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Company Information

Home » Market » Company Information

Bharti Airtel Ltd.

Oct 23
434.35 +3.70 (+ 0.86 %)
 
VOLUME : 826257
Prev. Close 430.65
Open Price 433.00
TODAY'S LOW / HIGH
427.30
 
 
 
437.30
Bid PRICE (QTY.) 0.00 (0)
Offer PRICE (Qty.) 0.00 (0)
52 WK LOW / HIGH
325.60
 
 
 
611.70
Oct 23
434.40 +3.75 (+ 0.87 %)
 
VOLUME : 18171287
Prev. Close 430.65
Open Price 434.90
TODAY'S LOW / HIGH
427.30
 
 
 
437.60
Bid PRICE (QTY.) 0.00 (0)
Offer PRICE (Qty.) 0.00 (0)
52 WK LOW / HIGH
325.50
 
 
 
612.00
Company Information Menu

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Market Cap. ( ₹ ) 236989.41 Cr. P/BV 3.07 Book Value ( ₹ ) 141.41
52 Week High/Low ( ₹ ) 612/326 FV/ML 5/1 P/E(X) 0.00
Bookclosure 07/08/2020 TTM EPS ( ₹ ) -82.94 Div Yield (%) 0.46
NOTES TO ACCOUNTS
You can view the entire text of Notes to accounts of the company for the latest year
Year End :2019-03 

Notes to Standalone Financial Statements

(All amounts are in millions of Indian Rupee; unless stated otherwise)

34. Related party disclosures

The significant related party transactions are summarised below:

For the year ended March 31, 2019

For the year ended March 31, 2018

(i) Rendering of services

Subsidiaries

Bharti Hexacom Limited

18,042

17,414

Bharti Airtel (UK) Ltd.

13,714

9,559

(ii) Receiving of services

Subsidiaries

Bharti Hexacom Limited

6,628

8,709

Bharti Infratel Limited

23,151

20,404

Bharti Airtel (UK) Limited

16,134

11,481

Telesonic Networks Limited

4,685

3,781

Nxtra Data Limited

7,833

1,959

Wynk Limited

6,348

2,897

Joint venture

Indus Towers Limited

41,133

38,046

(iii) Reimbursement of energy expenses

Subsidiary

Bharti Infratel Limited

16,601

13,680

Joint Venture

Indus Towers Limited

23,075

25,317

(iv) Fund transferred / expenses incurred on behalf of others

Subsidiary

Bharti Hexacom Limited

841

1,292

(v) Loans given

Subsidiaries

Nettle Infrastructure Investments Limited

100,828

50,604

Bharti Digital Networks Private Limited

4,201

10,538

Bharti Airtel (Services) Limited

6,398

5,658

Nxtra Data Limited

6,731

2,966

Wynk Limited

6,089

1,948

(vi) Repayment of loans given

Subsidiaries

Bharti Airtel (Services) Limited

6,054

4,883

Nettle Infrastructure Investments Limited

17,504

62,087

Nxtra Data Limited

2,403

2,185

Wynk Limited

5,447

2,146

Bharti Digital Networks Private Limited

4,310

-

(vii)Purchase of investments

Subsidiaries

Network i2i Limited

29,159

(viii) Sale of investment

Subsidiaries

Bharti Infratel Limited

113,594

-

Bharti Telemedia Ltd.

-

47,632

Bharti Airtel (USA) Limited

1,997

(ix) Dividend income

Subsidiaries

Bharti Hexacom Limited

-

476

Bharti Infratel Limited

20,014

3,724

(x) Dividend paid

Entities having control over the Company / entities having significant influence over the Company

Bharti Telecom Limited

10,014

7,506

Pastel Limited

2,957

2,271

(xi) Guarantees and collaterals given Subsidiary

Network i2i Limited

135,163

24,767

The outstanding balances of the above mentioned related parties are as follows:

Subsidiaries

Entitys having Joint Associates significant ORP/FC# ventures influence

As of March 31, 2019

Trade payables

(12,430)

(19,466)

(52)

(33)

(190)

Trade receivables

8,026

0

358

0

43

Loans (including accrued interest)

