Companies & Industry »Directors' Report
Bharti Airtel Ltd - Directors' Report

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Code: BHARTIARTL
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Directors





Dear Shareholders,

Your Directors have pleasure in presenting the 19th Annual Report on the Company’s business and operations, together with audited financial statements and accounts for the financial year ended March 31, 2014.

Company Overview

Bharti Airtel continued to be among the top four mobile service providers globally with presence in 20 countries, including India, Sri Lanka, Bangladesh and 17 countries in the African continent. The Company’s diversified service range includes mobile, voice and data solutions using 2G, 3G and 4G technologies. Its service portfolio also comprises an integrated suite of telecom solutions to its customers, besides providing long-distance connectivity in India, Africa and rest of the world. The Company also o3ers Digital TV and IPTV services in India.

All these services are rendered under a unified brand ‘airtel’, either directly or through subsidiary companies. The Company also deploys, owns and manages passive infrastructure pertaining to telecom operations through its subsidiary, Bharti Infratel Limited, which also owns 42% of Indus Towers Limited. Together, Bharti Infratel and Indus Towers is the largest passive infrastructure service provider in India.

Financial Results

In line with the statutory guidelines, the Company has adopted International Financial Reporting Standards (IFRS) for accounts consolidation from FY 2010-11. The Company publishes its standalone accounts according to India’s Generally Accepted Accounting Principles (IGAAP). The consolidated and standalone financial highlights of the Company’s operations are as follows:

Consolidated Financial Highlights (IFRS)

FY 2013-14 FY 2012-13
Particulars Rs. USD Rs. USD
Millions Millions* Millions Millions*
Gross revenue 857,461 14,151 769,045 14,129
EBITDA before exceptional items 277,770 4,584 232,579 4,273
Cash profit from operations before derivatives and forex fluctuations (before exceptional items) 241,813 3,991 195,643 3,594
Earnings before taxation 78,643 1,298 47,853 879
Net Income / (loss) 27,727 458 22,757 418

* 1 USD = Rs. 60.59 Exchange Rate for financial year ended March 31, 2014 (1 USD = Rs. 54.43 for financial year ended March 31, 2013)

Standalone Financial Highlights (IGAAP)

FY 2013-14 FY 2012-13
Particulars Rs. USD Rs. USD
Millions Millions* Millions Millions*
Gross revenue 499,185 8,239 453,509 8,332
EBITDA before exceptional items 171,522 2,831 149,338 2,744
Cash profit from operations after derivatives and forex fluctuations (after exceptional items) 158,158 2,610 132,815 2,440
Earnings before taxation 83,774 1,383 64,548 1,186
Net Income / (loss) 66,002 1,089 50,963 936

* 1 USD = Rs. 60.59 Exchange Rate for financial year ended March 31, 2014 (1 USD = Rs. 54.43 for financial year ended March 31, 2013)

The financial results and the results of operations including major developments have been further discussed in detail in the Management Discussion and Analysis section.

Share Capital

During the year, the Company allotted 199,870,006 fully paid up equity shares of face value of Rs. 5/- each to Three Pillars Pte. Limited, Singapore an a3liate of Qatar Foundation Endowment SPC (belonging to non-promoter category) at an issue price of Rs. 340/- per equity share (including premium of Rs. 335/- per equity share) for an aggregate consideration of Rs. 67,955.80 Mn (Rupees sixty seven billion nine hundred and fifty five million eight hundred and two thousand and forty only) on preferential basis.

Accordingly, the issued, subscribed and paid-up equity share capital of the Company increased from Rs. 18,987.65 Mn divided into 3,797,530,096 equity shares of Rs. 5/- each as on March 31, 2013 to Rs. 19,987 Mn divided into 3,997,400,102 equity shares of Rs. 5/- each as on March 31, 2014.

General Reserve

Pursuant to Section 123 of the Companies Act, 2013, the Company is not mandatorily required to transfer any amount to the General Reserve. Accordingly, the Company has not transferred any amount to the General Reserve.

Dividend

The Board recommends a final dividend of Rs. 1.80 per equity share of Rs. 5 each (36% of face value) for the FY 2013-14. The total dividend payout will amount to Rs. 7,195 Mn excluding tax on dividend. The payment of dividend is subject to the approval of the shareholders in the Company’s ensuing Annual General Meeting.

