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Building and Sharing Vital Infrastructure

Building and Sharing Vital Infrastructure

Bharti Crescent, 1 Nelson Mandela Road
Vasant Kunj, Phase II, New Delhi - 110 070 www.bharti-infratel.com Annual Report 2012-13

Table of Contents
Corporate Information

1

Board of Directors

2

Performance at a Glance

4

Joint Message from the Chairman and Managing Director

6

CEO’s Message

8

Corporate Social Responsibility

10

Directors’ Report

15

Management Discussion and Analysis

26

Report on Corporate Governance

32

Secretarial Audit Report

47

Standalone Financial Statements with Auditors’ Report

48

Consolidated Financial Statements with Auditors’ Report

84

Notice of Annual General Meeting

122

Glossary

132

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Corporate Information
Board of Directors
Mr. Rakesh Bharti Mittal – Chairman
Mr. Akhil Gupta – Managing Director
Mr. Bharat Sumant Raut
Mr. Jitender Balakrishnan
Ms. Leena Srivastava
Mr. Murray Philip King
Mr. N Kumar
Mr. Sanjay Nayar
Mr. Sarvjit Singh Dhillon
Mr. Vinod Dhall
Chief Executive Officer
Mr. D S Rawat
Company Secretary and Compliance Officer
Mr. Anupam Garg
Statutory Auditors
M/s S.R. Batliboi & Associates LLP, Chartered Accountants
Internal Auditors
M/s Protiviti Consulting Private Limited
Registered Office
Bharti Crescent, 1, Nelson Mandela Road
Vasant Kunj, Phase – II, New Delhi 110 070
Head Office
901, Park Centra, Sector 30, NH-8, Gurgaon, Haryana - 122 001
Website
www.bharti-infratel.com

1

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Board of Directors
Rakesh Bharti Mittal is the Chairman of the Company and a non-independent and non-executive
Director. He holds a diploma in electronics and controls from the Y.M.C.A. Institute of Engineering,
Faridabad. He is currently the vice chairman and managing director of Bharti Enterprises, the co-chairman of Bharti Foundation and is on the board of various companies. He has, in the past, served as a member of Agricultural and Processed Food Products Export Development Authority and as the chairman of the various national committees of the Confederation of Indian Industry. He has received various awards in the past including ‘Entrepreneur of the Year Award’ from Ludhiana Management
Association.
Akhil Gupta is the Vice Chairman and Managing Director of the Company. He is a certified chartered accountant and a fellow member of ICAI. He has also completed an advanced management program with Harvard Business School, Harvard University, United States. He is presently the chairman of Tower
And Infrastructure Providers Association, TAIPA and the president of the Telecom Sector Skill Council.
He has received various awards including the ‘CEO of the Year’ award at the National Telecom Awards
2012, and the ‘CA Business Achiever Award’ at the ICAI Awards 2008. He was also honoured by the telecom magazine ‘Tele.net’ in 2012 for ‘Outstanding Contribution to the Telecom Sector’.

Bharat Sumant Raut is an independent and non-executive Director of the Company. He holds a bachelors’ degree in law and a bachelors’ degree in commerce from University of Bombay. He is also a chartered accountant and a fellow member of ICAI. He was, in the past, associated with Sharp and
Tannan, Chartered Accountants, as a partner, with Price Waterhouse, Chartered Accountants, as a partner and with B S R & Co., Chartered Accountants and B S R & Associates, Chartered Accountants, as their founding partner. Since 2006 he practices as an advocate.

Jitender Balakrishnan is an independent and non-executive Director of the Company. He holds a bachelors’ degree in mechanical engineering from University of Madras and a post-graduate diploma in industrial management from University of Bombay. He has experience in the financial sector with
IDBI Bank Limited where he was the Deputy Managing Director and thereafter an advisor to IDBI Bank
Limited. He is currently an advisor to various corporates besides serving as an independent director on the board of various companies.

Leena Srivastava is an independent and non-executive Director of the Company. She holds a degree of Doctor of Philosophy from Indian Institute of Science, Bangalore. She is the vice chancellor of TERI
University and an executive director at TERI, New Delhi. She has worked on a range of policy issues related to energy for economic growth, climate and the environment.

2

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Murray Philip King is a non-independent and non-executive Director of the Company. He holds a bachelors’ degree in commerce from University of Queensland and is a member of the Institute of Chartered Accountants in Australia. Murray King is Chief Financial Officer Group Consumer. He joined Optus in 2003 and has held the key positions of Chief Financial Officer (2009 - present), Deputy Chief Financial Officer (2007 – 2009),
Commercial Director Consumer (2005 – 2007) and Commercial Director Mobile (2003 – 2005). Before joining
Optus, Murray worked at Virgin Mobile as a Finance Director and Acting Joint Managing Director, Mincom
Limited and Voxson Limited as Chief Financial Officer. Murray’s extensive accounting, finance and audit experience was founded in global firms Price Waterhouse and Coopers & Lybrand.
N Kumar is an independent and non-executive Director of the Company. He is an electronics engineer and a fellow member of the Indian National Academy of Engineering. He is the vice chairman of The Sanmar
Group, Chennai and is the Honorary Consul General of Greece in Chennai. He is on the Board of various public companies and carries with him over four decades of experience in the spheres of Technology, Management and Finance. He is the Chairman of National Accreditation Board for Certification Bodies, which is a constituent of Quality Council of India. He is also a member of the Board of Governors of the Institute for Financial
Management & Research (IFMR) and several other educational institutions. He has also been associated with the Confederation of Indian Industry as its President in the past and chairs the CII Institute of Quality now.
Sanjay Nayar is a non-independent and non-executive Director of the Company. He holds a bachelors’ degree in science (mechanical engineering) from University of Delhi and a post graduate diploma in management from the Indian Institute of Management, Ahmedabad. He is currently the chief executive officer of KKR India Advisors Private Limited. Prior to joining KKR India Advisors Private Limited in 2009, he was at Citigroup for 25 years with the last 7 years from 2002 to 2009 as CEO for India and South Asia operations. Sarvjit Singh Dhillon is a non-independent and non-executive Director of the Company. He holds a bachelors’ degree in arts having followed an approved programme in accounting and finance, from
Middlesex University, United Kingdom and a masters’ degree in business administration from the
University of Birmingham, United Kingdom. He is also a fellow member of the Chartered Institute of
Management Accountants, United Kingdom and has completed the Stanford executive program from the
Stanford University, United States. Presently, he is the group chief financial officer of Bharti enterprises and has in the past served as the chief financial officer and director of strategy at the group level.

Vinod Dhall is an independent and non-executive Director of the Company. He holds a bachelors’ degree in law from University of Delhi and a masters’ degree in mathematics from University of Allahabad. He entered the Indian Administrative Service in 1966 and was the secretary - Ministry of Corporate Affairs,
Government of India before his retirement. He was also a member of the Competition Commission of
India until 2008. He has held various other positions with the Government of India. He has also been an ex-officio member of SEBI, Life Insurance Corporation, General Insurance Corporation and has been associated with the United Nations Industrial Development Organisation. He is presently a practising lawyer. 3

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Performance at a Glance
Particulars

UNITS

Financial Year Ended March 31
2011
2012

2010
Consolidated Operating Highlights
Total Towers
Total Co-locations
Average Sharing factor
Sharing Revenue per Tower per month
Sharing Revenue per Sharing Operator per month Consolidated Financials
Revenue1
EBITDA1
EBIT1
Cash profit from operations1
Profit before Tax
Profit after Tax
Capex
Operating Free Cash Flow1 #
Total Capital Employed
Net Debt
Shareholder's Equity
Key Ratios
EBITDA Margin2
EBIT Margin2
Net Profit Margin2
Net Debt to EBITDA (LTM)
Interest Coverage ratio (LTM)
Return on Capital Employed (LTM)
Incremental Return on Capital Employed
(LTM)3
Return on Shareholder's Equity (LTM)
Incremental Return on Shareholder's
Equity (LTM)3
Valuation Indicators
Market Capitalization
Enterprise Value
EV / EBITDA (LTM )
EPS (Diluted)
PE Ratio

2013

Nos
Nos
Times
`
`

73,921
124,819
1.57
53,452
33,968

78,442
142,086
1.75
60,724
34,665

79,064
149,908
1.85
64,931
35,025

82,083
156,608
1.90
66,034
34,717

` Mn
` Mn
` Mn
` Mn
` Mn
` Mn
` Mn
` Mn
` Mn
` Mn
` Mn

70,074
23,905
6,331
18,193
3,691
2,373
32,587
(10,853)
166,570
30,226
136,344

84,988
31,085
10,914
24,425
7,769
5,394
24,098
4,652
166,806
26,823
139,983

94,521
35,344
13,905
29,144
11,282
7,491
14,103
19,113
157,652
12,411
145,241

102,720
38,354
16,103
32,287
15,307
10,025
21,470
18,084
144,735
(27,190)
171,925

%
%
%
Times
Times
%
%

34.1%
9.0%
3.4%
1.26
6.75
4.0%
9.5%

36.6%
12.8%
6.3%
0.86
7.19
6.5%
47.8%

37.4%
14.7%
7.9%
0.35
8.68
8.6%
∞4

37.3%
15.7%
9.8%
(0.71)
9.72
10.7%
∞4

%
%

2.0%
0.8%

3.9%
16.7%

5.3%
47.1%

6.3%
15.9%

` Bn
` Bn
Times
`
Times

N.A
N.A
N.A
1.42
N.A

N.A
N.A
N.A
3.09
N.A

N.A
N.A
N.A
4.29
N.A

338
311
8.10
5.61
31.89

Revenue, EBITDA, EBIT, Cash profit from operations and Operating free cash flow are excluding other income.
EBITDA, EBIT and Net profit margin have been computed on revenue excluding other income.
Incremental Return on Capital employed and Shareholder’s equity is computed on an annual basis.
4.
Incremental Return on Capital employed is not ascertainable as capital employed as at the yearend was lower than capital employed as at the end of the corresponding previous period.
#
Operating free cash flow has been adjusted for change in estimate for site restoration obligation.
Note: Previous years’ figures have been regrouped/ rearranged wherever necessary to conform to current year’s classifications.
1.

2.
3.

4

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Total Towers
(Nos.)

Total Co-locations
(Nos.)
156,608

82,083

78,442

Average Sharing Factor
(Times)

1.90

149,908

1.85

142,086

79,064
124,819

1.75

73,921

1.57

FY 2010

FY 2011

FY 2012

FY 2013

FY 2010

Revenue1
(` Mn)

FY 2011

FY 2012

FY 2013

FY 2010

EBITDA1
(` Mn)

FY 2011

FY 2012

Profit after Tax
(` Mn)
38,354

102,720

FY 2013

10,025

35,344

94,521

7,491

31,085

84,988

70,074

5,394

23,905

2,373

FY 2010

1.

FY 2011

FY 2012

FY 2013

FY 2010

FY 2011

FY 2012

FY 2013

FY 2010

FY 2011

FY 2012

FY 2013

Revenue and EBITDA are excluding other income.

5

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Joint Message from the Chairman and
Managing Director
Dear Shareholders,
2012-13 turned out to be a year where multiple issues across the globe continued to weigh down the global economic growth. While there were pockets of exuberance, as displayed by some recoveries in the US and certain Asian economies, the Euro Zone continued to be saddled with an unprecedented debt crisis. Though performing relatively better than many global economies, the Indian economy too toiled this year, and its economic growth remained less than satisfactory.
In the midst of overall weakness in the economy, telecom industry in India had a particularly daunting year with significant regulatory and policy uncertainties ranging from cancellation of large number of licenses issued in 2008 by the Hon’ble Supreme Court of India to the prospects of large payouts by existing operators towards spectrum. This caused several operators to exit operations in the country while many scaled back further investments.
Many operators continue to remain somewhat tentative in their capital deployment plans and rollouts.
As you would recall, when we created this Company, we gave ourselves the dual objectives of ensuring that vital infrastructure in the form of towers was shared amongst operators in a non-discriminatory manner, and that no operator should find it feasible to build towers anymore because of tower companies offering significant savings in
OpEx and CapEx besides reducing time to market.

Today, every operator in the country is our customer and practically all operators prefer to lease towers from tower companies rather than build them for captive use.

6

]

We are pleased to state that your Company has ably achieved both these objectives. Today, every operator in the country is our customer and practically all operators prefer to lease towers from tower companies rather than build them for captive use.
The highlight of the business model of a tower company is its long term contracts resulting in an annuity model visà-vis revenues. As a result, while this year, the roll-outs by operators were subdued, your company nevertheless had a robust year with strong financial performance. With a year on year revenue and EBITDA growth of 8.7% and
8.5% respectively, the profit after tax exceeded ` 1,000 crore mark for the year with an increase of over 33% over last year.