161,866

8

0

0

538

Security deposit

1,932

4,388

0

0

1,083

Guarantees and collaterals given

712,286

0

0

0

0

(including performance guarantees)

Unutilised facilities

109,914

As of March 31, 2018

Trade payables

(10,108)

(10,353)

(22)

0

(194)

Trade receivables

1,592

0

0

31

77

Loans (including accrued interest)

73,180

8

0

0

625

Security deposit

2,606

3,746

0

0

944

Guarantees and collaterals given

729,881

0

0

0

0

(including performance guarantees)

Unutilised facilities

123,600

-

-

-

-

# Other related parties / fellow companies

Outstanding balances at period end are un-secured and settlement occurs in cash.

The Company has agreed to ensure appropriate financial support only if and to the extent required by its subsidiaries (namely, Bharti Hexacom Limited, Bharti Airtel Services Limited, Bharti Teleports Limited, Nxtra Data Limited, Wynk Limited, Nettle Infrastructure Investments Limited, Bharti Airtel Lanka (Private) Limited, Network i2i Limited, Bharti International (Singapore) Pte Limited, Airtel Africa Limited and associate Airtel Payment Bank Limited.

KMP are those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly, including any director, whether executive or otherwise. Remuneration to key management personnel were as follows:

For the year ended March 31, 2019

For the year ended March 31, 2018

Short-Term employee benefits

273

263

Performance linked Incentive ('PLI')#

144

150

Post-employment benefit

28

28

Share-based payment

56

62

501

503

# Value of PLI considered above represents incentive at 100% performance level. However, same will be paid on the basis of actual performance parameters in next year. Additional provision of Nil and Rs. 21 has been recorded in the books towards PLI for the year ended March 31, 2019 and March 31, 2018 respectively. During the year ended March 31, 2019 and 2018, PLI of Rs. 150 and Rs. 143 respectively pertaining to previous year has been paid.

The remuneration accrued / paid by the Company to its Chairman and Managing Director & CEO (India and South Asia) for the year ended March 31, 2019 is in excess by Rs. 300.66 Mn. vis-a-vis the limits specified in Section 197 of Companies Act, 2013 ('the Act') read with Schedule V thereto, as the Company does not have profits. The Company is in the process of complying with the prescribed statutory requirements to regularize such excess payments, including seeking approval of shareholders, as necessary. Until then, the said excess amount is held in trust by the Chairman and Managing Director & CEO (India and South Asia).

As the liabilities for the gratuity and compensated absences are provided on an actuarial basis and calculated for the Company as a whole rather than each of the individual employees the said liabilities pertaining specifically to KMP are not known and hence, not included in the above table.

In addition to above, Rs. 1,888 thousand and Rs. 1,122 thousand have been paid as dividend to key management personnel during the year ended March 31, 2019 and March 31, 2018 respectively.

The details of loans and advances as required by schedule V of SEBI (listing obligation and disclosure requirement Regulation, 2015 are given in the table below.

March 31, 2019

March 31, 2018

Name of the Company

Outstanding balance

Maximum amount outstanding during the year

Outstanding balance

Maximum amount outstanding during the year

Subsidiaries

Bharti Telemedia Limited

200

200

Indo Teleports Limited

649

736

692

730

Bharti International (Singapore) Pte Limited

-

-

-

-

Nxtra Data Limited

8,268

8,451

3,941

4,323

Bharti Airtel Services limited

1,664

2,052

1,320

1,717

Airtel Broadband Services Private Limited

Wynk Limited

675

898

33

525

Augere Wireless Broadband India Private Limited

-

-

-

-

Nettle Infrastructure Investment Limited

139,981

139,981

56,657

68,140

Bharti Digital Networks Private Limited

10,429

10,538

10,538

10,538

Joint Venture

FireFly Networks Limited

8

8

8

8

161,874

162,864

73,189

85,981

35. Financial and capital risk

1. Financial risk

The business activities of the Company expose it to a variety of financial risks, namely market risks (that is, foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. The Company's risk management strategies focus on the unpredictability of these elements and seek to minimise the potential adverse effects on its financial performance. Further, the Company uses certain derivative financial instruments to mitigate some of these risk exposures (as discussed below in this note).

