project 2,412 - 2,235 7.09%
IMEWE- Project 2,800 31 2,557 12.79%
Unity - Project - Common & Others 1,287 - 1,149 10.00%
Unity - Project - Light Up 149 - 133 13.91%

Joint Ventures Entity

b) The Company entered into a Joint Venture with 9 other overseas mobile operators to form a regional alliance called the Bridge Mobile Alliance, incorporated in Singapore as Bridge Mobile Pte Limited. The principal activity of the venture is creating and developing regional mobile services and managing the Bridge Mobile Alliance Programme. The Company has invested USD 2.2 Mn, amounting to Rs 92 Mn, in 2.2 Mn ordinary shares of USD 1 each which is equivalent to an ownership interest of 10.00% as of March 31, 2013 (March 31, 2012 USD 2.2 Mn, Rs 92 Mn, ownership interest 10.00%).

During the year,the Company acquired 49% stake for a consideration of Rs 9,281 Mn (USD 165 Mn) in Qualcomm Asia Pacific’s (Qualcommn AP) 4 Indian Subsidiaries ("BWA entities"). The principal activity of the venture is to carry on the business of internet and broadband services.

The following represent the Company’s share of assets and liabilities, and income and results of the joint venture.

( Rs Millions)

Particulars As of March 31, 2013 As of March 31, 2012

(Unaudited)

(Unaudited)

Current assets

794

95

Non-current assets

36,796

2

Current liabilities

14,420

7

Non-current liabilities 15,674 8
Equity 7,496 82
Revenue 27 25
Other Income 82 -
Employee benefit expenses 17 15
Other expenses 20 7
Finance costs 225 -
Depreciation 1 1
Profit before tax (154) 2
Tax Expense 32 -
Profit for the year (186) 2

40. As of March 31, 2013, Bharti Airtel Employee’s Welfare

Trust (‘the Trust’) holds 3,937,055 equity shares (of face value of Rs 5 each) (March 31, 2012 2,456,750 equity shares) of the Company, out of which 1,498,457 equity shares were issued by the Company at the rate of Rs 25.68 per equity share fully paid up and 2,438,598 equity shares (of face value of Rs 5 each) were purchased from open market at average rate of Rs 260.68 per equity share.

41. Loans and advances in the nature of loans along with maximum amount outstanding during the year as per Clause 32 of the Listing Agreement are as follows:

(a) Loan and advance in the nature of loan bearing nil interest given to Bharti Telemedia Limited Rs 35,026 Mn (March 31, 2012 Rs 31,060 Mn at nil interest rate).

(b) Loan and advance in the nature of loan given to Bharti Airtel Lanka (Private) Limited is Rs 11,047 Mn (March 31, 2012 Rs 11,047 Mn at LIBOR + 4.5% interest rate). Effective February 10, 2012, no interest has been charged with an option for equity conversion.

(c) Loan and advance in the nature of loan given to Bharti Airtel International (Netherlands) B.V at LIBOR + 1.7% interest rate is Rs 67,757 Mn (March 31, 2012 Rs 50,686 Mn). Effective September 6, 2012, no interest has been charged as the outstanding loan has been converted into equity. (Refer note 36(v)).

(d) Loan and advance in the nature of loan given to Telesonic Networks Limited at SBI PLR + 1% interest rate is Rs 90 Mn (March 31, 2012 Rs 90 Mn).

(e) Loan and advance in the nature of loan given to Bharti Teleports Limited at 10.75% p.a. interest rate is Rs 302 Mn (March 31, 2012 Rs 332 Mn).

(f) Loan and advance in the nature of loan given to Bharti Airtel International (Mauritius) Limited at LIBOR + 1.7% interest rate is Rs 9,967 Mn (March 31, 2012 Rs 9,428 Mn). Effective September 6, 2012, no interest has been charged as the outstanding loan has been converted into equity. (refer note 36(v)).

(g) Loan and advance in the nature of loan given to Bharti International (Singapore) Pte Limited at LIBOR + 1.7% interest rate is Rs 32,378 Mn (March 31, 2012 Rs 24,939 Mn). Effective September 6, 2012, no interest has been charged as the outstanding loan has been converted into equity. (refer note 36(v)).

(h) Loan and advance in the nature of loan given to Bharti Airtel Service Limited at nil interest is

Rs 56 Mn (March 31, 2012 Rs 56 Mn).

(i) Loan and advance in the nature of loan given to Bharti Airtel (USA) Limited at 7.33% interest rate is Rs 53 Mn (March 31, 2012 Rs 53 Mn). year for the above entities.

42. Expenditure/Earnings in Foreign Currency (on accrual basis)

( Rs Millions)

Particulars For the year ended March 31, 2013 For the year ended March 31, 2012
Expenditure
On account of:
Interest 304 336
Professional & Consultation Fees 37 8
Travelling (Net of Reimbursement) 22 -
Roaming Charges(Incl. Commission) 1,685 2,029
Membership & Subscription 46 15
Staff Training & Others 43 23
Network Services 345 207
Annual Maintenance 1,690 1,324
Bandwidth Charges 2,959 2,892
Access Charges 13,872 9,915
Repairs & Maintenance 7 -
Marketing 743 515
Content Charges 105 145
Directors Commission and Sitting Fees 36 -
Agency Fees & Premium fees 3 60
Income Tax 155 135
Total 22,052 17,604
Earnings
Service Revenue 27,737 20,048
Management Charges 87 74
Total 27,824 20,122

43. CIF Value of Imports

( Rs Millions)

Particulars For the year ended March 31, 2013 For the year ended March 31, 2012
Capital Goods 25,516 17,628
Total 25,516 17,628

44. Auditors’ Remuneration

( Rs Millions)
Particulars For the year ended March 31, 2013 For the year ended March 31, 2012
- Audit Fee* 66 60
- Reimbursement of Expenses* 5 5
- As advisor for taxation matters* 1 -
- Other Services* 5 6
Total 77 71

* Excluding Service Tax

45. Details of Dues to Micro and Small Enterprises as Defined Under the MSMED Act, 2006

Amounts due to micro, and small enterprises under Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 aggregate to Rs 7 Mn (March 31, 2012 – Rs 25 Mn) based on the information available with the Company and the confirmation received from the creditors till the year end.