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

We are now seeing many of our customers rolling out 3G network on the back of strong data growth last year. We believe that with likely resolution of regulatory issues soon, these roll-outs shall accelerate in the coming years. We are very well positioned to cater to their demand and garner a major share thereof, given our extensive network and sound financial position.
Another major highlight for the year was Bharti Infratel successfully completing its Initial Public Offer (IPO) in
December 2012 to raise ` 41,728 Mn, including ` 9,425 Mn from the offer for sale by some of our existing PE investors.
Enthusiastic participation by institutional investors resulted in the overall issue being oversubscribed. The overall issue was subscribed 1.26 times. The stock is today listed on the two Indian bourses, NSE and BSE. We moved past another key milestone when Bharti Infratel was included in the
FTSE global equity indices and recently in the Category A stocks of BSE.
Recognizing the importance of this sector, the government also fulfilled a long standing demand from the industry when it bestowed ‘infrastructure status’ on the telecom tower infrastructure services. We believe this step will entitle the sector to some fiscal and other benefits and will also encourage shaping up of Public Private Partnerships
(PPPs) in the sector.
People and Partners have been at the heart of our success as a business enterprise. Your Company has diligently built a cohesive and employee friendly work culture that emphasizes customer centricity, teamwork and continuous improvement. With regard to our Partners, we managed to strengthen existing relationships and carve out new ones to secure better costs and quality for the business. Our partnership with IBM to manage
IT systems has helped us successfully manage our large and distributed tower infrastructure using the state of the art Tower Operations Centre (TOC) along with process integration and automation.
As a socially responsible business group, we have always stayed focused on running our business in an environmentally sustainable manner. Your Company continued to deploy innovative ideas and capital to help find effective solutions to mitigate environmental

challenges. We are pleased to state that today your
Company has over 1,200 solar installations across its network. Major initiatives are underway to augment solar installations across the network in the coming year as part of our green initiatives to reduce carbon footprint. As a responsible corporate entity, we have undertaken several programs to sensitize people towards HIV/AIDS, in the North Eastern regions of the country. At the same time, our association with Bharti Foundation, the philanthropic arm of Bharti Group, to help promote the cause of education among underprivileged rural children, continue to positively impact village community through the year.
Overall, the year gone by can best be described as a constructive year and a year of consolidation. We were suitably able to demonstrate our operational excellence, our financial strength, the sustainability and resilience of our business model as well as the fundamental role that your Company plays in providing vital telecom services to the country. We are pleased that we are partnering with our customers to continuously improve their costs and efficiencies. We would like to express our sincere gratitude to all our customers, shareholders, partners, bankers and employees for their unwavering support during the year. As the telecom industry’s regulatory landscape becomes clearer, and voice and data services continue to witness strong growth, we see an exciting journey ahead for us and we do believe that your Company is well prepared to seize these growth opportunities.
We continue to look forward to your invaluable suggestions in the year ahead.

Rakesh Bharti Mittal
Chairman

Akhil Gupta
Managing Director

7

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

CEO’s Message
Dear Shareholders,
Telecom sector continues to be in the midst of a challenging regulatory environment. Lot of work is being done on various policy matters like unified license, spectrum pricing, auction of licenses, implementation of EMF radiation norms etc. which will have a far reaching impact on the industry and our customers. Post the uncertainty created by the cancellation of 122 telecom operator licenses by the Hon’ble Supreme Court in February 2012; we now see clarity emerging within the operators on their future course of action in the selected few markets. We are confident that the government will come up with an early resolution of these issues, keeping the larger aim of telecom affordability and rural penetration as per government’s key mandates.
The good news is the inclusion of telecom tower infrastructure services in “Infrastructure sub sector list” by the government in March 2012. We believe this step demonstrates the government’s focus on this vital infrastructure. We look forward to some of the benefits which have been passed to other Infrastructure companies in the past.

Industry is realigning from
Voice only to the reality of
Voice and Data.

8

]

From a consumer perspective, a big opportunity lies ahead of us. Despite phenomenal growth in the telecom sector during the last decade, mobile penetration in rural
India stands at around 40%. With a young and growing population of India, data is clearly the future of mobile telecom. Industry is realigning from Voice only to the reality of Voice and Data. Still at an early stage of this shift, as voice continues to be the mainstay of the telecom industry, all our customers have undertaken deployment of 3G installations to cater to the needs of emerging data centric environment, much the same way as ‘voice revolution’ happened in India.
We are seeing a data revolution with 25% Q-o-Q growth in data traffic reported by operators in the last one year. We are geared up to garner a lion’s share of market presented by these opportunities.

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

The most awaited and important milestone that the
Company achieved during the year was being listed on the
2 Indian bourses, NSE and BSE. With a successful listing, we believe we are well positioned to embark upon the next steps in customer service excellence journey and create value for our customers and shareholders.
Our Operational Excellence journey, which was initiated some time back, was augmented with service excellence journey last year with the core objective of excelling on all customer satisfaction aspects. Customer Satisfaction
Scores, based on an independent survey, has shown consistent improvement in quality scores across all aspects of customer service delivery. Not only has this cemented our relationships with the customer but has also translated into better financial performance for us and our customers.
Despite several regulatory and business developments impacting the telecom industry, the Company has achieved considerable success in gaining its share of market from all leading telecom operators in its circles. On a consolidated basis, the sharing factor grew to reach a healthy ratio of 1.91 times as on March 31, 2013 as we added 6,700 co-locations
(net) during the year.
People continue to be the most important driver of our strategic intent and initiatives, and we continue to invest on people excellence with host of initiatives. We consistently strive to build a high performance organization and are committed to adopt the best HR practices.
As a responsible corporate, we continue to stay focused on building businesses which positively impact the society we live in. In line with the vision of being known for environment friendliness, the Company continues to deploy

people, ideas and capital to help find effective solutions to environmental challenges. The Company has over 1,200 solar installations across the network and has taken major steps to augment these in the coming year towards the above objective. During the year, the Company also implemented green networks adopting the RESCO model as a step towards partnering for power outsourcing.
During the year, the Company was recognized at various platforms and was conferred with CNBC Essar Steel
Infrastructure Excellence Award 2012, Dun & Bradstreet –
Axis Bank Infra Awards 2012, iCMG IT Architecture Award
2012, CIO-APC Green IT Award 2012 amongst many others.
Overall, 2012-13 turned out to be a year of growth and excellence, with a reassertion of our long standing relationships with our customers and leadership through technology and energy initiatives.
I take this opportunity to express my sincere gratitude to all our shareholders, customers, partners and employees for their continued enthusiasm, unflinching trust and support towards Bharti Infratel. We are confident that the strong foundation we have set for Bharti Infratel will truly help in constantly improving our leadership position and service delivery over the years.

D S Rawat
Chief Executive Officer

9

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Corporate Social Responsibility
Background
At Bharti Infratel, Corporate Social Responsibility is a way of life and is well-integrated with our Business Strategy.
Keeping this in mind, we have coined our Vision on Corporate Social Responsibility as:
“To be an ethical corporate citizen committed to adopting business practices that are environment friendly and integrated with our Company vision of being the best and most innovative passive communications infrastructure provider globally”.
To achieve our Corporate Social Responsibility Vision, we focus on:
1. Being a ‘Green’ Company
2. Help ‘Underprivileged Children’ through Education sponsorship, financial support and employee volunteering activities 3. Community Welfare initiatives in our area of operations.

Being a ‘Green’ Company
‘Go Green’ is inherent to our business model of tower sharing as every co-location we add to the network helps in bringing down the energy consumption on a per colocation basis.
We have institutionalized a GreenTowers P7 program which is aimed at minimizing dependency on diesel consumption and thereby reducing carbon footprint. The GreenTowers
P7 program is based on seven innovative ideas deploying cleaner energy technologies. As part of the program, we focus on:
A. Use of renewable energy resources,
B. Improving energy efficiency of tower infrastructure equipment, and
C. Reduction of equipment load on tower infrastructure equipment. A. Use of Renewable Energy Resources
Solar Installations
We operate over 1,200 solar powered towers with installed capacity of approx. 6 MW as at March 2013. This generates approx. 8 Mn units of energy on an annualised basis and helps us save over 21,000 Metric tonnes of CO2 emissions.

10

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Solar via RESCO – Community Power Concept for
Unconnected
We are encouraging energy companies to adopt the RESCO
(Renewable Energy Services Company) model to provide power for our towers through a distributed generation approach using clean and renewable energy sources like solar, wind, biomass, etc. The business model enables
RESCOs generate enough power, which can be shared with the local communities. This creates a sustainable business model for the RESCOs and at the same time provides the local community with clean and green electricity. In this regard, we have partnered with OMC Power to set up micro power plants next to our towers. These power plants provide clean energy through solar panels. This innovative green model helps in reducing dependence on diesel powered gensets in off-grid/poor grid locations and also supplies green power to rural households.
Biomass Power
Bharti Infratel has established the use of biomass waste to produce power at its towers. Successful trials have been concluded to reduce diesel consumption on poor grid towers.
To take forward this green initiative, we are working with
TAIPA to scale up biomass installations across our network using RESCO approach.
B. Improving Energy Efficiency of Tower Infrastructure
Equipment
Battery Bank Hybrid Solutions
The solution helps to ensure DG sets are running in optimum load range, resulting in enhanced battery backup which helps in reduction of DG run hours to minimize diesel consumption. The solution has been implemented on over
5,000 towers.
Variable speed DG sets
This solution ensures DG set runs at lower speed at low loads in contrast to the conventional approach wherein DG set runs at a constant speed. Successful pilots have been done and we plan to augment the installations across the network in the coming year.
Adoption of New Technologies
We have adopted new technologies such as Integrated Power
Management Solutions (IPMS) and Plug & Play Cabinet
(PPC) as part of standard configuration for new tower deployment. This helps achieve maximum use of grid power supply and thus, helps in minimizing diesel consumption at towers. Over
7,000 IPMS and over 1,600 PPC are installed in our network.

C. Reduction of Equipment Load on Tower Infrastructure
Equipment
Free Cooling Units (FCU)
FCU unit utilizes the outside ambient cold air for cooling the shelter without using air conditioners. Our network has more than 6,300 FCU installations.
Initiative - Diesel-free Towers
Bharti Infratel has initiated a comprehensive program to ensure zero diesel consumption at our tower sites.
Almost 2,000 towers across our network are Diesel-free towers. 11

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Helping Underprivileged Children Through
‘Education’ Sponsorship
• Financial contributions towards ‘Save the Girl Child’ campaign. • ACT (A Caring Touch) donations for supporting the rural education initiatives at Satya Bharti Schools – a matching contribution plan wherein the Company matches the contribution made by the employees.
• Electrification of 2 Satya Bharti Schools by way of installation of solar panels, in partnership with our vendor partner, Applied Solar Techniques. This effort has not only helped the school to run computers, but also goes a long way in creating sensitisation among the young minds about the need for environmental conservation. • Donation of computers, books and other stationery items. We focus on ‘Education’ as we strongly believe that good quality education can help shape the future of our nation and instil the right human values paving way for a bright and secure world.
During the year, we contributed an amount of ` 50 Mn towards sponsoring the Satya Bharti Schools - the flagship program of Bharti Foundation that is geared towards bringing sustainable changes through education and use of technology. These schools have been envisioned to be
“temples of learning, radiating knowledge and excellence for underprivileged children” and provide free education to them, with a special focus on girl child.
The focus of Bharti Foundation is to implement and support programs across primary, secondary and higher education levels with an aim to transform the children of rural India into educated, employable and responsible citizens of tomorrow, with a sense of commitment to the communities in which they live.
The curriculum of Satya Bharti School Programs is designed to focus on holistic development of children which adds to its uniqueness. Besides elementary education, Bharti
Foundation has also partnered with premier institutes like the Indian Institute of Technology, Delhi to set-up the Bharti
School of Telecommunication Technology and Management.
200 students are supported every year to pursue courses in the field of telecommunications.
Bharti Infratel, in its own way, has been supporting Bharti
Foundation through financial support as well as employee volunteering at Satya Bharti Schools.
12

With our commitment towards the social and development initiatives undertaken by Bharti Foundation, we are hopeful that we will be able to lend a higher sustainability to our
Corporate Social Responsibility agenda and help ‘make a difference’. The Satya Bharti Difference












Free Quality Education
Focus on Girl Child
Trained Teachers & Volunteers
Focus on English & Computers
Pedagogic Supervision & Support to Teachers
Stringent Ongoing Quality Checks & Audit Processes
Activity-based Learning
Healthy & Nutritious Mid-Day Meals
Large Spacious Classrooms
Separate Toilets for Boys & Girls
Running Water Facilities

Satya Bharti Schools – Key Statistics
(as on March 31, 2013)









Number of Schools Operational: 254
187 Primary Schools
62 Elementary Schools
5 Senior Secondary Schools
Number of States: 6
Number of Students Enrolled 37,286
% of Girl Students: 49%
% of Students from SC/ST/OBC Categories: 75%

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Community Welfare Initiatives
A. Mokokchung CSR Program
As an organization, we firmly believe in building businesses which positively impact the society we live in. With the responsibility of helping improve the quality of life of people on a sustainable basis, we embarked on a social transformation journey in the Mokokchung district of
Nagaland, North East (NE) telecom circle in 2010.
Bharti Infratel has joined hands with a local NGO NMP+
(Network of Mokokchung District People Living with HIV/
AIDS) to run a social welfare program to sensitize people on HIV / AIDS through awareness campaigns. The objective of Bharti Infratel’s volunteering program is to serve communities and improve their quality of life through HIV
/ AIDS sensitisation programs to dispel myths about people living with HIV and help promote and protect the human rights of people living with HIV/AIDS.
The district of Mokokchung has the highest population of HIV / AIDS affected people in Nagaland (3.5% vis-à-vis national average of 1.5%). This is also one of India’s most difficult and remote places - perched at an altitude of over
5,500 feet with no train or air connectivity and roads which are also extremely tedious to traverse. The main cause for the widespread prevalence of the disease is the lack of information and resistance to use available medical facilities due to the societal stigma attached.
Key activities of the Program:

These camps have helped facilitate establishment of adequate linkages between local people and the available health services in the region.
The Changemaker Awards
The Mokokchung program has been felicitated as the ‘Best Volunteering Program’ award at The
Changemaker’s Awards 2012-13, constituted by the CSR
Council of Bharti Enterprises in association with Bharti
Foundation that felicitates and acknowledges the efforts made towards corporate social responsibility by the Bharti Group Companies and their employees.

