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Bharti Airtel Ltd(Industry :   Telecommunications - Service Provider)
 
BSE Code:532454NSE Symbol: BHARTIARTLP/E  (TTM): 15.4
ISIN Demat:INE397D01024Div Yield %:0.41EPS   (TTM) :21.5
Book Value (Rs):179.873918Market Cap (RsCr):132313.94Face Value (Rs) :5
  Change Company 






Notes to financial statements











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 read with General Circular 8/2014 dated April 4, 2014 issued by the Ministry of Corporate Affairs. 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 Rs. and all amount are rounded to the nearest million (‘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 or 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 & Equipment 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.

Gains and losses arising from retirement or disposal of the intangible 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 or disposal.

(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,which has an independent use, 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 rewards incidental to 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 rewards incidental to ownership of the leased item are classified as finance lease. These are capitalised at the commencement of the lease at the fair value of the leased asset or,if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in the profit or loss. Leased assets are depreciated over the useful life of the asset. However,if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.

(ii) Where the Company is the Lessor

Leases in which the Company does not transfer substantially all the risks and rewards incidental to 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 rental income.

Leases in which the Company transfer substantially all the risks and rewards incidental to 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 finance 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 other current liabilities.

3.5. Borrowing Cost

Borrowing costs consist of interest and other costs that the Group 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. All other borrowing costs are expensed in the period in which they occur.

3.6. Impairment of Assets

The carrying amounts of assets are reviewed for impairment, whenever events or changes in circumstances indicate that the carrying amount may not be recoverable or when annual impairment testing for an asset is required. 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 for the purpose of cash flow statement comprise cash at bank, cash on hand and cheques 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. 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.

(iv) Dividend Income

Dividend income is recognised when the Company’s right to receive the payment is established.

(v) Provision for Doubtful Debts

The Company provides for amounts outstanding for more than 90 days from the date of billing, in case of active subscribers , roaming receivables, receivables for data services and for entire outstanding from deactivated customers net o3 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 translated using exchange rates prevailing at the reporting date. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are translated 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 translated using the exchange rates at the date 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 and cash-settled share-based options to certain employees. Equity-settled share-based options are measured at fair value on 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.

The fair value determined on the grant date of the cash settled shares based options is expensed over the vesting period, based on the Company’s estimates of the shares that will eventually vest. At the end of the each reporting period, until the liability is settled, and at the date of settlement, the fair value of the liability is recognised, with any changes in fair value pertaining to the vested period recognised immediately in profit or loss. 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.

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. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, by the reporting date.

(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. In the situations where the Company is entitled to a tax holiday under the Income-tax Act, 1961, no deferred tax (asset or liability) is recognised in respect of timing differences which reverse during the tax holiday period. Deferred tax in respect of timing differences which reverse after the tax holiday period is recognised in the year in which the timing differences originate.

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, i.e., the period for which MAT credit is allowed to be carried forward. 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.

3.19. Provisions and Contingencies

Provisions are recognised when the Company has a present obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. 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, 2013, to better reflect business synergies, intra city fibre networks earlier included in ‘Telemedia Services’, has now been included in ‘Mobile Services’. Further, in order to improve the comparability of results with the single segment telecom players, the Company has also allocated certain central common expenses, earlier included in ‘Unallocated’ to ‘Mobile Services’, ‘Telemedia Services’ and ‘Airtel Business’. Accordingly, previous period year segment figures have been restated.

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. This also includes intra city fibre networks.

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, 2014

(Rs. Millions)
Particulars Mobile Services Telemedia Services Airtel Business Unallocated Eliminations Total
Revenue
Revenue from operations 415,484 36,243 47,458 - - 499,185
Inter Segment Revenue 19,530 1,132 11,109 - (31,771) -
Total Revenue 435,014 37,375 58,567 - (31,771) 499,185
Results
Segment Result- Profit / (Loss)* 81,667 5,750 6,519 (1,844) - 92,092
Finance costs* 6,247
Exceptional items# 2,071
Profit / (Loss) before tax 83,774
Provision for Tax
- Current Tax (including MAT Credit) 19,800
- Deferred Tax (Credit)/ Charge (2,028)
Net Profit / (Loss) after tax 66,002
Other Information
Capital Expenditure 96,945 8,747 5,639 160 (9,887) 101,604
Depreciation and amortisation 62,527 8,996 5,320 - (4,530) 72,313
As of March 31, 2014
Segment Assets 462,946 29,753 30,922 424,928 - 948,549
Inter Segment Assets 322,048 38,392 63,058 28 (423,526) -
Advance tax (Net of provision for tax) 2,855 2,855
MAT Credit 30,637 30,637
Total Assets 784,994 68,145 93,980 458,448 (423,526) 982,041
Segment Liabilities** 154,462 8,384 25,227 117,213 - 305,286
Inter Segment Liabilities 46,424 12,988 18,236 345,878 (423,526) -
Deferred Tax Liability (net) 9,475 9,475
Total Liabilities 200,886 21,372 43,463 472,566 (423,526) 314,761

*Segment result excludes finance income of Rs. 7,117 Mn, which is netted o3 from finance costs for the purpose of segment reporting

**Unallocated liabilities includes amount borrowed for the acquisition of 3G & BWA Licenses (including spectrum) of Rs. 36,400 Mn

# Exceptional items shown separately relates to reassessment of residual useful lives of certain assets [Refer Note 36 for details].

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 379,520 34,185 39,804 - - 453,509
Inter Segment Revenue 22,284 1,142 9,329 - (32,755) -
Total Revenue 401,804 35,327 49,133 - (32,755) 453,509
Results
Segment Result- Profit / (Loss)* 59,149 7,020 1,393 6,105 - 73,667
Finance costs * 9,119
Profit / (Loss) before tax 64,548
Provision for Tax
- Current Tax (including MAT credit) 10,449
- Deferred Tax (Credit)/ Charge 3,136
Net Profit / (Loss) after tax 50,963
Other Information
Capital Expenditure 56,041 9,827 5,461 889 (10,304) 61,914
Depreciation and amortisation 59,044 7,608 5,484 (88) (3,781) 68,267
As of March 31, 2013
Segment Assets 423,195 39,170 36,964 344,522 - 843,851
Inter Segment Assets 258,873 16,680 53,133 8,262 (336,948) -
Advance tax (Net of provision for tax) 1,920 1,920
MAT Credit 33,061 33,061
Total Assets 682,068 55,850 90,097 387,765 (336,948) 878,832
Segment Liabilities** 144,769 7,150 20,808 153,140 - 325,867
Inter Segment Liabilities 36,852 7,021 24,739 268,336 (336,948) -
Deferred Tax Liability (net) 11,503 11,503
Total Liabilities 181,621 14,171 45,547 432,979 (336,948) 337,370

*Segment result excludes finance income of Rs. 7404 Mn, which is netted o3 from finance costs for the purpose of segment reporting **Unallocated liabilities includes amount borrowed for the acquisition of 3G and BWA Licenses (including spectrum) of Rs. 52,225 Mn Notes:

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

2. Capital expenditure represents gross additions, capital work-in-progress and capital advance given for acquiring 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 (net).

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

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, 2014 For the year ended March 31, 2013
Segment Revenue from external customers based on geographical location of customers
Within India 464,256 425,772
Others 34,929 27,737
499,185 453,509
Carrying amount of Segment Assets by geographical location of assets
Within India 960,288 850,974
Others 21,753 27,858
982,041 878,832
Cost incurred during the year to acquire Segment Assets by geographical location of assets
Within India 100,832 61,317
Others 772 597
101,604 61,914

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, capital work-in-progress and capital advance given for acquiring tangible and intangible assets during the year.

5. Share capital

(Rs. Millions)
Particulars As of March 31, 2014 As of March 31, 2013
Authorised shares
5,000,000,000 (March 31, 2013 - 5,000,000,000) equity shares of Rs. 5 each 25,000 25,000
Issued, Subscribed and fully paid-up shares
3,997,400,102 (March 31, 2013- 3,797,530,096) equity shares of Rs. 5 each 19,987 18,988
19,987 18,988

Note: 21,474,527 Equity shares of Rs. 10 each were alloted as fully paid-up shares upon the conversion of Foreign Currency Convertible Bonds ( FCCBs) during the financial years from 2007-08 to 2009-10 (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 For the year ended March 31, 2014 For the year ended March 31, 2013
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 (refer note 37) 199,870,006 999 - -
Outstanding at the end of the year 3,997,400,102 19,987 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, 2014, the Board of Directors has proposed dividend of Rs. 1.80 per share (March 31, 2013 Rs. 1.00). The Company, based on an independent legal opinion, has determined that the provisions of the Companies Act, 2013 apply to the proposed dividend for the year ended March 31, 2014, as it would be declared and paid after April 1, 2014. Since the Companies Act, 2013 does not mandate transfer of certain percentage of profits to general reserve, the Company has not transferred any amount to general reserve in respect of proposed dividend.

c. Details of shareholders ( as per the register of shareholders) holding more than 5% shares in the Company

Particulars As of March 31, 2014 As of March 31, 2013
No. % holding No. % holding
Equity shares of Rs. 5 each fully paid up
Bharti Telecom Limited* 1,745,595,460 43.67% 1,737,558,892 45.75%
Pastel Limited 591,319,300 14.79% 591,319,300 15.57%
Indian Continent Investment Limited 265,860,986 6.65% 265,860,986 7.00%
Life Insurance Corporation of India 207,987,846 5.20% 202,430,788 5.33%
Three Pillar Pte Limited 199,870,006 5.00% - -

*Above holding does not include 1,950,000 shares which have been credited to demat account after March 31, 2014 (March 31,2013 530,000 shares)

6. Reserves and Surplus

(Rs. Millions)
Particulars As of March 31, 2014 As of March 31, 2013
Capital Reserve 51 51
Securities Premium Reserve
Opening balance 40,896 40,798
Additions during the year 67,040 98
Closing balance 107,936 40,896
Revaluation Reserve 21 21
Employee Stock Options Outstanding
Opening balance 3,176 3,391
Add: Granted during the year# 131 362
Less:Forfeiture/Exercise 808 577
2,499 3,176
Less:Deferred stock compentation 134 335
Closing balance 2,365 2,841
(Rs. Millions)
Particulars As of March 31, 2014 As of March 31, 2013
Reserve for Business Restructuring 24,912 24,912
General Reserve
Opening balance 26,973 23,157
Add : Adjustment on account of exercise of stock options through open market purchase 70 (14)
Add: Transferred from surplus balance in statement of profit and loss - 3,830
Closing balance 27,043 26,973
Surplus in the Statement of Profit and Loss
Opening balance 426,780 383,438
Add : Profit for the year 66,002 50,963
Amount available for appropriation 492,782 434,401
Appropriations :
Transferred to General Reserve - (3,830)
Dividend proposed (refer note 52) (7,195) (3,798)
Tax on dividend proposed* (622) 7
Net surplus in the statement of profit and loss 484,965 426,780
Total 647,293 522,474

* Tax on dividend proposed is net of credit of Rs. 601 Mn (March 31, 2013 - Rs. 653 Mn) on account of dividend distribution tax on dividend from subsidiary companies.

# Includes an amount of Rs. 82 Mn (March 31, 2013 Rs. Nil) consequent to achievement of performance targets with respect to performance linked equity settled share based compensation to employees.

7. Long term borrowings

(Rs. Millions)
Particulars As of March 31, 2014 As of March 31, 2013
Secured
From Banks 10 15
From Others 4 5
Total secured loans 14 20
Unsecured
Term Loans:
From Banks 54,876 71,059
From Others 35,228 39,714
Total 90,104 110,773
Deferred payment liabilities 1,026 -
Total unsecured loans 91,130 110,773
Less: Current maturities (refer note 13)
From Banks 12,642 8,294
From Others 5,785 4,091
18,427 12,385
72,717 98,408

a. Secured loans represent vehicle loans 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 borrowing

(Rs. Millions)
Particulars Maturity Profile
Currency of borrowings Rate of Interest (Weighted average) As of March 31, 2014 Within one year between one and two years between two and five years over five years
INR 10.30% 59,439 11,656 15,755 23,028 9,000
USD 1.08% 31,705 6,771 5,529 10,493 8,912
Total 7.06% 91,144 18,427 21,284 33,521 17,912
(Rs. Millions)
Particulars Maturity Profile
Currency of borrowings Rate of Interest (Weighted average) As of March 31, 2014 Within one year between one and two years between two and five years over five 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 6.96% 110,793 12,385 20,071 72,993 5,344

c. The borrowings of Rs. 91,144 Mn outstanding as of March 31,2014 is repayable in total 559 half yearly installments and 5 yearly installments (borrowings of Rs. 110,793 Mn outstanding as of March 31, 2013 is repayable in total 315 half yearly installments).

