Together good things happen - Airtel

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Information relating to conservation of energy, technology absorption, research and development and foreign exchange earnings and outgo forming part 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, being a telecommunication services provider. However, the Company requires energy for its operations and every endeavor has been made to ensure the optimum use of energy, avoid wastage and conserve energy as far 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 EARNING AND OUTGO Activities relating to export initiatives taken to increase exports; development of new export markets for products and services; and export plans; International Long Distance Business The Company’s long distance business has seen significant growth and with India’s increasing integration into the global macro economy, further growth is anticipated. The Company has strong relationships for under-sea networks and continues to look for opportunity to invest in major cable systems to increase its presence and share of global traffic. International Calling Card Services The Company offers cost effective and reliable international calling services (Airtel CallHome) and Value Added Services, through its wholly owned subsidiary companies and connects the widespread NRI population in USA, UK, Canada and Singapore to their families in India and several other locations worldwide. The Company also plans to extend its wide range of services to other countries of the world through its global network. Telecom Services in other countries The Company continuously explores and evaluates various opportunities for growth and expansion inside and outside the country organically and through alliances, Annexure - B mergers/acquisitions in identified markets, subject to availability of licenses, growth potential and cost as well as other relevant factors. Bharti Airtel entered its second year of operations in Sri Lanka through its wholly owned subsidiary Bharti Airtel Lanka (Pvt) Ltd. Marketing voice and data solutions through a state of the art 3.5G network, the operations crossed one million revenue earning customers’ mark in less than 6 months of launch. Having gained leadership on both incremental customer market share and revenue market share indices, Bharti Airtel’s first international foray has been recognised as Sri Lanka’s fastest growing wireless service provider. The Company has commenced its expansion into the newly liberated North and East geographies of the country, which were inaccessible until now. In January 2010, the Company acquired 70% stake in Warid Telecom, Bangladesh (Warid) through infusion of fresh equity of approx USD 300 mn. Warid offers mobile services across all 64 districts of Bangladesh with a distribution network of 124 distributors and 34,000 retailers across the country. On March 30, 2010, Company entered into a legally binding definitive agreement with Zain Group to acquire Zain Africa B.V. based on an enterprise value of USD 10.7 bn. Zain’s African mobile services operations cover 15 countries with a total customer base of over 42 mn. With telecom penetration of approximately 32%, Zain covers a total population of over 450 mn in the region. The countries in which Zain Africa operates are - Burkina Faso, Chad, Congo Brazzaville, Democratic Republic of Congo, Gabon, Ghana, Kenya, Madagascar, Malawi, Niger, Nigeria, Sierra Leone, Tanzania, Uganda and Zambia. Zain is the market leader in 10 of the 15 countries and second in 4 countries. Along with Zain Africa B.V., the Company is the first Indian brand to go truly global with a footprint that covers over 1.8 bn people, with operations in 18 countries across Asia and Africa having a customer base of over 180 mn. This cross-border transaction is expected to further strengthen the historic Indo-Africa economic & social ties and provide a big boost to South- South cooperation. Total foreign exchange used and earned for the year: (a) Total Foreign Exchange Earning Rs 17,943 mn (b) Total Foreign Exchange Outgo Rs 34,583 mn
Information regarding the Employees Stock Option Scheme (as on March 31, 2010) Sl. Particulars ESOP Scheme 2005 ESOP Scheme 2001 No. 1) Number of stock options granted 21,337,264* 39,361,579** 2) Pricing formula Exercise Price not less than the par 29,015,686 @ 11.25 value of equity share and not more 1,760,000 @ 0.45 than the price prescribed under Chapter 4,380,000 @ 35.00 VII of the SEBI (Issue of Capital and 142,529 @ 0.00 Disclosure Requirements) Regulation 3,998,364 @ 5.00 2009 on Grant Date 40,000 @ 60.00 25,000 @ 110.50 3) Option vested 9,708,730 36,857,036 4) Number of options exercised 2,226,368 28,549,505 5) Number of shares arising as a result of exercise of option 2,226,368 Nil 6) Number of option lapsed 6,281,934 8,516,872 7) Money realized upon exercise of options Rs 283,712,555 Rs 375,268,085 8) Total number of options in force 12,828,962 2,295,202 9) Options granted to senior managerial personnel Ms. Abhilasha Hans 26,600 Nil Mr. Ajai Puri 42,000 Nil Mr. Atul Bindal 61,400 Nil Mr. Deven Khanna 10,600 Nil Dr. Jai Menon 59,000 Nil Mr. Joachim Horn Nil 90,000 Ms. Jyoti Pawar 20,000 Nil Mr. K. Shankar 39,000 Nil Mr. Manik Jhangiani Nil 150,000 Mr. Manoj Kohli 91,400 Nil Mr. N. Arjun 34,600 Nil Mr. Narender Gupta 10,600 Nil Mr. S. Asokan 31,400 Nil Mr. Sanjay Kapoor 89,000 Nil Mr. Sarvjit Singh Dhillon 10,600 Nil Ms. Shamini Ramalingam 11,400 Nil Mr. Srinivas K 59,000 Nil Ms. Vijaya Sampath 3,534 Nil 10) Diluted earning per share (EPS) as per AS 20 0.0017 NA 11) Difference between the employees compensation NA 38,04,341 cost based on intrinsic value of the stock and the (0.001) fair value for the year and its impact on profits and on EPS of the Company Annexure - C 12) a) Weighted average exercise price Rs 270.13 a) Rs 11.25; Re 0.45; Rs 35; Rs 0; Rs 5; Rs 60; Rs 110.5 b) Weighted average fair price Rs 155.11 b) NA; NA; NA; Rs 69.70; Rs 251.46; Rs 84.43; Rs 357.63 