The financial risk management for the Company is driven by the Company's senior management ('CSM'), in close co-ordination with the operating entities and internal / external experts subject to necessary supervision. The Company does not undertake any speculative transactions either through derivatives or otherwise. The CSM are accountable to the Board of Directors and Audit Committee. They ensure that the Company's financial risk-taking activities are governed by appropriate financial risk governance frame work, policies and procedures. The BoD of the respective operating entities periodically reviews the exposures to financial risks, and the measures taken for risk mitigation and the results thereof.

i. Foreign currency risk

Foreign exchange risk arises on all recognised monetary assets and liabilities, and any highly probable forecasted transactions, which are denominated in a currency other than the functional currency of the Company. The Company has foreign currency trade payables, receivables and borrowings. However, foreign exchange exposure mainly arises from borrowings and trade payables denominated in foreign currencies.

The foreign exchange risk management policy of the Company requires it to manage the foreign exchange risk by transacting as far as possible in the functional currency. Moreover, the Company monitors the movements in currencies in which the borrowings/capex vendors are payable and manage any related foreign exchange risk, which inter-alia include entering into foreign exchange derivative contracts - as considered appropriate and whenever necessary. For further details as to foreign currency borrowings, refer note 18. Further, for the details as to the fair value of various outstanding derivative financial instruments, refer note 36.

Foreign currency sensitivity

The impact of foreign exchange sensitivity on profit for the year and other comprehensive income is given in the table below:

Change in currency exchange rate

Effect on profit before tax

Effect on equity (OCI)

For the year ended March 31, 2019

US Dollars

5%

(4,555)

-5%

4,555

Others

5%

(703)

-

-5%

703

-

For the year ended March 31, 2018

US Dollars

5%

(5,013)

-5%

5,013

Others

5%

15

-5%

(15)

-

The sensitivity disclosed in the above table is mainly attributable to, in case of to foreign exchange gains / (losses) on translation of USD denominated borrowings, derivative financial instruments, trade payables, and trade receivables.

The above sensitivity analysis is based on a reasonably possible change in the under-lying foreign currency against the respective functional currency while assuming all other variables to be constant.

Based on the movements in the foreign exchange rates historically and the prevailing market conditions as at the reporting date, the Company's management has concluded that the above mentioned rates used for sensitivity are reasonable benchmarks.

ii. Interest rate risk

As the Company does not have exposure to any floating-interest bearing assets, or any significant long-term fixed-interest bearing assets, its interest income and related cash inflows are not affected by changes in market interest rates. Consequently, the Company's interest rate risk arises mainly from borrowings.

Borrowings

Borrowings with floating and fixed interest rates expose the Company to cash flow and fair value interest rate risk respectively. However, the short-term borrowings of the Company do not have a significant fair value or cash flow interest rate risk due to their short tenure. Accordingly, the components of the debt portfolio are determined by the CSM in a manner which enables the Company to achieve an optimum debt-mix basis its overall objectives and future market expectations.

The Company monitors the interest rate movement and manages the interest rate risk based on its risk management policies, which inter-alia include entering into interest swaps contracts - as considered appropriate and whenever necessary.

Interest rate sensitivity of borrowings

The impact of the interest rate sensitivity on profit before tax is given in the table below:

Interest rate sensitivity

Increase/ decrease (basis points)

Effect on profit before tax

For the year ended March 31, 2019

NR - borrowings

100

(1,611)

-100

1,611

US Dollar -borrowings

25

(51)

-25

51

Other Currency - borrowings

25

(37)

-25

37

For the year ended March 31, 2018

INR- borrowings

100

(716)

-100

716

US Dollar -borrowings

25

(66)

-25

66

The sensitivity disclosed in the above table is attributable to floating-interest rate borrowings and the interest swaps.

The above sensitivity analysis is based on a reasonably possible change in the under-lying interest rate of the Company's borrowings in INR, USD (being the significant currencies in which it has borrowed funds), while assuming all other variables (in particular foreign currency rates) to be constant.