B. Disaster Relief and Support

Till date, we have successfully conducted 45 camps and touched lives of 8000+ local people through direct coverage.
This cause has received wide coverage in prominent dailies including ‘The Telegraph’, thus creating an impact on a large part of society.

During the months of August-September 2012, many parts of lower Assam were reeling under ethnic violence. 2,084 villages and 22 districts were badly affected as hundreds of people died in the clash and were displaced from their home.
65,000 hectares of cropland were impacted, leading to a human tragedy which called for immediate support and relief.

Typically, every month three Camps are organized, these are mostly held in a cathedral after the Sunday mass. Each camp is a half day program with interactive sessions with speakers talking about HIV & AIDS scenario of Mokokchung, sharing medical facts about HIV / AIDS & ART (Anti Retroviral therapy
/ Treatment) and related chronic care. As a part of these sessions, emphasis is laid on promoting social acceptance of people living with HIV/AIDS and train people on critical health care issues and aspects of self management.

Bharti Infratel team came forward to provide humanitarian assistance to the victims of the region and supported the cause of providing relief to the victims by donating generously. Volunteers packaged the relief materials bought with the collected money and prepared them for distribution.
Packs comprising of essentials like cooking utensils, rice, oil, sugar, mosquito net, washing soap etc. were distributed at the relief camps.

Various Government departments including Health, Public
Relations, and Civil Administration have also come forward to join us in these campaigns. Health department regularly sends their AIDS testing support mobile unit & vehicle along with personnel in all our camps wherein medical tests are conducted.

Operationally, special permissions and police protection during curfew was taken and diesel filling during floods on the affected towers was done with use of rowing boats thereby providing all important connectivity to villagers and relief workers during the calamity.
13

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

C. Airtel Delhi Half Marathon

E. Joy of Giving Week

Bharti Infratel has been a part of the noble cause by participating in the Airtel Delhi Half Marathon as Corporate
Challenge Team and supporting the cause of Girl’s Education.
In the year 2012, 80 of our employees participated in the event while a contribution of ` 0.65 Mn was made.

Once every year, we celebrate the ‘Joy of Giving’ week. As a part of this initiative, each day is dedicated to making a social contribution in the form of a Blood donation camp, material donation, visit to a Satya Bharti School or other
NGO run institutions, tree plantation and ACT donation. All the material collected is donated at ‘Goonj’ centres across various locations.

D. Employee Philanthropy Program
ACT – ‘A Caring Touch’ is a Bharti Group Employee
Philanthropy Program where employees are encouraged to donate their time, skills, knowledge, materials and money, to either Bharti Foundation or any other charity empanelled in ACT. All monetary donations made to ACT are matched by the Bharti Infratel, as per policy.
A large number of employees show their support by voluntarily contributing as a recurring amount every month.
Donations given to Bharti Foundation are sent to various programs in the area of education; namely Satya Bharti
Schools (Primary) Program, Schools Improvement Program,
Bharti Computer Centres and Bharti Library Program, initiated for underprivileged children and Bharti Scholarship
Scheme for the youth.
Bharti Foundation shares regular communication of its various projects for these donors. The donors are also encouraged to visit the programs first-hand and conduct regular status and performance audits of how these donations are being spent.
In the FY 2012-13, Bharti Infratel made a donation of
` 0.65 Mn under the matching contribution scheme to Bharti
Foundation and ` 1.09 Mn to other NGOs.

14

F. Employment in rural pockets and upskilling of technicians In our endeavour to enhance direct and indirect employability among the rural populace, we ensure that the technicians for tower maintenance are indirectly hired from the local community. We have our presence in some of the remotest locations, where alternative employment opportunities virtually do not exist. Indirect hiring of the locals has helped several families improve their standards of living.
Besides, we invest extensively in training the technicians to improve their technical skills. We have partnered with
Nettur Technical Training Foundation (NTTF), a pioneer in Technical Training in India, to develop comprehensive training program.
As we stand committed to giving back to the society, we also have institutionalized the concept of running development centres for selecting high performing and high potential technicians who have the capability to take up higher level roles and responsibilities in the organization. The selected technicians go through an exhaustive development journey that includes class room trainings to improve their supervisory skills, English language, basic computer knowledge and are given real-time business projects and coaching and mentoring sessions with the circle operations team members.

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Directors’ Report
Dear Shareholders,
Your Directors are delighted to present the Seventh Annual Report on the business and operations of the Company together with audited financial statement and accounts for the financial year ending March 31, 2013.

OVERVIEW
The business of Bharti Infratel Limited and Indus Towers Limited (Indus) is to acquire, build, own and operate tower and related infrastructure. We have a nationwide presence with operations in all 22 telecommunication circles in India, with Bharti Infratel and Indus having operations in 4 overlapping circles.
In order to capitalize on the opportunities for tower sharing in the Indian telecommunications market, Bharti Airtel,
Bharti Infratel, Vodafone India and Idea Cellular agreed to establish Indus as an independently managed joint venture that provides non-discriminatory shared tower services to all wireless telecommunication service providers. Bharti Infratel,
Vodafone India and Aditya Birla Telecom hold 42%, 42% and 16% shareholding interest in Indus, respectively. Subject to certain exceptions, Bharti Infratel and Indus do not compete with each other in any telecommunication circle, they do not have any conflicts of interest in this regard and are able to work closely with each other and benefit from the synergies generated by the nationwide coverage and large scale of their operations.
Bharti Infratel and Indus provide access to their towers primarily to wireless telecommunication service providers on a shared basis, under long-term contracts. Bharti Infratel’s and Indus’ three largest customers are Bharti Airtel (together with Bharti
Hexacom), Vodafone India and Idea Cellular, which are the three leading wireless telecommunication service providers in India by wireless revenue.

Bharti Infratel Overview: Pan India Footprint

Bharti Infratel Circles
Indus Towers Circles
Overlapping Circles

On a consolidated basis, we are one of the largest tower infrastructure providers in India, based on the number of towers that Bharti Infratel owns and operates and the number of towers owned or operated by Indus, that are represented by Bharti
Infratel’s 42% equity interest in Indus.
As of March 31, 2013, Bharti Infratel owned and operated 35,119 towers with 63,573 co-locations in 11 telecommunication circles while Indus operated 111,819 towers with 221,511 co-locations in 15 telecommunication Circles. With Bharti Infratel’s towers and Bharti Infratel’s 42% interest in Indus, we have an economic interest in the equivalent of 82,083 towers and 156,608 co-locations in India as of March 31, 2013.
Your Company achieved success during the year in gaining its share of the market from all leading telecom operators in its circles of operations, despite several regulatory and business developments, which impacted the telecom industry. The
Company observed significant improvement in network uptime delivery during the year, recording the highest ever uptime.
The directors are pleased to inform that the Customer Satisfaction Scores, based on an independent survey, reflect that the
Company has excelled on all customer satisfaction aspects as is evident from the higher customer satisfaction scores. Our
Network Health Report, a monthly update on overall health of the network, is well received and appreciated by most customers.
On May 31, 2011, the Subsidiary Company “Bharti Infratel Ventures Limited” filed a ‘Scheme of Arrangement’ before Hon’ble
High Court of Delhi whereby the Subsidiary Company will merge with Indus, with appointed date as April 1, 2009. The Hon’ble
High Court of Delhi vide its order dated April 18, 2013 has sanctioned the said Scheme of Arrangement. The Scheme will be effective on filing the Hon’ble High Court’s order with Registrar of Companies (RoC).

15

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

FINANCIAL RESULTS AND RESULTS OF OPERATION
Financial highlights of operations of the Company as on March 31, 2013 are as follows:
A. Consolidated financial results as per Indian Generally Accepted Accounting Principles
(Figures in ` Mn)
Particulars
Revenue1
EBITDA1
Profit before Tax
Profit after Tax
1

Year ended
March 31, 2013
102,720
38,354
15,307
10,025

Year ended
March 31, 2012
94,521
35,344
11,282
7,491

Revenue and EBITDA are excluding other income.

B. Standalone financial results as per Indian Generally Accepted Accounting Principles
(Figures in ` Mn)
Particulars
Revenue1
EBITDA1
Profit before Tax
Profit after Tax
1

Year ended
March 31, 2013
44,601
17,772
13,216
10,098

Year ended
March 31, 2012
41,582
16,356
6,867
4,492

Revenue and EBITDA are excluding other income.

GENERAL RESERVE
Out of the total profit of ` 10,098 Mn on a standalone basis of Bharti Infratel Limited for the financial year ended March 31,
2013, an amount of ` 2,426 Mn has been transferred to the General Reserve.

DIVIDEND
The Board has recommended a final Dividend of ` 3.00 per equity share of the face value of ` 10 each fully paid up (i.e. 30%) for the financial year 2012-13, amounting to ` 6,629 Mn (inclusive of ` 963 Mn as tax on Dividend). The payment of dividend is subject to the approval of the shareholders at the ensuing annual general meeting of the Company. The Company has paid interim dividend(s) on September 7, 2012 @ ` 2.50 per equity share of ` 10 each fully paid up comprising of:
a. dividend of ` 1.50 per equity share of ` 10 each fully paid up (i.e. 15%), amounting to ` 3,038 Mn (inclusive of ` 424 Mn as tax on Dividend) out of the accumulated profits earned up to March 31, 2012 and
b. dividend of ` 1.00 per equity share of ` 10 each fully paid up (i.e. 10%), amounting to ` 2,025 Mn (inclusive of ` 283 Mn as tax on Dividend) out of profits of the Company for the current year i.e. FY 2012-13.

SHARE CAPITAL
During the year, the share capital of your Company was altered as follows:
a. The authorised share capital was increased from ` 6 Bn to ` 35 Bn by creation of 2.90 Bn equity shares of ` 10 each.
b. 1,161,605,820 equity shares of ` 10 each were allotted on August 23, 2012 as Bonus shares in the ratio of 2:1.
c. 146,234,112 equity shares of ` 10 each were allotted on December 22, 2012 under the initial public offering at a premium of ` 210.90.
d. 100,212 equity shares of ` 10 each were allotted on March 19, 2013 under the ESOP scheme at a premium of ` 99.67.

16

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

e. Consequent to above, the paid up share capital of the Company has increased from ` 5,808,029,100 to ` 18,887,430,540 represented by 1,888,743,054 equity shares of ` 10 each.