8. Taxes

i) Deferred tax liabilities (Net)

(Rs. Millions)
Particulars As of March 31, 2014 As of March 31, 2013
Deferred Tax Liabilities
Depreciation claimed as deduction under Income Tax Act but chargeable in the statement of profit and loss in future years 25,790 25,146
Gross Deferred Tax Liabilities 25,790 25,146
Less:
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) 5,900 4,995
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 4,842 4,003
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) 3,910 2,940
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) 1,663 1,705
Gross Deferred Tax Assets 16,315 13,643
Deferred Tax Liabilities (Net) 9,475 11,503

ii) Tax Expenses :

a) During the year ended March 31, 2013, the Company had 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 had been recognised during the year ended March 31, 2013.

b) During the year ended March 31, 2013, the Company had 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.

c) MAT credit includes income of Rs. 180 Mn (March 31, 2013 – expense of Rs. 1,481 Mn), current tax includes income of Rs. 1,384 Mn (March 31, 2013 – expense of Rs. 65 Mn) and deferred tax includes expense of Rs. 76 Mn (March 31, 2013 – income of Rs. 291 Mn) relating to earlier years.

9. Other long term liabilities

(Rs. Millions)
Particulars As of March 31, 2014 As of March 31, 2013
Security deposit received 2,848 5,024
Equipment supply payable 2,287 1,737
Deferred revenue 13,433 11,641
Lease rent equalisation 14,847 12,994
Others* 5,979 312
39,394 31,708

Security deposit 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.

*Others as of March 31, 2014 includes Rs. 4,104 Mn payable to Qualcomm Asia Pacific Pte. Limited towards purchase of balance equity shares upon satisfaction of certain conditions as per the share purchase agreement for acquisition of Airtel Broadband Services Private Limited (formerly know as Wireless Business Services Private Limited) (refer note 38 (i)).

10. Long term provisions

(Rs. Millions)
Particulars As of March 31, 2014 As of March 31, 2013
Provision for employee benefits (refer note 40)
Provision for gratuity 1,269 988
Provision for long term service award 105 66
1,374 1,054
Other provisions
Provision for asset retirement obligation 721 440
2,095 1,494

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, 2014 For the year ended March 31, 2013
Opening balance 440 439
Addition (net) 281 1
Closing balance 721 440

11. Short term borrowings

(Rs. Millions)
Particulars As of March 31, 2014 As of March 31, 2013
(Unsecured unless stated otherwise)
Loans
From banks 12,510 8,395
Loans repayable on demand
Cash Credit - 5
Loans from related parties (refer note 48 ) - 22,990
12,510 31,390

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

(Rs. Millions)
Particulars As of March 31, 2014 As of March 31, 2013
Currency of Borrowings Rate of Interest (Weighted average) Amount outstanding Rate of Interest (Weighted average) Amount outstanding
INR 9.96% 6,500 10.30% 3,500
USD 0.81% 6,010 3.28% 4,895
Total 5.56% 12,510 8.49% 8,395

b. The borrowings of Rs. 12,510 Mn outstanding as of March 31, 2014 is repayable in 4 bullet installments (borrowings of Rs. 8,395 Mn outstanding as of March 31, 2013 is repayable in 4 bullet installments).

12. Trade Payables

(Rs. Millions)
Particulars As of March 31, 2014 As of March 31, 2013
Dues to Micro and Small Enterprises * 38 16
Trade payables other than dues to Micro and Small Enterprises ** 62,625 51,356
62,663 51,372

* refer note 47 for details of dues to micro and small enterprises

** amount payable to related parties Rs. 11,177 Mn (March 31, 2013 Rs. 6,292 Mn) (refer note 48)

13. Other current liabilities

(Rs. Millions)
Particulars As of March 31, 2014 As of March 31, 2013
Deferred revenue 22,780 20,584
Equipment supply payables 30,633 38,938
Payable to others 27,616 22,406
Advance received from customers 1,440 1,347
Current maturities of long term debt (refer note 7) 18,427 12,385
Interest accrued but not due on borrowings 315 675
Other taxes payable 4,166 3,940
Unpaid dividends 33 27
Other liabilities* 1,044 5,732
106,454 106,034

Payable to others and Other liabilities include provision of Rs. 22,097 Mn as of March 31, 2014 and Rs. 17,900 Mn as of March 31, 2013 towards sub judice matters. *Includes payable to related party Rs. Nil (March 31, 2013 Rs. 4,792) (refer note 48)

14. Short term provisions

(Rs. Millions)
Particulars As of March 31, 2014 As of March 31, 2013
Provision for employee benefits (refer note 40)
Provision for Gratuity 241 318
Provision for Leave Encashment 794 744
Total 1,035 1,062
Others
Proposed Dividend (refer note 52) 7,195 3,798
Tax on Dividend 1,223 601
Total 8,418 4,399
9,453 5,461

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, 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 / adjustment - - - (2,290) (1) (14) (13) (1,219) (41) (3,578)
Reclassification 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
Additions - 50 303 38,726 54 11 554 2,247 252 42,197
Disposals / adjustment - (38) (156) (10,594) (81) (34) (735) (727) (65) (12,430)
Reclassification (3) (2) (22) 163 - - - (3) (162) (29)
As of March 31, 2014 411 1,312 6,056 536,679 1,413 253 3,022 27,994 4,252 581,392
Accumulated Depreciation
As of April 1, 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 / adjustment - - - (1,527) (1) (7) (10) (1,126) (21) (2,692)
Reclassification - - (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
Charge for the year# 7 - 294 57,737 113 21 386 2,048 477 61,083
Disposals / adjustment - - (79) (6,066) (74) (18) (665) (709) (47) (7,658)
Reclassification - - (12) 157 - - (1) 7 (158) (7)
As of March 31, 2014 35 - 1,894 307,472 1,217 217 2,092 25,042 2,741 340,710
Net Carrying Amount
As of April 1, 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
As of March 31, 2014 376 1,312 4,162 229,207 196 36 930 2,952 1,511 240,682

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

# Includes exceptional items of Rs. 2,071 Mn with respect to Plant and Equipment (refer note- 36) a. Freehold Land and Building includes Rs. 4 Mn (March 31, 2013 - Rs. 4 Mn) and Rs. 13 Mn (March 31, 2013 - 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, 2013 Additions Disposals / adjustment Reclassification As of March 31, 2014 As of April 1, 2013 Charge for the year Disposals / adjustment Reclassification As of March 31, 2014 As of March 31, 2014 As of March 31, 2013
Building on leasehold land 2,685 16 (25) - 2,676 570 104 (7) - 667 2,009 2,115

(Rs. Millions)

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

c. Reclassification includes reclass of assets between category of assets. During the year ended March 31, 2014, Rs. 29 Mn (March 31, 2013 Rs. (5) Mn) and Rs. 7 Mn (March 31, 2013 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. 1,718 Mn ( March 31, 2013 Rs. 1,107 Mn).

e. Refer note 10, 41 and 49 for ARO, jointly owned assets and assets given on operating lease, respectively.

16. Intangible assets

(Rs. Millions)
Particulars Software* Bandwidth Licenses Total
Cost
As of April 1, 2012 8,374 18,344 144,122 170,840
Additions 2,332 1,415 35,825 39,572
Reclassification (5) - - (5)
As of March 31, 2013 10,701 19,759 179,947 210,407
Additions 3,024 925 - 3,949
Disposals / adjustment - - (34) (34)
Reclassification - 29 - 29
As of March 31, 2014 13,725 20,713 179,913 214,351
Accumulated Amortisation
As of April 1, 2012 4,604 4,825 20,785 30,214
Charge for the year 2,535 1,304 8,853 12,692
Reclassification 20 17 - 37
As of March 31, 2013 7,159 6,146 29,638 42,943
Charge for the year 2,505 1,374 9,422 13,301
Disposals / adjustment - - - -
Reclassification 7 - - 7
As of March 31, 2014 9,671 7,520 39,060 56,251
Net Carrying Amount
As of April 1, 2012 3,770 13,519 123,337 140,626
As of March 31, 2013 3,542 13,613 150,309 167,464
As of March 31, 2014 4,054 13,193 140,853 158,100

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

a. The remaining amortisation period of license fees as of March 31, 2014 ranges between 1 to 11 years for Unified Access Service Licenses, 8 years for Long Distance Licenses, 16.4 years for 3G spectrum fees and 16.4 years for BWA license fees.

b. Licenses includes Net Block of 3G and 4G spectrum fees of Rs. 135,828 Mn as of March 31, 2014 (March 31, 2013 Rs. 144,135 Mn).

c. Capitalised borrowing costs

Borrowing cost capitalised during the year ended March 31, 2014 was Rs. Nil (March 31, 2013 Rs. 298 Mn). The Company capitalises borrowing cost in the Intangible assets under development. Additions to licenses includes borrowing cost of Rs. Nil (March 31, 2013 Rs. 2,591 Mn) transferred from Intangible assets under development. Disposals/adjustment to Licenses includes reversal of Rs. 34 Mn borrowing costs capitalised in the earlier years.

d. Reclassification includes reclass of assets between category of assets. During the year ended March 31, 2014, Rs. 29 Mn (March 31, 2013 Rs. (5) Mn) and Rs. 7 Mn (March 31, 2013 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, 2014 As of March 31, 2013
Trade investments (at cost)
Investment in Equity Instruments (Un-quoted)
Investment in Subsidiaries
1 ) Bharti Hexacom Limited: 175,000,000 (March 31, 2013 - 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, 2013 - 100,000) Equity shares of Rs. 10 each fully paid up 1 1
3) Bharti Airtel (USA) Limited: 300 (March 31, 2013 - 300) Equity shares of USD .0001 each fully paid up 509 509
4) Bharti Airtel (UK) Limited: 123,663 (March 31, 2013 - 123,663) Equity shares of GBP 1 each fully paid up 101 101
5) Bharti Airtel (Hongkong) Limited: 4,959,480 (March 31, 2013 - 4,959,480) Equity shares of HKD 1 each fully paid up 26 26
6) Bharti Airtel (Canada) Limited: 75,100 (March 31, 2013 - 75,100) Equity shares of Canadian Dollar (CAD) 1 each fully paid up 3 3
7) Network i2i Limited: 52,227,896 (March 31, 2013 - 9,000,000) Equity shares of USD 1 each fully paid up. (refer note 38 (v)) 7,925 5,316
8) Bharti Infratel Limited: 1,500,000,000 (March 31, 2013 -1, 500,000,000) Equity shares of Rs. 10 each fully paid up 82,182 82,182
9) Bharti Telemedia Limited : 9,690,000 (March 31, 2013 - 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, 2013 - 525,596,420) Equity shares of SLR 10 each fully paid up 2,049 2,049
11) Bharti Airtel Holdings (Singapore) Pte Limited: 1 (March 31, 2013 - 1) Equity share of Singapore Dollar (SGD) 1 each fully paid up and 338,642,771 (March 31, 2013 - 338,642,771) Equity shares of USD 1 each fully paid up 15,475 15,475
12) Bharti Airtel International (Mauritius) Ltd : 1,044,970,000 (March 31, 2013 - 889,970,000) shares of USD 1 each fully paid up (refer note 38) 57,639 48,121
(ii)
13) Airtel M Commerce Services Limited : 255,000,000 (March 31, 2013 - 156,000,000) Equity shares of Rs. 10 each fully paid up. (refer note 38) 2,550 1,560
(iii)
14) Bharti International (Singapore) Pte. Ltd : 593,739,000 (March 31, 2013 - 593,739,000) Equity shares of USD 1 each fully paid up 33,035 33,035
15) Bharti Airtel International (Netherlands) B.V.: 908,443,919 (March 31, 2013 - 908,443,919) Equity shares of EURO 1 each fully paid up 67,354 67,354
16) Telesonic Networks Limited (formerly known as Alcatel-Lucent Network Management Service India Ltd): 89,230,796 (March 31, 2013 - 89,230,796) Equity shares of Rs. 10 each fully paid up 91 91
17) Nxtra Data Limited: 5,050,000 (March 31, 2013 - Nil) Equity shares of Rs. 10 each fully paid up (refer note 38(iv)) 51 -
18) Airtel Broadband Services Private Limited ( formerly known as Wireless Business Services Private Limited): 5,667,137,909 (March 31, 2013 - Nil) Equity shares of Rs. 10 each fully paid up. (refer note 38 (i)) 65,270 -
(Rs. Millions)
As of As of
Particulars
March 31, 2014 March 31, 2013
Investment in Joint Ventures
1) Bridge Mobile PTE Limited: 2,200,000 (March 31, 2013- 2,200,000) Equity shares of USD 1 each fully paid up 92 92
2 ) Wireless Broadband Business Services (Delhi) Private Limited #@ Nil (March 31, 2013- 348,560,439) Equity shares of Rs. 10 each fully paid up. (refer note 38 (i)) - 4,225
3 ) Wireless Broadband Business Services (Haryana) Private Limited #@ Nil (March 31, 2013- 19,563,359) Equity shares of Rs. 10 each fully paid up. (refer note 38 (i)) - 237
4) Wireless Broadband Business Services (Kerala) Private Limited #@ Nil (March 31, 2013- 40,974,544) Equity shares of Rs. 10 each fully paid up. (refer note 38 (i)) - 497
5) Airtel Broadband Services Private Limited (formerly known as Wireless Business Services Private Limited)@Nil (March 31, 2013 356,572,850) Equity shares of Rs. 10 each fully paid up. (refer note 38 (i)) - 4,322
#Merged w.e.f. August 5, 2013 with Airtel Broadband Services Private Limited (Formerly known as Wireless Business Services Private Limited) @ became subsidiary w.e.f. June 25, 2013
Investment in Associates
1) Bharti Teleport Limited; 11,270,000 (March 31, 2013- 11,270,000) Equity shares of Rs. 10 each fully paid up 113 113
Investment in other equity Instrument
1) IFFCO Kissan Sanchar Limited : 100,000 (March 31, 2013- 100,000) Equity Shares of Rs. 10 each fully paid up 50 50
340,349 271,192
Other Investments (at cost)
Investment in Government Securities - National Savings Certificate (Un-quoted) : 18 units (March 31, 2013 - 18 units) 2 2
Less: Provision for diminution in value of investments 3 3
340,348 271,191
Aggregate value of Unquoted Investments 258,169 189,012
Aggregate value of Quoted Investments 82,182 82,182
Aggregate Market value of Quoted Investments 305,100 268,425
Aggregate provision for diminution in value of investments 3 3