Transfer of amount to Investor Education and Protection Fund

Since the Company declared its maiden dividend in August 2009 for the FY 2008-09, no unclaimed dividend is due for transfer to Investor Education and Protection Fund.

Fixed Deposits

The Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding, as on the balance sheet closure date.

Capital Market Ratings

As on March 31, 2014, the Company was rated by two domestic rating agencies, namely CRISIL and ICRA, and three international rating agencies, namely Fitch Ratings, Moody’s and S&P.

CRISIL and ICRA maintained their long-term ratings of the Company. Currently, they rate the Company at [CRISIL] AA+ / [ICRA] AA+ with a stable outlook. Short-term ratings were rea3rmed at the highest end of the rating scale at [CRISIL] A1+ / [ICRA] A1+.

During the year, Moody’s, an international credit rating agency, initiated ratings coverage on the Company and assigned it a rating of Baa3, with a stable outlook. As of March 31, 2014, the Company continued to be rated at the same level by Moody’s.

S&P upgraded its ratings to BBB- with a stable outlook during the year (BB+ / Stable earlier).

Fitch maintained its rating at BBB- but upgraded the outlook to Stable (BBB- / Negative earlier).

As on March 31, 2014, the Company was rated "Investment Grade" with a ‘Stable’ outlook by all three international credit rating agencies.

Employee Stock Option Plan

The Company presently has two Employee Stock Option (ESOP) schemes, namely the Employee Stock Option Scheme 2001 and the Employee Stock Option Scheme 2005. Besides attracting talent, the Schemes also helped to retain talent and experience.

Both the above mentioned ESOP schemes are at present administered through a Trust, whereby the shares held / acquired by the Trust are transferred to the employee, upon exercises of stock options as per the terms of the Scheme.

In view of the Circular issued by SEBI, the Company stopped acquiring further shares from the open market towards appropriation of the same for the ESOP scheme 2005. The shares acquired / held by the Trust prior to the circular will be utilised to administer the above schemes in accordance with the applicable regulations.

In compliance with the provisions of Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (the SEBI Guidelines), HR & Nomination Committee administers and monitors the Company’s ESOP schemes. The applicable disclosures as stipulated under the SEBI Guidelines, as on March 31, 2014 are provided in Annexure C to this report.

A certificate from M/s. S. R. Batliboi & Associates LLP, Chartered Accountants, Statutory Auditors, with respect to the implementation of the Company’s ESOP schemes, would be placed before the shareholders at the ensuing Annual General Meeting. A copy of the same will also be available for inspection at the Company’s registered o3ce.

Directors

In line with the Company’s policy on Independent Directors, Mr. Pulak Prasad has retired from the Board w.e.f. September 5, 2013. Further, during the previous financial year, Mr. Nikesh Arora ceased to be the Director of the Company w.e.f. March 13, 2014. The Directors place on record their appreciation for help, guidance and contribution made by the outgoing Directors during their tenure on the Board.

Sheikh Faisal Thani Al-Thani, Mr. Ben Verwaayen, Mr. V. K. Viswanathan and Mr. D. K. Mittal were appointed as Additional Directors during the year. They will cease to hold o3ce on the date of ensuing Annual General Meeting and are eligible for re-appointment. The Company has received notices from members under Section 160 of the Companies Act, 2013 (Corresponding section to Section 257 of the Companies Act, 1956), proposing the appointment of Sheikh Faisal Thani Al-Thani as the Company’s Non-Executive Director and appointment of Mr. Ben Verwaayen, Mr. V. K. Viswanathan and Mr. D. K. Mittal as the Company’s Non-Executive Independent Directors along with necessary deposit of Rs. 1,00,000/- for each Director. The Board recommends their appointment.

Ms. Chua Sock Koong and Mr. Rajan Bharti Mittal retire by rotation at the ensuing Annual General Meeting and being eligible, have o3ered themselves for re-appointment.

In terms of Section 149, 150 and 152 read with Schedule IV and any other applicable provisions, if any, of the Companies Act, 2013 and rules made thereunder and Clause 49 of the Listing Agreement, it is proposed to appoint Mr. Manish Kejriwal, Ms. Obiageli Ezekwesili and Mr. Craig Ehrlich as Independent Directors of the Company to hold o3ce for the term as mentioned in the explanatory statement to item nos. 7 to 14 of notice of the Annual General Meeting.

