21.Forward Contracts & Derivative Instruments The Group’s activities expose it to a variety of financial risks, including the effects of changes in foreign currency exchange rates and interest rates. The Group uses derivative financial instruments such as foreign exchange contracts, Option contracts and interest rate swaps to manage its exposures to interest rate and foreign exchange fluctuations. The following table details the status of the Group’s exposure as on March 31, 2010: Sr Particulars Notional Value Notional Value No (March 31, 2010) (March 31, 2009) A For Loan related exposures * a) Forwards 25,777,373 58,581,419 b) Options 15,985,406 16,087,384 c) Interest Rate Swaps 10,965,195 12,572,404 Total 52,727,974 87,241,206 B For Trade related exposures * a) Forwards 1,467,050 5,347,203 b) Options 1,986,160 534,975 Total 3,453,210 5,882,178 C Unhedged foreign currency borrowing 22,127,125 34,834,314 D Unhedged foreign currency payables 19,753,099 30,470,083 E Unhedged foreign currency receivables 931,039 - *All derivatives are taken for hedging purposes only and trade related exposure includes hedges taken for forecasted receivables. The Group has accounted for derivatives, which are covered under the Announcement issued by the ICAI, on marked-to-market basis and has recognized reversal of losses of Rs 42,467 thousand for the year ended March 31, 2010 [recorded reversals of losses for earlier period of Rs 1,835,399 thousand for the year ended March 31, 2009 (including reversal of losses recognised in earlier periods Rs 1,230,080 thousand towards embedded derivatives)] 22.During the year ended March 31, 2005 the Company issued USD 115,000,000 Zero Coupon Convertible Bonds due 2009 (the “FCCBs”). The FCCBs are convertible at any time on or after June 12, 2004 (or such earlier date as is notified to the holders of the FCCBs by the Issuer) up to April 12, 2009 by holders into fully paid equity shares with full voting rights with a par value of Rs 10 each of the Issuer (“Shares”) at an initial Conversion Price (as defined in the “Terms and Conditions of the FCCBs”) of Rs 233.17 per share with a fixed rate of exchange on conversion of Rs 43.56 = USD 1.00. The Conversion Price is subject to adjustment in certain circumstances. The FCCBs could be redeemed, in whole or in part, at the option of the Issuer at any time on or after May 12, 2007 and prior to April 12, 2009, subject to satisfaction of certain conditions, at their “ Early Redemption Amount” (as defined in the “Terms and Conditions of the FCCBs”) at the date fixed for such redemption if the “Closing Price” (as defined in the “Terms and Conditions of the FCCBs”) of the Shares translated into U.S. dollars at the “prevailing rate” (as defined in the “Terms and Conditions of the FCCBs”) for each of 30 consecutive “Trading Days” (as defined in the “Terms and Conditions of the FCCBs”), the last of which occurs not more than five days prior to the date upon which notice of such redemption is published, is greater than 120 percent of the “Conversion Price” (as defined in the “Terms and Conditions of the FCCBs”) then in effect translated into U.S. dollars at the rate of Rs 43.56 = USD 1.00. The FCCBs could also be redeemed in whole, and not in part, at any time at the option of the Issuer at their Early Redemption Amount if less than 5 percent in aggregate principal amount of the FCCBs originally issued is outstanding. The FCCBs could also be redeemed in whole, at any time at the option of the Issuer at their Early Redemption Amount in the event of certain changes relating to taxation in India. The Issuer could, at the option of any holder of any FCCBs, repurchase at the Early Redemption Amount such FCCBs at such time as the Shares cease to be listed or admitted to trading on the NSE or upon the occurrence of a “Change of Control” (as defined in the “Terms and Conditions of the FCCBs”) in respect of the Issuer. These FCCBs were listed in the Singapore Exchange Securities Trading Limited (the “SGX-ST”). The Company has during the year ended March 31, 2010, converted FCCBs equivalent to USD 350,000 into 65,385 equity shares of the Company at the option exercised by the bond holders which is as follows: Date of Allotment No. of Shares FCCB Value Allotted (USD) May 1, 2009 65,385 350,000 The balance FCCBs equivalent to USD 50,000 have been redeemed at 111.84% of their principal amount after completion of the statutory formalities. As of March 31, 2010, there are no FCCBs pending for conversion into equity shares. 23.The Boards of Directors in its meeting held on April 29, 2009 had proposed dividend of Rs 2 per share, which was duly approved by the shareholders of the Company in the annual general meeting held on August 21, 2009. Accordingly, dividend and tax thereon on shares issued from April 1, 2009 to August 21, 2009 (record date for payment of dividend), has been accounted for in these financial statements.
24. As at March 31, 2010 the accumulated losses of Bharti Telemedia Limited, Bharti <strong>Airtel</strong> (Canada) Limited, Bharti <strong>Airtel</strong> (USA) Limited, Bharti Infratel Ventures Limited, Bharti <strong>Airtel</strong> Lanka (Pvt) Limited and Bharti <strong>Airtel</strong> (Hongkong) Limited exceed the networth of the respective companies. However, in view of the support from Bharti <strong>Airtel</strong>, the holding Company, the accounts of these companies including Bharti <strong>Airtel</strong> Services Limited, Bharti <strong>Airtel</strong> (Singapore) Private Limited, Bharti <strong>Airtel</strong> Holdings (Singapore) Pte Limited and Bharti <strong>Airtel</strong> (UK) Limited, are prepared on a going concern basis. Bharti <strong>Airtel</strong> Annual Report 2009-10 25. The Board of Directors recommended a final dividend of Re 1 per equity share of Rs 5 each (20% of face value) for financial year 2009-10. The payment is subject to the approval of the shareholders in the ensuing Annual General Meeting of the Company 26. Previous year figures have been regrouped / reclassified where necessary to conform to the current year’s classification. 157
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