18. Long-term Loans and Advances

(Rs. Millions)
Particulars As of March 31, 2014 As of March 31, 2013
Unsecured, considered good unless stated otherwise
Capital Advances
Considered good* 54,519 1,195
Considered doubtful 106 140
Less: Provision for doubtful advances (106) (140)
54,519 1,195
Security Deposit
Considered good** 9,005 8,704
Considered doubtful 723 541
Less: Provision for doubtful deposit (723) (541)
9,005 8,704
Loans and advances to related parties (refer note 48) 51,019 46,398
MAT Credit Entitlement# 30,637 33,061
145,180 89,358

* Includes advance payments of Rs. 53,304 Mn towards spectrum (refer note 38(vi))

**Includes security deposit/advance with/to related parties of Rs. 7,308 Mn ( March 31, 2013 – Rs. 7,119 Mn) (refer note - 48)

# MAT credit of Rs. 2,604 Mn (March 31, 2013 – Nil) has been utilised during the year ended March 31, 2014 and adjusted with Provision for tax.

19. Other Non-current Assets

(Rs. Millions)
Particulars As of March 31, 2014 As of March 31, 2013
Unsecured, considered good, unless stated otherwise
Non-current bank balances (refer note 23) 493 10
Advances * 15,704 13,061
Unamortised upfront fees and Deferred Premium 1,704 1,040
17,901 14,111

*Advances represent payments made to various Government authorities under protest and are disclosed net of provision of Rs. 20,199 Mn (March 31, 2013 Rs. 15,263 Mn)

20. Current Investments

(Rs. Millions)
Particulars As of March 31, 2014 As of March 31, 2013
Current investment (at lower of cost and fair market value)
Investment in Mutual Funds 4,865 10,765
Investment in Deposits and Bonds 26 35
4,891 10,800
Aggregate value of Unquoted Investments 26 35
Aggregate value of Quoted Investments 4,865 10,765
Aggregate Market Value of Quoted Investments 4,881 10,841
Aggregate provision for diminution in value of investments - -

Details of investments are provided below:

(Rs. Millions, except as stated otherwise)

As of March 31, 2014 As of March 31, 2013
Particulars (No. of Units) Amount (No. of Units) Amount
Investment in mutual funds (Quoted)
Axis Liquid Fund 405,484 575 32,545 42
Baroda Pioneer Treasury Advantage Fund Plan A - Growth 86,357 127 - -
Birla Sun Life Cash Plus - Instl. Prem- Growth 5,948,101 1,221 4,684,442 872
DBS Chola Liq Sup Inst. Plan -Cumulative - - 174,694 276
DWS Insta Cash Plus Fund - Super Institutional Plan - Growth - - 4,726,818 715
ICICI Prudential Institutional Liquid Plan - Super 335,693 64 3,460,250 594
IDFC Ultra Short Term Fund - - 116,730,561 1,900
JP Morgan India Liquid Fund- Super Inst. Growth Plan 18,484,749 305 86,125,530 1,300
Kotak Liquid (Institutional Premium Plan) -Growth - - 590,854 1,396
BOI AXA Liquid Fund 69,211 100 - -
Pramerica Liquid Fund - Growth 125,259 170 - -
Reliance Liquidity Fund-Growth Option 35,475 68 720,786 1,264
Religare Liquid Fund - Super Institutional Growth 417,082 733 577,406 924
Tata Liquid Super High Inv. Fund- Appreciation - - 692,590 1,482
Tata Money Market Fund Plan A - Growth 249,461 502 - -
UTI Liquid Cash Plan Institutional - Growth Option 476,781 1,000 - -
Total 26,633,653 4,865 218,516,476 10,765
Investment in Deposits and Bonds (Unquoted)
India Innovation Fund 10 6 10 5
7.30% REC Secured Bonds 20 20 30 30
Total 30 26 40 35

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

(Rs. Millions)
Particulars As of March 31, 2014 As of March 31, 2013
Stock-In-Trade* 11 21
11 21

* Net of provision for diminution in value Rs. 411 Mn (March 31, 2013 Rs. 512 Mn)

22. Trade Receivables

(Rs. Millions)
Particulars As of March 31, 2014 As of March 31, 2013
Unsecured, unless stated otherwise Receivables outstanding for a period exceeding six months
Considered good 229 1,081
Considered doubtful 10,369 9,649
Less: Provision for doubtful receivables (10,369) 229 (9,649) 1,081
Other receivables
Considered good 21,426 21,387
Considered doubtful 3,162 1,721
Less: Provision for doubtful receivables (3,162) 21,426 (1,721) 21,387
21,655 22,468

Refer note 9 on security deposit.

23. Cash and Bank Balances

(Rs. Millions)
Particulars As of March 31, 2014 As of March 31, 2013
Cash and cash equivalents
Balances with banks
- On current accounts 875 1,615
- Deposits with original maturity of 3 months or less 3,300 1,375
Cheques on hand 228 189
Cash on hand 22 73
On unpaid dividend account 33 27
4,458 3,279
Other bank balances
Deposits with original maturity of more than 3 months but less than 12 months 2 348
Deposits with original maturity of more than 12 months 7 5
Margin money deposit 486 5
495 358
Less: Amount disclosed under non-current assets (refer note 19) 493 10
4,460 3,627

24. Short-term Loans and Advances

(Rs. Millions)
Particulars As of March 31, 2014 As of March 31, 2013
Unsecured, considered good unless stated otherwise
Loans and advances to related parties (refer note 48) 12,510 1,242
Advances recoverable in cash or kind
Considered good 3,645 5,925
Considered doubtful 1,793 1,134
Less: Provision for doubtful advances (1,793) 3,645 (1,134) 5,925
Balances with customs, excise and other authorities 5,208 5,046
Advance Tax [net of provision for tax of Rs. 108,461 Mn (March 31, 2013 Rs. 91,216 Mn) and net of Rs. 419 Mn TDS receivable provided for (March 31,2013 Rs. 217 Mn)]# 2,855 1,920
24,218 14,133

# MAT credit of Rs. 2,604 Mn (March 31, 2013 – Nil) has been utilised during the year ended March 31, 2014 and adjusted with Provision for tax.

25. Other Current Assets

(Rs. Millions)
Particulars As of March 31, 2014 As of March 31, 2013
Unsecured, considered good, unless stated otherwise
Unbilled Revenue 10,715 9,919
Interest accured on loan given to related parties 682 471
Unamortised upfront fees and Deferred Premium 704 266
Others 52 333
12,153 10,989

26. Contingent Liabilities

(i) Total Guarantees outstanding as of March 31, 2014 amounting to Rs. 57,582 Mn (March 31, 2013 – Rs. 29,714 Mn) have been issued by banks and financial institutions on behalf of the Company. These guarantees include certain financial bank guarantees which have been given for subjudice matters and in compliance with licensing conditions, the amount with respect to these have been disclosed under capital commitments, contingencies and liabilities, as applicable, in compliance with the applicable accounting standards.

Corporate Guarantees outstanding as of March 31, 2014 amounting to Rs. 770,121 Mn (March 31, 2013 - Rs. 537,606 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, 2014 As of March 31, 2013
(i) Taxes, Duties and Other demands (under adjudication / appeal / dispute)
-Sales Tax and Service Tax 10,463 6,649
-Income Tax 16,651 15,032
-Customs Duty 4,463 4,463
-Entry Tax 3,676 3,408
-Stamp Duty 359 351
-Municipal Taxes 122 111
-DoT demands* 2,487 2,362
-Other miscellaneous demands 59 118
(ii) Claims under legal cases including arbitration matters
-Access Charges / Port Charges 5,781 4,616
-Others 557 570
Total 44,618 37,680

*in addition, refer note (g) (vi), (g) (vii) and (g) (viii) 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 and Service Tax Sales Tax

The claims for sales tax as of March 31, 2014 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.

Service Tax

The service tax demands as of March 31, 2014 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, iv. disallowance of cenvat credit used in excess of 20% limit, and v. employee talk time

c) Income Tax

Income tax demands under appeal mainly included the appeals filed by the Company before various appellate authorities against the disallowance by the income tax authorities of certain expenses being claimed, 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.

d) Custom Duty

The custom authorities, in some states, demanded Rs. 4,463 Mn as of March 31, 2014 (March 31, 2013 - Rs. 4,463 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 CESTAT 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.

e) 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, 2014 was Rs. 3,676 Mn (March 31, 2013 - Rs. 3,408 Mn).

f) Access Charges (Interconnect Usage Charges)/Port Charges

(i) 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 Telecom Regulatory Authority of India (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 Company’s favour. BSNL has challenged the same in Hon’ble Supreme Court. However, no stay has been granted.

(ii) In another proceeding with respect to distance based carriage charges, 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 August 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 Call Data Records (CDRs) to TRAI. The CDRs have been furnished to TRAI. (iii) 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 rates were further revised downwards by TRAI in 2012. On BSNL’s appeal, TDSAT declined to stay the revised regulation.

Further, the Hon’ble Supreme Court vide its judgement dated December 6, 2013, passed in another matter, held that TRAI is empowered to issue regulations on any matter under Section 11(1)(b) of TRAI Act and the same cannot be challenged before TDSAT. Accordingly, all matters raised before TDSAT, wherein TDSAT had interfered in Appeal and passed judgements, all such orders do not have any significance. However, parties can file Writ Petitions before High Court challenging such regulations.

The Company believes that the above said judgement has further strengthened the position of the Company on many issues with respect to Regulations which had been in its favour and impugned before TDSAT.

g) Department of Telecommunications (‘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 financial year 06-07 and financial year 07-08 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 Courts & TDSAT.