Mr. Tsun-yan Hsieh, Independent Director has expressed his desire to step down from the Board e3ective from the conclusion of ensuing Annual General Meeting. Accordingly, his appointment as an Independent Director for a further term, as required under the provisions of Companies Act, 2013, is not being proposed to the shareholders at the ensuing Annual General Meeting.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges and in the opinion of the Board, all the Independent Directors proposed to be appointed fulfil the conditions specified in the Companies Act, 2013 and the rules made thereunder and are independent of the management. The Board recommends their appointment.

A brief resume, nature of expertise, details of directorships held in other public limited companies of the Directors proposed to be appointed / re-appointed, along with their shareholding in the Company, as stipulated under Clause49 of the Listing Agreement with the Stock Exchanges, is appended as an annexure to the Notice of the before ensuing Annual General Meeting.

Subsidiary Companies

As on March 31, 2014, your Company has 117 subsidiary companies, as set out in Page no. 242 of the Annual Report (for Abridged Annual Report please refer Page no. 92).

Pursuant to the General Circular No. 2 / 2011, dated February 8, 2011, issued by the Ministry of Corporate A3airs, Government of India, the Board of Directors have consented for not attaching the balance sheet, statement of profit & loss and other documents, as set out in Section 212(1) of the Companies Act, 1956, in respect of its subsidiary companies, for the year ended March 31, 2014.

The statement pursuant to the above referred circular is annexed on page no. 99 of the Abridged Annual Report and page no. 249 of the full version Annual Report.

The audited financial statements of each of its subsidiaries are available for inspection at the Company’s registered o3ce and the registered o3ce of the respected subsidiary companies. Copies of the annual accounts of the subsidiary companies will also be made available to the investors of Bharti Airtel and those of the subsidiary companies upon request.

Abridged Financial Statements

In terms of the provision of Section 219(1)(b)(iv) of the Companies Act, 1956 and Clause 32 of the Listing Agreement, the Board of Directors has decided to circulate the Abridged Annual Report containing salient features of the balance sheet and statement of profit & loss and other documents to the shareholders for the FY 2013-14, who have not registered their e-mail id. Full version of the Annual Report will be available on the Company’s website, www.airtel.com, and will also be made available to investors upon request. To support the green initiative of the Ministry of Corporate A3airs and in accordance with the provisions of Companies Act, 2013, the Company has also decided to send all future communications, including the Annual Report, through email to those shareholders, who have registered their email id with their depository participant / Company’s registrar and share transfer agent. If a shareholder wishes to receive a printed copy of such communications, he / she may please send a request to the Company, which will send a printed copy of the communication to the shareholder. The shareholders are hereby requested to kindly update their email ids with the Registrar and share transfer agent (RTA) and respective Depository Participants (DPs).

Management Discussion & Analysis Report

Management’s Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming a part of the Annual Report.

Corporate Governance

A detailed report on Corporate Governance, pursuant to the requirements of Clause 49 of the Listing Agreement, forms part of the Annual Report. However, in terms of the provision of Section 219(1)(b)(iv) of the Companies Act, 1956 and Clause 32 of the Listing Agreement, the Abridged Annual Report, excluding this report, has been sent to the Company’s members. Members who desire to obtain the full version of the report may write to the Company Secretary at the registered o3ce address and will be provided with a copy of the same. A certificate from M/s. S. R. Batliboi & Associates LLP, Chartered Accountants, Gurgaon, the Statutory Auditors of the Company, confirming compliance of conditions of Corporate Governance, as stipulated under Clause 49, is annexed to the report as Annexure A.

Corporate Social Responsibility & Sustainability and Business Responsibility Report

At Bharti Airtel, Corporate Social Responsibility (CSR) encompasses much more than social outreach programmes. It lies at the heart of the Company’s business operations. Detailed information on the Company’s CSR initiatives is provided in this Annual Report’s CSR section and the Business Responsibility Report.

SEBI, vide its Circular CIR/CFD/DIL/8/2012 dated August 13, 2012, mandated the top 100 listed entities, based on market capitalisation at BSE and NSE, to include Business Responsibility Report as a part of the Annual Report describing the initiatives taken by the companies from Environmental, Social and Governance perspective.

