Together good things happen - Airtel

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with respect to labour cases and a potential claim for liquidated damages. The management believes that, based on legal advice, the outcome of these contingencies will be favourable and that a loss is not probable. No amounts have been paid or accrued towards these demands. k) Bharti Mobinet Limited (‘BMNL’) litigation Bharti Airtel is currently in litigation with DSS Enterprises Private Limited (DSS) (0.34 per cent equity interest in erstwhile Bharti Cellular Limited (BCL)) for an alleged claim for specific performance in respect of alleged agreements to sell the equity interest of DSS in erstwhile BMNL to Bharti Airtel. The case filed by DSS to enforce the sale of equity shares before the Delhi High Court had been transferred to District Court and was pending consideration of the Additional District Judge. This suit was dismissed in default on the ground of nonprosecution. DSS had filed an application for restoration of the suit but has subsequently withdrawn the restoration application. In respect of the same transaction, Crystal Technologies Private Limited (‘Crystal’), an intermediary, has initiated arbitration proceedings against the Company demanding Rs 194,843 thousand regarding termination of its appointment as a consultant to negotiate with DSS for the sale of DSS stake in erstwhile BMNL to Bharti Airtel. The Ld. Arbitrator has partly allowed the award for a sum of Rs 31,222 thousand, 9% interest from period October 3, 2001 till date of award (i.e May 28, 2009) included in Note 3 (b) above and a further 18% interest from date of award to date of payment. The Company has filed an appeal against the said award. Hon’ble Delhi High Court, on October 28, 2009 has directed both the parties to file their submission before the hearing on May 7, 2010. DSS has also filed a suit against a previous shareholder of BMNL and Bharti Airtel challenging the transfer of shares by that shareholder to Bharti Airtel. The suit was subsequently dismissed as frivolous, which has been appealed to in the Delhi High Court by DSS and subsequently transferred to District Court. DSS has also initiated arbitration proceedings seeking direction for restoration of the cellular license and the entire business associated with it including all assets of BCL/BMNL to DSS or alternatively, an award for damages. An interim stay has been granted by the Delhi High Court with respect to the commencement of arbitration proceedings. The stay has been made absolute. Further against the above Order of Single Judge making the stay in favour of Bharti absolute, DSS filed an appeal before the Division Bench of Delhi High Court. The matter has been admitted, whereafter the matter reached for arguments and was dismissed on account of non prosecution. The liability, if any, of Bharti Airtel arising out of above litigation cannot be currently estimated. Since the amalgamation of BCL and erstwhile Bharti Infotel Limited (BIL) with Bharti Airtel, DSS, a minority shareholder in BCL, had been issued 2,722,125 equity shares of Rs 10 each (5,444,250 equity shares of Rs 5 each post split) bringing the share of DSS in Bharti Airtel down to 0.14% as at March 31, 2010. The management believes that, based on legal advice, the outcome of these contingencies will be favorable and that a loss is not probable. Accordingly, no amounts have been accrued or paid in regard to this dispute. 4. Export Obligation Bharti Airtel has obtained licenses under the Export Promotion Capital Goods (‘EPCG’) Scheme for importing capital goods at a concessional rate of customs duty against submission of bank guarantee and bonds. Under the terms of the respective schemes, the Company is required to export goods of FOB value equivalent to, or more than, five times the CIF value of imports in respect of certain licenses and eight times the duty saved in respect of licenses where export obligation has been refixed by the order of Director General Foreign Trade, Ministry of Finance, as applicable within a period of eight years from the import of capital goods. The Export Promotion Capital Goods Scheme, Foreign Trade Policy 2004-2009 as issued by the Central Government of India, covers both manufacturer exporters and service providers. Accordingly, in accordance with Clause 5.2 of the Policy, export of telecommunication services would also qualify. Accordingly, the Company is required to export goods and services of FOB value of Rs 1,002,766 thousand (March 31, 2009 Rs 2,596,473 thousand) by February 22, 2018. 5. a) Estimated amount of contracts to be executed on capital account and not provided for (net of advances) Rs 15,684,080 thousand as at March 31, 2010 (March 31, 2009- Rs 29,526,399 thousand). b) Under the IT Outsourcing Agreement, the Group has commitments to pay Rs 6,597,050 thousand as at March 31, 2010 (March 31, 2009 - Rs 7,563,213 thousand) comprising of finance lease and service charges. In addition, the future monthly rentals under this contract are determined on a revenue share basis over the non-cancellable period of the agreement.