INITIAL PUBLIC OFFER
Bharti Infratel has listed its equity shares on the NSE and BSE in India on Friday, December 28, 2012. The issue, comprising of 146.23 Mn fresh equity shares and 42.67 Mn equity shares on offer for sale (OFS) by the selling shareholders, opened for subscription during December 11-14, 2012 was oversubscribed 1.26 times. The reserved portion of Qualified Institutional Buyers
(QIBs) was oversubscribed 2.84 times.
The Company raised ` 32,303 Mn from the public issue excluding ` 9,425 Mn pertaining to the OFS by the selling shareholders, namely Compassvale Investments Pte. Ltd., GS Strategic Investments Limited, Anadale Limited and Nomura Asia Investment
(IB) Pte. Ltd.
The Company intends to use issue proceeds from the IPO for the installation of new towers, upgradation and replacement on existing towers, green initiatives at tower sites and general corporate purposes.
Bharti Infratel has been included in the FTSE Global Equity Indices starting January 7, 2013. Bharti Infratel was added to FTSE
All-World Index (Large Cap) with an investability weighting of 9% and also to FTSE All-Emerging Index.
FTSE’s flagship global benchmark, the FTSE All-World, is used by investors worldwide to structure and benchmark their international equity portfolios. The FTSE global equity universe covers over 7,400 securities in 47 different countries and captures 98% of the world’s investable market capitalization.
The stock has also been shifted from category B to category A Stock of BSE.

FIXED DEPOSITS
The Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the date of Balance Sheet.

SUBSIDIARY COMPANY
As on March 31, 2013, the Company has one wholly owned subsidiary (100%), viz, Bharti Infratel Ventures Limited. The statement of Company’s interest in its wholly owned subsidiary, Bharti Infratel Ventures Limited under Section 212(1)(e) of the Companies
Act, 1956 is annexed herewith and forms part of the Directors’ Report.
Pursuant to General Circular No. 2/2011 dated February 8, 2011 issued by the Ministry of Corporate Affairs, 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 company for the year ended March 31,
2013. The statement pursuant to the circular is annexed as part of the notes to the consolidated accounts of the Company on page 121 of the Annual Report.
Annual accounts of the subsidiary, along with related information are available for inspection at the Company’s registered office.
Copies of the annual accounts of the subsidiary company will also be made available to the Company’s investors upon request.

AUDITORS
The Statutory Auditors of the Company M/s. S.R. Batliboi & Associates LLP (formerly known as M/s. S.R. Batliboi & Associates),
Chartered Accountants shall retire at the conclusion of forthcoming annual general meeting. They have given the Company a notice regarding their unwillingness to be reappointed.
M/s. S.R. Batliboi & Co. LLP, Chartered Accountants, have given their consent to act as statutory auditors of the Company and a certificate confirming therein that their appointment, if made, will be within the limits prescribed u/s 224(1B) of the
Companies Act, 1956 has been received from them.
M/s. S.R. Batliboi & Co. LLP, Chartered Accountants, is an independent audit firm and none of your directors are related or interested in it, whether directly or indirectly.
17

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

AUDITORS’ REPORT
The Board has duly examined the statutory auditors’ report on accounts and clarifications, wherever necessary, have been included in the Notes to Accounts section of the Annual Report.
As regards the comment under para xxi of the annexure to the independent auditors’ report to address the issues of fraud pertaining to electricity payments and asset pilferage, the company has taken appropriate steps including legal action against the external parties involved etc. The Company is further strengthening its internal control systems to reduce the probability of occurrence of such events in future.

SECRETARIAL AUDIT REPORT
Keeping with the high standards of corporate governance adopted by the Company and also to ensure proper compliance with the provisions of various corporate laws, the regulations and guidelines issued by the Securities and Exchange Board of India and the listing agreement, the Company has voluntarily started Secretarial Audit from a practicing company secretary firm.
M/s. Chandrasekaran Associates have been conducting the Secretarial Audit of the Company on continuous basis. They have submitted their report confirming the compliances with all the applicable provisions of various corporate laws. The Secretarial
Audit Report is provided separately in the Annual Report.

DIRECTORS
Pursuant to the provisions of the Companies Act, 1956, Mr. Akhil Gupta, Director of the Company, is liable to retire by rotation at the forthcoming annual general meeting and being eligible, offers himself for re-appointment. Further, the term of
Mr. Akhil Gupta as Managing Director will expire on July 31, 2013. Your Board, based on the recommendations of the HR &
ESOP Compensation Committee, proposes the re-appointment of Mr. Akhil Gupta for a further period of 5 years as per the terms and conditions mentioned in the Notice of ensuing annual general meeting and in terms of the articles of association of the Company. Mr. Akhil Gupta would not be liable to retire by rotation.
Since the date of last Directors’ Report Mr. Rakesh Bharti Mittal, Mr. Bharat Sumant Raut, Mr. Jitender Balakrishnan, Mr. Vinod
Dhall and Mr. Sanjay Nayar were appointed w.e.f. September 3, 2012 and Mr. Murray Philip King and Ms. Leena Srivastava were appointed w.e.f. November 5, 2012 as additional director(s) of the Company to hold office up to the date of forthcoming annual general meeting.
The Company has received notices under section 257 of the Companies Act, 1956 proposing the appointment of Mr. Rakesh
Bharti Mittal, Mr. Bharat Sumant Raut, Mr. Jitender Balakrishnan, Mr. Vinod Dhall, Mr. Sanjay Nayar, Mr. Murray Philip King and Ms. Leena Srivastava as Director(s) liable to retire by rotation.
Your Board recommends their appointment/ re-appointment at the ensuing annual general meeting.
A brief resume, nature of expertise, details of directorships held in other public limited companies and other information of the directors proposing appointment/re-appointment pursuant to clause 49 of the Listing Agreement with the Stock Exchanges is appended as an annexure to the notice of ensuing annual general meeting.
Mr. Sunil Bharti Mittal, Mr. Rohit Sipahimalani and Mr. Inder Walia resigned from the Board on September 3, 2012. The Board places on record its sincere appreciation for the guidance rendered by Mr. Mittal, Mr. Sipahimalani and Mr. Walia.

CORPORATE GOVERNANCE
Your Company is committed to benchmarking itself with global standards for providing good corporate governance. The
Chairman and Directors constantly endeavour to take the business forward in such a way that it maximizes long term value for the stakeholders. The Company has put in place an effective corporate governance system which ensures that the provisions of Clause 49 of the listing agreement are duly complied with.
A detailed report on the corporate governance pursuant to the requirements of clause 49 of the listing agreement forms part of the Annual Report. A certificate from the auditors of the Company, M/s. S. R. Batliboi & Associates LLP, Chartered
Accountants, confirming compliance of conditions of corporate governance as stipulated in Clause 49 is annexed to the report as Annexure A.

18

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

BOARD COMMITTEES AND ITS COMPOSITION
In accordance with the listing agreement requirements, the details of the Board committees are presented as part of the
Corporate Governance Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)
At Bharti Infratel, CSR is a way of life and is well integrated with our business strategy. Detailed information on the initiatives of the Company towards CSR activities is provided in the Corporate Social Responsibility section of the Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT
In accordance with the listing agreement requirements, the Management Discussion and Analysis report is presented in a separate section forming part of the Annual Report.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The statement 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 given in Annexure B to this report.

HUMAN RESOURCES
At Bharti Infratel, we strongly believe that employee engagement is a key pillar towards building organisational effectiveness.
The primary objective of achieving a high employee engagement is to create passion in all that we do and enable the workforce towards meeting and surpassing the performance expectations, leading to long-term success. We strongly believe that our people are our competitive advantage and the key to shaping our future.
Our people embody our core values and define who we are. We have 1,256 on roll employees on a standalone basis. The Company believes in the values of pioneering, service orientation & continuous improvement, positive, passionate & involved and respect & fairness for all stakeholders aligned to the vision. To facilitate leadership development and groom individuals for larger leadership roles, the Company has developed a robust Leadership Competency Framework which defines the essential competencies and behavioural manifestations that are required for future development planning.

EMPLOYEES STOCK OPTION PLAN

Employees continue to be the key driving force of the organization and remain a strong source of our competitive advantage.
Therefore, to develop a sense of ownership among the employees within the organization, the Company instituted an employee stock option scheme namely Employee Stock Option Scheme 2008 (“ESOP Scheme 2008”). The objective of ESOP Scheme
2008 is employee engagement and long term retention by providing employees of the Company an opportunity to participate in the Company’s anticipated valuation enhancement by contributing to superior performance and shareholder returns. The
Company undertook a bonus issue of equity shares in the ratio of two equity shares for every one equity share held on August
23, 2012. Pursuant to the adjustment made as a result of this bonus issue, the total number of options that can be granted under ESOP Scheme 2008 is 16,215,000.
During the year under review, 100,212 equity shares were allotted to the employees upon exercise of stock options.
Disclosure in compliance with clause 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme and
Employee Stock Purchase Scheme) Guidelines, 1999, as amended, is 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 ESOP
Scheme 2008 would be placed before the shareholders at the ensuing annual general meeting and a copy of the same will also be available for inspection at the registered office of the Company.

PARTICULARS OF EMPLOYEES
The information as required to be provided in terms of section 217(2A) of the Companies Act, 1956 read with Companies
(Particulars of Employees) Rules, 1975 have been set out in Annexure D to this report.

19

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

QUALITY CONTROL
Your Company has established well structured quality processes and systems at every stage of its work, from designs, materials, workmanship at site, operations and maintenance through the entire lifecycle of the towers and related services. The Company has adopted the following stage-wise quality assurance practices:





pre-dispatch inspection of all major material such as tower components, DG sets, shelters and battery banks; on-site inspection during works in progress such as civil, electrical and tower installation works; quality audits post completion of works to ensure process completion; and preventive maintenance audits during operation and maintenance of sites to ensure timely maintenance of equipment and basic site hygiene.

Your Company has a Standard Quality Process and Guidelines for civil, tower and electrical works and a Quality Assurance Plan
(“QAP”) for pre-dispatch inspection for effective material verification at vendor premises. Regular project reviews, governance meetings and third party audits are conducted on a regular basis in order to encourage maintenance of quality and ensure that towers are strictly in accordance with Company’s approved specifications.
These quality assurance practices enable us to maintain high performance standards across the network, resulting in key long-term advantages:
• good asset life as per specifications and designs;
• high network uptime for customers, with fewer network outages; and
• high levels of customer satisfaction due to hassle-free active infrastructure installation.

AWARDS & RECOGNITION
Recognising our strong business leadership within the telecom tower infrastructure space and our world-class service delivery, your Company was awarded the Top Infrastructure Company Award in the Telecom Infrastructure category at Dun
& Bradstreet – Axis Bank Infra Awards 2012, for the second year in a row.
The Company was conferred the CIO 100 Efficient Enterprise Special Awards 2012 for using information technology in innovative ways to deliver business value, create competitive advantage, optimize business processes and enable overall growth.
Your Company won the PCQUEST Best IT Implementation of The Year Award 2012 for implementing Infratel Enterprise Suite
(IES) that was designed to automate and align business processes within six value streams in the organization.
For enabling rural telecom penetration in the toughest terrains and remotest locations, your Company was awarded the 2012
– CNBC Essar Steel, Infrastructure Excellence Award as the “Telecom Infrastructure Company of the Year”.
The Company was awarded the coveted CIO-APC Green IT Award 2012, for successfully consolidating and virtualising our data center and making significant reduction in carbon emissions.
Your Company won the globally acclaimed iCMG IT Architecture Award 2012 for its landmark end-to-end enterprise tool –
Infratel Enterprise Suite. This first of its kinds IT platform within the telecom infrastructure industry, was awarded the Best
Enterprise & IT Architecture Award in Telecom category, and was recognised for its intricate stack of technology platforms, integration with multiple applications and the significant cross-functional benefits which it has delivered. The category saw participation across 25 countries and over 100 global organisations.

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. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
II. we have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended March 31, 2013 and of the profit of the Company for that period;
III. we have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
IV. we have prepared the annual accounts on a going concern basis.
20

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

ACKNOWLEDGEMENT
The Directors wish to place on record their appreciation for the assistance and co-operation extended by customers, strategic investors, bankers, vendors, business partners, various agencies and departments of Government of India and State Governments where Company’s operations are existing, supporting the Company’s various projects.
The Directors would also like to place on record their sincere appreciation for the valuable contribution, unstinted efforts and the spirit of dedication shown by the employees of the Company at all levels in ensuring an excellent all round operational performance. Place: New Delhi
Date: April 30, 2013

For and on behalf of the Board
Rakesh Bharti Mittal
Chairman

Annexure A
AUDITORS’ CERTIFICATE REGARDING COMPLIANCE OF CONDITIONS OF CORPORATE GOVERNANCE
To
The Members of Bharti Infratel Limited
We have examined the compliance of conditions of corporate governance by Bharti Infratel Limited (“the Company”), for the period December 28, 2012 (i.e. the date from which the Company is required to comply with the terms of the Listing Agreement) to March 31, 2013 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 effectiveness with which the management has conducted the affairs of the Company.
For S.R. BATLIBOI & ASSOCIATES LLP
Firm registration number: 101049W
Chartered Accountants per Nilangshu Katriar
Partner
Membership No.: 58814
Place: Gurgaon
Date: April 30, 2013
21

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Annexure B
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
As part of the normal course of the business, the Company operates and maintains telecom tower infrastructure which requires energy consumption. Every endeavour has been made to ensure the optimal use of energy, avoid wastage and conserve energy as far as possible.
The Company continuously evaluates global innovation and technology as a benchmark and as required, enters into arrangements to avail of the latest technology trends and practices.