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 certain mobility circles.

v) DoT demand also include penalty for alleged failure to meet the procedural requirement for submission of EMF radiation self certification. 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 table above, the contingent liability on DoT matters includes the following:

vi) Post the Hon’ble Supreme Court Judgment on October 11, 2011 on components of AGR 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 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.

vii) On January 8, 2013, DoT issued a demand on the Company and one of its subsidiaries for Rs. 52,013 Mn towards levy of one time spectrum charge. The demand includes a retrospective charge of Rs. 9,090 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. 42,923 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, vide 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. The DoT has filed its reply and the next date of hearing is June 30, 2014.

viii) Based on the scope of Service under UAS License the Company has been providing 3G service under a commercial arrangement, i.e., "3G Intra Circle Roaming (‘3G ICR’) Agreements with other operators", where the Company has not been allocated 3G spectrum.

The Department of Telecommunications(‘DoT’) 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 under 3G ICR arrangements. DoT vide its order dated March 15, 2013 directed the Company to stop providing 3G services in these 7 circles (under 3G ICR arrangements) and also levied a financial penalty of Rs. 3,500 Mn. The same was challenged by the Company before Hon’ble Delhi High Court which 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 (SLP) before the Hon’ble Supreme Court, challenging the order of the Division Bench. The Hon’ble Supreme Court, vide its interim order dated April 11, 2013, restrained DoT from taking any coercive action and also directed the Company not to extend the facilities to any new customer on the basis of the 3G ICR arrangements in the meantime.

Both the writ petition as well as the appeal against interim order before the Supreme Court were disposed with liberty to the Company to approach TDSAT. On October 3, 2013, the Company filed the petition before TDSAT which was heard by TDSAT and vide judgment dated April 29, 2014, TDSAT held 3G ICR to be a competent service and quashed the penalty of Rs. 3,500 Mn levied by DoT on the Company.

h) 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.

i) Bharti Mobinet Limited (‘BMNL’) Litigation

The Company is in litigation in various proceedings at various stages and in various forums with DSS Enterprises Private Limited (DSS) (which had 0.34 per cent 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 the Company. In respect of one of the transactions with respect to purchase of 10.5% share of DSS in Skycell by the Company, 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 the Company. 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 in Hon’ble High Court 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 Hon’ble Supreme Court wherein the matter has been admitted on the condition that the amount as per Single Judge Order shall be secured in Hon’ble Supreme Court, 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 the Company challenging the transfer of shares by that shareholder to the Company. 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 Hon’ble Delhi High Court with respect to the commencement of arbitration proceedings. The stay was made absolute. The liability, if any, of the Company arising out of above litigation cannot be currently estimated. Since the amalgamation of BCL and erstwhile Bharti Infotel Limited (BIL) with the Company, 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 the Company down to 0.136% as of March 31, 2014.

27. Capital and Other Commitments

a) Estimated amount of contracts to be executed on capital account and not provided for (net of advances) Rs. 159,239 Mn as of March 31, 2014 (March 31, 2013 - Rs. 17,041 Mn). (refer note 38(vi))

b) Under certain Outsourcing Agreements, the Company has estimated commitments to pay Rs. 311 Mn as of March 31, 2014 (March 31, 2013 - Rs. 8,245 Mn) comprising of assets and service charges. The amount represents total minimum commitment over the unexpired period of the contracts (uptill 5 years from the reporting date), since it is not possible for the Company to determine the extent of assets and services to be provided over the unexpired period of the contract. 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, namely, Bharti Airtel Services Limited, Bharti Airtel (USA) Limited, Bharti Airtel (Hongkong) Limited, Bharti Airtel (Japan) Limited, Bharti Airtel (France) Limited, Bharti Telemedia Limited, Airtel M Commerce Services Limited, Telesonic Networks Limited, Bharti International (Singapore) Pte Limited, Bharti Airtel Holdings (Singapore) Pte Limited, Bharti Airtel International (Netherlands) B.V. including its subsidiaries.

29. Revenue From Operations

(Rs. Millions)
Particulars For the year ended March 31, 2014 For the year ended March 31, 2013
Service Revenue
- Voice revenue 404,264 357,425
- Others 94,863 96,061
Sale of products 58 23
499,185 453,509

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, 2014 For the year ended March 31, 2013
Interest income on bank deposits 173 985
Interest income on loan given to related parties 260 1,112
Dividend income from subsidiaries 4,588 4,100
Net gain on sale of investments 2,096 1,208
Net foreign exchange gain - 6,597
Profit on sale of fixed assets 95 -
Other non-operating income
Lease rentals 66 6
Liabilities/Provision written back 114 144
Miscellaneous income 1,142 480
8,534 14,631
31. Cost of Goods Sold
(Rs. Millions)
Particulars For the year ended March 31, 2014 For the year ended March 31, 2013
(Increase)/ Decrease in inventories (183) (177)
Purchase of Stock-in-Trade 205 196
22 19
32. Employee Benefit Expenses
(Rs. Millions)
Particulars For the year ended March 31, 2014 For the year ended March 31, 2013
Salaries and wages 14,565 13,094
Contribution to provident and other funds (refer note 40) 670 612
Expenses on employee stock option plan (refer note 50) 195 242
Sta3 welfare expenses 572 622
Others 479 543
16,481 15,113

33. Power and Fuel, Rent and Other Operating Expenses

(Rs. Millions)
Particulars For the year ended March 31, 2014 For the year ended March 31, 2013
Power and fuel
Network 40,569 34,615
Others 1,128 1,084
41,697 35,699
Rent
Network 55,911 51,129
Others 993 1,096
56,904 52,225
Other expenses
Interconnect and Port charges 210 1,074
Insurance
Network 501 501
Others 0 36
Installation 89 35
Repairs and Maintenance
Plant and Machinery 22,837 20,507
Building 191 194
Others - Network 645 634
Others - Administrative 926 936
Leased Line and Gateway charges 1,253 1,323
Internet access and bandwidth charges 6,396 5,715
Advertisement and Marketing 6,074 5,993
Sales Commission, Customer verification and Content cost 15,779 21,108
Indirect Selling and Distribution 3,350 3,190
Sim card utilisation 1,068 1,920
Legal and Professional 1,906 2,141
Rates and Taxes 441 407
IT and Call Center Outsourcing 11,701 10,842
Travelling and Conveyance 1,269 1,243
Bad debts written o3 2,644 1,881
Provision for doubtful debts and advances (refer note 53) 3,220 1,742
Provision for diminution in stock/ capital work in progress 190 542
Collection and Recovery Expenses 3,984 4,482
Loss on sale of Fixed Assets (net) - 481
Printing and Stationery 689 728
Net foreign exchange loss 1,417 -
Miscellaneous Expenses
Network 1,130 825
Sales and Marketing 3,858 3,209
Administrative 943 735
92,711 92,424

Note: Miscellaneous Expenses (Sales and Marketing) above includes goodwill waivers which are other than trade discount, of Rs. 716 Mn (for the year ended March 31, 2013 Rs. 392 Mn).

34. Finance Costs
(Rs. Millions)
Particulars For the year ended March 31, 2014 For the year ended March 31, 2013
Interest expense 10,228 14,885
Other borrowing cost 1,036 607
Loss from swap arrangements (net) 476 190
Applicable net (gain)/loss on foreign currency borrowings 1,624 841
13,364 16,523
35. Depreciation and Amortisation Expense
(Rs. Millions)
Particulars For the year ended March 31, 2014 For the year ended March 31, 2013
Depreciation of tangible assets (refer note 15) 59,012 55,575
Amortisation of intangible assets (refer note 16) 13,301 12,692
72,313 68,267

36. Exceptional Items

a) During the year ended March 31, 2014, the Company has reassessed useful life of certain categories of network assets due to technological developments and has revised the remaining useful life in respect of those assets effective April 1, 2013. Out of those assets, additional depreciation charge of Rs. 2,071 Mn (March 31, 2013- Rs. Nil) on assets for which the revised useful life has expired on April 1, 2013 has been recognised and disclosed as ‘Exceptional Items’ and additional depreciation charge of Rs. 2,708 Mn (March 31, 2013- Rs. Nil) for balance assets has been recognised and reflected as ‘Depreciation and amortisation expense’ for the year ended March 31, 2014. The impact of above change on the depreciation charge for the future years is as follows:

(Rs. Millions)
Particulars Year ending March 31, 2015 Year ending March 31, 2016 Year ending March 31, 2017 After March 31, 2017
Increase/(decrease) in depreciation 158 (624 (783) (3,530)

b) Tax expense includes:

i) Tax benefit of Rs. 540 Mn (March 31, 2013 - Rs. Nil) on above ii) Reversal of tax provision of Rs. 640 Mn (March 31, 2013 - Rs. Nil) on account of settlement of an uncertain tax position

37. Preferential Allotment

During the year ended March 31, 2014, the Company has issued 199,870,006 equity shares to M/s. Three Pillars Pte. Ltd (belonging to non-promoter category), an affiliate of Qatar Foundation Endowment, constituting 5% of the post issue share capital of the Company, through preferential allotment at a price of Rs. 340 per share aggregating to Rs. 67,956 Mn. The proceeds of the preferential allotment were utilised towards the repayment of equivalent debt in accordance with the objective of the preferential allotment.

38. Acquisitions/Additional investments / New developments

(i) On June 25, 2013, the Company acquired additional equity stake of 2% by way of subscription to fresh equity in its existing 49% owned joint venture companies, namely, Airtel Broadband Services Private Limited (‘ABSPL’) (formerly known as Wireless Business Services Private Limited), Wireless Broadband Business Services (Delhi) Private Limited, Wireless Broadband Business Services (Kerala) Private Limited and Wireless Broadband Business Services (Haryana) Private Limited (together referred as "BWA entities"), for a sum of Rs. 638 Mn, thereby increasing its equity shareholding to 51% in each of these entities.

The Scheme of Arrangement (‘Scheme’) under Section 391 to 394 of the Companies Act, 1956 for amalgamation of Wireless Broadband Business Services (Delhi) Private Limited, Wireless Broadband Business Services (Kerala) Private Limited and Wireless Broadband Business Services (Haryana) Private Limited (collectively referred to as "the transferor companies") with ABSPL was approved by the Hon’ble High Courts of Delhi and Bombay vide order dated May 24, 2013 and June 28, 2013, respectively, with appointed date July 6, 2010, and filed with the Registrar of Companies on August 5, 2013, effective date of the Scheme. Accordingly, the transferor companies have ceased to exist and have merged into ABSPL. The shares issued to the Company in ABSPL in exchange of shares in transferor companies have been accounted for at the carrying amount of investment in the transferor companies.

On August 30, 2013, the Company increased its equity investment in ABSPL by way of conversion of loan of Rs. 49,094 Mn, thereby increasing its shareholding from 51% to 93.45% and on October 17, 2013 further acquired 371,273,844 equity shares of ABSPL for a total consideration of Rs. 6,257 Mn from Qualcomm Asia Pacific Pte. Ltd., the only other shareholder of ABSPL, thereby increasing it’s shareholding to 100%. An amount of Rs. 4,104 Mn is payable upon satisfaction of certain conditions as per the share purchase agreement. The Scheme of Arrangements ("Scheme’) under Sections 391 to 394 of the Companies Act, 1956 for amalgamation of ABSPL, a wholly-owned subsidiary of the Company, with the Company, was approved by the Hon’ble High Courts of Delhi and Bombay on January 21, 2014 and April 11, 2014, respectively. The Scheme shall be effective on filing of certified copies of Orders of Hon’ble High Courts of Bombay and Delhi with the Registrar of Companies (ROC) and obtaining of any other regulatory approval. The said orders are yet to be filed with ROC. Accordingly, the Scheme has not been given effect to in these financial statements.

(ii) During the year ended March 31, 2014, the Company has made equity investment of Rs. 9,518 Mn (USD 155 Mn) in Bharti Airtel International (Mauritius) Limited.

(iii) During the year ended March 31, 2014, the Company has made equity investment of Rs. 990 Mn in Airtel M Commerce Services Limited.

(iv) During the year ended March 31, 2014, the Company has made equity investment of Rs. 51 Mn in Nxtra Data Limited (a wholly owned subsidiary company). Pursuant to the approval of the shareholders through Postal Ballot on September 30, 2013, the Company has transferred the Data Center and Managed Services undertaking as a going concern on a slump sale basis to Nxtra Data Limited, w.e.f. January 1, 2014 for a consideration of Rs. 1,771 Mn.

