Together good things happen - Airtel

24.Operating lease - As a Lessee
The lease rentals charged during the year for
cancelable/non-cancelable leases relating to rent of
building premises and cell sites as per the agreements and
maximum obligation on long-term non-cancelable
operating leases are as follows:
(Rs '000)
Particulars As at
As at
March 31,2010 March 31, 2009
Lease Rentals (Excluding
Lease Equalisation Reserve)
Obligations on non
cancelable leases :
34,626,021 27,689,266
Not later than one year
Later than one year
but not later
33,279,040 30,102,470
than five years 84,316,547 75,778,742
Later than five years 133,690,403 136,829,016
Total 251,285,990 242,710,228
The escalation clause includes escalation at various periodic
levels ranging from 0 to 50%, includes option of renewal
from 1 to 99 years and there are no restrictions imposed on
lease arrangements.
Operating Lease – As a Lessor
i) The Company has entered into a non–cancelable lease
arrangement to provide approximately 100,000 Fiber pair
kilometers of dark fiber on indefeasible right of use (IRU)
basis for a period of 18 years. The lease rental receivable
proportionate to actual kilometers accepted by the
customer is credited to the Profit and Loss Account on a
straight – line basis over the lease term. Due to the nature
of the transaction, it is not possible to compute gross
carrying amount, depreciation for the year and
accumulated depreciation of the asset given on operating
lease as at March 31, 2010 and accordingly, disclosures
required by AS 19 is not provided.
ii) The future minimum lease payments receivable are:
Particulars As at
(Rs '000)
As at
March 31,2010 March 31, 2009
Not later than one year
Later than one year
but not later than
170,158 164,081
five years 438,056 481,121
Later than five years 429,034 554,772
Total 1,037,248 1,199,974
25.Finance Lease - as a Lessee
The Company entered into a composite IT outsourcing
agreement, whereby the vendor supplied fixed assets and
IT related services to the Company. Based on the risks and
26.The breakup of net Deferred Tax Asset/ (Liability) as on
March 31, 2010 is as follows:
Particulars As at
(Rs '000)
As at
March March
31,2010 31, 2009
Deferred tax Assets
Provision for doubtful debts / advances
charged in financial statement but
allowed as deduction under the
Income Tax Act in future years
(to the extend considered realisable) 4,703,292 4,116,922
Lease Rent Equilization charged in
financial statement but allowed
as deduction under the Income Tax
Act in future years on actual
payment basis 1,633,773 796,399
Foreign exchange fluctuation and
MTM losses charged in financial
statement but allowed as deduction
under the Income Tax Act in future
years (by way of depreciation
and actual realisation, respectively) 737,987 3,649,311
Other expenses claimed as deduction
in the financial statement but allowed
as deduction under Income Tax Act
in future year on actual payment (Net) 887,841 610,483
Gross Deferred Tax Assets 7,962,893 9,173,116
Deferred Tax Liabilities
Bharti Airtel Annual Report 2009-10
rewards incident to the ownership, the fixed asset and
liability are recorded at the fair value of the leased assets at
the time of receipt of the assets, since it is not possible for
the Company to determine the extent of fixed assets and
services under the contract at the inception of the
contract. These assets are depreciated over their useful
lives as in the case of the Company’s own assets.
Since the entire amount payable to the vendor towards
the supply of fixed assets and services during the year is
accrued, the disclosures as per AS 19 are not applicable.
There are no restrictions imposed on lease arrangements.
Depreciation claimed as deduction
under Income Tax Act but chargeable
in the financial statement in
future years (7,995,436) (5,820,367)
Less: Transfer Under the Scheme
of Arrangement - (79,772
Add: Acquired Under the Scheme of Merger - (1,874)
Gross Deferred Tax Liabilities (7,995,436) (5,902,013)
Net Deferred Tax Assets / (Liabilities) (Net) (32,543) 3,271,103
The tax impact for the above purpose has been arrived at by applying a tax
rate of 33.99% being the substantively enacted tax rate for Indian companies
under the Income Tax Act, 1961
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