( Rs Millions)

S. No. Particulars March 31, 2013 March 31, 2012
1 The principal amount and the interest due thereon [ Rs Nil (March 31, 2012 – Rs _NIL)] remaining unpaid to any supplier as at the end of each accounting year 7 25
2 The amount of interest paid by the buyer in terms of Section 16 of the MSMED ACT, 2006, along with the amounts of the payment made to the supplier beyond the appointed day during each accounting year - -
3 The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under MSMED ACT, 2006 - -
4 The amount of interest accrued and remaining unpaid at the end of each accounting year - -
5 The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise for the purpose of disallowance as a deductible expenditure under Section 23 of the MSMED ACT, 2006 - -

46. Related Party Disclosures

In accordance with the requirements of Accounting Standards (AS) -18 on Related Party Disclosures, the names of the related parties where control exists and/or with whom transactions have taken place during the year and description of relationships are:

Name of the related party and related party relationship:

(i) Key Management Personnel

Sunil Bharti Mittal

Manoj Kohli

Sanjay Kapoor (till February 28, 2013)

Gopal Vittal (effective from February 1, 2013)

(ii) Other Related Parties

(a) Entities where control exist – Subsidiary/

Subsidiaries of Subsidiary

Bharti Hexacom Limited

Bharti Airtel Services Limited

Bharti Telemedia Limited

Bharti Airtel (USA) Limited

Bharti Airtel Lanka (Private) Limited

Bharti Airtel (UK) Limited

Bharti Airtel (Canada) Limited

Bharti Airtel (Hongkong) Limited

Bharti Infratel Limited

Network i2i Limited

Bharti Airtel Holdings (Singapore) Pte Ltd

Bharti Infratel Lanka (Private) Limited (subsidiary of Bharti Airtel Lanka (Private) Limited)

Bharti Infratel Ventures Limited (subsidiary of

Bharti Infratel Limited)

Airtel M Commerce Services Limited

Bharti Airtel (Japan) Kabushiki Kaisha (subsidiary of Bharti Airtel Holdings (Singapore) Pte Ltd)

Bharti Airtel (France) SAS (subsidiary of Bharti

Airtel Holdings (Singapore) Pte Ltd)

Bharti Airtel International (Mauritius) Limited

Bharti International (Singapore) Pte Ltd

Airtel Bangladesh Limited (subsidiary of Bharti

Airtel Holdings (Singapore) Pte Ltd)

Bharti Airtel International (Netherlands) B.V.

Bangladesh Infratel Networks Limited (subsidiary of Airtel Bangladesh Limited)

Bharti Airtel Africa B.V. (subsidiary of Bharti Airtel

International (Netherlands) B.V.)

Related Party Disclosures

Telesonic Networks Limited (earlier known as Airtel Networks Limited
Alcatel-Lucent Network Management Services India Ltd) (effective from February 5, 2013) Airtel Rwanda Limited
Airtel Tanzania Limited #
Other subsidiaries of Bharti Airtel Africa B.V.: Airtel Towers (Ghana) Limited
Africa Towers N.V. Airtel Towers (S.L.) Company Limited
Africa Towers Services Limited Airtel Uganda Limited
Airtel Ghana Limited Airtel (Seychelles) Limited
Airtel (SL) Limited Bharti Airtel Acquisition Holdings B.V.
Airtel Burkina Faso S.A. # Bharti Airtel Burkina Faso Holdings B.V.
Airtel Congo S.A. # Bharti Airtel Cameroon B.V.
Airtel Direct to Home Services (Kenya) (dissolved on January 8, 2013) Bharti Airtel Chad Holdings B.V.
Bharti Airtel Congo Holdings B.V.
Airtel DTH Services (SL) Limited Bharti Airtel Developers Forum Limited
Airtel DTH Services Burkina Faso S.A. Bharti Airtel DTH Holdings B.V.
Airtel DTH Services Congo (RDC) S.p.r.l Bharti Airtel Gabon Holdings B.V. #
Airtel DTH Services Congo S.A. Bharti Airtel Ghana Holdings B.V. #
Airtel DTH Services Gabon S.A Bharti Airtel Kenya B.V. #
Airtel DTH Services Ghana Limited Bharti Airtel Kenya Holdings B.V.
Airtel DTH Services Madagascar S.A. (dissolved on October 5, 2012) Bharti Airtel Madagascar Holdings B.V. #
Airtel DTH Services Malawi Limited Bharti Airtel Malawi Holdings B.V. #
Airtel DTH Services Niger S.A. (dissolved on November 14, 2012) Bharti Airtel Mali Holdings B.V.
Bharti Airtel Niger Holdings B.V. #
Airtel DTH Services Nigeria Limited Bharti Airtel Nigeria B.V. #
Airtel DTH Services T.Chad S.A. (dissolved on Bharti Airtel Nigeria Holdings B.V.
November 6, 2012) Bharti Airtel Nigeria Holdings II B.V.
Airtel DTH Services Tanzania Limited Bharti Airtel Cameroon Holding B.V. (dissolved on
Airtel DTH Services Uganda Limited March 27, 2013)
Bharti DTH Services Zambia Limited Bharti Airtel RDC Holdings B.V.
Airtel Madagascar S.A. Bharti Airtel Services B.V.
Airtel Malawi Limited Bharti Airtel Sierra Leone Holdings B.V. #
Airtel Mobile Commerce (SL) Limited Bharti Airtel Tanzania B.V. #
Airtel Mobile Commerce B.V. Bharti Airtel Uganda Holdings B.V. #
Airtel Mobile Commerce Burkina Faso S.A. Bharti Airtel Zambia Holdings B.V. #
Airtel Mobile Commerce (Ghana) Limited Burkina Faso Towers S.A.
Airtel Mobile Commerce Holdings B.V. Celtel (Mauritius) Holdings Limited
Airtel Mobile Commerce Madagascar (S.A.) Celtel Cameroon SA (dissolved on March 26, 2013)
Airtel Mobile Commerce Limited Celtel Congo (RDC) S.a.r.l. #
Airtel Mobile Commerce (Tanzania) Limited Airtel Gabon S.A. (formerly Celtel Gabon S.A
Airtel Mobile Commerce Tchad SARL w.e.f.July 11, 2012)
Airtel Mobile Commerce Uganda Limited Celtel Niger S.A.
Airtel Mobile Commerce Rwanda Limited Airtel Tchad S.A. (formerly Celter Tchad S.A.w.e.f. June 1, 2012) #
Airtel Mobile Commerce (Kenya) Limited Celtel Zambia plc
Airtel Money Niger S.A. Channel Sea Management Company (Mauritius)
Airtel Money (RDC) S.p.r.l Limited
Airtel Networks Kenya Limited # Congo (RDC) Towers S.p.r.l.

 

Congo Towers S.A. Bridge Mobile Pte Limited
Gabon Towers S.A. Wireless Broadband Business Services (Delhi)
Indian Ocean Telecom Limited Private Limited (acquired on May 24, 2012)*
Kenya Towers Limited Wireless Broadband Business Services (Haryana)
Madagascar Towers S.A. Private Limited (acquired on May 24, 2012)*
Wireless Broadband Business Services (Kerala)
Malawi Towers Limited Private Limited (acquired on May 24, 2012)*
Mobile Commerce Congo S.A. Wireless Business Services Private Limited (acquired on May 24, 2012)*
Airtel Money S.A. (Gabon) (formerly Mobile Commerce Gabon S.A w.e.f. June 25, 2012)
Montana International (d) Entities where Key Management Personnel and their relatives exercise significant influence/Group Companies
MSI-Celtel Nigeria Limited
Niger Towers S.A. Beetel Teletech Limited
Partnership Investments Sprl Bharti Airtel Employees Welfare Trust
Rwanda Towers Limited Bharti Axa General Insurance Company Limited
Socit Malgache de Telephonie Cellulaire SA Bharti Axa Life Insurance Company Limited
Tanzania Towers Limited Bharti Enterprises Limited
Tchad Towers S.A. Bharti Foundation
Towers Support Nigeria Limited Bharti Realty Holdings Limited
Uganda Towers Limited Bharti Realty Limited
Zambian Towers Limited Bharti Retail Limited
Zap Trust Company Nigeria Limited Bharti Softbank Holdings Pte Limited
Zebrano (Mauritius) Limited Bharti Wal-Mart Private Limited
ZMP Limited Centum Learning Limited
(b) Associates/Associate of Subsidiary Comviva Technologies Limited (till December 13, 2012)
Bharti Teleports Limited Fieldfresh Foods Private Limited
Tanzania Telecommunications Company Limited
(Associate of Bharti Airtel Tanzania B.V.) Guernsey Airtel Limited
Telesonic Networks Limited (earlier known as Indian Continent Investment Limited
Alcatel-Lucent Network Management Services India Jersey Airtel Limited
Ltd) (till February 4, 2013) Nile Tech Limited
Seychelles Cable Systems Company Limited (Associate of Airtel (Seychelles) Limited) Mehrauli Realty and Consultants Limited
(c) Joint Ventures/Joint Venture of Subsidiary (e) Entities having significant influence over the Company
Forum I Aviation Limited (Joint Venture of Bharti Singapore Telecommunications Limited
Airtel Services Limited) Pastel Limited
Indus Towers Limited (Joint Venture of Bharti Infratel Limited) Bharti Telecom Limited