13) Method and significant assumptions used to Black Scholes / Lattice Valuation Model estimate the fair values of options (i) risk free interest rate i) 6.44% p.a. to 7.86% p.a. (The Government Securities curve yields considered as on valuation date) (ii) expected life ii) 48 to 66 months (iii) expected volatility iii) 36.13% to 37.47% (assuming 250 trading days to annualize) (iv) expected dividends iv) 20% (Dividend yield of 0.31%) (v) market price of the underlying share on grant date v) Rs 307.42 to Rs 412.13 per equity share Bharti Airtel Annual Report 2009-10 * Granted 2,602,712 options out of the options lapsed over a period of time ** Granted 7,681,579 options out of the options lapsed over a period of time 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 There is no variation in the terms of options during the year The quantum and the price of the options have been adjusted due to sub-division in the face value of shares Other than the employees stated in point no. 9, no other employee was granted stock options exceeding 5% of the total grants or exceeding 1% of the issued capital during the year 39
Page 1 and 2: Together good things happen... Bhar
Page 3 and 4: Table of contents 1 2 3 4 5 6 7 8 9
Page 5 and 6: Corporate history and Top 30 shareh
Page 7 and 8: Awards & honours With a belief that
Page 9 and 10: Chairman’s message Closer home, w
Page 11 and 12: To be provided Akhil Gupta Chua Soc
Page 13 and 14: Pulak Chandan Prasad Rakesh Bharti
Page 15 and 16: Bharti Airtel Annual Report 2009-10
Page 17 and 18: CEO (India & South Asia)’s Airtel
Page 19 and 20: Airtel Experience Last year was tru
Page 21 and 22: Together good things happen custome
Page 23 and 24: Together good things happen Bharti
Page 27 and 28: Taking everybody along Bharti Airte
Page 33 and 34: Photos by Amit Bhatia, Legal & Regu
Page 35 and 36: exemption to the Company from attac
Page 37 and 38: In July 2009, the Company has sub-d
Page 39: egarding compliance of conditions o
Page 43 and 44: • Restriction on Sale of Equity O
Page 45 and 46: FINANCIAL PERFORMANCE (Amount in Rs
Page 47 and 48: INTERNAL CONTROL SYSTEMS The Compan
Page 49 and 50: consent. The appointments of such d
Page 51 and 52: g) Tenure of independent directors
Page 53 and 54: directors will be entitled to commi
Page 55 and 56: - Matters required to be included i
Page 57 and 58: Key Responsibilities Key responsibi
Page 59 and 60: Special resolutions passed at the l
Page 61 and 62: MEANS OF COMMUNICATION The quarterl
Page 63 and 64: Distribution of shareholding By num
Page 65 and 66: The Board of directors, Bharti Airt
Page 67 and 68: Annexure referred to in paragraph 4
Page 69 and 70: (x) The Company has no accumulated
Page 73 and 74: Particulars C. Cash flow from finan
Page 75 and 76: Particulars SCHEDULE : 3 SECURED LO
Page 77 and 78: Particulars SCHEDULE : 6 INVESTMENT
Page 79 and 80: Particulars SCHEDULE : 9 CASH AND B
Page 83 and 84: SCHEDULE: 21 STATEMENT OF SIGNIFICA
Page 85 and 86: Forward Exchange Contracts covered
Page 87 and 88: Minimum Alternative Tax (MAT) credi
Page 89 and 90: Unless otherwise stated below, the
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6. Employee benefits a) During the
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e) The estimates of future salary i
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epayable on disconnection, net of o
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2008-09 Particulars Year ended Purc
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) Details of trade investments purc
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Bharti Airtel Annual Report 2009-10
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Related Party Transaction for 2009-
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24.Operating lease - As a Lessee Th
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(v) The Information concerning stoc
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Particulars As at As at March 31, 2
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Auditors' Report to The Board of Di
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Particulars C. Cash flow from finan
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Particulars SCHEDULE : 2 (Cont.) Pr
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Particulars SCHEDULE : 6 INVESTMENT
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Particulars SCHEDULE : 12 CURRENT L
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ecognised over the period of servic
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Standard 15 (revised), “Employee
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SCHEDULE: 22 NOTES TO THE FINANCIAL
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obligations fully due to certain no
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c) Reconciliation of opening and cl
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Joint Venture Entities: b) The Comp
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13. Particulars of securities charg
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(Rs '000) Related Party Transaction
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17. Leases a) Operating Lease - As
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d) 2006 Plan under the Old Scheme T
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24. As at March 31, 2010 the accumu
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Notice is hereby given that the fif
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EXPLANATORY STATEMENT (Under sectio
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Mr. Rakesh Bharti Mittal Date of bi
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To Karvy Computershare Private Limi
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Bharti Airtel Limited, Bharti Cresc
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Together good things happen - Airtel

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