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Company Information

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Bharti Airtel Ltd.

Jun 29, 04:01
382.60 +5.25 (+ 1.39 %)
 
VOLUME : 287546
Prev. Close 377.35
Open Price 377.00
TODAY'S LOW / HIGH
376.95
 
 
 
386.45
Bid PRICE (QTY.) 0.00 (0)
Offer PRICE (Qty.) 0.00 (0)
52 WK LOW / HIGH
283.95
 
 
 
400.65
Jun 29, 03:59
382.45 +5.25 (+ 1.39 %)
 
VOLUME : 4234116
Prev. Close 377.20
Open Price 377.75
TODAY'S LOW / HIGH
377.70
 
 
 
386.35
Bid PRICE (QTY.) 0.00 (0)
Offer PRICE (Qty.) 382.45 (1458)
52 WK LOW / HIGH
283.05
 
 
 
401.00
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Market Cap. ( ₹ ) 152880.57 Cr. P/BV 3.29 Book Value ( ₹ ) 116.42
52 Week High/Low ( ₹ ) 401/283 FV/ML 5/1 P/E(X) 36.05
Bookclosure 19/08/2016 EPS ( ₹ ) 10.61 Div Yield (%) 0.26
NOTES TO ACCOUNTS
You can view the entire text of Notes to accounts of the company for the latest year
Year End :2016-03 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 Section 133 of the Companies Act, 2013 read with rule 7 of the Companies (Accounts) Rules, 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 except expenditure incurred on Corporate Social Responsibility (CSR'), which was accounted as appropriation to statement of profit and loss during previous year (in accordance with the guidance issued by ICAI, 'FAQ on the provision of CSR under section 135 of the Companies Act 2013 and Rules thereon'). During current year, Company has aligned accounting treatment of CSR with Guidance Note on Accounting for Expenditure on Corporate Social Responsibility Activities' issued by the Institute of Chartered Accountants of India in May 2015. Accordingly, expenditure pertaining to CSR activities is charged as an expense in the statement of profit and loss (refer note 3.21).

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

3. 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.

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 telecommunication services provided through fixed line 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.

Unallocated - Unallocated includes other income, profits/ (losses), assets (including non-current investments) and liabilities of the Company which are not allocated to the business segments and is primarily related to the corporate headquarter of the Company. These also include current tax (net of provisions of tax), deferred tax (net), MAT credit and borrowings not allocated to the primary business segments.

4. Guarantees and Contingent Liabilities

(i) Total Guarantees outstanding as of March 31, 2016 amounting to Rs. 99,911 Mn (March 31, 2015 - Rs. 101,379 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, 2016 amounting to Rs. 798,800 Mn (March 31, 2015 - Rs. 857,497 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):

b) Sales tax /VAT and Service tax

- Sales tax/VAT

Claims for sales tax / VAT as of March 31, 2016 comprise cases relating to:

i. the appropriateness of the declarations made by the Company under the relevant sales tax / VAT legislations which was primarily procedural in nature;

ii. the applicable sales tax / VAT on disposals of certain property and equipment items;

iii. lease circuit / broadband connectivity services;

iv the applicability of sales tax / VAT on sale of SIM cards, SIM replacements, VAS, Handsets and Modem rentals;

v. In the State of Jammu & Kashmir, the Company has disputed the levy of General Sales Tax / VAT on its telecom services and towards which the Company has received a stay from the Hon'ble Jammu & Kashmir High Court. The demands received to date have been disclosed under contingent liabilities.

- Service Tax

Service tax demands as of March 31, 2016 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 include 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 dealer's/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 custom duty 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.

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 our 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, the Hon'ble TDSAT in its order dated May 21, 2010, allowed BSNL appeal praying to recover distance based carriage charges. On filing of appeal by the telecom operators, Hon'ble Supreme Court asked the telecom operators to furnish details of distance- based carriage charges owed by them to BSNL. Further in a subsequent hearing held on 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 BSNLs appeal, TDSAT passed it's judgement 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 BSNLs 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 ll(l)(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, 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) DoT demands include demands raised for contentious matters relating to computation of license fees and spectrum charges.

