Notes to financial statements

(1)

39. Earnings Per Share

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

Particulars For the year ended

March 31, 2015

For the year ended March 31, 2014 Basic and Diluted Earnings per Share :

Nominal value of equity shares (`) 5 5

Proﬁt attributable to equity shareholders (A) 132,005 66,002

Weighted average number of equity shares outstanding during the year (Nos. in Mn) (B)

3,997 3,955

Basic/ Diluted earnings per Share (`) (A/B) 33.02 16.69

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

(` Millions)

March 31, 2015

For the year ended March 31, 2014

Employer’s Contribution to Provident Fund *@ 650 662

Employer’s Contribution to ESI and other Funds* 7 8

* 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 and Leave Encashment For the year ended March 31, 2015:

(` Millions)

Particulars Gratuity # Leave Encashment #

Current service cost 240 142

Interest cost 127 64

Expected return on plan assets (6) -

Net actuarial (gain) / loss (84) (133)

Total * 277 73

Actual return on plan assets (76) -

For the year ended March 31, 2014:

(` Millions)

Particulars Gratuity # Leave Encashment #

(2)

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

(` 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) 24.38 24.38 For the year ended March 31, 2014:

(` Millions)

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

(` Millions)

Change in Obligation

Present value of obligation at beginning of year 1,586 794

Beneﬁts paid (305) (133)

Acquisitions / transfer in / transfer out (47) (14)

Actuarial (gain) / loss (14) (133)

Present value of obligation at year end 1,587 720

Change in plan assets :

Fair value of plan assets at beginning of year 76 -

Expected return on plan assets 6 -

Actuarial gain / (loss) 70 -

Amount received on redemption of plan assets (152) -

Fair value of plan assets at year end - -

Net funded status of the plan 1,587 720

Current Liabilities 450 720

(3)

(` Millions)

Change in Obligation

Present value of obligation at beginning of year 1,382 744

Beneﬁts paid (252) (114)

Acquisitions/ transfer in/ transfer out (14) (8)

Actuarial (gain) / loss 95 (62)

Present value of 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 -

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:

(` Millions) Particulars Gratuity As of March 31, 2015 As of March 31, 2014 As of March 31, 2013 As of March 31, 2012 As of March 31, 2011

Present value of obligation 1,587 1,586 1,382 1,119 995

Plan assets - 76 76 76 76

Surplus / (deﬁcit) (1,587) (1,510) (1,306) (1,043) (919)

Experience adjustments on plan liabilities- gain/(loss)

(69) (28) (31) (57) (87)

Experience adjustments on plan assets- gain/(loss)

70 (6) (6) (6) (6) (` Millions) Particulars Leave Encashment As of March 31, 2015 As of March 31, 2014 As of March 31, 2013 As of March 31, 2012 As of March 31, 2011

(4)

g) Movement in other long term employee beneﬁts :

The provision for long term service award provided by the Company as of March 31, 2015 is ` 86 Mn (March 31, 2014 ` 105 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, 2015

(` Millions except % share)

Cable Project Total

Contribution

Capital Work In Progress

Net block % Share

SMW-4 3,317 - 1,637 8.27%

EIG - Project 2,677 205 1,805 7.22%

IMEWE- Project 3,063 - 2,206 12.84%

As of March 31, 2014

(` 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. 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. As of March 31, 2015, the Company’s investment in Bridge Mobile Pte Limited is USD 800,000, amounting to ` 34 Mn in 800,000 ordinary shares of USD 1 each which is equivalent to an ownership interest of 10.00% (March 31, 2014: Investment of USD 2.2 Mn, amounting to

` 92 Mn, USD 2.2 Mn ordinary shares, ownership interest 10.00%). During the year March 31, 2015, Bridge Mobile PTE Limited reduced its share capital by USD 14 Mn and has proportionately returned part of its share capital to all its joint venture partners. Accordingly, the Company has received ` 87 Mn (USD 1 per share for 1,400,000 shares).

ii) 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(i))

(5)

The following represent the Company’s share of assets and liabilities, and income and results of the joint ventures. (` Millions) Particulars As of March 31, 2015 (Unaudited) As of March 31, 2014 (Unaudited)* Balance Sheet Current assets 47 113 Non-current assets 4 4 Current liabilities 21 11 Non-current liabilities - - Equity 30 106 (` Millions) Particulars

For the year ended March 31, 2015 (Unaudited)

For the year ended March 31, 2014 (Unaudited) Statement of Proﬁt and Loss

Revenue 38 37

Other Income - 103

Employee beneﬁt expenses 22 24

Other expenses 7 36

Finance costs - 3

Depreciation 1 1

Proﬁt/ (loss) before tax 8 76

Tax Expense - 26

Loss for the year 8 50

*includes shares 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, 2015, Bharti Airtel Employee’s Welfare Trust (‘the Trust’) holds 1,410,642 equity shares (of face value of ` 5

each) (March 31, 2014 2,374,698 equity shares) of the Company.

Particulars As of March 31, 2015 As of March 31, 2014 As of March 31, 2015 As of March 31, 2014

Number of shares (` Millions)

Opening Balance 2,374,698 3,937,055 342 674

Purchased during the year - - - -

Issued during the year (964,056) (1,562,357) (228) (332)

Closing Balance 1,410,642 2,374,698 114 342

43. Loans and advances in the nature of loans along with

maximum amount outstanding during the year as per Clause 32 of the Listing Agreement are as follows: (a) Loan and advance in the nature of loan given to Bharti

(c) Loan and advance in the nature of loan given to Bharti Airtel International (Netherlands) B.V at LIBOR + 1.25% interest rate is ` 32,047 Mn (March 31, 2014 ` 10,895 Mn at LIBOR + 1.75% interest rate).

(6)

(f) Loan and advance in the nature of loan given to Bharti International (Singapore) Pte Limited at LIBOR + 1.25% interest rate is ` 8,887 Mn (March 31, 2014 ` 2,731 Mn at LIBOR + 1.75% interest rate).

(g) Loan and advance in the nature of loan given to Nxtra Data Limited at nil interest rate is ` 2,000 Mn (March 31, 2014 ` 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 ` 635 Mn (March 31, 2014 ` 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 ` 5,390 Mn (March 31, 2014 ` 49,094 Mn at nil interest rate).

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)

(` Millions)

March 31, 2015

For the year ended March 31, 2014 Expenditure

On account of :

Interest 496 295

Bank Charges 447 304

Professional & Consultation Fees 90 36

Travelling (Net of Reimbursement) 39 26

Roaming Charges (including Commission) 1,330 1,868

Membership & Subscription 56 95

Staﬀ Training & Others 28 2

Network Services 464 447

Annual Maintenance 1,905 1,863

Bandwidth Charges 2,644 3,723

Access Charges 21,288 18,689

Repairs & Maintenance 13 -

Marketing 150 673

Content Charges 1,016 1,289

Directors Commission and Sitting Fees 59 49

Income Tax 147 210 Total 30,172 29,569 Earnings Service Revenue 36,040 34,929 Interest Income 469 208 Management Charges 765 566 Total 37,274 35,703

45. CIF Value of Imports

(` Millions)

March 31, 2015

For the year ended March 31, 2014

Capital Goods 37,221 16,145