Technology Absorption
‘Go Green’ is inherent to our Business Model of tower sharing as every co-location we add to the network helps in bringing down the energy consumption on a per co-location basis.
We have institutionalized a GreenTowers P7 program which is aimed at minimizing dependency on diesel consumption and thereby reducing carbon footprint and has already implemented solar power network across 1200+ towers. Our technical team continues to explore and pilot new technical initiatives in the process of ‘putting ideas to work’ to promote the ‘Go Green’ agenda at the Company.
Form B
1) Research and Development (R & D) - Not Applicable
2) Technology absorption, adaptation and innovation – Detailed update on the technology advancements made by the
Company is covered as part of the Corporate Social Responsibility section on page 10.

Foreign Exchange Earning and Outgo
(i) Activities relating to exports; initiatives taken to increase exports; development of new export markets for products and services; and export plans;

Bharti Infratel Limited being a telecom tower Infrastructure service provider has not undertaken any activity relating to exports or development of export markets for services.

(ii) Total foreign exchange used and earned

(a) Total Foreign Exchange Earning

:

Nil

(b) Total Foreign Exchange Outgo

:

` 184 Mn (Including payment of interim dividend of ` 124 Mn)

22

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Annexure C
DISCLOSURE AS REQUIRED UNDER SEBI (EMPLOYEE STOCK OPTION SCHEME AND EMPLOYEE STOCK
PURCHASE SCHEME) GUIDELINES, 1999 AS ON MARCH 31, 2013
S.No.
(i)
(ii)
(iii)

Particulars
Total Options granted under the Scheme
Options Granted during the year
Pricing Formula

(iv)
(v)
(vi)

Options vested as of 31st March 2013
Options exercised during the year
The total number of shares arising as a result of exercise of Options
Options lapsed/cancelled during the year
Variation of terms of Options during the year
Money realised by exercise of Options during the year
Total Number of Options in force
Employee-wise details of Options granted to:
(a) Options granted to Senior managerial personnel during the year

(vii)
(viii)
(ix)
(x)
(xi)

(b) Options granted to employees exceeding 5% of the total grants during the year

(xii)

(xiii)

(xiv)
(xv)

(c) Options granted to employees exceeding 1% of the issued capital during the year
Diluted Earnings Per Share (EPS) pursuant to issue of shares on exercise of Options calculated in accordance with Accounting Standard AS 20
Difference 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
a) Weighted-average exercise price
b) Weighted-average fair prices
Method and significant assumptions used to estimate the fair values of Options.
(a) Risk free interest rate
(b) Expected Life
(c) Expected Volatility
(d) Expected Dividends
(e) Market Price of the underlying share on grant date ESOP Scheme 2008
9,946,524
33,570
• 9,255,690 Options under Plan I and 657,264 Options under
Plan II were granted at a discount of 50% of the fair market value of the Equity Shares.
• The exercise price of the 33,570 Options granted under Plan III is ` 10 per option.
6,505,888
137,421
137,421
212,647
Variation in terms of repurchase of Options.
` 15,070,962
9,034,013
Name
Rajiv Arora
Prashant Jagdish Keole
Name
Vijay Kumar Jain
Rajiv Arora
Prashant Jagdish Keole
Harvinder Pal Singh
Jaspal Singh Tandon
Nil

Grant Size
4,230
3,850
Grant Size
4,640
4,230
3,850
3,190
2,810
Nil

` 5.7

N.A.

` 110
` 220
Black Scholes valuation model
8.37% to 8.62%
36 - 60 months
52.42% to 52.43%
Nil
N.A.

23

24

Name

Designation

Nature of duties of the employee

Anil Kumar
Sharma

D S Rawat

P Sairam
Prasad

Pankaj Miglani

Prashant Veer
Singh

Vikas Joshi

2

3

4

5

6

7

Chief Human
Resource Officer

Chief Information
Officer

Chief Financial
Officer

Chief Technical and
O&M Officer

Chief Executive
Officer

Circle Business Head

Managing Director

HR

Technology Services

Finance

Operations &
Maintenance,
Technical Services

Business Head

Operations

General
Management

Chief Operating
Officer

Chief Operating
Officer
Operations

Operations
B.E.

B.E.

Bsc / MPM / LLB

B.E./ MBA

CA/ CS/ ICWA

B. Tech

B.E.

B.E./ MBA

CA

Qualification(s)

52

50

53

43

43

43

45

51

57

Age
(in
years)

2-Jan-13

19-Aug-09

1-Apr-10

1-Apr-10

8-Aug-11

23-Sep-09

28-Jul-10

6-Jul-09

1-Aug-08

Date of
Commencement of
Employment

30

28

30

20

18

19

24

30

28

Total experience (in years)

Gross Remuneration comprises of Salary, Taxable Allowances & Perquisities and Company’s contribution to Provident Fund.
The employee would qualify for being included in Category (A) or (B) on the following basis:
For (A) if the aggregate remuneration drawn by him during the year was not less than ` 60,00,000 p.a.
For (B) if the aggregate remuneration drawn by him during the part of year was not less than ` 5,00,000 p.m.
None of the employees mentioned above is a relative of any Director of the Company.
None of the employees mentioned above holds 2% or more share capital of the Company.
The employees are governed by the general terms and conditions of employment and the policies of the Company.
Nature of employment for all the employees is permanent except for Mr. Akhil Gupta which is contractual.

Sunil Khurana

2

Notes: 1. 2.

3. 4. 5. 6.

Sunil Razdan

1

(B) EMPLOYED FOR PART OF THE FINANCIAL YEAR

Akhil Gupta

1

(A) EMPLOYED THROUGHOUT THE FINANCIAL YEAR

Sl.
No.

Reliance Communication/Sr. VP Network Operations

HUL / GM - HR - Supply Chain South
Asia & Head Employee Relations

Bharti Airtel Limited/ Vice President
- IT & Innovation

Bharti Airtel Limited / Head - Global
Voice

WTTIL (VIOM)/Chief Projects Head

Huawei Telecommunications (I) Co. P
Ltd / Executive Director

Reliance Communications/ Executive
Vice President - CSC Business

Bharti Airtel Limited / Jt. Managing
Director

Previous Employment /
Designation

GE/ VP - Services, South Asia

15,163,230

12,790,051

7,005,166

11,136,920

8,124,324

19,390,531

7,061,825

63,653,073

Gross
Remuneration
(in `)

STATEMENT OF PARTICULARS UNDER SECTION 217(2A) OF THE COMPANIES ACT, 1956 READ WITH THE COMPANIES
(PARTICULARS OF EMPLOYEES) RULES, 1975 FOR THE YEAR ENDED MARCH 31, 2013 AND FORMING PART OF THE DIRECTORS’ REPORT

Annexure D

4,772,860

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

STATEMENT RELATING TO SUBSIDIARY COMPANY PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956
1

Name of the Subsidiary Company

BHARTI INFRATEL VENTURES
LIMITED

2

Financial Year of the Subsidiary Ended on

3

Holding Company’s Interest in the subsidiary company at the end of the Financial Year of Subsidiary.

4

Net Aggregate amount of Profit / (Loss) of the Subsidiary for the above financial year, so far as it concerns members of the Company (In Million `)

(a)

Dealt with in the accounts of the Holding Company

(b)

Not dealt within the accounts of the Holding Company

5

Net aggregate amount of Profit/(Losses) for the Previous Financial Years of the
Subsidiary, so far as it concerns members of the Holding Company (In Million `)

(a)

Dealt with in the accounts of the Holding Company

(b)

Not dealt within the accounts of the Holding Company

NIL

6

Changes in the Interest of Holding Company in the Subsidiary Company between the end of the Financial year of the Subsidiary and the end of Financial year of the Company.

NIL

7

Material Changes between the end of the Financial year of the Subsidiary and the end of
Financial year of the Company in respect of

(a)

Subsidiary’s Fixed assets

NIL

(b)

Subsidiary’s Investments

NIL

(c)

Money lent by the Subsidiary

NIL

(d)

Money borrowed by the subsidiary for any purpose other than that of meeting current liabilities NIL

March 31, 2013

Place : New Delhi
Date :
April 30, 2013

100%

180.2
NIL

(646.8)

For and on behalf of the board
Akhil Gupta
Managing Director

D S Rawat
Chief Executive Officer

Anupam Garg
Company Secretary

Sarvjit Singh Dhillon
Director

Pankaj Miglani
Chief Financial Officer

25

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Management Discussion and Analysis
ECONOMIC OVERVIEW
As per the World Economic Outlook published by the International Monetary Fund (IMF) in October 2012, a gradual recovery of growth is foreseen for this year. Global growth is projected at 3.6% in 2013, slightly above the levels of 3.3% in 2012.
Growth is however forecast to remain slow in the major advanced economies, with emerging markets contributing to a bulk of the global growth.
As per the Economic Survey released by the Government of India in March 2013, following the slowdown induced by the global financial crisis in 2008-09, the Indian economy responded strongly to fiscal and monetary stimulus and achieved a growth rate of 8.6% and 9.3% respectively in 2009-10 and 2010-11.
The economic survey projects the economy to grow in the range of 6.1% to 6.7% in 2013-14, on the back of structural reforms, job creation, combating inflation both through monetary and supply-side measures, reducing the costs for borrowers of raising financing and reducing the impediments to investment. The economic growth prospects in these clearly compliment the Company’s strategy of offering telecom infrastructure in India.

TELECOM TOWER INFRASTRUCTURE SECTOR DEVELOPMENTS
Indian Telecom Tower Infrastructure Sector
Over the five-year period 2005-2010, the wireless telecommunications services sector has grown rapidly. The mobile subscriber base rose to around 868 Mn at the end of March 2013 (source – TRAI) from 99 Mn at the end of 2005- 2006. This growth of mobile subscribers in India in recent years provides a huge opportunity for telecom tower industry, especially given the low penetration of voice telephony in rural India, as well as the offtake of data services in urban India.
The Indian telecommunications industry is one of the most competitive globally. The focus of Indian operators in the last ten years or so has been to develop an affordable mass market telecommunications service model which allows for service availability across India’s urban and rural areas at affordable prices. A strong focus on optimization of operational expenses through the outsourcing of non-core areas, process innovation, cost-to-serve alignment and strategic partnerships has also resulted in steady growth of the Tower Industry.
Infrastructure sharing is effective in optimizing the utilization of available resources and helps to bring down the cost of providing telecommunications services. With the reduction in overall tariffs and restrictions placed by various local regulatory bodies on the installation of telecom towers, infrastructure sharing amongst service providers has become the norm rather than the exception in the Indian telecommunications industry.
Tower companies provide the entire range of tower infrastructure that is required by wireless telecommunications service providers to offer mobile telephony services to their subscribers. Tower infrastructure refers to equipment such as towers, shelters, power regulation equipment, battery banks, diesel generator sets (“DG sets”), air conditioners, fire extinguishers and a security cabin, required at a site where such towers are installed. There are generally two types of towers – Ground Based
Towers (“GBTs”) and Roof Top Towers (“RTTs”). Average specifications for GBT and RTT summarized in the following table:

GBT

RTT

GBT
4,000 sq. ft.