6. Employee benefits a) During the year, the Company has recognized the following amounts in the Profit and Loss Account Defined Contribution Plans Particulars For the year (Rs '000) For the year ended March ended March 31, 2010 31, 2009 Employer’s Contribution to Provident Fund *@ 478,025 430,173 Employer’s Contribution to Super annuation Fund # 100 2,162 Employer’s Contribution to ESI * 131 755 * Included in Contribution to Provident and Other Funds (Refer Schedule 16) # Included in Salaries, Wages and Bonus (Refer Schedule 16) @ Includes Contribution to Defined Contribution Plan for Key Managerial Personnel (Refer Note 16 below) Defined Benefit Plans Gratuity liability and leave encashment liability are defined benefit obligations and are provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year. For the Year ended March 31, 2010 Particulars Gratuity # (Rs '000) Leave Encashment # Funded Unfunded Total Unfunded Current service cost 96,473 69,444 165,917 136,017 Interest cost Expected Return on 37,667 11,694 49,362 35,823 plan assets (5,691) - (5,691) - Actuarial (gain) / loss 7,773 129,945 137,718 127,443 Past service cost Curtailment and - - - - Settlement cost / (credit) Net gratuity/ - - - - Leave encashment cost 136,222 211,084 347,306 299,283 For the Year ended March 31, 2009 Particulars Gratuity # (Rs '000) Leave Encashment # Funded Unfunded Total Unfunded Current service cost 137,385 16,290 153,675 137,873 Interest cost Expected Return on 24,644 8,777 33,421 34,851 plan assets (4,894) - (4,894) - Actuarial (gain) / loss 121,656 (7,094) 114,562 34,078 Past service cost Curtailment and - - - - Settlement cost / (credit) Net gratuity/ - - - - Leave encashment cost 278,791 17,973 296,764 206,802 # Included in Salaries, Wages and Bonus (Refer Schedule 16) b) The assumptions used to determine the benefit obligations are as follows : For the Year ended March 31, 2010 Particulars Gratuity Leave Encashment Discount Rate Expected Rate of increase in 7.50% 7.50% Compensation levels Expected Rate of Return on 8.00% 8.00% Plan Assets Expected Average remaining 7.50% N.A. working lives of employees (years) 24.71 years 24.71 years For the Year ended March 31, 2009 Bharti Airtel Annual Report 2009-10 Particulars Gratuity Leave Encashment Discount Rate Expected Rate of increase in Compensation levels 7.50% 7.50% - 1st Three Years 15.00% 15.00% - Thereafter Expected Rate of Return on 7.00% 7.00% Plan Assets Expected Average remaining 7.50% N.A. working lives of employees (years) 25.23 years 25.23 years 89
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Together good things happen... Bhar
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Table of contents 1 2 3 4 5 6 7 8 9
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Corporate history and Top 30 shareh
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Awards & honours With a belief that
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Chairman’s message Closer home, w
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To be provided Akhil Gupta Chua Soc
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Pulak Chandan Prasad Rakesh Bharti
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Bharti Airtel Annual Report 2009-10
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CEO (India & South Asia)’s Airtel
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Airtel Experience Last year was tru
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Together good things happen custome
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Together good things happen Bharti
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Taking everybody along Bharti Airte
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Photos by Amit Bhatia, Legal & Regu
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exemption to the Company from attac
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In July 2009, the Company has sub-d
Page 39 and 40: egarding compliance of conditions o
Page 41 and 42: Information regarding the Employees
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 71 and 72: Bharti Airtel Annual Report 2009-10
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: Unless otherwise stated below, the
Page 93 and 94: e) The estimates of future salary i
Page 95 and 96: epayable on disconnection, net of o
Page 97 and 98: 2008-09 Particulars Year ended Purc
Page 99 and 100: ) Details of trade investments purc
Page 103 and 104: Related Party Transaction for 2009-
Page 111 and 112: 24.Operating lease - As a Lessee Th
Page 113 and 114: (v) The Information concerning stoc
Page 115 and 116: Particulars As at As at March 31, 2
Page 117 and 118: Auditors' Report to The Board of Di
Page 121 and 122: Particulars C. Cash flow from finan
Page 123 and 124: Particulars SCHEDULE : 2 (Cont.) Pr
Page 125 and 126: Particulars SCHEDULE : 6 INVESTMENT
Page 127 and 128: Particulars SCHEDULE : 12 CURRENT L
Page 133 and 134: ecognised over the period of servic
Page 135 and 136: Standard 15 (revised), “Employee
Page 137 and 138: SCHEDULE: 22 NOTES TO THE FINANCIAL
Page 139 and 140: 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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Related Party Transaction for 2009-
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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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