ii) DoT demands include alleged short payment of license fee for financial year 2006-07 and 2007-08 due to difference of interpretation of Adjusted Gross Revenue (AGR) between Company and DoT and interest thereon, which the Company has obtained stay from appropriate Hon'ble High Courts and TDSAT TDSAT has pronounced itsjudgement on April 23,2015 thereby setting aside the impugned demands raised by DoTand directed to rework the license fees payable in light of the judgement and to issue fresh demands. Pursuant thereto Union of India (UOI) and the Company (on limited heads of revenue) along with various other operators have filed appeals/ cross appeals before the Hon'ble Supreme Court of India. The Hon'ble Supreme Court of India issued notice in the appeals and has declined to grant any interim relief to UOI. The appeals tagged together came up for hearing on February 29, 2016 and the Supreme Court allowed DoT to raise demands as per its understanding with the condition that the demands raised will not be enforced till the final decision of the Supreme Court. The matter is likely to be listed for hearing after 8 weeks. DoT further had issued LF demand cum show cause notice for financial year 2009-10 dated June 26, 2015 which has been challenged before TDSAT TDSAT vide an interim order dated August 17, 2015 had directed DoT not to invoke any bank guarantees for realisation of impugned demand amounting to Rs. 12,316 Mn and vide its order dated November 6, 2015, TDSAT has disposed of the matter after recording the statement made by UOI that the demand notice should be construed as an advance notice, which the DoT does not intend to enforce until the appeals against Tribunal's AGR judgement pending before the Hon'ble Supreme Court is finally disposed of

iii) 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.

iv) DoT demands 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:

v) Post the Hon'ble Supreme Court Judgement on October 11, 2011 on components of Adjusted Gross Revenue for computation of license fee, based on the legal advice, the Company believes that the realised and unrealised foreign exchange gain should not be included in Adjusted Gross Revenue (AGR) for computation of license fee thereon. Accordingly, the license fee on such foreign exchange gain has not been provided in the 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 Hon'ble High Court of Kerala, stay has been obtained, wherein the licensee can continue making the payment as was being done throughout the period of license on telecom activities. Further as stated in point (iii) above, TDSAT has pronounced itsjudgement on April 23, 2015, wherein it has stated that any gain or loss due to foreign exchange fluctuation does not have any bearing on the license fees and directing DoTto rework and issue fresh demands to the operators. The next date of hearing is fixed for June 28, 2016 at Kerala High Court.

vi) On January 8, 2013, DoT issued a demand on the Company for Rs. 51,353 Mn towards levy of one time spectrum charge. The demand includes a retrospective charges of Rs. 8,940 Mn for holding GSM Spectrum beyond 6.2 Mhz for the period from July 1, 2008 to December 31, 2012 and also a prospective charge of Rs. 42,413 Mn for GSM spectrum held beyond 4.4 Mhz for the period from January 1, 2013, till the expiry of the initial terms of the respective licenses.

In the opinion of the Company, inter-alia, the above demand amounts to alteration of financial terms of the licenses issued in the past. Based on a petition filed by the Company, the Hon'ble High Court of Bombay, 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 awaited.

vii) DoT had issued notices to the Company as well as various other Telecom Service Providers to stop provision of services under3G Intra Circle Roaming (ICR) arrangements in the service areas where such service providers had not been allocated 3G Spectrum. DoT also levied a financial penalty ofRs. 3,500 Mn. Company contested the notices and upon various rounds of litigations, ultimately, the TDSAT vide its judgement dated April 29, 2014, held 3G ICR arrangements to be competent and compliant with the licensing conditions and quashed the notice imposing penalty. The DoT has challenged the order of TDSAT in an appeal filed before the Hon'ble Supreme Court, which has been admitted. However, Hon'ble Supreme Court has refused to grant any interim order during the pendency of the appeal. The case is yet to be listed for hearing in the Hon'ble Supreme Court.

viii) 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.

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.

DSS Enterprises has preferred an SLP challenging the order dated May 12, 2005 passed by the Hon'ble Delhi High Court in Company Appeal No.30 of 2004. The Company Appeal was dismissed by Hon'ble Delhi High Court on the grounds of non-disclosure of material facts before the Hon'ble High Court. This appeal has been admitted by the Hon'ble Supreme Court and our Counter Affidavit has been filed, matter is to be now listed for hearing in due course.

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, 2016.

5. Capital and Other Commitments

Estimated amount of contracts to be executed on capital account and not provided for (net of advances) Rs. 45,115 Mn as of March 31, 2016 (March 31, 2015 - Rs. 274,832 Mn) (including Rs. 10,970 Mn (March 31, 2015 - Rs. 244,040 Mn) towards spectrum (refer note 37(H)).