Roof Top

Height (m)

40-60

14-20

Occupancy Capacity

26

RTT

Space Requirement

3-5 co-location

2-3 co-location

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

There are two kinds of infrastructure that constitute a telecom tower:
• Active Infrastructure: Radio antenna, BTS/cell site, cables etc that are owned and supplied by telecom operators
• Tower Infrastructure: Steel tower, shelter room, DG set, Power regulation equipment,
Battery bank, security cabin etc. that supports active infrastructure

DEVELOPMENT IN REGULATIONS
Key regulatory developments in the recent past were as follows:
Grant of Infrastructure status to Telecommunication Towers sector
In March 2012, the Cabinet Committee on Infrastructure approved the framework for using the harmonized master list of infrastructure subsectors, which was notified in the
Official Gazette of India on March 28, 2012. The harmonized master list of infrastructure subsectors is meant to guide all the agencies responsible for supporting infrastructure in various ways. The harmonized list of infrastructure subsectors includes ‘telecommunication towers’ under the ‘Communication’ category.
We believe that as a result of this development, the telecom towers industry will be entitled to certain benefits inter-alia in the form of:





higher ECB limits, lower lending rates, certain excise exemptions, accelerated depreciation benefits.





eligibility for viability gap funding, lower import duties, tax holidays, and

Recommendation on Telecommunications Infrastructure Policy
The TRAI has issued several papers, including a paper titled “Recommendations on Telecommunications Infrastructure Policy” dated April 12, 2011 and a paper titled “Recommendations on Guidelines for Unified License/Class License and Migration of
Existing Licenses” dated May 12, 2012, in which it has recommended, among other things, that:
• Standard designs be developed for all types of telecommunications towers;
• IP-1 licensees and wireless telecommunications service providers be mandated to share in-building solutions and distributed antenna systems;
• An IP-1 license revenue-based fee be introduced;
• Infrastructure providers be permitted to install and share certain active infrastructure;
• Universal Service Obligation funds be restricted to specific areas;
• Camouflaging to be made mandatory in areas of heritage, environmental or architectural importance; and
• Infrastructure sharing to be mandated in locations of heritage, security and environmental importance.
Recommendations on Guidelines for Unified License
In addition to the “Recommendations on Telecommunications Infrastructure Policy”, TRAI has also issued a paper titled
“Recommendations on Guidelines for Unified License/Class License and Migration of Existing Licenses” dated May 12, 2012, wherein TRAI has recommended that the limit of foreign direct investment in such infrastructure providers should be brought down to 74% within a period of three years of a unified licensing regime coming into force. However, the limit of FDI in IP-1’s as per the FDI policy of the Government of India is 100%. However, such companies are required to divest 26% in favour of
Indian public in 5 years, if these companies are listed in other parts of the world.
Recommendations on Approach towards Green Telecommunications
Further, TRAI has released its “Recommendations on Approach towards Green Telecommunications” dated April 12, 2011 pursuant to which TRAI has highlighted the challenges posed by telecommunications, to the environment and ways to address the same.
The TRAI recommendations also provide for:
• Single window clearance for all tower-related approvals;
• Uniform charges for these approvals;
27

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

• Priority electricity board connections for towers; and
• Potential tax benefits.
License Regime for IP-1 Service Providers
The Department of Telecommunications has clarified, vide its press release dated February 15, 2012, that the decision on TRAI’s recommendation to bring IP-1 service providers under licensing regime who are currently unlicensed passive infrastructure providers, has been deferred for further examination.
Telecom Operator License Cancellations by Supreme Court
In relation to the cancellation of 122 2G licenses pursuant to the judgment of the Supreme Court of India in February 2012, the DoT conducted auctions of the 2G spectrum in November 2012 in which certain operators who had lost license won back licenses. Since the participation in the auction was limited, the government conducted another auction in March 2013 for 2G spectrum as well as CDMA spectrum which also evoked only lukewarm participation.
While the Supreme Court had earlier allowed the operators whose licenses were cancelled to continue operations pending the outcome of the auction process, vide its order dated February 15, 2013 the Supreme Court held that the licensees who continued operation after February 2, 2012 and who did not bid in November 2012 auctions or who remained unsuccessful are required to discontinue their operations in the concerned circles/areas and only the successful applicants are to be allowed to operate in such circles.
Telecom Tower Design Specifications
The Department of Telecommunication has vide its letter dated December 11, 2012 recommended all telecom service providers to establish/use telecom towers that conform to applicable Generic Requirements (GR’s) issued by Telecom Engineering Center
(TEC), Department of Telecommunications and that telecom towers erected/used by the telecom service providers with effect from April 1, 2014 shall conform to the GR’s of Towers issued by TEC. The letter also provided that telecom service providers may suggest new designs, if any, along with specifications to TEC by January 31, 2013 so that such designs can be shortlisted and vetted for structural safety, etc and corresponding GR’s can be issued to ensure that the specifications are ready well in advance for usage before the due date i.e. April 1, 2014. The industry association/s is in the process of submitting their observations and comments to these directions on behalf of the infrastructure service providers/operators.
Judgments and Policies related to EMF Radiation
In relation to EMF radiation, the Inter Ministerial Committee (“IMC”) had examined and issued recommendations in relation to the effect of EMF radiation from the base stations and mobile phone. The recommendations made by IMC were accepted by the Government and consequently directions in this regard were issued by DoT to the mobile operators on April 10, 2012 making the new norms applicable from September 1, 2012.
In one of the petitions filed by Justice I.S. Israni (retd.), the Rajasthan High Court passed a judgment dated November 27, 2012 wherein inter-alia the Court directed removal of existing towers from schools, hospitals, play grounds etc. installed across the State on account of radiation, within specified months from the date of the judgment. The impact of the said judgment on
Bharti Infratel (standalone) is only on seven towers in Rajasthan. Moreover, a Special Leave Petition has been filed against the said judgment by various industry associations wherein notice has been issued by the apex court to all the parties while granting stay against High Court Order till further orders.

OPPORTUNITIES & THREATS
Opportunities
Low rural penetration levels
Indian telecom market holds large untapped potential in the rural areas. With rural tele-density still at 40.23% (as at March
2013, Source – TRAI), there is headroom for growth for the sector for voice services currently and over time for data services as well.
The high cost of providing services, together with the ability to quickly deploy state of the art networks would translate into growth opportunities for the Company. Already, Bharti Infratel has a wide footprint in the B and C category circles of India which would see a substantial portion of the expansion of networks to meet the untapped rural markets.

28

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Roll out of New Technologies
The Indian wireless telecommunications market is experiencing an increase in demand for data services, the key catalysts of which are India’s growing young, urban population, the availability of affordable handsets and the production and proliferation of relevant content. Operators, having spent close to ` 1,063 Bn on the 3G and 4G licenses, are also focused towards growing the data story.
The resulting expansion of 3G and 4G network services will require wireless telecommunications service providers to install additional active telecommunications transmission equipment at the towers where they currently operate. In addition, while telecommunications service providers may initially seek to add active telecommunications infrastructure at their existing sites to meet the demand for 3G and 4G services, we expect that the increasing proliferation in India of such services and the higher tower density required will lead to demand for new towers from their customers.
New Revenue Streams
Considering the proliferation of data services, expansion of 3G/4G network, infrastructure expansion across B & C class cities, there is likely to be a surge in demand for In-building solutions.
Also, TRAI recommendations on Telecom Infrastructure Policy dated April 2011 promote IBS sharing as it provides for:
• All buildings including hospitals having more than 100 beds and shopping malls of more than 25,000 square feet super built area to be IBS enabled within one year;
• IBS/DAS solutions to be put in all Central Government buildings including central PSU buildings, Airports and buildings falling under their jurisdiction & control;
• IP-1 and telecom service providers may be mandated to share IBS/DAS system deployed in the buildings, complexes or streets. We have already completed a pilot implementation of IBS and are geared up to meet the customer’s needs to deploy additional
IBS across the network.
In addition, there exists the possibility of offering transmission backhaul through optical fibre connectivity and microwave connectivity at towers in the future, subject to favourable regulatory changes, as well as providing first level maintenance services in relation to customers’ active infrastructure installed at towers.
Threats
General economic conditions in India
Indian economy has shown signs of slowdown in growth over the last several years, with real GDP growth rate decreasing to
6.5% in the year ended March 31, 2012 from 6.7% in the year ended March 31, 2011, 7.4% in the year ended March 31, 2010 and 9.3% in the year ended March 31, 2009.
As Bharti Infratel’s business and growth prospects mainly depend on demand from wireless telecommunications service providers in India, any adverse impact of recent economic conditions on the customers and the broader operating environment could have a negative effect on the Company.
Regulatory Environment in India
Financial year 2012-13 experienced uncertain regulatory environment with 2G license allotment taking center stage as a political agenda in India. Following the 122 license cancellations and having to rebid spectrum at higher prices in the recent rounds of auction, operators may look towards greater cost rationalizations, including optimizing the existing networks.
Further, the wireless telecommunications industry may face policy changes in relation to spectrum pricing, auction of licenses, implementation of EMF radiation norms, etc.
Such regulatory developments may have a significant bearing on the long term growth prospects of the industry along with a setback to government’s agenda as laid out in the National Telecom policy. The implementation of the regulatory recommendations could result in increased costs for telecommunications service providers, and as a result, reduced demand for new towers or collocations from our customers, which could in turn adversely affect our business.
The industry looks forward to reasonable clarity on these regulatory aspects from the authorities in light of the government’s own articulated policy directions on affordability and rural penetration.

29

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Financial Results and Results of Operations
Bharti Infratel put up a healthy performance in the financial year 2012-13. On a consolidated basis, the Company added 9,934
(gross) co-locations during the year, while net co-locations added were 6,700. As on March 31, 2013, average sharing factor stood at 1.91 times, on a consolidated basis.
Our consolidated revenue from operations for the year ended March 31, 2013 was ` 102,720 Mn, a growth of 8.7% compared to year ended March 31, 2012. Our consolidated revenue comprises of primarily revenues from co-locations of Bharti Infratel and 42% economic Interest in Indus and their energy billings, and revenues from Bharti Infratel Ventures Ltd (BIVL). For the year ended Mar 31, 2013, Bharti Infratel and Indus had average sharing factors of 1.81 and 1.99 per tower, respectively.
The Company on a consolidated basis had an EBITDA of ` 38,354 Mn witnessing a growth of 8.5% year on year. The EBITDA margin for the financial year ended March 31, 2013 was 37.3%. The Company on a consolidated basis reported a net income of
` 10,025 Mn for the full year ended March 31, 2013 i.e. 9.8% of our consolidated revenues, registering Y-o-Y growth of 33.8%.*
The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in
India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the
Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis except in case of assets for which fair valuation is carried out. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.
Risks & Concerns
The following section discusses the various aspects of enterprise-wide risk management. Readers are cautioned that the risk related information outlined here is not exhaustive and is for information purpose only.
Bharti Infratel believes that risk management and internal control are fundamental to effective corporate governance and the development of a sustainable business. Bharti Infratel has a robust process to identify key risks across its operations and prioritize relevant action plans that can mitigate these risks. Key risks that may impact the Company’s business include:
Changes in regulatory environment
The regulatory environment in India continues to be challenging. Recent regulatory developments will have significant implications on the future of telephony as well as India’s global competitiveness. The entire industry looks to the Government for a fair, transparent and sustainable telecom regime. Amidst this uncertain regulatory environment, the positive feature is that larger players continue to enjoy majority of market share. Considering we derive a substantial portion of our revenues from the three largest telecom players in India, the risk is mitigated to a large extent.
Natural disasters damaging telecom networks
The Company’s telecom networks are subject to risks of natural disasters or other external factors. The Company maintains insurance for its assets, equal to the replacement value of its existing telecommunications network, which provides cover for damage caused by fire, special perils and terrorist attacks. Such failures and natural disasters even when covered by insurance may cause disruption, though temporary, to the Company’s operations. The Company has been investing significantly in business continuity plans and disaster recovery initiatives which will enable it to continue with normal operations and offer seamless service to our customers under most circumstances.

INTERNAL CONTROL SYSTEMS
The Chief Executive Officer and Chief Financial Officer are accountable for financial controls, measured by objective metrics on accounting hygiene and audit scores. The Company deploys a robust system of internal controls that facilitates the accurate and timely compilation of financial statements and management reports, ensures regulatory and statutory compliance, and safeguards investor interest by ensuring the highest level of governance and periodic communication with investors.
The Audit Committee reviews the effectiveness of the internal control system in the Company and also invites the senior management/functional directors to provide an update on their functions from time to time. A Certificate forming part of the
Corporate Governance Report confirms the existence of effective internal control systems and procedures in the Company.
* Revenue and EBIDTA are excluding other Income

30

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

The Company’s Internal Assurance Group also conducts periodic assurance reviews to assess the adequacy of internal control systems and reports to the Audit Committee of the Board.
M/s. Protiviti Consulting Private Limited are the internal auditors of the Company and they submit quarterly audit report to the audit committee. The Company has taken several steps to enhance the internal control systems across all its circle operations such as: significantly improving the quality and frequency of various reconciliations, enhancing the scope and coverage of revenue assurance checks, segregation of duties, rolling out self-validation checks, regular physical verification, systems audits, desktop reviews as well as continuous training and education.
In summary, the healthy balance between empowerment and accountability at every operating level fosters a culture of responsible growth and well-judged risk taking.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES
Integrating the best global practices with business operations is at the heart of our Human Resource strategy. This revolves around the pillars of productivity, culture and capability building. Human Capital development has facets of generating focus on Hi-Potential initiatives (HIPO), Technical, Functional, Behavioral and Leadership skills.
Technical & Functional Learning
Your company has developed customized interventions for certifying technicians on the tower equipment. We have also deployed process simulations and functional skill building on the e-Learning format.
Hi-Pot (HIPO) Initiatives
We have developed a job skill mapping for the critical roles in the organization, which help us in identifying employees for leadership pipeline at various levels. We have also created pipelines for leadership across various roles. The Company also tied-up with leading global business schools/ institutions for various skill building initiatives for this segment.
Leadership & Behavioral Learning
Our leadership competency framework is well integrated with our Talent Management practices. This helps in selecting the right talent, development of leadership behaviors and in building a performance oriented culture. We have also written and deployed a Competency Development Resource Guide which is a repository of resources for development planning on our leadership competency behaviors.