* Refer note 36 above for details of new operations during the year.

# Transactions of similar nature with such subsidiaries have been clubbed and shown under the head ‘Other African Subsidiaries’ as their contribution to total transaction value is less than 10%.

Related Party Transaction for 2012-13

( Rs Millions)
Entities where control exist
Nature of transaction Bharti Hexacom Limited (**) Bharti Airtel Services Limited Bharti Airtel (USA) Limited Bharti Airtel (UK) Limited Bharti Airtel (Canada) Limited Bharti Airtel (Hongkong) Limited Bharti Airtel Holdings (Singapore) Pte Limited Airtel Bangladesh Limited Bharti Telemedia Limited

Bharti Infratel Limited (**)

Bharti Airtel Lanka (Private) Limited (@)
($)
Purchase of fixed assets/bandwidth (214) (2) - - - - - - - - -
Sale of fixed assets/retirement of bandwidth 1,259 - 3 - - - - - - - -
Purchase of Investments - - - - - - - - - - -
Sale of Investments - - - - - - - - - - -
Rendering of services 6,450 - 280 11 - 7 11 0 239 169 282
Receiving of services (2,105) (2,522) (394) (128) - (75) - (3) (40) (12,062) (379)
Reimbursement of energy expenses - - - - - - - - - (16,766) -
Common cost allocation charged by the Company 659 - - - - - - - - - -
Fund transferred/Expenses incurred on behalf of others 361 1,681 - 0 - 1 - - 386 13 -
Fund received/Expenses incurred on behalf of the Company (68) (1,575) (10) - - - - - (254) - -
Employee related expenses incurred on behalf of others 90 138 - - - - - - 302 28 -
Employee related expenses incurred on behalf of the Company (8) (21) - - - (0) - - (52) - -
Remuneration - - - - - - - - - - -
Donation - - - - - - - - - - -
Amount received on exercise of ESOP options - - - - - - - - - - -
Security deposit/Advances paid - - - - - - - - - 72 -
Security deposit/Advances received - - - - - - - - - (816) -
Loan received - - - - - - - - - (13,500) -
Loan given - - - - - - - - 3,174 3,670 -
Subscription to share capital (refer note 36) - - - - - - - - - - -
Interest charged by others - - - - - - - - - (1,743) -
Interest charged by the Company - - 1 - - - - - - - 64
Dividend Paid/(Received) (350) - - - - - - - - (3,750) -
Outstanding balances at year end
Borrowings - - - - - - - - - (23,091) -
Trade Payables - - - (15) - (6) - (6) - (2,199) -
Loans and Advances (including security deposits) - 729 - - - - - - 35,026 1,769 11,517
(refer note 41)
Trade Receivables 904 154 720 - 25 - 5 - - - 6
Total Balance 904 883 720 (15) 25 (6) 5 (6) 35,026 (23,522) 11,523
Maximum Loans and Advance
Outstanding during the year 56 53 35,026 11,047
Guarantees and Collaterals (refer note 26(i)) 2,096 86 10,878 582 -

** Refer note 48 (viii).

@ Loans and advances also includes interest receivables.

$ Gross of Rs 24 Mn provided for.

( Rs Millions)
Nature of transaction Entities where control exist
Network i2i Limited

Bharti Infratel Ventures Limited

Airtel M Commerce Services Limited

Telesonic Networks Limited (Formerly known as Alcatel- Lucent Network Management Services India Limited) (&) Bharti Airtel (Japan) Kabushiki Kaisha Bharti Airtel (France) SAS Bharti Airtel International (Mauritius) Limited Bharti International (Singapore) Pte Limited Bharti Airtel International (Netherlands) B.V. (**) Telecom (Seychelles) Limited Airtel (Ghana) Limited Airtel Networks Limited Other African Subsidiaries
Purchase of fixed assets/ bandwidth (106) - - (330) - - - (121) - - - - -
Sale of fixed assets/retirement of bandwidth 205 - - - - - - 705 - - - - -
Purchase of Investments - - - - - - - - - - - - -
Sale of Investments - - - - - - - - - - - - -
Rendering of services 71 - - 16 0 0 1 583 95 46 288 400 1,979
Receiving of services (925) - (103) (436) (8) (37) - (1,114) - (39) (463) (501) (1,900)
Reimbursement of energy expenses - - - - - - - - - - - - -
Common cost allocation charged by the Company - - - - - - - - - - - - -
Fund transferred/Expenses incurred on behalf of others - - 213 - - - - 53 - - - - -
Fund received/Expenses incurred on behalf of the Company - - (58) - - - - - - - - - -
Employee related expenses incurred on behalf of others - - 131 - - - - - - - - - -
Employee related expenses incurred on behalf of the Company - - (1) - - - - - - - - - -
Remuneration - - - - - - - - - - - - -
Donation - - - - - - - - - - - - -
Amount received on exercise of ESOP options - - - - - - - - - - - - -
Security deposit/Advances paid - 6 - - - - - - - - - - -
Security deposit/Advances received - - - - - - - - - - - - -
Loan received - - - - - - - - - - - - -
Loan given - - - - - - - 4,600 11,164 - - - -
Subscription to share capital (refer note 36) - - 1,060 1 - - 43,274 32,184 67,353 - - - -
Interest charged by others - - - - - - - - - - - - -
Interest charged by the Company - - - - - - 93 294 614 - - - -
Dividend Paid/(Received) - - - - - - - - - - - - -
Outstanding balances at year end Borrowings - - - - - - - - - - - - -
Trade Payables - - - (867) (3) (15) - - - - (27) - (126)
Loans and Advances (including security deposits) (refer note 41) - - - 90 - - - - - - - - -
Trade Receivables 371 6 62 - - - 1 1,136 38 0 - 191 -
Total Balance 371 6 62 (777) (3) (15) 1 1,136 38 0 (27) 191 (126)
Maximum Loans and Advance
Outstanding during the year - - 90 - - 9,967 32,378 67,757 - - - -
Guarantees and Collaterals (refer note 26(i)) 96,311 431,028

** Refer note 48 (viii).

& Rs 546.15 Mn loan to Telesonic Networks Ltd acquired for Rs 0.5 Mn converted into equity.