(v) During the year ended March 31, 2014, the Company has made equity investment of Rs. 2,609 Mn (USD 43 Mn) in Network i2i Limited by way of transfer of its co-ownership interest in three of its undersea cables to Network i2i Limited (refer note 55).

(vi) During the year ended March 31, 2014, the Company has won the auction for 99.80 MHz spectrum in 13 service areas in the auction conducted by the Government of India. The Company has opted for the deferred payment option and has paid an advance of Rs. 53,304 Mn with the balance amount of Rs. 129,129 Mn payable in 10 equal installments after a moratorium of two years. Pending the allocation of spectrum by the Government of India, the balance amount has been disclosed under capital commitments. (refer note 27)

39. Earnings Per Share

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

Particulars For the year ended March 31, 2014 For the year ended March 31, 2013
Basic and Diluted Earnings per Share :
Nominal value of equity shares (Rs.) 5 5
Profit attributable to equity shareholders (A) 66,002 50,963
Weighted average number of equity shares outstanding during the year (Nos. in Mn) (B) 3,955 3,798
Basic/Diluted earnings per Share (Rs.) (A/B) 16.69 13.42

40. 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, 2014 For the year ended March 31, 2013
Employer’s Contribution to Provident Fund *@ 662 608
Employer’s Contribution to ESI * 8 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, 2014

(Rs. Millions)
Particulars Gratuity # Leave Encashment #
Current service cost 258 171
Interest cost 117 63
Expected return on plan assets (6) -
Actuarial (gain) / loss 101 (62)
Total * 470 172
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

# 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, 2014

(Rs. Millions)
Particulars Gratuity Leave Encashment
Discount rate 8.00% 8.00%
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) 24.39 24.39

For the year ended March 31, 2013

(Rs. Millions)
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

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

For the year ended March 31, 2014

(Rs. Millions)
Particulars Gratuity Leave Encashment
Change in Defined Benefit Obligation
Defined benefit obligation at beginning of year 1,382 744
Current service cost 258 171
Interest cost 117 63
Benefits paid (252) (114)
Transferred (refer note 38 (iv)) (14) (8)
Actuarial (gain) / loss 95 (62)
Defined benefit obligation at year end 1,586 794
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 1,510 794
Current Liabilities 241 794
Non-Current Liabilities 1,269 -
For the year ended March 31, 2013
(Rs. Millions)
Particulars Gratuity Leave Encashment
Change in Defined Benefit Obligation
Defined 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)
Defined 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 -

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, 2014 As of March 31, 2013 As of March 31, 2012 As of March 31, 2011 As of March 31, 2010
Defined benefit obligation 1,586 1,382 1,119 995 800
Plan assets 76 76 76 76 76
Surplus / (deficit) (1,510) (1,306) (1,043) (919) (724)
Experience adjustments on plan liabilities- gain/ (loss) (28) (31) (57) (87) (130)
Experience adjustments on plan assets- gain/ (loss) (6) (6) (6) (6) (6)
(Rs. Millions)
Leave Encashment
Particulars As of March 31, 2014 As of March 31, 2013 As of March 31, 2012 As of March 31, 2011 As of March 31, 2010
Defined benefit obligation 794 744 652 607 534
Plan assets - - - - -
Surplus / (deficit) (794) (744) (652) (606) (534)
Experience adjustments on plan liabilities- gain/ (loss) 98 79 51 (97) (106)
Experience adjustments on plan assets- gain/ (loss) - - - - -

g) Movement in other long term employee benefits :

The provision for long term service award provided by the Company as of March 31, 2014 is Rs. 105 Mn (March 31, 2013 Rs. 66 Mn).

41. Investment in Joint Ventures/Jointly Owned Assets

a) Jointly owned assets

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, 2014

(Rs. Millions except % share)
Cable Project Total Contribution Capital Work In Progress Net block % Share
SMW-4 3,382 97 1,811 13.07%
EIG - Project 2,412 - 1,913 7.09%
IMEWE- Project 3,063 - 2,422 12.84%

Refer note 55 for cables transferred to Network i2i Limited, a wholly owned subsidiary of the Company.

As of March 31, 2013

(Rs. Millions except % share)
Cable Project Total Contribution Capital Work In Progress Net block % 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%

b) Joint Ventures Entity

(i) The Company has 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, 2014 (March 31, 2013 USD 2.2 Mn, Rs. 92 Mn, ownership interest 10.00%).

(ii) During the year ended March 31, 2013, the Company acquired 49% stake for a consideration of Rs. 9,281 Mn (USD 165 Mn) in Qualcomm Asia Pacific’s 4 Indian Subsidiaries ("BWA entities"). The principal activity of the venture is to carry on the business of internet and broadband services. During the year ended March 31, 2014, the Company has increased its equity investment in Airtel Broadband Services Private Limited (ABSPL) from 49% to 100% and ABSPL became the wholly owned subsidiary of the Company (refer note 38).

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

(Rs. Millions)
Particulars As of March 31, 2014 As of March 31, 2013
(Unaudited)* (Unaudited)
Current assets 113 794
Non-current assets 4 36,796
Current liabilities 11 14,420
Non-current liabilities - 15,674
Equity 106 7,496
Revenue 37 27
Other Income 103 82
Employee benefit expenses 24 17
Other expenses 36 20
Finance costs 3 225
Depreciation 1 1
Profit/ (loss) before tax 76 (154)
Tax Expense 26 32
Loss for the year 50 (186)

*includes share of income and results of ABSPL till June 25, 2013, i.e., the date, it became the subsidiary of the Company.

42. As of March 31, 2014, Bharti Airtel Employee’s Welfare Trust (‘the Trust’) holds 2,374,698 equity shares (of face value of Rs. 5 each) (March 31, 2013 3,937,055 equity shares) of the Company.

Particulars As of March 31, 2014 As of March 31, 2013 As of March 31, 2014 As of March 31, 2013
Number of shares (Rs. Millions)
Opening Balance 3,937,055 2,456,750 674 282
Purchased during the year - 2,945,000 - 762
Issued during the year (1,562,357) (1,464,695) (332) (370)
Closing Balance 2,374,698 3,937,055 342 674

43. Loans and advances in the nature of loan 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 given to Bharti Telemedia Limited at nil interest rate is Rs. 35,770 Mn (March 31, 2013 Rs. 35,026 Mn at nil interest rate).

(b) Loan and advance in the nature of loan given to Bharti Airtel Lanka (Private) Limited at nil interest rate is Rs. 11,047 Mn (March 31, 2013 Rs. 11,047 Mn at nil interest rate).

(c) Loan and advance in the nature of loan given to Bharti Airtel International (Netherlands) B.V at LIBOR + 1.75% interest rate is Rs. 10,895 Mn (March 31, 2013 Rs. 67,757 Mn at LIBOR + 1.7% interest rate).

(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, 2013 Rs. 90 Mn at SBI PLR + 1% interest rate).

(e) Loan and advance in the nature of loan given to Bharti Teleports Limited at SBI +1% interest rate is Rs. 412 Mn (March 31, 2013 Rs. 302 Mn at SBI +1% interest rate).

(f) Loan and advance in the nature of loan given to Bharti Airtel International (Mauritius) Limited is Rs. Nil (March 31, 2013 Rs. 9,967 Mn at LIBOR + 1.7% interest rate).

(g) Loan and advance in the nature of loan given to Bharti International (Singapore) Pte Limited at LIBOR + 1.75% interest rate is Rs. 2,731 Mn (March 31, 2013 Rs. 32,378 Mn at LIBOR + 1.7% interest rate).

(h) Loan and advance in the nature of loan given to Bharti Airtel (USA) Limited is Rs. Nil (March 31, 2013 Rs. 53 Mn at 7.33% p.a. interest rate).

(i) Loan and advance in the nature of loan given to Nxtra Data Limited at nil interest rate is Rs. 2,000 Mn (March 31, 2013 Rs. Nil).

(j) Loan and advance in the nature of loan given to Bharti Airtel Services Limited at nil interest rate is Rs. 635 Mn (March 31, 2013 Rs. 56 Mn at nil interest rate).

(k) Loan and advance in the nature of loan given to Airtel Broadband Services Private Limited at nil interest rate is Rs. 49,094 Mn (March 31, 2013 Rs. Nil).

Refer note 48 for outstanding balance at the end of the year for the above entities.

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

(Rs. Millions)

Particulars For the year ended March 31, 2014 For the year ended March 31, 2013
Expenditure
On account of :
Interest 295 304
Professional & Consultation Fees 36 37
Travelling (Net of Reimbursement) 26 22
Roaming Charges (including Commission) 1,868 1,685
Membership & Subscription 95 46
Sta3 Training & Others 2 43
Network Services 447 345
Annual Maintenance 1,863 1,690
Bandwidth Charges 3,723 2,959
Access Charges 18,689 13,872
Repairs & Maintenance - 7
Marketing 673 743
Content Charges 1,289 105
Directors Commission and Sitting Fees 49 36
Agency Fees & Premium fees - 3
Income Tax 210 155
Total 29,265 22,052
Earnings
Service Revenue 34,929 27,737
Management Charges 106 87
Total 35,035 27,824

45. CIF Value of Imports

(Rs. Millions)
Particulars For the year ended March 31, 2014 For the year ended March 31, 2013
Capital Goods 16,145 25,516
Total 16,145 25,516
46. Auditors’ Remuneration
(Rs. Millions)
Particulars For the year ended March 31, 2014 For the year ended March 31, 2013
- Audit Fee* 68 66
- Reimbursement of Expenses* 5 5
- As advisor for taxation matters* - 1
- Other Services* 11 5
Total 84 77

* Excluding Service Tax

47. 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. 38 Mn (March 31, 2013 – Rs. 16 Mn) based on the information available with the Company and the confirmation received from the creditors till the year end.

(Rs. Millions)
Sr No Particulars March 31, 2014 March 31, 2013
1 The principal amount and the interest due thereon [Rs. Nil (March 31, 2013 – Rs.3NIL)] remaining unpaid to any supplier as at the end of each accounting year. 38 16
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. - -

48. Related Party Disclosures

In accordance with the requirements of Accounting Standard (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

Gopal Vittal (w.e.f. February 1, 2013)

Sanjay Kapoor (till February 28, 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 ("BIL")

Bharti Infratel Services Limited (incorporated on June

4, 2013 as subsidiary of BIL)

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 ("BIVL") (subsidiary of BIL)

(w.e.f June 11, 2013, merged with Indus Towers Limited)

Airtel M Commerce Services Limited

Airtel Broadband Services Private Limited (formerly

known as Wireless Business Services Private Limited)

(subsidiary w.e.f. June 25, 2013)*

Wireless Broadband Business Services (Delhi) Private

Limited (subsidiary w.e.f. June 25, 2013)*$

Wireless Broadband Business Services (Haryana)

Private Limited (subsidiary w.e.f. June 25, 2013)*$

Wireless Broadband Business Services (Kerala) Private

Limited (subsidiary w.e.f. June 25, 2013)*$

Nxtra Data Limited (incorporated on July 2, 2013)*

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.)

Telesonic Networks Limited (formerly known as

Alcatel-Lucent Network Management Services India

Limited) (effective February 5, 2013)

Other subsidiaries of Bharti Airtel International

(Netherlands) B.V. :

Africa Towers N.V.

Africa Towers Services Limited

Airtel Ghana Limited

Airtel (SL) Limited #

Airtel Burkina Faso S.A. #

Airtel Congo S.A #

Airtel DTH Services (SL) Limited ^

Airtel DTH Services Burkina Faso S.A. @

Airtel DTH Services Congo (RDC) S.p.r.l ^

Airtel DTH Services Congo S.A. @

Airtel DTH Services Gabon S.A @

Airtel DTH Services Ghana Limited @

Airtel DTH Services Nigeria Limited

Airtel DTH Services Tanzania Limited ^

Airtel DTH Services Uganda Limited @

Bharti DTH Services Zambia Limited ^

Airtel Madagascar S.A.#

Airtel Malawi Limited #

Airtel Mobile Commerce (SL) Limited

Airtel Mobile Commerce B.V.

Airtel Mobile Commerce Burkina Faso S.A.

Airtel Mobile Commerce (Ghana) Limited

Airtel Mobile Commerce Holdings B.V.

Airtel Mobile Commerce Madagascar S.A.

Airtel Mobile Commerce Limited

Airtel Mobile Commerce (Tanzania) Limited

Airtel Mobile Commerce Tchad S.a.r.l.