OUTLOOK
As one of the leading providers of tower infrastructure services, the Company is well poised to benefit from the demand for towers as India is at a critical inflection point of data growth and the incremental voice growth. The operator landscape is also rationalizing as some of the evils of hyper-competition are going away and operators focus with a renewed rigor on rollouts, seamless coverage and new technologies in order to effectively compete in the marketplace and recover economic returns on the enormous investments made on spectrum and license.
Bharti Infratel’s outlook is in line with future growth potential of the sector. With a global scale of operations, pan India geographic spread, significant deployment expertise and healthy relationships with the customers who are India’s leading telecom operators, the Company is poised to benefit from all growth opportunities in the Indian market. Also our continued unwavering focus on cost and synergies across the organization will keep us in a healthy financial position and this very business model augurs well for its expansion and success in new geographies.

SUMMARY
Despite some degree of recent slowdown, India continues to be one of the fastest growing economies in the world with a significant demand for telecom services on the back of low rural penetration levels, poor broadband access and a large and growing youth population with demand for high speed data and allied telecom services.
As a leading provider of telecom tower Infrastructure services, the Company is well positioned to benefit from the secular growth of this sector, while further aiding the vision and goal of providing affordable telephone and broadband access to all parts of the country.

31

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Report on Corporate Governance
GOVERNANCE PHILOSOPHY
The aim of Corporate Governance is to ensure commitment of the Board in managing the Company in a transparent manner for maximizing long-term value of the Company for its shareholders and all other partners. It integrates all the participants involved in a process, which is economic, and at the same time social.
At Bharti Infratel, corporate governance practices are based on the following broad principles with the objective of adhering to the highest standard of governance through continuous evaluation & benchmarking:












Well-experienced and diverse Board of Directors;
Adoption of transparent procedures and practices and arriving at decisions on the strength of adequate information;
Ensuring compliance with regulatory and fiduciary requirements in letter and spirit;
High levels of disclosures for dissemination of corporate, financial and operational information to all its stakeholders;
Adoption of policy on tenure of independent directors, rotation of auditors and a code of conduct for directors and senior management; Creation of committees for audit, HR & ESOP and investor grievance;
Ensuring complete and timely disclosure of relevant operational information to enable the Board to play an effective role in guiding strategy;
Informal meeting of independent directors without the presence of any non independent/executive directors to identify areas where they need more clarity or information and then put them before the Board;
Reviewing regularly and establishing effective meeting practices that encourage active participation and contribution from all members;
Independence of directors in reviewing and approving corporate strategy, major business plans and activities; and
Well defined corporate structure that establish checks and balances and delegates decision making to appropriate levels in the organization, though the Board remains in effective control of the affairs of the Company at all times.

Governance Structure
The corporate governance structure of our Company is multi-tiered, comprising governing/functional business management boards at various levels, each of which is interlinked in the following manner:
a) Strategic Supervision and Direction – by the Board of Directors, who exercise independent judgment in overseeing management performance on behalf of the shareowners and other stakeholders and hence plays a vital role in the oversight and management of the Company;
b) Control and implementation – by the Infratel Executive Committee. This team owns and drives company-wide processes, systems and policies and meets on a monthly basis to review execution of business strategy and ensuring operational synergies are achieved. This team also functions as a role model for leadership development and as a catalyst for imbibing customer centricity and meritocracy in the culture of the Company;
c) Operations management – by the Circle Executive Committee for day-to-day management and decision making, focused on enhancing the efficiency and effectiveness of the circle business indicators; and
d) Risk Committee which monitors the effectiveness of the risk management process and reviews & approves the risk mitigation strategies of the Company.
Our governance structure helps in clearly determining the responsibilities and entrusted powers of each of the business entities, thus enabling them to perform those responsibilities in the most effective manner. It also allows us to maintain our focus on the organizational DNA and current and future business strategy, besides enabling effective delegation of authority and empowerment at all levels.
Office of the Ombudsperson
The Office of the Ombudsperson is an independent forum for employees and external stakeholders of the Company to raise concerns and complaints about improper practices which are in breach of the Code of Conduct.
The Office aims to provide a fair and equitable redressal mechanism. The process is designed to offer protection to the complainant provided the disclosure is made in good faith and the alleged action constitutes a genuine and serious breach of Code of Conduct. The Ombudsperson treats all disclosures in a confidential and sensitive manner.
32

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Prevention of Sexual Harassment
Bharti is committed to being an equal opportunity employer, and in order to support this, we are strongly committed to creating a harassment and discrimination free workplace. The Company has a ‘zero-tolerance’ approach towards any act of sexual harassment.
Information Security
Information assets of the Company are provided comprehensive protection against the consequences of breaches of confidentiality, failures of integrity, interruptions to their availability, loss of authenticity and/ or repudiation of a transaction.
The Bharti Infratel Information Security Policy provides management direction and support to ensure protection of Company’s information assets, and to allow access, use and disclosure of such information in accordance with appropriate standards, laws and regulations.
Information Security and Business Continuity Certification:
ISO 27001:
Taking forward the Information Security framework, the process of setting up Information Security Management System (ISMS) was initiated last year. This covered our Head Office, Tower Operations Center, Data Center and the circle offices of Madhya
Pradesh & Chhattisgarh, Bihar, Assam and North-East.
Training on implementation of information security management systems was imparted to 33 employees who have been certified as “ISO 27001 Implementer”. Regular training sessions and awareness campaigns were conducted to ensure understanding and awareness of the Information Security policy across the organization.
Assessment on documentation and information security controls implementation was conducted by the British Standard of
Institution (BSI) as part of the certification audit process. We have been awarded the coveted ISO 27001 certificate without a single non-conformity. Successful ISO 27001 certification reiterates our commitment towards providing our customers with a secure and trustworthy service.
BS 25999:
We have invested substantially in the implementation of business continuity management systems and disaster recovery plans.
Last year, we embarked upon a BS 25999 audit and certification program. This covered our Head Office, Tower Operations
Center, Data Center and the circle offices of Madhya Pradesh & Chhattisgarh, Bihar, Assam and North-East.
Over 30 employees have been trained and certified as “ISO 22301 Implementer” to put into place the Business Continuity
Management system across the organization.
The certification audit process was done by the British Standards of Institution (BSI) in March-April 2013. We have been recommended for certification without a single non-conformity. Recommendation for award of BS 25999 certification has helped benchmark our business continuity and disaster recovery plans with global standards.

BOARD OF DIRECTORS
The Board of Directors along with its committees provides leadership and guidance to the Company’s management and directs, supervises and controls the performance of the Company.
Meeting, Attendance and Composition
During the financial year 2012-13, the Board of Directors met 6 (six) times on April 30, 2012; August 3, 2012; August 8, 2012;
November 5, 2012; December 22, 2012 and January 31, 2013. The period between any two consecutive meetings of the Board of Directors of the Company was not more that 4 (four) months.
The Board of Directors approved 26 (twenty six) matters by passing resolution(s) by circulation during the financial year 2012-13.
The Board of Directors presently consists of 10 (ten) directors comprising of one managing director and nine non-executive directors (NED) of which 5 are Independent. The Chairman is a Non-executive director.
Detailed profile of each of the directors is available on the website of the Company at www.bharti-infratel.com in the Investor
Relations section.
33

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Composition of the Board of Directors of the Company and other directorship(s)/ committee membership(s)/ Chairmanship(s) as on March 31, 2013, number of meetings held during their tenure and attended by them etc. are given in Table – 1.
Table – 1 Details about Company’s Board of Directors
ATTENDANCE RECORD DURING FINANCIAL YEAR 2012-13
Name of Director
No. of Board Meetings held Attendance at last during his/ her tenure and
AGM
attended
Held
Attended
Executive Director
Mr. Akhil Gupta (MD)
6
Non-executive Directors
3
Mr. Inder Walia1
3
Mr. Murray Philip King3
3
Mr. Rakesh Bharti Mittal
(Chairman)2
3
Mr. Rohit Sipahimalani1
6
Mr. Sanjay Nayar4
Mr. Sarvjit Singh Dhillon
6
3
Mr. Sunil Bharti Mittal1
Non-executive Independent Directors
3
Mr. Bharat Sumant Raut2
3
Mr. Jitender
Balakrishnan2
3
Ms. Leena Srivastava3
Mr. N Kumar
6
3
Mr. Vinod Dhall2

6

DIRECTORSHIP/ MEMBERSHIP ON MARCH 31, 2013
Number
Committee membership(s)/ of outside chairmanship(s)^ Directorship(s)*
Membership(s) Chairmanship(s)
(including
chairmanship)

Yes

7

6

3

2
25
2

No
NA
NA

NA
Nil
8

NA
Nil
3

NA
Nil
1

36
3
4
2

No
No
No
No

NA
6
3
NA

NA
4
2
NA

NA
1
Nil
NA

3
3

NA
NA

4
12

3
6

3
1

2
6
3

NA
Yes
NA

3
6
5

1
4
7

Nil
3
3

* Excluding Private Companies, Foreign Companies, Section 25 Companies, Trusts and Alternate Directorship
^ Committees for this purpose mean Audit Committee and Shareholders’/Investors’ Grievance Committee of Indian public companies, including committees of
Bharti Infratel Limited
1
Ceased to be a director w.e.f. September 3, 2012
2
Appointed as additional director w.e.f. September 3, 2012
3
Appointed as additional director w.e.f. November 5, 2012
4
Mr. Sanjay Nayar ceased to be a nominee director w.e.f. September 3, 2012 and appointed as an additional director w.e.f. September 3, 2012
5
Board meeting dated November 5, 2012 attended by alternate director Mr. Hui Weng Cheong
6
Board meeting dated August 3, 2012 attended by alternate director Mr. Ravi Lambha

Independent Directors
Clause 49 of the Listing Agreement with the stock exchanges requires every listed company to have the requisite number of independent directors on the board and also sets out various criteria for a person to be eligible for appointment as an
Independent Director.
The Company has formulated a comprehensive policy for independent directors in line with the requirements under clause 49 of the listing agreement. The policy provides that at the time of appointment and thereafter every year in April, the independent directors submit a self declaration confirming their independence and compliance with the eligibility criteria as laid above among other things. All such declarations are placed before the Board for information.
All independent directors meet separately prior to the commencement of every board meeting without the presence of any non independent director or representatives of management to discuss and form an independent opinion on the agenda items and other board related matters. Mr. N Kumar is the Lead Independent Director.
Information supplied to the Board
Board members are given agenda papers along with necessary documents and information in advance of each meeting of the
Board and Committee(s). However, in case of business exigencies or urgencies, the resolution(s) are passed by way of circulation.

34

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Code of Conduct
The Company has laid down a Code of Conduct (Code) for all Board members and senior management of the Company. The
Code is available on the website of the Company www.bharti-infratel.com. The Code has been circulated to all members of the
Board and senior management and they have affirmed compliance with the Code. A declaration signed by the Chief Executive
Officer (CEO) to this effect is attached as Annexure - I to this report.
Certification
The certificate required under clause 49(V) of the listing agreement duly signed by the Managing Director, Chief Executive
Officer and Chief Financial Officer was placed before the Board and the same is attached as Annexure - II to this report.
Risk Mitigation Plan
The Company has laid down procedures to inform the Board members about the risk assessment and minimization procedures.
These procedures are being periodically reviewed to ensure that management controls risk through means of properly defined framework. COMMITTEES OF THE BOARD
The Board of Directors has constituted committee(s) of directors, with adequate delegation of powers. The Company Secretary of the Company acts as the secretary to the meetings of the committees. Each committee has its own charter which sets forth the purposes, goals and responsibilities of the committees. As at the year end, there are 4 (four) committees of the Board as per following details:
1. Audit Committee
As on March 31, 2013, the Audit Committee of the Board comprises of 4 (four) non executive directors of which 3 (three) are independent. The Chairman of the Audit Committee is a Non-executive Independent director.
The role and terms of the Audit Committee covers the area of Clause 49 of the listing agreement with stock exchanges and section 292A of the Companies Act, 1956 besides other terms as may be referred to by the Board of Directors of the Company.
The charter covering the role and power of the Committee is available on the website of the Company www.bharti-infratel.com which broadly include approval of annual internal audit plan; review of financial reporting systems; ensuring compliance with regulatory guidelines; discussions on quarterly, half yearly and annual financial results; interaction with statutory, internal and cost auditors; recommendation for appointment and remuneration of auditors.
In addition, the Committee also reviews, as applicable:
a.
b.
c.
d.
e.
f.