6. The Company has undertaken to provide financial support, to its subsidiaries, namely, Bharti Airtel Services Limited, Bharti Telemedia Limited, Airtel M Commerce Services Limited, Bharti Teleports Limited, Nxtra Data Limited, Bharti Airtel (USA) Limited, Bharti Airtel (Hongkong) Limited, Bharti Airtel (Japan) Limited, Bharti Airtel Lanka (Private) Limited, Bharti Airtel Holdings (Singapore) Pte Limited including its subsidiaries and Bharti Airtel International (Netherlands) BV. including its subsidiaries.

7. Exceptional Items

Exceptional items comprise of the following :

a. Charge for regulatory fee provisions of Rs. 2,659 Mn (March 31, 2015 Rs. Nil) arising out of re-assessment of certain positions for the year ended March 31, 2016.

b. Charge of Rs. 4,140 Mn (March 31, 2015 Rs. Nil) towards operating costs on network refarming and up-gradation program for the year ended March 31, 2016.

Tax expense includes tax benefit ofRs. 2,243 Mn for the year ended March 31, 2016 (March 31, 2015 Rs. Nil) on above exceptional items.

8. Acquisitions / Additional Investments / New Developments

(i) The Scheme of Arrangements ('Scheme') under sections 391 to 394 of the Companies Act, 1956 with respect to amalgamation of Airtel Broadband Services Private Limited (ABSPL'), a wholly owned subsidiary of the Company, with the Company, as approved by the Hon'ble High Court of Bombay on April 11, 2014, has been filed by the Company with the Registrar of Companies ('ROC) on April 9, 2015, being the effective and appointed date of the scheme whereby ABSPL shall cease to exist. The Company has accounted amalgamation in the nature of merger under the pooling of interest method. Accordingly, the assets, liabilities and reserves in the books of ABSPL have been recognised by the Company as at the date of the amalgamation at the same carrying values. The difference ofRs. 8,599 Mn between the share capital of ABSPL and the carrying value of investment in the equity shares of ABSPL in the books of the Company has been adjusted with the reserves of the Company. The carrying values of assets,

However, DoT vide its letter dated February 2, 2015, has given its approval for taking on record the merger of ABSPL with the Company, subject to certain conditions as stipulated in the letter. One of the conditions of merger requires payment ofRs. 4,361 Mn, equal to the difference between the entry fee for Unified Access Service License and entry fees paid for Internet Service Provider license. The Hon'ble Telecom Disputes Settlement and Appellate Tribunal (TDSAT) vide its interim order dated February 9, 2015 has allowed the Company to operationalise the spectrum subject to filing an undertaking that in case the petition fails, it shall pay the sum ofRs. 4,361 Mn along with interest as may be determined by the Tribunal within eight weeks from the date of judgement. The Company has filed an undertaking before TDSAT for the same.

On February 24,2012, the TDSAT ordered the Company to pay certain dues (including interest and penalties) allegedly owed by one of then existing Company's Indian non-controlling shareholders, Tulip Telecom Limited (Tulip), to the DoT without prejudice to the right of Tulip to contest the claim and provided that any sum ultimately found not to be due (or paid by Tulip) would be refunded by the Department of Telecommunication (DoT), without interest, within four weeks of the date of completion of the assessment of Tulip in respect of assessment years in question. Accordingly, as per the terms and conditions of the TDSAT order dated February 24, 2012, the Company had deposited Rs. 4,104 Mn.

Further as per the agreement dated February 13, 2012 entered betweenthe Companies, Qualcomm Asia Pacific Pte. Limited and Tulip, upon the final determination date being reached, that Tulip is liable to pay the Company an amount equal to the relevant amount determined to be owed by Tulip that is not paid by Tulip and retained by the DoT from the Company's deposit as described in above paragraph (the "Indemnity Amount") in the bank account specified by the Company within 15 days from the final determination date or the date of the payment notice when final determination date has already occurred prior to the payment notice, without any demur or protest and notwithstanding any dispute regarding the same or any portion thereof. The balance amount will be recovered by the Company from DoT as per the above TDSAT order

Accordingly, based on the TDSAT order and agreements referred herein, the amount deposited with DoT has been considered good and recoverable in these special purpose financial statements.