Airtel Mobile Commerce Uganda Limited

Airtel Mobile Commerce Rwanda Limited

Airtel Mobile Commerce (Seychelles) Limited (subsidiary w.e.f. August 9, 2013)

Airtel Mobile Commerce (Kenya) Limited

Airtel Money Niger S.A.

Airtel Money (RDC) S.p.r.l

Airtel Networks Kenya Limited #

Airtel Networks Limited

Airtel Rwanda Limited #

Airtel Tanzania Limited #

Airtel Towers (Ghana) Limited

Airtel Towers (SL) Company Limited

Airtel Uganda Limited #

Airtel (Seychelles) Limited

Bharti Airtel Acquisition Holdings B.V.

Bharti Airtel Burkina Faso Holdings B.V.

Bharti Airtel Cameroon B.V.

Bharti Airtel Chad Holdings B.V.

Bharti Airtel Congo Holdings B.V.

Bharti Airtel Developers Forum Limited

Bharti Airtel DTH Holdings B.V.

Bharti Airtel Gabon Holdings B.V.

Bharti Airtel Ghana Holdings B.V.

Bharti Airtel Kenya B.V.

Bharti Airtel Kenya Holdings B.V.

Bharti Airtel Madagascar Holdings B.V.

Bharti Airtel Malawi Holdings B.V.

Bharti Airtel Mali Holdings B.V.

Bharti Airtel Niger Holdings B.V.

Bharti Airtel Nigeria B.V.

Bharti Airtel Nigeria Holdings B.V. ^

Bharti Airtel Nigeria Holdings II B.V.

Bharti Airtel RDC Holdings B.V.

Bharti Airtel Services B.V.

Bharti Airtel Sierra Leone Holdings B.V.

Bharti Airtel Tanzania B.V.

Bharti Airtel Uganda Holdings B.V.

Bharti Airtel Zambia Holdings B.V.

Burkina Faso Towers S.A.

Celtel (Mauritius) Holdings Limited

Celtel Congo (RDC) S.a.r.l. #

Airtel Gabon S.A.#

Celtel Niger S.A.#

Airtel Tchad S.A.#

Airtel Networks Zambia Plc (formerly known as Celtel Zambia plc)#

Channel Sea Management Company (Mauritius) Limited

Congo (RDC) Towers S.p.r.l.

Congo Towers S.A.

Gabon Towers S.A.

Indian Ocean Telecom Limited

Kenya Towers Limited

Madagascar Towers S.A.

Malawi Towers Limited

Mobile Commerce Congo S.A.

Airtel Money S.A. (Gabon)

Montana International

MSI-Celtel Nigeria Limited ^

Niger Towers S.A.

Partnership Investments S.p.r.l.

Rwanda Towers Limited

Socit Malgache de Telephonie Cellulaire SA

Tanzania Towers Limited

Tchad Towers S.A.

Towers Support Nigeria Limited

Uganda Towers Limited

Warid Congo S.A. (subsidiary w.e.f. March 12, 2014)

Warid Telecom Uganda Limited (subsidiary w.e.f. May 13, 2013) (merged with Airtel Uganda Limited w.e.f. February 1, 2014)

Zambian Towers Limited

Zap Trust Company Nigeria Limited

Zebrano (Mauritius) Limited

Airtel Mobile Commerce Zambia Limited (formerly known as ZMP Limited)

(b) Associates / Associate of subsidiary

Bharti Teleports Limited

Tanzania Telecommunications Company Limited (Associate of Bharti Airtel Tanzania B.V.)

Seychelles Cable Systems Company Limited (Associate of Airtel (Seychelles) Limited)

Telesonic Networks Limited (formerly known as Alcatel-Lucent Network Management Services India Limited) (till February 4, 2013)

(c) Joint Ventures /Joint Venture of Subsidiary

Forum I Aviation Limited (Joint Venuture of Bharti Airtel Services Limited)

Indus Towers Limited (Joint Venture of Bharti Infratel Limited)

Bridge Mobile Pte Limited

Wireless Broadband Business Services (Delhi) Private Limited (till June 24, 2013)*

Wireless Broadband Business Services (Haryana) Private Limited (till June 24, 2013)*

Wireless Broadband Business Services (Kerala) Private Limited, (till June 24, 2013)*

Airtel Broadband Services Private Limited (formerly known as Wireless Business Services Private Limited) (till June 24, 2013)*

(d) Entities where Key Management Personnel and their relatives exercise significant influence /Group Companies

Beetel Teletech Limited

Bharti Airtel Employees Welfare Trust

Bharti AXA General Insurance Company Limited

Bharti AXA Life Insurance Company Limited

Bharti Enterprises Limited

Bharti Foundation

Bharti Realty Holdings Limited

Bharti Realty Limited

Bharti Retail Limited

Bharti Wal-Mart Private Limited (till December 28, 2013)

BSB Portal Limited

Centum Learning Limited

Comviva Technologies Limited (till December 13, 2012)

Fieldfresh Foods Private Limited

Indian Continent Investment Limited

Jersey Airtel Limited

Nile Tech Limited

Mehrauli Realty and Consultants Limited

Mobinteco Limited

Y2CF Digital Media Limited (w.e.f May 6, 2013)

Hike Limited (formerly known as MessngrCo Private Limited)

(e) Entities having significant influence over the Company Singapore Telecommunications Limited

Pastel Limited

Bharti Telecom Limited

* Refer note 38 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%.

@ Dissolved during the year ended March 31, 2014

^ Under Liquidation. Airtel DTH Services Tanzania Limited liquidated on 3rd April 2014. $ Merged w.e.f. August 5, 2013 with Airtel Broadband Services Private Limited (formerly known as Wireless Business Services Private Limited)

The details of amounts due to or due from the related parties as of March 31, 2014 and March 31, 2013 are as follows:

(Rs. Millions)
As of As of
S.No Particulars
March 31, 2014 March 31, 2013
1 Loans & Advances (including accrued interest, wherever applicable)
Entities where control exist:
Bharti Airtel (Services) Limited 634 -
Airtel Broadband Services Pvt. Ltd.* 3,800 -
Bharti Telemedia Ltd. 33,226 35,026
Bharti Airtel Lanka (Pvt.) Ltd. 11,517 11,517
Nxtra Data Limited 2,000 -
Telesonic Networks Limited (Formerly known as Alcatel-Lucent Network 90 90
Management Services India Limited)
Bharti International (Singapore) Pte Ltd. 2,467 -
Bharti Airtel International (Netherlands) B.V. 9,831 -
Associate:
Bharti Teleports Ltd. 320 302
Entity where key management personnel & their relatives exercise
significant influence:
Bharti Airtel Employees Welfare Trust 326 662
64,211 47,597
*refer note 38(i)
2 Borrowings (including accrued interest)
Entity where control exist:
Bharti Infratel Ltd. - 23,091
- 23,091
3 Security Deposit/Advances given
Entities where control exist:
Bharti Airtel (Services) Limited 729 729
Bharti Infratel Ltd. 1,777 1,769
Joint Venture of Subsidiary:
Indus Towers Limited 3,813 3,727
Entities where key management personnel & their relatives exercise
significant influence:
Bharti Realty Limited 358 353
Bharti Realty Holdings Limited 86 86
Centum learning Limited 60 60
Nile Tech Ltd. 395 395
Bharti Enterprises Limited 90 -
7,308 7,119
4 Trade Receivables/(Payables)
Entities where control exist:
Bharti Hexacom Ltd. 278 904
Bharti Airtel (Services) Limited (757) 154
Bharti Telemedia Ltd. 26 -
Bharti Infratel Ventures Ltd. - 6
Bharti Infratel Ltd. (2,692) (2,199)
Airtel M Commerce Services Limited (36) 62
Airtel Broadband Services Pvt. Ltd.* 151 -
Telesonic Networks Limited (Formerly known as Alcatel-Lucent Network (318) (867)
Management Services India Limited)
Network i2i Limited (137) 371
Nxtra Data Limited 182 -
Bharti Airtel (USA) Ltd. 182 720
Bharti Airtel (UK) Ltd. (543) (15)
Bharti Airtel (Hongkong) Ltd. (31) (6)
Bharti Airtel (Canada) Ltd.$ 26 25
Bharti Airtel (Japan) Kabushiki Kaisha (4) (3)
Bharti Airtel (France) SAS (46) (15)
Bharti Airtel International (Mauritius) Ltd. 2 1
Bharti International (Singapore) Pte Ltd. (778) 1,136
Bharti Airtel Holdings (Singapore) Pte Limited 1 5
Bharti Airtel International (Netherlands) B.V. 355 38
Bharti Airtel Lanka (Pvt.) Ltd. 3 6
Airtel Bangladesh Ltd. (2) (6)
Airtel Networks Ltd. 76 191
Airtel (Seychelles) Limited (4) 0
Airtel Ghana Ltd. 68 (27)
Other African Subsidiaries (40) (126)
Associate:
Bharti Teleports Ltd. 81 7
Joint Venture/ Joint Venture of Subsidiary:
Forum 1 Aviation Ltd (3) (3)
Indus Towers Limited (7,395) (6,708)
Bridge Mobile Pte Limited (4) (5)
Wireless Business Services Pvt. Ltd. # * - (2,242)
Wireless Broadband Business Services (Delhi) Pvt. Ltd. # * - (2,167)
Wireless Broadband Business Services (Haryana) Pvt. Ltd. # * - (124)
Wireless Broadband Business Services (Kerala) Pvt. Ltd. # * - (259)
Entities where key management personnel & their relatives exercise significant influence:
Beetel Teletech Limited (41) (21)
Bharti Realty Limited (1) (4)
Bharti Realty Holdings Limited (7) (3)
Bharti Retail Ltd. 37 31
Bharti Wal-Mart Private Limited - 6
Bharti Enterprises Limited (56) (56)
Bharti AXA Life Insurance Company Limited 5 3
Bharti AXA General Insurance Co Ltd 2 18
BSB Portal Limited (1) -
Centum learning Limited (66) (72)
Fieldfresh Foods Private Limited 0 1
Hike Limited 14 -
Jersey Airtel Limited (0) 1
Mehrauli Realty and Consultants Limited - (2)
Mobinteco Limited 2 -
Entity having significant influence over the Company:
Singapore Telecommunications Ltd. 294 324
Key Management Personnel:
Sunil Bharti Mittal - (143)
Sanjay Kapoor - (12)
Gopal Vittal - (9)
Manoj Kohli - -
(11,177) (11,084)

$ gross of Rs. 24 Mn provided for

# Wireless Broadband Business Services Entities became Joint Venture w.e.f. July 1, 2012. Advances of Rs. 4,847 Mn were received before July 1, 2012 when these entities were associates * refer note 38(i)

The details of the related party transactions entered into by the Company for the years ended March 31, 2014 and March 31, 2013 are as follows:

(Rs. Millions)
S.No Particulars For the year ended March 31, 2014 For the year ended March 31, 2013
1 Purchase of fixed assets/ bandwidth
Entities where control exist:
Bharti Hexacom Ltd. 158 214
Bharti Airtel (Services) Limited 0 2
Network i2i Limited - 106
Telesonic Networks Limited (Formerly known as Alcatel-Lucent Network 1,993 330
Management Services India Limited)
Bharti Airtel (France) SAS 47 -
Bharti International (Singapore) Pte Ltd. 296 121
Associate:
Telesonic Networks Limited (Formerly known as Alcatel-Lucent Network - 1,583
Management Services India Limited)
Entity where key management personnel & their relatives exercise significant influence:
Beetel Teletech Limited 422 257
2,916 2,613
2 Sale of fixed assets/ IRU given
Entities where control exist:
Bharti Hexacom Ltd. 773 1,259
Bharti Airtel (USA) Ltd. - 3
Network i2i Limited 2,547 205
Nxtra Data Limited 1,771 -
Bharti International (Singapore) Pte Ltd. 101 705
Entities where key management personnel & their relatives exercise
significant influence:
Bharti Enterprises Limited 2 -
Bharti Retail Ltd. 20 -
Mehrauli Realty and Consultants Limited 72 -
Comviva Technologies Limited - 0
Jersey Airtel Limited - 0
Joint Venture of Subsidiary:
Indus Towers Limited - 0
Entity having significant influence over the Company:
Singapore Telecommunications Ltd. 9 28
5,295 2,200
3 Purchase of Investments/Subscription to share capital@
Entities where control exist:
Network i2i Limited 2,609 -
Airtel Broadband Services Pvt. Ltd. 49,732 -
Nxtra Data Limited 51
Airtel M Commerce Services Limited 990 1,060
Telesonic Networks Limited (Formerly known as Alcatel-Lucent Network - 1**
Management Services India Limited)
Bharti Airtel International (Mauritius) Ltd. 9,518 43,274
Bharti International (Singapore) Pte Ltd. - 32,184
Bharti Airtel International (Netherlands) B.V. - 67,353
62,901 1,43,872
@ refer note 38
** Rs. 546.15 Mn loan to Telesonic Networks Limited (Formerly known as Alcatel-Lucent Network Management Services India Limited) acquired for Rs. 0.5 Mn converted into equity
4 Rendering of Services
Entities where control exist:
Bharti Hexacom Ltd. 7,745 6,450
Bharti Airtel (Services) Limited 115 -
Bharti Airtel (USA) Ltd. 217 280
Bharti Airtel (UK) Ltd. 131 11
Airtel Broadband Services Pvt. Ltd.* 8 -
Bharti Airtel (Hongkong) Ltd. 98 7
Bharti Airtel Holdings (Singapore) Pte Limited 12 11
Airtel Bangladesh Limited - 0
Bharti Telemedia Ltd. 49 239
Bharti Infratel Ltd. 159 169
Bharti Airtel Lanka (Pvt.) Ltd. 363 282
Network i2i Limited 106 71
Airtel M Commerce Services Limited 3 -
Telesonic Networks Limited (Formerly known as Alcatel-Lucent Network Management Services India Limited) 121 16
Bharti Airtel (Japan) Kabushiki Kaisha 1 0
Bharti Airtel (France) SAS 2 0
Bharti Airtel International (Mauritius) Ltd. 1 1
Bharti International (Singapore) Pte Ltd. 562 583
Bharti Airtel International (Netherlands) B.V. 506 95
Airtel (Seychelles) Limited 40 46
Airtel Ghana Ltd. 242 288
Airtel Networks Ltd. 218 400
Other African Subsidiaries 1,267 1,979
Associate:
Bharti Teleports Ltd. 5 4
Telesonic Networks Limited (Formerly known as Alcatel-Lucent Network - 81
Management Services India Limited)
Joint Venture of Subsidiary:
Indus Towers Limited 22 22
Entities where key management personnel & their relatives exercise significant influence:
Bharti Wal-Mart Private Limited 4 12
Comviva Technologies Limited - 3
Fieldfresh Foods Private Limited 0 1
Bharti AXA Life Insurance Company Limited 15 12
Jersey Airtel Limited 29 21
Bharti Retail Ltd. 35 44
Mobinteco Limited 2 -
Hike Limited 66 -
BSB Portal Limited 3 -
Entity having significant influence over the Company:
Singapore Telecommunications Ltd. 1,555 1,422
13,702 12,550
* refer note 38(i)
5 Receiving of services
Entities where control exist:
Bharti Hexacom Ltd. 2,549 2,105
Bharti Airtel (Services) Limited 3,343 2,522
Bharti Airtel (USA) Ltd. 477 394
Bharti Airtel (UK) Ltd. 743 128
Bharti Airtel (Hongkong) Ltd. 110 75
Airtel Bangladesh Ltd. 2 3
Bharti Telemedia Ltd. 59 40
Bharti Infratel Ltd. 14,085 12,062
Bharti Airtel Lanka (Pvt.) Ltd. 727 379
Network i2i Limited 1,233 925
Airtel M Commerce Services Limited 161 103
Nxtra Data Limited 395 -
Telesonic Networks Limited (Formerly known as Alcatel-Lucent Network 2,612 436
Management Services India Limited)
Bharti Airtel (Japan) Kabushiki Kaisha 10 8
Bharti Airtel (France) SAS 96 37
Bharti International (Singapore) Pte Ltd. 1,379 1,114
Airtel (Seychelles) Limited 44 39
Airtel Ghana Ltd. 188 463
Airtel Networks Ltd. 170 501
Other African Subsidiaries 1,272 1,900
Associate:
Bharti Teleports Ltd. 2 -
Telesonic Networks Limited (Formerly known as Alcatel-Lucent Network Management Services India Limited) - 2,182
Joint Venture/ Joint Venture of Subsidiary:
Forum 1 Aviation Ltd 45 54
Indus Towers Limited 32,350 30,146
Bridge Mobile Pte Limited 29 29
Entities where key management personnel & their relatives exercise significant influence:
Bharti Wal-Mart Private Limited 3 2
Comviva Technologies Limited - 672
Beetel Teletech Limited 395 103
Bharti Realty Limited 548 510
Nile Tech Ltd. 596 590
BSB Portal Limited 307 -
Y2CF Digital Media Pvt. Ltd. 8 -
Bharti Realty Holdings Limited 194 187
Fieldfresh Foods Private Limited - 1
Bharti AXA Life Insurance Company Limited 1 -
Jersey Airtel Limited 1 1
Centum learning Limited 216 423
Bharti Retail Ltd. 7 23
Bharti AXA General Insurance Co Ltd 40 9
Entity having significant influence over the Company:
Singapore Telecommunications Ltd. 480 586
64,946 58,752
6 Common cost allocation charged by the Company
Entity where control exist:
Bharti Hexacom Ltd. 794 659
Associate:
Bharti Teleports Ltd. 2 2
796 661
7 Fund Transferred / Expenses incurred on behalf of others
Entities where control exist:
Bharti Hexacom Ltd. 562 361
Bharti Airtel (Services) Limited 299 1,681
Bharti Airtel (UK) Ltd. - 0
Airtel Broadband Services Pvt. Ltd.* 105 -
Bharti Airtel (Hongkong) Ltd. - 1
Bharti Telemedia Ltd. 633 386
Bharti Infratel Ltd. 7 13
Network i2i Limited 7 -
Airtel M Commerce Services Limited 78 213
Nxtra Data Limited 102
Telesonic Networks Limited (Formerly known as Alcatel-Lucent Network Management Services India Limited) 128
Bharti International (Singapore) Pte Ltd. - 53
Joint Venture:
Wireless Business Services Pvt. Ltd.* 18 -
Associate:
Bharti Teleports Ltd. 14 14
Entities where key management personnel & their relatives exercise significant influence:
Beetel Teletech Limited - 12
Bharti Retail Ltd. 15 14
Entity having significant influence over the Company
Singapore Telecommunications Ltd. 1 -
1,969 2,748
* refer note 38(i)
8 Fund received/Expenses incurred on behalf of the Company
Entities where control exist:
Bharti Hexacom Ltd. 103 68
Bharti Airtel (Services) Limited 9 1,575
Bharti Airtel (USA) Ltd. - 10
Bharti Airtel Holdings (Singapore) Pte Limited 3 -
Bharti Telemedia Ltd. 74 254
Airtel M Commerce Services Limited 211 58
Associate:
Bharti Teleports Ltd. 2 -
Entity where key management personnel & their relatives exercise significant influence:
Bharti Enterprises Limited 638 669
Entity having significant influence over the Company:
Singapore Telecommunications Ltd. - 24
1,040 2,658
9 Employee related expenses incurred on behalf of others
Entities where control exist:
Bharti Hexacom Ltd. 138 90
Bharti Airtel (Services) Limited 307 138
Bharti Telemedia Ltd. 173 302
Bharti Infratel Ltd. - 28
Airtel M Commerce Services Limited 142 131
Nxtra Data Limited 12 -
Associate:
Bharti Teleports Ltd. 13 16
785 705
10 Employee related expenses incurred on behalf of the Company
Entities where control exist:
Bharti Hexacom Ltd. 15 8
Bharti Airtel (Services) Limited 54 21
Bharti Airtel (Hongkong) Limited - 0
Bharti Telemedia Ltd. 25 52
Airtel M Commerce Services Limited 0 1
Entity where key management personnel & their relatives exercise significant influence:
Bharti Enterprises Limited 92 83
186 165
11 Donation
Entity where key management personnel & their relatives exercise significant influence:
Bharti Foundation 196 106
196 106
12 Security deposit given/Advances paid
Entities where control exist:
Bharti Infratel Ltd. 24 72
Bharti Infratel Ventures Ltd. - 6
Joint Venture/ Joint Venture of Subsidiary:
Wireless Business Services Pvt. Ltd.* - 15
Wireless Broadband Business Services (Delhi) Pvt. Ltd.* - 39
Indus Towers Limited 86 192
Entities where key management personnel & their relatives exercise significant influence:
Bharti Realty Limited - 31
Nile Tech Ltd. - 52
Bharti Enterprises Limited 90 -
* refer note 38(i) 200 407
13 Refund of Capital Advance
Entity where control exist:
Airtel Broadband Services Pvt. Ltd.* 4,757 -
4,757 -
* refer note 38(i)
14 Advance received/Refund of Security deposit given
Entity where control exist:
Bharti Infratel Ltd. 16 816
Associates:
Wireless Business Services Pvt. Ltd.* - 2,258
Wireless Broadband Business Services (Delhi) Pvt. Ltd.* - 2,206
Wireless Broadband Business Services (Haryana) Pvt. Ltd.* - 124
Wireless Broadband Business Services (Kerala) Pvt. Ltd.* - 259
Joint Venture of Subsidiary:
Indus Towers Limited - 2,180
Entity where key management personnel & their relatives exercise significant influence:
Bharti Realty Holdings Limited - 8
16 7,851
* refer note 38(i)
15 Repayment of Loan taken
Entity where control exist:
Bharti Infratel Ltd. 22,990 3,670
22,990 3,670
16 Loans given
Entities where control exist:
Bharti Airtel (Services) Limited 634 -
Airtel Broadband Services Pvt. Ltd.* 22,728 -
Bharti Telemedia Ltd. 1,520 3,174
Nxtra Data Limited 2,000 -
Bharti International (Singapore) Pte Ltd. 2,211 4,600
Bharti Airtel International (Netherlands) B.V. 9,045 11,164
Entity where key management personnel & their relatives exercise significant influence:
Bharti Airtel Employees Welfare Trust 332 762
Associate:
Bharti Teleports Ltd. 110 130
Joint Venture of Subsidiary:
Wireless Business Services Pvt. Ltd.* 14,904 -
Wireless Broadband Business Services (Delhi) Pvt. Ltd.* 13,016 -
Wireless Broadband Business Services (Haryana) Pvt. Ltd.* 693 -
Wireless Broadband Business Services (Kerala) Pvt. Ltd.* 1,556 -
Entity where key management personnel & their relatives exercise significant influence:
Bharti Wal-Mart Private Limited - -
68,749 19,830
* refer note 38(i)
17 Repayment of Loans given
Entity where control exist:
Bharti Telemedia Ltd. 3,320 -
Entity where key management personnel & their relatives exercise significant influence:
Bharti Airtel Employees Welfare Trust 338 369
Associate:
Bharti Teleports Ltd. 100 -
3,758 369
18 Loans received
Entity where control exist:
Bharti Infratel Ltd. - 13,500
- 13,500
19 Interest charged by others
Entities where control exist:
Bharti Hexacom Ltd. 19 -
Bharti Infratel Ltd. 485 1,743
504 1,743
20 Interest charged by the Company
Entities where control exist:
Bharti Airtel (USA) Ltd. - 1
Bharti Airtel Lanka (Pvt.) Ltd. - 64
Telesonic Networks Limited (Formerly known as Alcatel-Lucent Network 14 0
Management Services India Limited)
Bharti Airtel International (Mauritius) Ltd. - 93
Bharti International (Singapore) Pte Ltd. 40 294
Bharti Airtel International (Netherlands) B.V. 164 614
Associates:
Bharti Teleports Ltd. 35 32
Telesonic Networks Limited (Formerly known as Alcatel-Lucent Network Management Services India Limited) - 14
253 1,112
21 Dividend Income
Entities where control exist:
Final Dividend for FY 2012-13
Bharti Hexacom Ltd. 88 -
Bharti Infratel Ltd. 4,500 -
4,588 -
Final Dividend for FY 2011-12
Bharti Hexacom Ltd. - 88
Bharti Infratel Ltd. - -
- 88
Interim Dividend for FY 2012-13
Bharti Hexacom Ltd. - 262
Bharti Infratel Ltd. - 3,750
- 4,012
22 Dividend Paid
Entity where key management personnel & their relatives exercise significant influence:
Indian Continent Investment Ltd. 266 266
Entities having significant influence over the Company
Pastel Ltd. 591 591
Bharti Telecom Ltd. 1,738 1,735
2,595 2,592
23 Reimbursement of energy expenses
Entity where control exist:
Bharti Infratel Ltd. 17,440 16,766
Joint Venture of Subsidiary:
Indus Towers Limited 21,961 18,615
39,401 35,381
24 Remuneration*
Key Management Personnel:
Sunil Bharti Mittal 239 243
Gopal Vittal** 67 14
Manoj Kohli 10 -
Sanjay Kapoor - 82
316 339
25 Guarantees and collaterals given on behalf of others (Including Performance guarantees)
Entity where control exist:
Bharti Hexacom Ltd. 2,171 2,096
Bharti Telemedia Ltd. 727 582
Airtel Bangladesh Ltd. 26,444 10,878
Bharti Airtel (Services) Limited - 86
Bharti Airtel International (Netherlands) B.V 684,320 431,028
Bharti International (Singapore) Pte. Limited 56,486 96,311
770,148 540,981

* Includes expense recognised in the statement of profit and loss for options granted during the year ended March 31, 2014. Uptill, March 31, 2013, the fair value of the options granted was disclosed in the respective year of grant.