Based on the movements in the interest rates historically and the prevailing market conditions as at the reporting date, the Company's management has concluded that the above mentioned rates used for sensitivity are reasonable benchmarks.

iii. Price risk

The Company invests its surplus funds in various mutual funds (debt fund, equity fund, liquid schemes and income funds etc.), short term debt funds, government securities and fixed deposits. In order to manage its price risk arising from investments, the Company diversifies its portfolio in accordance with the limits set by the risk management policies.

iv. Credit risk

Credit risk refers to the risk of default on its obligation by the counter-party the risk of deterioration of credit-worthiness of the counter-party as well as concentration risks of financial assets, and thereby exposing the Company to potential financial losses.

The Company is exposed to credit risk mainly with respect to trade receivables, investment in bank deposits/debt securities / mutual funds and derivative financial instruments.

Trade receivables

The Trade receivables of the Company are typically non-interest bearing un-secured and derived from sales made to a large number of independent customers. As the customer base is widely distributed both economically and geographically, there is no concentration of credit risk.

As there is no independent credit rating of the customers available with the Company, the management reviews the credit-worthiness of its customers based on their financial position, past experience and other factors. The credit risk related to the trade receivables is managed / mitigated by each business unit, basis the Company's established policy and procedures, by setting appropriate payment terms and credit period, and by setting and monitoring internal limits on exposure to individual customers. The credit period provided by the Company to its customers generally ranges from 14-30 days except Airtel business segment wherein it ranges from 7-90 days.

The Company uses a provision matrix to measure the expected credit loss of trade receivables, which comprise a very large numbers of small balances. Refer note 14 for details on the impairment of trade receivables. Based on the industry practices and the business environment in which the entity operates, management considers that the trade receivables are credit impaired if the payments are more than 90 days past due.

The ageing analysis of trade receivables as of the reporting date is as follows:

Neither past due nor impaired

Past due but not impaired

Less Than 30 to 60 60 to 90 Above 90 Total 30 days days days days

March 31, 2019

14,692

10,154

3,727

3,504

6,413

38,490

March 31, 2018

18,320

14,119

5,207

4,052

1,498

43,196

The Company performs on-going credit evaluations of its customers' financial condition and monitors the credit-worthiness of its customers to which it grants credit in its ordinary course of business. The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Company determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amount due. Where the financial asset has been written-off the Company continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognised in profit and loss.

Financial instruments and cash deposits

The Company's treasury, in accordance with the board approved policy, maintains its cash and cash equivalents, deposits and investment in mutual funds and enters into derivative financial instruments - with banks, financial and other institutions, having good reputation and past track record, and high credit rating. Similarly, counter-parties of the Company's other receivables carry either no or very minimal credit risk. Further, the Company reviews the credit-worthiness of the counterparties (on the basis of its ratings, credit spreads and financial strength) of all the above assets on an on-going basis, and if required, takes necessary mitigation measures.

v. Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. Accordingly, as a prudent liquidity risk management measure, the Company closely monitors its liquidity position and deploys a robust cash management system. It maintains adequate sources of financing including bilateral loans, debt, and overdraft from both domestic and international banks at an optimised cost. It also enjoys strong access to domestic and international capital markets across debt and equity.

Moreover, the Company's senior management regularly monitors the rolling forecasts of the entities' liquidity reserve (comprising of the amount of available un-drawn credit facilities and cash and cash equivalents) and the related requirements, to ensure they have sufficient cash on an on-going basis to meet operational needs while maintaining sufficient headroom at all times on its available un-drawn committed credit facilities, so that there is no breach of borrowing limits or relevant covenants on any of its borrowings. For details as to the Borrowings, refer note 18.

Based on past performance and current expectations, the Company believes that the cash and cash equivalents, cash generated from operations and available un-drawn credit facilities, will satisfy its working capital needs, capital expenditure, investment requirements, commitments and other liquidity requirements associated with its existing operations, through at least the next twelve months.