( Rs Millions)

Associates Joint Venture/Joint Venture of Subsidiary Entities where key management personnel and its relatives exercise significant influence
Nature of transaction Telesonic Networks Limited (Formerly known as Alcatel- Lucent Network Management Services India Limited) Bharti Teleport Limited Wireless Business Services Private Limited (#) Wireless Broadband Business Services (Delhi) Private Limited (#) Wireless Broadband Business Services (Haryana) Private Limited (#) Wireless Broadband Business Services (Kerala) Private Limited (#) Forum 1 Aviation limited Indus Towers Limited Bridge Mobile Pte Limited Bharti Wal-Mart Private Limited Comviva Technologies Limited Beetel Teletech Limited Indian Continent Investment Limited Bharti Realty Limited Bharti Realty Holdings Limited Field Fresh Foods Private Limited
Purchase of fixed assets/bandwidth (1,583) - - - - - - - - - (0) (257) - - - -
Sale of fixed assets/retirement of bandwidth - - - - - - - 0 - - 0 - - - - -
Purchase of Investments - - - - - - - - - - - - - - - -
Sale of Investments - - - - - - - - - - - - - - - -
Rendering of services 81 4 - - - - - 22 - 12 3 - - - - 1
Receiving of services (2,182) - - - - - (54) (30,146) (29) (2) (672) (103) - (510) (187) (1)
Reimbursement of energy expenses - - - - - - - (18,615) - - - - - - - -
Common cost allocation charged by the Company - 2 - - - - - - - - - - - - - -
Fund transferred/Expenses incurred on behalf of others - 14 - - - - - - - - - (12) - - - -
Fund received/Expenses incurred on behalf of the Company - - - - - - - - - - - - - - - -
Employee related expenses incurred on behalf of others - 16 - - - - - - - - - - - - - -
Employee related expenses incurred on behalf of the Company - - - - - - - - - - - - - - - -
Remuneration - - - - - - - - - - - - - - - -
Donation - - - - - - - - - - - - - - - -
Amount received on exercise of ESOP options - - - - - - - - - - - - - - - -
Security deposit/Advances paid - - 15 39 - - - 192 - - - - - 31 - -
Security deposit/Advances received - - (2,257) (2,206) (124) (259) - (2,180) - - - - - - (8) -
Loan received - - - - - - - - - - - - - - - -
Loan given - 130 - - - - - - - 0 - - - - - -
Subscription to share capital (refer note 36) - - - - - - - - - - - - - - - -
Interest charged by others - - - - - - - - - - - - - - - -
Interest charged by the Company 14 32 - - - - - - - - - - - - - -
Dividend Paid/(Received) - - - - - - - - - - - - 266 - - -
Outstanding balances at year end Borrowings - - - - - - - - - - - - - - - -
Trade Payables - - (2,242) (2,167) (124) (259) (3) (6,708) (5) - - (21) - (4) (3) -
Loans and Advances (including security deposits) (refer note 41) - 302 - - - - - 3,727 - - - - - 353 86 -
Trade Receivables - 7 - - - - - - - 6 - - - - - 1
Total Balance - 309 (2,242) (2,167) (124) (259) (3) (2,981) (5) 6 - (21) - 350 83 1
Maximum Loans and Advance Outstanding during the year 302

Guarantees and Collaterals (refer note 26(i))

# Wireless Broadband Business Services Entities became joint ventures w.e.f. July 1, 2012. Advances worth Rs 4847 Mn were received before July 1, 2012 when these entities were Associates.

( Rs Millions)
Entities where key management personnel and its relatives exercise significant influence
Nature of transaction Bharti AXA Life Insurance Company Limited Bharti Foundation Bharti Airtel Employees Welfare Trust Jersey Airtel Limited Bharti Enterprises Limited Centum Learning Limited Bharti Retail Limited Bharti AXA General Insurance Company Limited Mehrauli Realty and Consultants Limited Nile Tech Limited
Purchase of fixed assets/bandwidth - - - - - - - - - -
Sale of fixed assets/retirement of bandwidth - - - 0 - - - - - -
Purchase of Investments - - - - - - - - - -
Sale of Investments - - - - - - - - - -
Rendering of services 12 - - 21 - - 44 - - -
Receiving of services - - - (1) - (423) (23) (9) - (590)
Reimbursement of energy expenses - - - - - - - - - -
Common cost allocation charged by the Company - - - - - - - - - -
Fund transferred/Expenses incurred on behalf of others - - - - - - 14 - - -
Fund received/Expenses incurred on behalf of the Company - - - - (669) - - - - -
Employee related expenses incurred on behalf of others - - - - - - - - - -
Employee related expenses incurred on behalf of the - - - - (83) - - - - -
Company
Remuneration - - - - - - - - - -
Donation - 106 - - - - - - - -
Amount received on exercise of ESOP options - - (369) - - - - - - -
Security deposit/Advances paid - - 762 - - - - - - 52
Security deposit/Advances received - - - - - - - - - -
Loan received - - - - - - - - - -
Loan given - - - - - - - - - -
Subscription to share capital (refer note 36) - - - - - - - - - -
Interest charged by others - - - - - - - - - -
Interest charged by the Company - - - - - - - - - -
Dividend Paid/(Received) - - - - - - - - - -
Outstanding balances at year end Borrowings - - - - - - - - - -
Trade Payables - - - - (56) (72) - - (2) -
Loans and Advances (including security deposits) (refer note 41) - - 662 - - 60 - - - 395
Trade Receivables 3 - - 1 - - 31 18 - -
Total Balance 3 - 662 1 (56) (12) 31 18 (2) 395

Maximum Loans and Advance Outstanding during the year Guarantees and Collaterals (refer note 26(i))

( Rs Millions)

Entities having significant influence over the Company Key Management Personnel
Nature of transaction Singapore Telecommunications Limited Pastel Limited Bharti Telecom Limited Sunil Bharti Mittal Gopal Vittal Sanjay Kapoor
Purchase of fixed assets/bandwidth - - - - - -
Sale of fixed assets/retirement of bandwidth 28 - - - - -
Purchase of Investments - - - - - -
Sale of Investments - - - - - -
Rendering of services 1,422 - - - - -
Receiving of services (586) - - - - -
Reimbursement of energy expenses - - - - - -
Common cost allocation charged by the Company - - - - - -
Fund transferred/Expenses incurred on behalf of others - - - - - -
Fund received/Expenses incurred on behalf of the Company (24) - - - - -
Employee related expenses incurred on behalf of others - - - - - -
Employee related expenses incurred on behalf of the Company - - - - - -
Remuneration - - - 243 14 82
Donation - - - - - -
Amount received on exercise of ESOP options - - - - - -
Security deposit/Advances paid - - - - - -
Security deposit/Advances received - - - - - -
Loan received - - - - - -
Loan given - - - - - -
Subscription to share capital (refer note 36) - - - - - -
Interest charged by others - - - - - -
Interest charged by the Company - - - - - -
Dividend Paid/(Received) - 591 1,735 - - -
Outstanding balances at year end
Borrowings - - - - - -
Trade Payables - - - (143) (9) (12)
Loans and Advances (including security deposits) - - - - - -
(refer note 41)
Trade Receivables 324 - - - - -
Total Balance 324 - - (143) (9) (12)
Maximum Loans and Advance
Outstanding during the year
Guarantees and Collaterals (refer note 26(i))