Accordingly, a detailed report on Corporate Social Responsibility and Business Responsibility Report forms a part of the Annual Report. However, in terms of the Section 219(1)(b)(iv) of the Companies Act, 1956 and Clause 32 of the Listing Agreement, the Abridged Annual Report, excluding this report, will be sent to the Company’s members. Members who desire to obtain the full version of the report may write to the Company Secretary at the registered o3ce address and will be provided with a copy of the same.

Sustainability Journey

Sustainability initiatives have been integral to the Company’s journey since inception. The last three years witnessed the Company adding a more comprehensive and structured sustainability plan with active co-operation of all stakeholders. The objective is to benefit our community and the planet through all our operations and engagements. Bharti Airtel is strengthening its e3orts on issues like climate change, employee engagement, waste management, digital inclusion and impact on communities, among many others.

The Company is committed to maintain the highest standards of governance, safety and environmental performance across the value chain.

An update on the sustainability journey of the Company forms part of the Corporate Social Responsibility and Sustainability report. The detailed sustainability report for the year 2012-13 is available on the website of the Company and can be viewed by clicking the hyperlink "http://www.airtel.in/sustainability".

Statutory Auditors

The Company’s Statutory Auditors, M/s. S. R. Batliboi & Associates LLP, Chartered Accountants, Gurgaon, will retire at the conclusion of the ensuing Annual General Meeting.

In terms of provisions of Section 139 of the Companies Act, 2013 and Companies (Audit and Auditors) Rules, 2014, the Statutory Auditors (including Associate Audit Firm) can be appointed for a maximum term of 10 years which shall be inclusive of the existing tenure completed by such Statutory Auditors.

Since, M/s. S. R. Batliboi & Associates LLP, Chartered Accountants has completed 7 years as Statutory Auditors of the Company, it is proposed to re-appoint them for a further term of 3 consecutive years from the conclusion of the ensuing Nineteenth Annual General Meeting to the conclusion of Twenty-Second Annual General Meeting subject to ratification by the shareholders at every Annual General Meeting.

The Company has received letters from the Auditors to the e3ect that their appointment, if made, shall be in accordance with the conditions as prescribed in the rule 4 of the Companies (Audit and Auditors) Rules, 2014, and that they are not disqualified for appointment within the meaning of Section 139 and 141 of the Companies Act, 2013.

Auditors’ Report

The Board has duly examined the Statutory Auditors’ Report to the accounts, which is self-explanatory. Clarifications, wherever necessary, have been included in the Notes to Accounts section of the Annual Report.

As regards the comments under para i(a) of the annexure to the Independent Auditors’ Report regarding updation of quantitative and situation details relating to certain fixed assets, the Company has initiated a comprehensive project with the involvement of technical experts, to deploy automated tools and processes which will enable near real-time tracking and reconciliation of fixed assets. This project will be spread over two years.

Cost Auditors

The Board, on the recommendation of the Audit Committee and subject to the rules to be notified by the Ministry of Corporate A3airs (MCA) in this regard, has approved the appointment of M/s. R. J. Goel & Co., Cost Accountants, as Cost Auditor for the financial year ending March 31, 2015. The Cost Auditors will submit their report for the financial year ending 2013-14 on or before the due date.

In accordance with the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, since the remuneration payable to the Cost Auditors is required to be ratified by the shareholders, the Board recommends the same for the approval by the shareholders at the Annual General Meeting.

Secretarial Audit Report

The Company had appointed M/s. Chandrasekaran Associates, Company Secretaries, New Delhi, to conduct its Secretarial Audit for the financial year ended March 31, 2014. The Secretarial Auditors have submitted their report confirming the compliance with all the applicable provisions of various corporate laws. The Secretarial Audit Report is provided separately in the Annual Report. However, in terms of the provision of Section 219(1)(b)(iv) of the Companies Act, 1956 and Clause 32 of the Listing Agreement, the Abridged Annual Report, excluding this annexure, will be sent to the Company’s members. Members who desire to obtain this information may write to the Company Secretary at the registered o3ce address and will be provided with a copy of the same.