(ii) During the year ended March 31, 2015, the Company had won the auction for 95.20 MHz spectrum in 15 service areas for an amount of Rs. 244,040 Mn in the auction conducted by the Government of India ('GOI'). The Company has opted for deferred payment option and accordingly, during the year ended March 31, 2016, paid an advance ofRs. 66,496 Mn with the balance amount ofRs. 177,544 Mn payable in 10 equal installments after a moratorium period of two years.

During the year ended March 31, 2016, Government of India issued Letters of Intent for earmarking the spectrum in all the 15 service areas. During the year ended March 31, 2016, the GOI has allotted 91.80 MHz of spectrum to the Company. Accordingly, the Company has recognised deferred payment liability ofRs. 166,574 Mn with respect to these spectrum.

The balance amount of Rs. 10,970 Mn (March 31, 2015 Rs. 244,040 Mn) attributable towards the spectrum not yet allotted to the Company, has been disclosed as part of capital commitments as of March 31, 2016.

(iii) During the year ended March 31, 2016, the Company has issued 4.375% Senior Unsecured USD 1,000 Mn (Rs. 63,973 Mn approximately) Notes at the price of 99.304% that are due for repayment in March 2025. The said notes are listed on the Singapore Exchange.

(iv) During the year ended March 31, 2016, the Company has made an additional equity investment of Rs. 110,155 Mn (USD 1,685 Mn) in Bharti Airtel International (Mauritius) Limited.

(v) During the year ended March 31, 2016, the Company has made an additional equity investment of Rs. 1,060 Mn in Airtel M Commerce Services Limited.

(vi) During the year ended March 31, 2016, the Company has made an additional equity investment of Rs. 471 Mn in Bharti Airtel Lanka (Private) Limited by way of conversion of accrued interest on loan into equity.

(vii) During the year ended March 31, 2016, the Company has increased its equity investment in Indo Teleports Limited ("Teleports") formerly known as Bharti Teleports Limited from 49% to 95% for a consideration ofRs. 172 Mn, thereby acquiring control over Teleport.

(viii) During the year ended March 31, 2016, the Company has purchased 100% stake in Augere Wireless Broadband Private Limited. The consummation of the said transaction is subject to the approval from statutory authorities.

(ix) During the year ended March 31, 2016, the Company has entered into a definitive agreement with Videocon Telecommunications Limited (VTL) to acquire rights to use spectrum in the 1800 Mhz band for six circles (viz. Bihar, Haryana, Madhya Pradesh, UP (East), UP (West) and Gujarat). The closing of the said transaction is subject to certain customary regulatory approvals and other closing conditions.

(x) Subsequent to the balance sheet date, the Company has entered into a definitive agreement with Aircel Limited and its subsidiaries Dishnet Wireless Limited and Aircel cellular Limited, to acquire rights to use spectrum in the 2300 Mhz band for eight circles (viz. Tamil Nadu, Bihar, Jammu & Kashmir, West Bengal, Assam, North East, Andhra Pradesh and Odisha). The closing of the transaction is subject to certain customary regulatory approvals and other closing conditions.

9. Loans and advances in the nature of loans along with maximum amount outstanding during the year as per Para A of Schedule V of Securities and Exchange Board of India (Listing obligations and disclosure requirements) Regulations, 2015 are as follows:

(a) Loan and advance in the nature of loan given to Bharti Telemedia Limited at nil interest rate is Rs. 32,289 Mn (March 31, 2015 Rs. 33,395 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. Nil (March 31, 2015 Rs. 11,047 Mn (LKR 25,916 Mn) at nil interest rate)

(c) Loan and advance in the nature of loan given to Bharti Airtel International (Netherlands) BV at LIBOR 1.25% interest rate is Rs. 34,820 Mn (USD 506 Mn) (March 31, 2015 Rs. 32,047 Mn (USD 506 Mn) at LIBOR 1.25% interest rate).

(d) Loan and advance in the nature of loan given to Telesonic Networks Limited at SBI base rate is Rs. 220 Mn (March 31, 2015 Rs. 90 Mn at SBI base rate).

(e) Loan and advance in the nature of loan given to Bharti Teleports Limited at SBI base rate 1% interest rate is Rs. 488 Mn (March 31, 2015 Rs. 466 Mn at SBI base rate 1% interest rate).

(f) Loan and advance in the nature of loan given to Bharti International (Singapore) Pte Limited at LIBOR 1.25% interest rate is Rs. 9,656 Mn (USD 140 Mn) (March 31, 2015 Rs. 8,887 Mn (USD 140 Mn) at LIBOR 1.25% interest rate).