The table below summarises the maturity profile of the Company's financial liabilities based on contractual

As of March 31, 2019

Carrying amount

On Demand

Less than 6 months

6 to 12 months

1 to 2 years

> 2 years

Total

Interest bearing borrowings*#

867,120

154

245,989

92,495

108,502

863,206

1,310,346

Other financial liabilities*

111,649

2,402

66,463

9,461

13,378

19,945

111,649

Trade payables#

191,688

-

191,688

-

-

-

191,688

Financial liabilities

1,170,457

2,556

504,140

101,956

121,880

883,151

1,613,683

(excluding derivatives)

Derivative assets

72

-

50

18

4

1

72

Derivative liabilities

(1,775)

-

(1,189)

(265)

(149)

(172)

(1,775)

Net derivatives

(1,703)

-

(1,139)

(247)

(145)

(171)

(1,703)

As of March 31, 2018

Carrying amount

On Demand

Less than 6 months

6 to 12 months

1 to 2 years

>2 years

Total

Interest bearing borrowings*#

677,839

0

111,946

55,395

72,856

910,420

1,150,617

Other financial liabilities*

88,202

3,284

65,564

-

-

19,354

88,202

Trade payables#

176,990

176,990

176,990

Financial liabilities (excluding derivatives)

943,031

3,284

354,500

55,395

72,856

929,774

1,415,809

Derivative assets

275

-

152

43

80

-

275

Derivative liabilities

(352)

-

(83)

(145)

(107)

(17)

(352)

Net derivatives

(77)

-

69

(102)

(27)

(17)

(77)

*lt includes contractual interest payment based on interest rate prevailing at the end of the reporting period after adjustment for the impact of interest swaps, over the tenor of the borrowings.

#lnterest accrued but not due has been included in interest bearing borrowings and excluded from other financial liabilities.

The Company from time to time in its usual course of business guarantees certain indebtedness of its subsidiaries. Accordingly, as of March 31, 2019 and March 31, 2018 Company has issued corporate guarantee against debt / advance aggregating to Rs. 285,503 and Rs. 353,114 respectively. The outflow in respect of these guarantees arises only on any default / non-performance of the subsidiary with respect to the guaranteed debt/ advance and substantial amount of such loans are due for payment after two years from the reporting date.

vi. Reconciliation of liabilities whose cash flow movements are disclosed as part of financing activities in the statement of cash flows:

Non-cash changes

Balance sheet caption

Statement of cash flows line item

April 1, 2018

Cash flows

Interest capitalised

Interest expense

Foreign exchange movement

March 31, 2019

Borrowings*

Proceeds / repayments of borrowings (including short-term)

220,473

166,307

5,437

4,300

396,517

Interest accrued but not due / derivative instruments

Interest and other finance charges pa id

23,758

(52,307)

838

72,542

25

(13,932)

30,924

*lt does not include deferred payment liabilities, finance lease obligations and bank overdraft. 2. Capital risk

The Company's objective while managing capital is to safeguard its ability to continue as a going concern (so that it is enabled to provide returns and create value for its shareholders, and benefits for other stakeholders), support business stability and growth, ensure adherence to the covenants and restrictions imposed by lenders and / or relevant laws and regulations, and maintain an optimal and efficient capital structure so as to reduce the cost of capital. However, the key objective of the Company's capital management is to, ensure that it maintains a stable capital structure with the focus on total equity, uphold investor; creditor and customer confidence, and ensure future development of its business activities. In order to maintain or adjust the capital structure, the Company may issue new shares, declare dividends, return capital to shareholders, etc.

The Company manages its capital structure and makes adjustments to it, in light of changes in economic conditions or its business requirements.

The Company monitors capital using a gearing ratio calculated as below:

As of March 31, 2019

As of March 31,2018

Borrowings

837,899

654,158

Less: Cash and cash equivalents

1,876

4,626

Less: Term deposits with bank

126

105

Net debt

835,897

649,427

As of March 31, 2019

As of March 31,2018

Equity

983,593

1,028,609

Total capital

983,593

1,028,609

Capital and Net Debt

1,819,490

1,678,036

Gearing Ratio

45.94%

38.70%

36. Fair value of financial assets and liabilities

The category wise details as to the carrying value and fair value of the Company's financial instruments are as follows:

Level

Carrying Value as of

Fair Value as of

March 31, 2019

March 31, 2018

March 31, 2019

March 31, 2018

Financial Assets

Fair value through profit or loss

Derivatives

- Currency swaps, forward and option

Level 2

72

195

72

195

contracts

- Interest rate swaps

Level 2

80

80

Investments

Level 1

16,696

16,696

Investments

Level 2

63

63

63

63

Amortised cost

Loans and security deposits

172,276

82,786

172,276

82,786

Trade receivables

38,490

43,196

38,490

43,196

Cash and cash equivalents

1,876

4,626

1,876

4,626

Other bank balances

320

825

320

825

Other financial assets

12,741

12,097

12,741

12,097

242,534

143,868

242,534

143,868

Financial Liabilities

Fair value through profit or loss

Derivatives

- Currency swaps, forward and option

Level 2

1,775

352

1,775

352

contracts

Amortised cost

Borrowings- fixed rate

Level 1

68,528

64,484

67,019

63,045

Borrowings- fixed rate

Level 2

573,328

463,653

611,713

503,800

Borrowings- floating rate

196,043

126,021

196,043

126,021

Trade payables

191,688

176,990

191,688

176,990

Other financial liabilities

140,870

111,883

140,870

111,883

1,172,232

943,383

1,209,108

982,091

The following methods / assumptions were used to estimate the fair values:

i. The carrying value of other bank balances, trade receivables, trade payables, short-term borrowings, floating-rate long-term borrowings, other current financial assets and liabilities approximate their fair value mainly due to the short-term maturities of these instruments / being subject to floating-rates.

ii. The fair value of other long-term borrowings and non-current financial assets / liabilities is estimated by discounting future cash flows using current rates applicable to instruments with similar terms, currency, credit risk and remaining maturities.

iii. The fair values of derivatives are estimated by using pricing models, wherein the inputs to those models are based on readily observable market parameters. The valuation models used by the Company reflect the contractual terms of the derivatives (including the period to maturity), and market-based parameters such as interest rates, foreign exchange rates, volatility etc. These models do not contain a high level of subjectivity as the valuation techniques used do not require significant judgement and inputs thereto are readily observable.

The following table describes the key inputs used in the valuation (basis discounted cash flow technique) of the Level 2 financial assets/ liabilities as of March 31, 2019 and March 31, 2018:

Financial assets /liabilities

Inputs used

Derivatives

- Currency swaps, forward and option contracts

Forward currency exchange rates, interest rates

- Interest swaps

Prevailing / forward interest rates in market, interest rates

Fixed rate borrowings

Prevailing interest rates in market, future payouts, interest rates

During the year ended March 31, 2019 and March 31, 2018, there were no transfers between Level 1 and Level 2 fair value measurements. None of the financial assets and financial liabilities are in Level 3.

37. Other matters

i. In 1996, the Company had obtained the permission from DoT to operate its Punjab license through one of its wholly owned subsidiary. However DoT cancelled the permission to operate in April, 1996 and subsequently reinstated in March, 1998. Accordingly, for the period from April 1996 to March, 1998 ('blackout period') the license fee was disputed and not paid by the Company.

Subsequently, basis the demand from DoT in 2001, the Company paid the disputed license fee of Rs 4,8 56 for blackout period under protest. Consequently, the license was restored subject to arbitrator's adjudication on the dispute. The arbitrator adjudicated the matter in favour of DoT, which was challenged by the Company before Hon'ble Delhi High Court. In 2012, Hon'ble Delhi High Court passed an order setting aside the arbitrator's award, which was challenged by DoT and is pending before its division bench. Meanwhile, the Company had filed a writ petition for recovery of the disputed license fee and interest thereto. However, the single bench, despite taking the view that the Company is entitled to refund, dismissed the writ petition on the ground that the case is still pending with the larger bench. The Company therefore has filed appeal against the said order with division bench and is currently pending. DoT had also filed an appeal against the single judge order. Both these appeals are tagged together and are listed for final hearing. The Hon'ble court has directed both the parties to file comprehensive written submission.

ii. TRAI vide Telecom Interconnect Usages Charges Regulation (Eleventh Amendment) 2015 has reduced the IUC charges for mobile termination charges to 14 paisa from 20 paisa and abolished the fixed-line termination charges. The Company has challenged the said Regulation before the Hon'ble Delhi High Court and the matter is currently pending.