( Rs Millions)

Entities where control exist
Nature of transaction Bharti Hexacom Limited (**) Bharti Airtel (Services) Limited Bharti Airtel (USA) Limited Bharti Airtel (UK) Limited Bharti Airtel (Canada) Limited Bharti Airtel (Hongkong) Limited Bharti Airtel Holding (Singapore) Pte Limited Airtel Bangladesh Limited Bharti Telemedia Limited

Bharti Infratel Limited (**)

Bharti Airtel Lanka (Private Limited
Purchase of fixed assets/bandwidth (133) - - - - - - - - - -
Sale of fixed assets/retirement of bandwidth 485 - - - - - - - - - -
Purchase of Investments - (20) - - - - - - - - -
Sale of Investments - - - - - - - - - - -
Rendering of services 5,708 - 115 7 1 2 11 - 397 131 171
Receiving of services (1,828) (2,457) (217) (31) - (10) - (9) (48) (15,063) (82)
Reimbursement of energy expenses - - - - - - - - - (10,849) -
Common cost allocation charge’s Received 857 - - - - - - - - - -
Fund transferred/Expenses incurred on behalf of others 1,070 3,835 - - - - - - 162 2 -
Fund received/Expenses incurred on behalf of the Company (778) (4,707) (11) - - - - - (420) - -
Employee related expenses incurred on behalf of others 65 279 - - - - - - 281 15 -
Employee related expenses incurred on behalf of the (5) (27) - - - - - - (83) - -
Company
Remuneration - - - - - - - - - - -
Donation - - - - - - - - - - -
Amount received on exercise of ESOP options - - - - - - - - - - -
Security deposit/Advances paid - - - - - - - - - 54 -
Security deposit/Advances received - - - - - - - - - - -
Loan received*** - - - - - - - - - (5,360) -
Loan given - - - - - - - - 5,707 - 1,349
Subscription to share capital (Refer note 36) - - - - - - - - - - -
Interest paid - - - - - - - - - (1,055) -
Interest received 303 - 4 - - - - - - - 407
Dividend Paid/(Received) (262) - - - - - - - - - -
Outstanding balances at year end Borrowings - - - - - - - - - (13,259) -
Trade Payables - - - (280) - - - (5) - (1,702) -
Loans and Advances (including security deposits) - 785 51 - - - - - 30,945 2,512 11,454
(Refer note 41)
Trade Receivables 270 281 698 - 23 2 11 - 24 - 55
Total Balance 270 1,066 749 (280) 23 2 11 (5) 30,969 (12,449) 11,509
Maximum Loans and Advance
Outstanding during the year 56 53 31,060 11,047
Guarantees and Collaterals (Refer note 26 (i)) 1,656 103 5500 663 -

** Refer note 48(viii).

*** Net of repayment of loan of Rs 6100 Mn.

@ Loan and advances also includes interest receivables.

Entities where control exist
Nature of transaction Network i2i Limited

Airtel M Commerce Services Limited

Bharti Airtel (Japan) Kabushiki Kaisha

Bharti Airtel (France) SAS

Bharti Airtel International (Mauritius) Limited (@)

Bharti International (Singapore) Pte Limited (@)

Bharti Airtel International (Netherlands) B.V. (**) (@)

Airtel (Seychelles) Limited Airtel (Ghana) Limited Airtel Networks Limited Other African Subsidiaries
Purchase of fixed assets/bandwidth (377) - - - - (144) - - - - -
Sale of fixed assets/retirement of bandwidth 1,421 10 - - - 94 - - - - -
Purchase of Investments - - - - - - - - - - -
Sale of Investments - - - - - - - - - - -
Rendering of services 103 - - - - 501 72 41 139 378 311
Receiving of services (1,130) (6) (2) (21) - (1,114) - (44) (95) (103) (133)
Reimbursement of energy expenses - - - - - - - - - - -
Common cost allocation charge’s Received - - - - - - - - - - -
Fund transferred/Expenses incurred on behalf of others 8 268 - - - - - - - - -
Fund received/Expenses incurred on behalf of the Company - (2) - - - (142) - - - - -
Employee related expenses incurred on behalf of others - 91 - - - - - - - - -
Employee related expenses incurred on behalf of the Company - (6) - - - - - - - - -
Remuneration - - - - - - - - - - -
Donation - - - - - - - - - - -
Amount received on exercise of ESOP options - - - - - - - - - - -
Security deposit/Advances paid - - - - - - - - - - -
Security deposit/Advances received - - - - - - - - - - -
Loan received - - - - - - - - - - -
Loan given - - - - 9,055 24,939 39,032 - - - -
Subscription to share capital (Refer note 36) - 460 - - 201 211 - - - - -
Interest paid - - - - - - - - - - -
Interest received - - - - 126 301 464 - - - -
Dividend Paid/(Received) - - - - - - - - - - -
Outstanding balances at year end
Borrowings - - - - - - - - - - -
Trade Payables - - - (65) - - - (26) - - -
Loans and Advances (including security deposits) (Refer note 41) - - - - 9,181 25,240 51,176 - - - -
Trade Receivables 637 300 - - - 897 56 - 111 287 181
Total Balance 637 300 - (65) 9,181 26,137 51,232 (26) 111 287 181
Maximum Loans and Advance
Outstanding during the year - - - - 9,428 24,939 50,686 - - - -
Guarantees and Collaterals (Refer note 26 (i)) 82,365 391,130

** Refer note 48(viii).

@ Loan and advances also includes interest receivables.

( Rs Millions)

Associates

Joint Venture/Joint Venture of

Entities where key management personnel and its relatives exercise significant influence
Nature of transaction Alcatel- Lucent Network Management Services India Ltd. Bharti Teleport Limited Forum 1 Aviation Limited Subsidiary Indus Towers Limited Bridge Mobile Pte Limited Bharti Wal- Mart Private Limited Comviva Technolo-gies Limited Beetel Teletech Limited Indian Continent Investment Limited Bharti Realty Limited Bharti Realty Holdings Limited Field Fresh Foods Private Limited
Purchase of fixed assets/bandwidth (2,392) - - - - - (5) (179) - - - -
Sale of fixed assets/retirement of bandwidth - - - - - - - - - - - -
Purchase of Investments - - - - - - - - - - - -
Sale of Investments - - - - - - - - - - - -
Rendering of services 131 5 - 29 - 6 3 11 - - - 2
Receiving of services (2,194) - (35) (25,385) (20) - (673) (84) - (383) (183) -
Reimbursement of energy expenses - - - (14,314) - - - - - - - -
Common cost allocation charge’s Received - 1 - - - - - - - - - -
Fund transferred/Expenses incurred on behalf of others - 8 - - - - - - - - - -
Fund received/Expenses incurred on behalf of the Company - - - - - - - - - - - -
Employee related expenses incurred on behalf of others - 15 - - - - - - - - - -
Employee related expenses incurred on behalf of the Company - - - - - - - - - - - -
Remuneration - - - - - - - - - - - -
Donation - - - - - - - - - - - -
Amount received on exercise of ESOP options - - - - - - - - - - - -
Security deposit/Advances paid - - - 163 - - - - - 70 - -
Security deposit/Advances received - - - - - - - - - - - -
Loan received - - - - - - - - - - - -
Loan given**** - (38) - - - - - - - - - -
Subscription to share capital (Refer note 36) - 98 - - - - - - - - - -
Interest paid - - - - - - - - - - - -
Interest received 14 33 - - - - - - - - - -
Dividend Paid/(Received) - - - - - - - - 266 - - -
Outstanding balances at year end
Borrowings - - - - - - - - - - - -
Trade Payables (1,006) (28) (7) (6,164) (6) - - (21) - - - -
Loans and Advances (including security deposits) 90 172 - 5,720 - - - - - 315 94 -
(Refer note 41)
Trade Receivables - - - - - 2 5 - - 6 4 -
Total Balance (916) 144 (7) (444) (6) 2 5 (21) - 321 98 -
Maximum Loans and Advance
Outstanding during the year 90 332