(g) Loan and advance in the nature of loan given to Nxtra Data Limited at nil interest rate is Rs. 2,480 Mn (March 31, 2015 Rs. 2,000 Mn at nil interest rate).

(h) Loan and advance in the nature of loan given to Bharti Airtel Services Limited at nil interest rate is Rs. 320 Mn (March 31, 2015 Rs. 635 Mn at nil interest rate).

(i) Loan and advance in the nature of loan given to Airtel Broadband Services Private Limited at nil interest rate is Rs. Nil (March 31, 2015 Rs. 5,390 Mn at nil interest rate).

(j) Loan and advance in the nature of loan given to Wynk Limited at nil interest rate is Rs. 40 Mn (March 31, 2015 Rs. Nil at nil interest rate).

(k) Loan and advance in the nature of loan given to Augere Wireless Broadband India Private Limited at 12% interest rate is Rs. 49 Mn (March 31, 2015 Rs. Nil at nil interest rate).

(l) Loan and advance in the nature of loan given to Firefly Networks Limited at 9.8% interest rate is Rs. 5 Mn (March 31, 2015 Rs. Nil at nil interest rate).

(m) Loans and advance in the nature of loan given to Bharti Airtel Employees Welfare Trust at nil interest rate is Rs. 516 Mn (March 31, 2015 Rs. 326 Mn at nil interest rate).

Refer note 47 for outstanding balance at the end of the year for the above entities.

9. 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

Gopal Vittal

(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 (subsidiary of Bharti Airtel Holdings (Singapore) Pte Ltd)

Bharti Airtel (Canada) Limited (dissolved on December 31,2015)

Bharti Airtel (Hongkong) Limited

Bharti Infratel Limited ("BIL")

Bharti Infratel Services Limited (subsidiary of Bharti Infratel Limited) (under process of striking off)

Network i2i Limited

Bharti Airtel Holdings (Singapore) Pte Ltd

Bharti Infratel Lanka (Private) Limited (subsidiary of Bharti Airtel Lanka (Private) Limited) (under process of striking off)

Airtel M Commerce Services Limited

Airtel Broadband Services Private Limited (merged with Bharti Airtel Limited w.e.f April 9, 2015).

Nxtra Data Limited

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

Bharti Airtel (France) SAS (subsidiary of Bharti Airtel Holdings (Singapore) Pte Ltd)

Bharti Airtel International (Mauritius) Limited

Bharti International (Singapore) Pte Ltd

Airtel Bangladesh Limited (subsidiary of Bharti Airtel Holdings (Singapore) Pte Ltd) (Under Amalgamation)

Bharti Airtel International (Netherlands) B.V

Bangladesh Infratel Networks Limited (subsidiary of Airtel Bangladesh Limited) (Under liquidation)

Telesonic Networks Limited

Wynk Limited

Indo Teleports Limited (formely know as Bharti Teleports Limited) (w.e.f. August 27, 2015)

Smartx Service Limited (subsidiary of Bharti Infratel Limited)

Other subsidiaries of Bharti Airtel International (Netherlands) B.V.:

Africa Towers N.V

Africa Towers Services Limited

Airtel (Ghana) Limited

Airtel (Seychelles) Limited

Airtel (SL) Limited

Airtel Burkina Faso S.A.

Airtel Congo S.A

Airtel DTH Services (SL) Limited (under liquidation)

Airtel DTH Services Congo (DRC) SARL (Dissolved w.e.fMarch2, 2016)

Airtel DTH Services Nigeria Limited (under liquidation)

Airtel Gabon S.A.

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 Kenya Limited

Airtel Mobile Commerce Limited (Malawi)

Airtel Mobile Commerce Madagascar S.A.

Airtel Mobile Commerce Rwanda Limited

Airtel Mobile Commerce (Seychelles) Limited

Airtel Mobile Commerce (Tanzania) Limited

Airtel Mobile Commerce Tchad SARL

Airtel Mobile Commerce Uganda Limited

Airtel Mobile Commerce Zambia Limited

Airtel Money (RDC) S.A.

Airtel Money Niger S.A.

Airtel Money S.A. (Gabon)

Airtel Networks Kenya Limited

Airtel Networks Limited

Airtel Networks Zambia Pic

Airtel Rwanda Limited

Airtel Tanzania Limited

Airtel Tchad S.A.