Particulars of Employees

The information, as required to be provided in terms of Section 217(2A) of the Companies Act, 1956, read with Companies (Particular of Employees) Rules, 1975, have been set out in the enclosed annexure to this report. In terms of the provision of Section 219(1)(b)(iv) of the Companies Act, 1956 and Clause 32 of the Listing Agreement, the Abridged Annual Report that has been sent to the Company’s members does not contain the same. Members who desire to obtain this information may write to the Company Secretary at the registered o3ce address and will be provided with a copy of the same.

Energy Conservation, Technology Absorption, and Foreign Exchange Earnings and Outgo

Beingaserviceprovidingorganisation,mostoftheinformation of the Company, as required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988, as amended, is not applicable. However, the information, as applicable, has been given in Annexure B to this report.

Directors’ Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, to the best of their knowledge and belief, confirm that: I. The applicable accounting standards have been followed, along with proper explanation relating to material departures, in the preparation of the annual accounts for the year ended March 31, 2014.

II. They have selected and applied consistently and made judgments and estimates that are reasonable and prudent to give a true and fair view of the Company’s state of a3airs and profits, as at the end of the financial year. III. They have taken proper and su3cient care to maintain adequate accounting records in accordance with the provisions of the Companies Act, 1956, and to safeguard the Company’s assets and to prevent and detect fraud and other irregularities.

IV. They have prepared the annual accounts on a going concern basis.

Acknowledgements

Your Directors wish to place on record their appreciation to the Department of Telecommunications (DoT), the Central Government, the State Governments in India, Government of Bangladesh, Government of Sri Lanka and Governments in the 17 countries in Africa, Company’s Bankers and business associates, for the assistance, co-operation and encouragement they extended to the Company. The Directors also extend their appreciation to the employees for their continuing support and unstinting e3orts in ensuring an excellent all-round operational performance. The Directors would like to thank various partners, viz. Bharti Telecom Limited, Singapore Telecommunications Ltd. and other shareholders for their support and contribution. We look forward to their continued support in future.

For and on behalf of the Board
Date: April 29, 2014 Sunil Bharti Mittal
Place: Gurgaon Chairman

Annexure A

Auditors Certificate Regarding Compliance of Conditions of Corporate Governance

To

The Members of Bharti Airtel Limited,

We have examined the compliance of conditions of Corporate Governance by Bharti Airtel Limited ("the Company"), for the year ended March 31, 2014, as stipulated in Clause 49 of the Listing Agreement of the said Company with Stock Exchanges in India.

The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement. We state that such compliance is neither an assurance as to the future viability of the Company nor the e3ectiveness with which the management has conducted the a3airs of the Company.

For S. R. Batliboi & Associates LLP

Chartered Accountants

ICAI Firm Registration No: 101049W

per Nilangshu Katriar

Partner

Membership No: 58814

Place: Gurgaon

Date: April 29, 2014

Annexure B

Information relating to conservation of energy, technology absorption, research and development, and foreign exchange earnings and outgo forming parts of Directors’ Report in terms of Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988

Conservation of Energy and Technology Absorption

The information in Part A and B, pertaining to conservation of energy and technology absorption, are not applicable to Bharti Airtel, as it is a telecommunication services provider. However, the Company requires energy for its operations and every endeavour has been made to ensure the optimum energy use, avoid wastage and conserve energy as much as possible.

The Company continuously evaluates global innovation and technology as a benchmark and, whenever required, enters into arrangements to avail of the latest technology trends and practices.

Foreign Exchange Earnings and Outgo

Activities relating to initiatives taken to increase exports; development of new export markets for products and services, and export plans.

International Long-distance Business

The Company has a global footprint with services in 26 countries with 13 points of presence (PoPs). It continues to focus on emerging markets. The infrastructure establishes a seamless connectivity globally, o3ering at least three cables on every route, thereby providing unparalleled diversity and resilience. The Company witnessed growth in its long-distance voice business, emerging among the Top 10 Global Carriers. It believes that its presence and operations in developing markets, especially Asia and Africa, coupled with strong bilateral global relationships, will further strengthen its position by increasing global tra3c share.

Telecom Services in Other Countries

Bharti Airtel Lanka (Private) Limited is Sri Lanka’s fastest growing wireless service provider. It expanded its footprint by starting commercial operations in the country’s eastern and northern parts. Airtel, at Sri Lanka, ended the financial year with 1.7 Mn customers. The Company continues to gain leadership in both incremental customer market share and revenue market share through aggressive marketing and strong distribution network.