Guarantees and Collaterals (Refer note 26 (i))

**** Net of repayment of loan received from Bharti Teleports Limited of Rs 235 Mn.

( Rs Millions)

Entities where key management personnel and its relatives exercise significant influence

Nature of transaction Bharti AXA Life Insurance Company Limited Bharti Founda- tion Bharti Airtel Employees Welfare Trust Jersey Airtel Limited Bharti Enterprises Limited Centum Learning Limited Bharti Retail Limited Bharti AXA General Insurance Company Limited Mehrauli Realty and Consultants Limited Nile Tech Limited
Purchase of fixed assets/bandwidth - - - - - - - - - -
Sale of fixed assets/retirement of bandwidth - - - - - - - - - -
Purchase of Investments - - - - - - - - - -
Sale of Investments - - - - - - - - - -
Rendering of services 1 - - 26 3 - 36 - - -
Receiving of services - - - (1) - (477) (16) (3) - (510)
Reimbursement of energy expenses - - - - - - - - - -
Common cost allocation charge’s Received - - - - - - - - - -
Fund transferred/Expenses incurred on behalf of others - - - - - - 13 - - -
Fund received/Expenses incurred on behalf of the Company - - - - (535) - - - - -
Employee related expenses incurred on behalf of others - - - - 3 - - - - -
Employee related expenses incurred on behalf of the Company - - - - - (12) (1) - - -
Remuneration - - - - - - - - - -
Donation - 105 - - - - - - - -
Amount received on exercise of ESOP options - - (539) - - - - - -
Security deposit/Advances paid - - 546 - - - - - 5 1
Security deposit/Advances received - - - - - - - - - -
Loan received - - - - - - - - - -
Loan given - - - - - - - - - -
Subscription to share capital (Refer note 36) - - - - - - - - - -
Interest paid - - - - - - - - - -
Interest received - - - - - - - - - -
Dividend Paid/(Received) - - - - - - - - - -
Outstanding balances at year end
Borrowings - - - - - - - - - -
Trade Payables - - - - - - - - (2) -
Loans and Advances (including security deposits) - - 271 - - 36 - 5 - 343
(Refer note 41)
Trade Receivables - - - 7 175 - 5 - -
Total Balance - - 271 7 175 36 5 5 (2) 343
Maximum Loans and Advance
Outstanding during the year
Guarantees and Collaterals (Refer note 26 (i))

 

Entities having significant influence over the Company

Key Management Personnel

Nature of transaction Singapore Telecommunications Limited Pastel Limited Bharti Telecom Limited Sunil Bharti Mittal ManojKohli ($) Sanjay Kapoor
Purchase of fixed assets/bandwidth - - - - - -
Sale of fixed assets/retirement of bandwidth - - - - - -
Purchase of Investments - - - - - -
Sale of Investments - - - - - -
Rendering of services 1,047 - - - - -
Receiving of services (450) - - - - -
Reimbursement of energy expenses - - - - - -
Common cost allocation charge’s Received - - - - - -
Fund transferred/Expenses incurred on behalf of others - - - - - -
Fund received/Expenses incurred on behalf of the Company (25) - - - - -
Employee related expenses incurred on behalf of others - - - - - -
Employee related expenses incurred on behalf of the Company - - - - - -
Remuneration - - - 213 (11) 40
Donation - - - - - -
Amount received on exercise of ESOP options - - - - - -
Security deposit/Advances paid - - - - - -
Security deposit/Advances received - - - - - -
Loan received - - - - - -
Loan given - - - - - -
Subscription to share capital (Refer note 36) - - - - - -
Interest paid - - - - - -
Interest received - - - - - -
Dividend Paid/(Received) - 591 1,728 - - -
Outstanding balances at year end
Borrowings - - - - - -
Trade Payables - - - (113) - (13)
Loans and Advances (including security deposits) (Refer note 41) - - - - - -
Trade Receivables 361 - - - - -
Total Balance 361 - - (113) - (13)
Maximum Loans and Advance
Outstanding during the year
Guarantees and Collaterals (Refer note 26 (i))
$ Represents remuneration provided in earlier year reversed in the FY 2011-12.

47. Operating Lease - As a Lessee

The lease rentals charged during the year for cancellable/non-cancellable leases relating to rent of building premises and cell sites as per the agreements and maximum obligation on long-term non-cancellable operating leases are as follows:

Particulars As of March 31, 2013 As of March 31, 2012
Lease Rentals [Excluding Lease Equalisation Reserve - 2,302 Mn (FY 2011-12 2,353 Mn)]

49,925

45,361

Obligations on non cancellable leases :
Not later than one year 52,044 31,687
Later than one year but not later than five years 138,302 111,625
Later than five years 147,548 145,862
Total 337,894 289,174

The escalation clause includes escalation ranging from 0 to 2.5%, includes option of renewal from 1 to 15 years and there are no restrictions imposed on lease arrangements.

Operating Lease – As a Lessor i) The Company has entered into a non–cancellable lease arrangement to provide approximately 129,554 fiber pair kilometers of dark fiber on indefeasible right of use (IRU) basis for a period of

18 years. The lease rental receivable proportionate to actual kilometers accepted by the customer is credited to the statement of profit and loss on a straight – line basis over the lease term. Due to the nature of the transaction, it is not possible to compute gross carrying amount, depreciation for the year and accumulated depreciation of the asset given on operating lease as of March 31, 2013 and accordingly, disclosures required by AS 19 are not provided.

ii) The future minimum lease payments receivable are:

( Rs Millions)

Particulars As of March 31, 2013 As of March 31, 2012
Not later than one year 115 50
Later than one year but not later than five years - -
Later than five years - -
Total 115 50

48. Employee Stock Compensation

(i) Pursuant to the shareholders’ resolutions dated February 27, 2001 and September 25, 2001, the Company introduced the "Bharti Tele-Ventures Employees’ Stock Option Plan" (hereinafter called "the Old Scheme") under which the Company decided to grant, from time to time, options to the employees of the Company and its subsidiaries. The grant of options to the employees under the Old Scheme is on the basis of their performance and other eligibility criteria.

(ii) On August 31, 2001 and September 28, 2001, the Company issued a total of 1,440,000 (face value Rs 10 each) equity shares at a price of Rs 565 per equity share to the Trust. The Company issued bonus shares in the ratio of 10 equity shares for every one equity share held as at September 30, 2001, as a result of which the total number of shares allotted to the trust increased to 15,840,000 (face value Rs 10 each) equity shares.