Airtel Towers (Ghana) Limited

Airtel Towers (S.L) Company Limited

Airtel Uganda Limited

Bharti Airtel Africa B.V

Bharti Airtel Burkina Faso Holdings 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. (under liquidation)

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. (dissolved w.e.f February 24 2016)

Celtel (Mauritius) Holdings Limited

Airtel Congo (RDC) S.A (formerly know as Celtel Congo (RDC) S.a.r.l.)

Celtel Niger S.A.

Channel Sea Management Company Mauritius Limited

Congo RDC Towers S.A.

Congo Towers S.A. (under dissolution)

Gabon Towers S.A. (under dissolution)

Indian Ocean Telecom Limited

Kenya Towers Limited (sold on September 23, 2015)

Madagascar Towers S.A.

Malawi Towers Limited

Mobile Commerce Congo S.A.

Montana International

MSI-Celtel Nigeria Limited (under liquidation)

Niger Towers S.A.(dissolved w.e.f. March 17, 2016)

Partnership Investments S.A.R.L.

Societe Malgache de Telephonie Cellulaire SA

Tanzania Towers Limited

Tchad Towers S.A.

Towers Support Nigeria Limited (under liquidation)

Uganda Towers Limited (sold on June 1, 2015)

Warid Congo S.A.(Merged with Airtel Congo SA on October 16, 2015, dissolved on November 5, 2015)

Warid Telecom Uganda Limited (under amalgamation)

Zambian Towers Limited (sold on August 31, 2015)

Zap Trust Company Nigeria Limited (under liquidation)

Bharti Airtel Rwanda Holdings Ltd (formerly known as Zebrano (Mauritius) Limited)

Airtel Money Transfer Limited (Incorporated on July 20, July 2015)

(b) Associates /Associate of subsidiary Tanzania Telecommunications Company Limited (Associate of Bharti Airtel Tanzania BV.)

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

Indo Teleports Limited (formerly known as Bharti Teleports Limited) (uptill August 27, 2015

(c) Joint Ventures /Joint Venture of Subsidiary

Forum I Aviation Limited (Joint Venture of Bharti Airtel Services Limited) (Ceased to be related party w.e.f January 7, 2016)

Indus Towers Limited (Joint Venture of Bharti Infratel Limited)

Bridge Mobile Pte Limited

FireFly Networks Limited

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

Bharti Foundation

Bharti Airtel Employees Welfare Trust

Hike Limited

Mobinteco Limited (Merged with Hike Limited w.e.f December 22, 2015)

Cedar Support Services Limited

(e) Entities having significant influence over the Company

Singapore Telecommunications Limited

Pastel Limited

Bharti Telecom Limited

(f) Group Companies **

Beetel Teletech Limited

Bharti Axa General Insurance Company Limited

Bharti Axa Life Insurance Company Limited

Bharti Realty Holdings Limited

Bharti Realty Limited

Bharti Retail Limited

Ignite World Private Limited (formerly known as BSB Portal Limited)

Hike Messenger Limited (formerly known as BSB Innovation India Limited)

Centum Learning Limited

Fieldfresh Foods Private Limited

Indian Continent Investment Limited

Jersey Airtel Limited

Mehrauli Realty and Consultants Limited

Nile Tech Limited

Y2CF Digital Media Limited

Bharti Enterprises Limited

Atrium Restaurants India Private Limited

Bharti Land Limited

Centrum Work skills India Limited

Augere Wireless Broadband India Private Limited (w.e.f December 31, 2015)

10. 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 ofRs. 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 ofRs. 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)

11. 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.

12. a) The Board of Directors, in its meeting held on April 28, 2015, proposed a final dividend ofRs. 2.22 per equity share of Rs. 5.00 each (44.4% of face value) for financial year 2014-15 which was duly approved by the shareholders of the Company in the Annual General Meeting held on August 21, 2015.

b) During the year ended March 31, 2015, on August 13, 2014, the Board of Directors declared an interim dividend for Rs. 1.63 per equity share of Rs. 5.00 each (32.6% of face value)

c) Net dividend remitted in foreign exchange:

d) Dividend ofRs. 1.36 per share (Face value per share Rs. 5) proposed for the financial year 2015-16.

13. 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 exit any security interest on any of its assets without prior written consent of the lenders except in certain agreed circumstances, (refer note 4)

14. 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 paidRs. 4,856 Mnto 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. 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 hearing on May 12, 2015.

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