**Includes an amount of Rs. 25 Mn towards expense recognised in the statement of profit and loss for options granted during the year ended March 31, 2014.

49. Operating lease

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:

(Rs. Millions)
Particulars As of March 31, 2014 As of March 31, 2013
Lease Rentals [Excluding Lease Equalisation Reserve - Rs. 3,079 Mn ( 2012-13 Rs. 2,302 Mn) ] 53,825 49,925
Obligations on non cancellable leases :
Not later than one year 56,538 52,044
Later than one year but not later than five years 228,617 138,302
Later than five years 130,621 147,548
Total 415,776 337,894

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 by lease arrangements.

Operating Lease – As a Lessor

i) The Company has entered into non–cancellable lease arrangements to provide dark fiber on indefeasible right of use (IRU) basis and certain premises on lease. 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, 2014 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, 2014 As of March 31, 2013
Not later than one year 319 115
Later than one year but not later than five years 1,305 -
Later than five years 1,134 -
Total 2,757 115

50. 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 ( 2,880,000 equity shares post split of one equity share of Rs. 10 each into 2 equity shares of Rs. 5 each) 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 (31,680,000 equity shares post share split of one equity share of Rs. 10 each into 2 equity shares of Rs. 5 each).

(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. (18,734,552 equity shares post share split of one equity share of Rs. 10 each into 2 equity shares of Rs. 5 each)

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

Scheme Plan Year of issuance of plan Share options granted (thousands) Vesting period (years) Contractual term (years) Weighted average exercise price
Equity settled
Plans
Scheme I 2001 Plan 2002 30,893 1 - 4 7 21.25
Scheme I 2004 Plan 2004 4,380 1 - 4 7 35.00
Scheme I Superpot 2004 143 1 - 3 7 -
Scheme I 2006 Plan 2006 5,264 1 - 5 7 5.50
Scheme 2005 2005 Plan 2005 11,260 1 - 4 7 237.06
Scheme 2005 2008 Plan & Annual Grant Plan (AGP) 2008 8,817 1 - 3 7 352.13
Scheme 2005 Performance Share Plan (PSP) 2009 Plan 2009 1,691 3 - 4 7 5.00
Scheme 2005 Special ESOP & Restricted Share Units (RSU) 2010 3,615 1 - 5 7 5.00
Scheme 2005 Long Term Incentive (LTI) Plan 2011 422 1 - 3 7 5.00
Scheme 2005 LTI Plan 2012 1,593 1 - 3 7 5.00
Cash settled Plans
Performance Unit Plan (PUP) 2013 Performance Unit Plan (PUP) 2013 2013 2,167 1 - 3 3 -

(v) The following table exhibits the net compensation expenses arising from share based payment transaction:

(Rs. Millions)
Particulars Year ended March 31, 2014 Year ended March 31, 2013
Expenses arising from equity-settled share-based payment transactions (42) 242
Expenses arising from Cash-settled share-based payment transactions 237 -
195 242

(vi) The total carrying value of cash settled share based compensation liability is Rs. 266 Mn and Rs. nil as of March 31, 2014 and March 31, 2013, respectively.

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

(Shares in Thousands)

As of March 31, 2014

As of March 31, 2013

Particulars Number of share options Weighted average exercise price (Rs.) Number of share options Weighted average exercise price (Rs.)
Equity Settled Plans
Scheme I - 2006 plan
Outstanding at beginning of year 1,185 5.89 1,445 5.73
Granted 150 5.00 62 5.04
Exercised* (320) 5.36 (294) 5.00
Forfeited / Expired (476) 5.00 (28) 6.92
Outstanding at end of year 539 6.74 1,185 5.89
Exercisable at end of year 223 9.21 606 6.74
Scheme 2005 - 2005 plan
Outstanding at beginning of year 1,736 384.72 2,602 331.48
Granted - - - -
Exercised# (130) 201.88 (451) 127.44
Forfeited / Expired (598) 339.18 (415) 333.42
Outstanding at end of year 1,008 436.06 1,736 384.72
Exercisable at end of year 1,008 436.06 1,736 384.72
Scheme 2005 - 2008 plan and AGP
Outstanding at beginning of year 4,314 355.80 4,835 355.84
Granted - - - -
Exercised# (10) 301.47 (16) 314.70
Forfeited / Expired (865) 361.04 (505) 358.49
Outstanding at end of year 3,439 354.54 4,314 355.80
Exercisable at end of year 3,439 354.54 4,305 355.61
Scheme 2005 - PSP 2009 plan
Outstanding at beginning of year 569 5.00 1,256 5.00
Granted - - - -
Exercised# (217) 5.00 (189) 5.00
Forfeited / Expired (110) 5.00 (498) 5.00
Outstanding at end of year 242 5.00 569 5.00
Exercisable at end of year 154 5.00 24 5.00
Scheme 2005 - Special ESOP & RSU
Plan
Outstanding at beginning of year 1,470 5.00 2,362 5.00
Granted - - - -
Exercised# (610) 5.00 (478) 5.00
Forfeited / Expired (452) 5.00 (414) 5.00
Outstanding at end of year 408 5.00 1,470 5.00
Exercisable at end of year 369 5.00 535 5.00
Scheme 2005 - LTI Plan
Outstanding at beginning of year 1,815 5.00 406 5.00
Granted - - 1,593 5.00
Exercised# (275) 5.00 (37) 5.00
Forfeited / Expired (468) 5.00 (147) 5.00
Outstanding at end of year 1,072 5.00 1,815 5.00
Exercisable at end of year 183 5.00 61 5.00
Cash Settled Plan
PUP 2013
Outstanding at beginning of year - - -
Granted 2,167 - - -
Exercised - - - -
Forfeited / Expired (189) - - -
Outstanding at end of year 1,978 - - -
Exercisable at end of year - - - -

* 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.

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

Options Outstanding Options Granted Options Excercised
Plan Options (thousands) Exercise price Weighted average remaining contractual life (years) Options (thousands) Weighted average Fair Value Options (thousands) Weighted average share price
Equity settled Plans
2006 Plan 539 5.00 to 110.50 4.40 150 329.14 320 301.16
2005 Plan 1,008 110.50 to 461.00 0.43 - - 130 316.90
2008 Plan & Annual Grant Plan (AGP) 3,439 295.00 to 402.50 1.62 - - 10 320.55
Performance Share Plan (PSP) 2009 Plan 242 5 .00 2.77 - - 217 326.62
Special ESOP & Restricted Share Units (RSU) 408 5 .00 3.20 - - 610 324.96
LTI Plan 1,072 5 .00 2.66 - - 275 327.05
Cash settled Plans
Performance Unit Plan (PUP) 2013 1,978 - 2.36 2,167 316.85 - -

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

Particulars Year Ended March 31, 2014 Year Ended March 31, 2013
Risk free interest rates 8.38% to 8.53% 7.88% to 8.84%
Expected life 16 to 60 months 48 to 60 months
Volatility 36.31% to 39% 36.42% to 41.58%
Dividend yield 0.31% to 0.32% 0.28% to 0.36%
Weighted average share price on the date of grant 318.9 to 337.4 274.40 to 336.70
Weighted average exercise price on the date of grant 0 to 5 5.00 to 5.04

The volatility of the options is based on the historical volatility of the share price since the Company’s equity shares became publicly traded.

(x) Bharti Infratel Limited (BIL) has given stock options to certain empoyees of the Company and the corresponding compensation cost is borne by BIL.

51. 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 foreign exchange fluctuations and changes in interest rate. The following table details the status of the Company’s exposure:

(Rs. Millions)
Sr No Particulars Notional Value Notional Value
(March 31, 2014) (March 31, 2013)
A For Loan related exposures*
a) Forwards 7,272 930
b) Options 11,958 10,487
Total 19,230 11,417
B For Trade related exposures*
a) Forwards 7,452 2,299
b) Options 2,404 952
Total 9,856 3,251
C Unhedged foreign currency borrowing 18,484 11,276
D Unhedged foreign currency payables 26,941 25,689
E Unhedged foreign currency receivables 166 511

*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 net loss of Rs. 73 Mn ( including reversal of loss of Rs. 8 Mn towards embedded derivatives) for the year ended March 31, 2014 [recorded loss of Rs. 233 Mn (including loss of Rs. 281 Mn towards embedded derivatives) for the year ended March 31, 2013].

52. a) The Board of Directors, in its meeting held on May 2, 2013, proposed a final dividend of Rs. 1.00 per equity share of Rs. 5.00 each (20% of face value) for financial year 2012-13, which was duly approved by the shareholders of the Company in the Annual General Meeting held on September 5, 2013.

b) Net dividend remitted in foreign exchange:

(Rs. Millions)
Particulars During the year ended March 31, 2014 During the year ended March 31, 2013
Number of non-resident shareholders 5 5
Number of equity shares held on which dividend was due (Nos. in Million) 862 862
Amount remitted (Rs. in Millions) 862 862
Amount remitted (USD in Millions) 13 16

c) Dividend of Rs. 1.80 per share (Face value per share Rs. 5) proposed for the year 2013-14.

53. Movement in Provision for Doubtful Debts/Advances

(Rs. Millions)
Particulars For the year ended March 31, 2014 For the year ended March 31, 2013
Balance at the beginning of the year 13,262 11,552
Addition- Provision for the year 5,864 3,623
Application- Write o3 of bad debts (net of recovery) (2,644) (1,881)
Others (16)* (32)**
Balance at the end of the year# 16,466 13,262

* Rs. 16 Mn provision for doubtful receivable transferred to Nxtra Data Limited, as part of slump sale, during the year ended March 31, 2014

** Rs. 32 Mn regrouped to advances under other Non-Current assets as of March 31, 2013

# includes provision for doubtful TDS receivable of Rs. 419 Mn (March 31,2013 Rs. 217 Mn) grouped under Advance tax

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:

(Rs. Millions)
Particulars For the year ended March 31, 2014 For the year ended March 31, 2013
Opening Balance 33,163 25,278
Additions (net) 9,133 7,885
Closing Balance 42,296 33,163

54. 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.

55. During the year ended March 31, 2014, the Company has transferred co-ownership of three undersea cables having net WDV of Rs. 2,725 Mn (March 31, 2013 – Rs. Nil) to its wholly owned subsidiary Network i2i Limited, a company incorporated and existing under the laws of Mauritius, with the intention to aggregate certain international undersea cables under a single entity (refer note 38(v)).

56. The Company has completed an independent evaluation for all international and domestic transactions for the year ended March 31, 2013 and has reviewed the same for the year ended March 31, 2014 to determine whether the transactions with associated enterprises are undertaken at "arm’s length price". Based on the internal and external transfer pricing review and validation, the Company believes that all transactions with associate enterprises are undertaken on the basis of arm’s length principle.

57. 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). In 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 of DoT on the issue of condonation of delay was allowed on July 16, 2013. The next date of hearing is fixed on May 9, 2014. However, the Company on October 30, 2013 has filed the writ Petition for recovery of License fee in Delhi High Court, notice issued by HC and listed for July 26, 2014. Further to the development during the year ended March 31, 2014, 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 Company, 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, 2014.

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

   
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