(iii) Pursuant to the shareholders’ resolution dated September 6, 2005, the Company announced a new Employee Stock Option Scheme (hereinafter called "the New Scheme") under which the maximum quantum of options was determined at 9,367,276 (face value Rs 10 each) options to be granted to the employees from time to time on the basis of their performance and other eligibility criteria.

(iv) The following table provides an overview of all existing share option plans of the Company:

Entity Scheme Plan Year of issuance of plan Share options granted (thousands) Vesting period (years) Contractual term (years) Weighted average exercise price Classification /accounting treatment
Bharti Scheme I 2001 Plan 2002 30,893 1 - 4 7 21.25 Equity settled
Airtel
Bharti Scheme I 2004 Plan 2004 4,380 1 - 4 7 35.00 Equity settled
Airtel
Bharti Scheme I Superpot 2004 143 1 - 3 7 - Equity settled
Airtel
Bharti Scheme I 2006 Plan 2006 5,114 1 - 5 7 5.52 Equity settled
Airtel
Bharti Scheme 2005 Plan 2005 11,260 1 - 4 7 237.06 Equity settled
Airtel 2005
Bharti Airtel Scheme 2005 2008 Plan & Annual Grant Plan 2008 8,817 1 - 3 7 352.13 Equity settled
(AGP)
Bharti Scheme Performance 2009 1,691 3 - 4 7 5.00 Equity settled
Airtel 2005 Share Plan (PSP) 2009
Bharti Airtel Scheme 2005 Plan Special ESOP & Restricted Share Units (RSU) 2010 3,615 1 - 5 7 5.00 Equity settled
Bharti Airtel Scheme 2005 LTI Plan 2011 422 1 - 3 7 5.00 Equity settled
Bharti Airtel Scheme 2005 LTI Plan 2012 1,593 1 - 3 7 5.00 Equity settled

(v) The information concerning stock options granted, exercised, forfeited and outstanding at the year-end is as follows :

As of March 31, 2013 As of March 31, 2012
(Shares in Thousands) Number of share options Weighted average exercise price ( Rs ) Number of share options Weighted average exercise price ( Rs )
Scheme I - 2006 plan
Number of shares under option:
Outstanding at beginning of year 1,445 5.73 2,057 5.51
Granted 62 5.04 239 5.00
Exercised* (294) 5.00 (594) 5.00
Expired - - - -
Forfeited (28) 6.92 (257) 5.00
Outstanding at end of year 1,185 5.89 1,445 5.73
Exercisable at end of year 606 6.74 521 6.97
Scheme 2005 - 2005 plan
Number of shares under option:
Outstanding at beginning of year 2,602 331.48 3,468 309.34
Granted - - 28 156.50
Exercised# (451) 127.44 (597) 166.80

 

As of March 31, 2013 As of March 31, 2012
(Shares in Thousands) Number of share options Weighted average exercise price ( Rs ) Number of share options Weighted average exercise price ( Rs )
Expired - - - -
Forfeited (415) 333.42 (297) 388.72
Outstanding at end of year 1,736 384.72 2,602 331.48
Exercisable at end of year 1,736 384.72 2,578 333.38
Scheme 2005 - 2008 plan and AGP
Number of shares under option:
Outstanding at beginning of year 4,835 355.84 5,915 355.16
Granted - 34 373.38
Exercised# (16) 314.70 (246) 329.61
Expired - - - -
Forfeited (505) 358.49 (868) 359.35
Outstanding at end of year 4,314 355.80 4,835 355.84
Exercisable at end of year 4,305 355.61 4,224 349.26
Scheme 2005 - PSP 2009 plan
Number of shares under option:
Outstanding at beginning of year 1,256 5.00 1,456 5.00
Granted - - 40 5.00
Exercised# (189) 5.00 - -
Expired - - - -
Forfeited (498) 5.00 (240) 5.00
Outstanding at end of year 569 5.00 1,256 5.00
Exercisable at end of year 24 5.00 - -
Scheme 2005 - LTI Plan
Number of shares under option:
Outstanding at beginning of year 406 5.00 - -
Granted 1,593 5.00 422 5.00
Exercised# (37) 5.00 - -
Expired - - - -
Forfeited (147) 5.00 (16) 5.00
Outstanding at end of year 1,815 5.00 406 5.00
Exercisable at end of year 61 5.00 - -
Scheme 2005 - Special ESOP & RSU
Plan
Number of shares under option:
Outstanding at beginning of year 2,362 5.00 2,975 5.00
Granted - - 361 5.00
Exercised# (478) 5.00 (578) 5.00
Expired - - - -
Forfeited (414) 5.00 (396) 5.00
Outstanding at end of year 1,470 5.00 2,362 5.00
Exercisable at end of year 535 5.00 418 5.00

* Shares given on exercise of the options are out of the shares issued to the Trust.

# Shares given on exercise of the options are out of the purchase of shares from the open market by the Trust.

(vi) The following table summarises information about options exercised and granted during the year and about options outstanding and their remaining contractual life:

Options Granted Options Excercised
Entity Plan Options Outstanding (thousands) Remaining Contractual term (years) Options (thousands) Weighted average Fair Value Options (thousands) Weighted average exercise price
Bharti Airtel 2006 Plan 1,185 0.17 to 6.72 62 302.91 294 5.00
Bharti Airtel 2005 Plan 1,736 0.17 to 5.10 - - 451 127.44
Bharti Airtel 2008 Plan & Annual Grant Plan (AGP) 4,314 2.25 to 5.17 - - 16 314.70
Bharti Airtel Performance Share Plan (PSP) 2009 Plan 569 3.34 to 5.34 - - 189 5.00
Bharti Airtel Special ESOP & Restricted Share Units (RSU) 1,470 4.01 to 5.10 - - 478 5.00
Bharti Airtel LTI Plan 1,815 5.35 to 6.36 1,593 266.44 37 5.00

(vii) The fair value of the options granted was estimated on the date of grant using the Black-Scholes/Monte Carlo/ Lattice valuation model with the following assumptions:

Particulars Year ended March 31, 2013 Year ended March 31, 2012
Risk free interest rates 7.88% to 8.84% 7.76% to 8.63%
Expected life 48 to 60 months 48 to 60 months
Volatility 36.42% to 41.58% 41.07 to 42.09%
Dividend yield 0.28% to 0.36% 0.28%
Weighted average share price on the date of grant 274.40 to 336.70 361.83 to 424.11

The volatility of the options is based on the historical volatility of the share price since the Company’s equity shares became publicly traded, which may be shorter than the term of the options.

(viii) The Company has granted stock options to the employees of the subsidiaries i.e. Bharti Hexacom Limited, Bharti Infratel Limited (BIL) and Bharti Airtel International (Netherlands) B.V. and the corresponding compensation cost is borne by the Company. Further BIL has also given stock options to certain employees of the Company and the corresponding compensation cost is borne by BIL.

49. Forward Contracts & Derivative Instruments and Unhedged Foreign Currency Exposure

The Company’s activities expose it to a variety of financial risks, including the effects of changes in foreign currency exchange rates and interest rates. The Company uses derivative financial instruments such as foreign exchange contracts, option contracts and interest rate swaps to manage its exposures to interest rate and foreign exchange fluctuations.