Airtel Bangladesh Limited continues to grow and currently has over 6.9 Mn customers. The Company has 125 distributors and over 117,000 retailers across the country. In the six players markets, which are extremely competitive for the operators, the Company’s immediate focus is to ensure faster quality network rollout across the country and build a strong dynamic brand. As in March 2014, Airtel Bangladesh Limited reached population coverage of about 80%.

Airtel Africa continues to grow with the ending revenue earning customer base for the year at 69.4 Mn. Airtel has further consolidated its market position in Nigeria and has been declared as the second largest telecommunications services provider in the country by customer numbers, basis latest research by market regulator. This is an indication that Bharti Airtel’s investment in Sub-Saharan Africa’s largest economy is bearing fruit. Network rollout continued aggressively, with the total number of sites ending at 17,792 at the end of March 2014.

Total foreign exchange used and earned for the year:

(a) Total Foreign Exchange Earning Rs. 35,035 Mn

(b) Total Foreign Exchange Outgo Rs. 46,272 Mn

Annexure C

Information Regarding The Employees Stock Option Scheme (As on March 31, 2014)

Sl. No. Particulars ESOP Scheme 2005 ESOP Scheme 2001
1) Number of stock options granted 27,397,047* 40,680,078**
2) Pricing Formula Exercise Price not less than the par value of the equity share and not more than the price prescribed under Chapter VII of the SEBI (Issue of Capital and Disclosure Requirements) Regulation 2009 on Grant Date 29,015,686 @ 11.25
1,760,000 @ 0.45
4,380,000 @ 35.00
142,530@ 0.00
5,316,862 @ 5.00
40,000 @ 60.00
25,000 @ 110.50
3) Options vested 23,537,619 39,302,100
4) Number of options exercised 6,638,986 30,501,709
5) Number of shares arising as a result of exercise of option during the FY 2013-14 Nil Nil
6) Number of options lapsed 14,588,587 9,639,383
7) Money realised by exercise of options 656,241,988 391,094,165
8) Total number of options in force 6,169,474 538,986
9) Options granted to senior managerial personnel during the FY 2013-14
Mr. Gopal Vittal Nil 150,000
10) Diluted earning per share (EPS) as per AS 20 N.A. N.A.
11) Di3erence between the employees compensation cost based on intrinsic value of the Stock and the fair value for the year and its impact on profits and on EPS of the Company N.A. N.A.
12) a) Weighted average exercise price Rs. 212.08 a) Rs. 11.25; Rs. 0.45;
Rs. 35; Rs. 0; Rs. 5;
Rs. 60; Rs. 110.5
b) Weighted average fair value Rs. 185.12 b) NA; NA; NA; NA;
Rs. 264.27; Rs. 84.43;
Rs. 357.63
13) Method and significant assumptions used to estimate the fair values of options Black Scholes / Lattice Valuation Model / Monte Carlo Simulation
(i) risk free interest rate i) 8.45% p.a to 8.53% p.a (The Government Securities curve yields are considered as on valuation date)
(ii) expected life ii) 48 to 60 months
(iii) expected volatility iii) 39%
(iv) expected dividends iv) 20% (Dividend yield of 0.32%)
(v) market price of the underlying share on grant date v) Rs. 337.40 per equity share

Notes:

* Granted 8,662,495 options out of the options lapsed over a period of time.

** Granted 9,000,078 options out of the options lapsed over a period of time.

1. The options granted to the senior managerial personnel under both the schemes are subject to the adjustments as per the terms of respective performance share plan.

2. During the year, the ESOP Compensation Committee had revised the performance measures of performance linked options granted to Mr. Manoj Kohli under ESOP scheme 2001 and 2005; Mr. Gopal Vittal under ESOP scheme 2001.

3. During the year, the ESOP Compensation Committee had revised the performance measures of Long Term Incentive Plan - 2011 read with ESOP scheme 2005.

4. Other than the employee stated in point no. 9, no other employee was granted stock options exceeding 5% of the total options granted during the year.

5. No employee was granted stock options exceeding 1% of the issued capital during the year.

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