The following table details the status of the Company’s exposure as of March 31, 2013:

( Rs Millions)

Sr Notional Value Notional Value
No Particulars (March 31, 2013) (March 31, 2012)
A For Loan related exposures *
a) Forwards 930 6,744
b) Options 10,487 18,212
c) Interest Rate Swaps (Principal amount of the contract) - 1,279
Total 11,417 26,235
B For Trade related exposures *
a) Forwards 2,299 2,880
b) Options 952 1,843
Total 3,251 4,723
C Unhedged foreign currency borrowing 11,276 19,665
D Unhedged foreign currency payables 25,689 14,181
E Unhedged foreign currency receivables 511 89,416

* All derivatives are taken for hedging purposes only and trade related exposure includes hedges taken for forecasted receivables.

The Company has accounted for derivatives, which are covered under the Announcement issued by the ICAI, on marked-to-market basis and has recorded losses of Rs 233 Mn (including losses of Rs 281 Mn towards embedded derivatives) for the year ended March 31, 2013 [recorded losses of Rs 82 Mn ( including losses of Rs 156 Mn towards embedded derivatives) for the year ended March 31, 2012].

50. a) The Board of Directors, in its meeting held on May 2, 2012, recommended a final dividend of Rs 1.00 per equity share of Rs 5.00 each (20% of face value) for financial year 2011-12, which was duly approved by the shareholders of the Company in the Annual General Meeting held on September 6, 2012.

b) Net Dividend remitted in foreign exchange:

Particulars For the year ended March 31, 2013 For the year ended March 31, 2012*
Number of non-resident shareholders 5 5
Number of equity shares held on which dividend was due 862 862
(Nos. in Mn)
Amount remitted ( Rs in Mn) 862 862
Amount remitted (USD in Mn) 16 19

*Dividend of Rs 1 per share (Face value per share Rs 5) recommended for the year 2010-11.

51. Movement in Provision for Doubtful Debts/Advances

( Rs Millions)

Particulars For the year ended March 31, 2013 For the year ended March 31, 2012
Balance at the beginning of the year 11,656 10,277
Addition - Provision for the year 3,623 4,124
Application - Write off of bad debts (net off recovery) (1,881) (2,745)
Others* (84) -
Balance at the end of the year 13,314 11,656

* Rs 84 Mn regrouped to advances under other Non-currrent assets as of March 31, 2013.

The movement of provision towards subjudice matters disclosed under other non-current assets (refer note 19) and other current liabilities (refer note 13) is as below:

Particulars As of March 31, 2013 As of March 31, 2012
Opening Balance 25,278 17,032
Additions (Net) 7,885 8,246
Closing Balance 33,163 25,278

52 . Details of debt covenant w.r.t. the Company’s 3G/BWA borrowings: The loan agreements with respect to 3G/BWA borrowings contains a negative pledge covenant that prevents the Company to create or allow to exist any Security Interest on any of its assets without prior written consent of the Lenders except in certain agreed circumstances.

53. The Company has approved the transfer of its co-ownership in the undersea cables and its indefeasible right of usage in related backhaul assets taken from other operators to its wholly owned subsidiary Network i2i Limited, a company incorporated and existing under the laws of Mauritius with the intention to aggregate all international undersea cables under a single entity. Pending approval from consortium partners/appropriate authorities, wherever applicable, no adjustment has been made in the financial statements for the year ended March 31, 2013 and the carrying amount of Rs 4,842 Mn of identified assets (for which approval has been received) have been continued to be classified under Fixed Assets as the Company continues to use these cables. Further, the approval from appropriate authorities for remaining assets with the carrying amount of Rs 4,767 Mn is pending to be received.

54. The Company has completed the transfer pricing study for the period upto March 31, 2012. For the year ended March 31, 2013, the Company is in the process of getting an independent evaluation done for certain transactions to determine whether the transactions with associated enterprises were undertaken at "arms length price". Based on the transfer pricing study, the Company believes that all transactions with associate enterprises are at arm length price, accordingly, there is no Transfer Pricing adjustments for the year under consideration. 55. During the year ended March 31, 2013, Bharti Infratel

Limited (BIL), a subsidiary of the Company, has made Initial Public Offering (IPO) through book building process of 188,900,000 equity shares of Rs 10 each. The IPO comprised of fresh issue of 146,234,112 equity shares of Rs 10 each by BIL and an offer for sale of 42,665,888 equity shares of Rs 10 each by the existing shareholders.

BIL has raised Rs 32,303 Mn from fresh issue of shares. Post the issue, the holding of the Company in BIL has reduced from 86.09% to 79.42%. The equity shares were allotted on December 22, 2012.

56. During the year ended March 31, 2013, the Company was awarded a favorable order by the TDSAT in respect of an outstanding dispute pertaining to interconnect agreements. The Company, based on the TDSAT judgment and independent legal opinion, has recognised revenue of Rs 5,167 Mn, resulting in higher profit before tax by Rs 3,012 Mn, and net profit by Rs 2,169 Mn, during the year ended March 31, 2013, relating to previous year.

57. During the year ended March 31, 2013, DoT has issued demand notices for the financial year 2006-07 to 2010-11 aggregating Rs 23,763 Mn in respect of assessment of licenses towards disallowances of the permissible deductions. Further, DoT has also issued demands in the matter of Spectrum Usage Charge (SUC) assessment for the financial years 2010-11 & 2011-12 aggregating

Rs 8,221 Mn arising on account of disallowance of adjustments made by the group in terms of TDSAT orders dated November 19, 2009 and April 22, 2010.

The Company has taken the appropriate action/legal recourse and believes that the probability of above claims getting materialised is remote.

58. The Company (M/s J T Mobiles Limited subsequently merged with the Company) was awarded license by DoT to operate cellular services in the state of Punjab in December 1995. On April 18, 1996, the Company obtained the permission from DoT to operate the Punjab license through its wholly owned subsidiary, Evergrowth Telecom Limited (ETL). On December 1996, DoT raised argument that the permission dated April 18, 1996 has not become effective and cancelled the permission to operate which was subsequently reinstated on March 10, 1998 (the period from April 18, 1996 to March 10, 1998 has been hereinafter referred to as ‘blackout period’). On July 15, 1999, license was terminated due to alleged non-payment of license fees, liquidated damages and related penal interest relating to blackout period.

In September, 2001, in response to the demand raised by DoT, the Company had paid Rs 4,856 Mn to DoT under protest subject to resolution of the dispute through arbitration. Consequently, the license was restored and an arbitrator was appointed for settlement of the dispute. Arbitrator awarded an unfavourable order, which was challenged by the Company before Hon’ble Delhi High Court.

On September 14, 2012, Hon’ble Delhi High Court passed an order setting aside the award passed by the arbitrator. DoT in the meanwhile has preferred an Appeal, including condonation of delay in filing of appeal, which is presently pending before the Division Bench of the Delhi High Court. The Appeal on the issue of condonation of delay is listed for arguments on May 8, 2013.

The Company is in the process of evaluating legal course of action for recovery of the amount paid under protest together with interest thereon. Pending such evaluation and thereby initiation of recovery process, the Group, based on independent legal opinion, has not given any accounting treatment for the impact of the judgement in the financial statements for the year ended March 31, 2013.

59. Previous year figures have been regrouped/reclassified where necessary to conform to current year’s classification.

Consolidated Financial Statement with Auditor’s Report

   
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