Management’s discussion and analysis of Company’s operations;
Periodical internal audit reports;
Letters of statutory auditors to management on internal control weakness, if any;
Statement of significant related party transactions;
Financial statements, in particular, investment made by subsidiary company; and
Risk framework.

Meeting, Attendance and Composition
During the financial year 2012-13, the Audit Committee met 4 (four) times i.e. on April 30, 2012; August 3, 2012; November 5,
2012 and January 31, 2013. The time gap between two meetings was less than four months. The Audit Committee members approved 1 (one) matter by passing resolution by circulation during the financial year 2012-13.
Further the Committee held a video conference call on January 24, 2013 before the regular meeting to discuss internal assurance report and internal control issue. This provides an opportunity to the Audit Committee to devote more time on other significant matters in regular meeting.
The composition and attendance of members at the meetings held during the financial year 2012-13, are given in Table – 2.

35

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Table - 2 Details of Audit Committee
Name of Director

No. of Meetings held during his tenure and attended
Held
Attended

No. of Conference call held during his tenure and attended
Held
Attended

Non-executive Independent Directors
Mr. Bharat Sumant Raut – Chairman1
Mr. Jitender Balakrishnan1
Mr. Vinod Dhall1
Mr. N Kumar2
Non-executive Directors

2
2
2
2

2
2
2
2

1
1
1
NA

1
1
1
NA

Mr. Rohit Sipahimalani2
Mr. Sanjay Nayar3
Mr. Sarvjit Singh Dhillon4
Executive Director

2
3
1

25
2
1

NA
1
NA

NA
1
NA

Mr. Akhil Gupta2

2

2

NA

NA

Appointed as member w.e.f. September 3, 2012
Ceased to be member w.e.f. September 3, 2012
3
Mr. Sanjay Nayar ceased to be a member w.e.f September 3, 2012 and again appointed as member w.e.f. December 22, 2012
4
Mr. Sarvjit Singh Dhillon was appointed as member w.e.f. September 3, 2012 and ceased to be a member w.e.f. December 22, 2012
5
Audit Committee meeting dated August 3, 2012 attended by alternate director Mr. Ravi Lambha
1

2

2. HR & ESOP Compensation Committee
The Board of Directors has constituted the HR & ESOP Compensation Committee which also serves as a remuneration Committee as per schedule XIII of the Companies Act, 1956 and the non-mandatory requirements prescribed in clause 49 of the listing agreement. As on March 31, 2013 the HR & ESOP Compensation Committee comprises of 3 (three) non executive directors of which 2 (two) are Independent. The Chairman of the Committee is a Non-executive Independent director.
The constitution, role and terms of the HR & ESOP Compensation Committee covers the area of compliance with the provisions of the Companies Act, 1956, the Securities Exchange Board of India Act, 1992, and the applicable rules and guidelines promulgated there under and the listing agreement with stock exchanges. The key responsibilities of the HR & ESOP Compensation
Committee include the following:
(i) recommending senior managers and such other key management personnel for the Company, as the Board may determine, and to determine the compensation payable to the management personnel and staff, which shall be market-related, consisting of a fixed and a variable part;
(ii) review the performance of the management personnel and review and approve compensation strategy from time to time in the context of the then current Indian market in accordance with applicable laws. However, the Committee shall in no event consider any compensation payable by the Company to its Directors and/or employees, which are contractual arrangements between the Company and the directors and/or employees of the Company, as the case may be;
(iii) framing suitable policies and systems to ensure that there is no violation, by an employee of any applicable laws in India or overseas, including: (a) The Securities and Exchange Board of India (Insider Trading) Regulations, 1992; or (b) The Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to the
Securities Market) Regulations, 1995;
(iv) nalysing, monitoring and reviewing various human resource and compensation matters; a (v) perform such functions as are required to be performed by the compensation Committee under the Securities and Exchange
Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999; and
(vi) perform such other activities as may be delegated by the Board of Directors and/or are statutorily prescribed under any law to be attended to by such Committee.
Meeting, Attendance and Composition
During the financial year 2012-13, the HR & ESOP Compensation Committee met 4 (four) times i.e. on April 30, 2012; August
3, 2012; November 5, 2012 and January 31, 2013. The time gap between two meetings was less than four months. The HR &
ESOP Compensation Committee members approved 1 (one) matter by passing resolution by circulation during the financial year 2012-13.

36

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

The composition and attendance of members at the meetings held during the financial year 2012-13, are given in Table – 3.
Table – 3 Details of HR & ESOP Compensation Committee
Name of Director

Category

Mr. N Kumar – Chairman1
Ms. Leena Srivastava2
Mr. Inder Walia3
Mr. Murray Philip King2
Mr. Rakesh Bharti Mittal4
Mr. Rohit Sipahimalani3
Mr. Sanjay Nayar5

Non executive Independent director
Non executive Independent director
Non-executive director
Non-executive director
Non-executive director
Non-executive director
Non-executive director

No. of Meetings held during his/ her tenure and attended
Held
Attended
2
2
1
0
2
2
1
1
1
1
2
26
3
1

Appointed as member w.e.f. September 3, 2012
Appointed as member w.e.f. November 5, 2012
Ceased to be members w.e.f. September 3, 2012
4
Mr. Rakesh Bharti Mittal was appointed as member w.e.f. September 3, 2012 and ceased to be a member w.e.f. December 22, 2012
5
Ceased to be a member w.e.f. December 22, 2012
6
HR & ESOP Compensation Committee meeting dated August 3, 2012 attended by alternate director Mr. Ravi Lambha
1

2
3

Remuneration Policy for Directors
Remuneration paid to executive director
The remuneration of executive director i.e. Mr. Akhil Gupta - Managing Director is approved by the Board of Directors within the limits approved by the shareholders on the basis of the recommendation of the HR & ESOP Compensation Committee.
The executive directors’ remuneration has two components: fixed pay and variable pay (performance linked incentive). The fixed pay is paid to the director on monthly basis, the performance linked incentive is paid on the basis of individual performance after the end of financial year. In addition to the fixed and variable pay, Mr. Akhil Gupta is also entitled to ESOPs as applicable from time to time and other perquisites and retirement benefits as per the policy of the Company.
Remuneration paid to Non-executive Independent director
As per the Independent Director Policy adopted by the Board, the independent directors are eligible for sitting fees and commission. Details as per the policy are as follows:
• Commission up to a maximum amount of ` 1,000,000/- per annum (for meetings where financial results are considered);
• Chairman of the audit committee is entitled to an additional commission of ` 500,000/- per annum (for meetings where financial results are considered);
• The commission is payable annually after approval of financial results for the year;
• The payment of commission is prorated to the number of meetings attended by the director;
• The payment of commission is subject to availability of sufficient profits within an overall ceiling of 1% or 3% of net profits and is within the limits approved by the shareholders in general meeting held on July 22, 2008;
• Sitting fees of ` 10,000/- for attending meeting of the Board;
• Sitting fees of ` 10,000/- for attending all the meetings of Committee of Board at one occasion;
• Reimbursement/ arrangement for payment of out of pocket expenses incurred by the directors for attending the meeting.
There are no pecuniary relationships or transactions between the Independent directors and the Company, except for sitting fees and commission drawn by them for attending the Board and Committee(s) thereof.

37

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Remuneration to directors
Table - 4 gives details of remuneration paid to directors. During 2012-13, the Company did not advance any loan to any of its directors. Table – 4 Remuneration to directors Name of the
Director
Mr. Akhil Gupta
Mr. Bharat
Sumant Raut
Mr. Jitender
Balakrishnan
Ms. Leena
Srivastava
Mr. N Kumar
Mr. Vinod Dhall
Total

(figures in `)
Sitting Fees
Nil
50,000

Salary and
Allowances1
36,243,473
Nil

Performance
Linked Incentive
27,370,000
Nil

50,000

Nil

20,000
70,000
50,000
240,000

Perquisites2

Commission3

Total

39,600
Nil

Nil
750,000

63,653,073
800,000

Nil

Nil

500,000

550,000

Nil

Nil

Nil

250,000

270,000

Nil
Nil
36,243,473

Nil
Nil
27,370,000

Nil
Nil
39,600

Nil
500,000
2,000,000

70,000
550,000
65,893,073

Note: No director has been granted any stock options during the year.
1
The salary and allowance includes the Company’s contribution to the Provident Fund.
2
The value of the perquisites is calculated as per the provisions of the Income Tax Act, 1961.
3
Commission provision for financial year 2012-13.

3. Shareholders’/ Investors’ Grievance Committee
The shareholders’/Investor’ Grievance Committee has been constituted on September 3, 2012 in accordance with Clause 49 of the listing agreement. The Committee comprise of 3 (three) members. Mr. Rakesh Bharti Mittal, Non-executive director is the Chairman of the Committee.
The main function of the investors’ grievance Committee of the Board is to strengthen the investor relations. The Committee looks into redressal of shareholders’ complaints and is responsible for supervising and ensuring efficient and judicious transfer of shares and proper and timely attendance on the investors grievances. The key responsibilities of the Committee are as under:
(i) Redressal of Shareholders’/Investors’ complaints;
(ii) Allotment of shares, approval of transfer or transmission of shares, debentures or any other securities;
(iii) Issue of duplicate certificates and new certificates on split/ consolidation/renewal;
(iv) Non-receipt of declared dividends, balance sheets of the Company; and
(v) Carrying out any other function as prescribed under in the Listing Agreement.
Meeting, Attendance and Composition
Meeting of the shareholders’/investors’ grievance Committee was held on March 28, 2013. The attendance records of members of the shareholders’ grievance Committee is given in Table - 5
Table – 5 Details of Shareholders’ Grievance Committee
Name of Director

Category

Mr. Rakesh Bharti Mittal – Chairman
Mr. Sarvjit Singh Dhillon
Mr. Akhil Gupta

Non- executive director
Non- executive director
Executive director

38

Number of meetings during the year 2012-13
Held
Attended
1
1
1
1
1
1

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Compliance Officer
Mr. Anupam Garg, Company Secretary acts as compliance officer of the Company for complying with the requirements of the listing agreement with the stock exchanges and requirements of SEBI (Prohibition of Insider Trading) Regulation, 1992.
During the financial year 2012-13, the complaints received by the Company were general in nature, which were resolved to the satisfaction of the shareholders. The status of complaints is reported to the Board on quarterly basis. Details of investors’ complaints as on March 31, 2013 are given in Table – 6.
Table – 6 Details of shareholders’ complaints during 2012-13
Complaints pending at the beginning Number of complaints received during 2012-13

Complaints redressed during the year 2012-13

Complaints pending at the end of the year (March 31, 2013)

Nil

42

42

Nil

To redress investor grievances, the Company has a dedicated e-mail address, compliance.officer@bharti-infratel.in to which investors may send their grievances.
4. Committee of Directors
In addition to the above committees, the Board has also constituted a functional committee known as the ‘Committee of
Directors’ to cater various day-to-day requirements and to facilitate seamless operations of the Company.

SUBSIDIARY COMPANIES
Clause 49 defines a ‘material non-listed Indian Subsidiary’ as an unlisted subsidiary, incorporated in India, whose turnover or net worth (i.e. paid up capital and free reserves) exceeds 20% of the consolidated turnover or net worth respectively, of the listed holding company and its subsidiaries in the immediately preceding accounting year.
Bharti Infratel Ventures Limited is a material non-listed Indian subsidiary as defined under clause 49 of the listing agreement.
Mr. N Kumar, Non-executive Independent director of the Company has been nominated and appointed by the Company as a director on the Board of Bharti Infratel Ventures Limited w.e.f. December 27, 2012, in compliance with the clause 49(III)(i) of the listing agreement with the stock exchanges.

GENERAL BODY MEETINGS
Location, date and time of annual general meetings held during the last three years and special resolutions passed thereat are given in Table - 7
Table – 7 Details of Annual General Meeting
Year

Time, Day, Date & Location

Summary of Special Resolutions

2011-2012

5:00 p.m. IST
Friday
August 3, 2012
Bharti Crescent, 1, Nelson Mandela Road,
Vasant Kunj, Phase – II, New Delhi 110 070

None

2010-2011

3:30 p.m. IST
Friday
July 22, 2011
Bharti Crescent, 1, Nelson Mandela Road,
Vasant Kunj, Phase – II, New Delhi 110 070

None

2009-2010

4:30 p.m. IST
Monday
August 9, 2010
Bharti Crescent, 1, Nelson Mandela Road,
Vasant Kunj, Phase – II, New Delhi 110 070

None

There was no matter required or proposed to be dealt by the Company through postal ballot as required pursuant to section
192A of the Companies Act, 1956.
39

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

DISCLOSURES
Related Party Transactions
A statement in the summary form of transactions with related parties in ordinary course of business is placed periodically before the Audit Committee as well as to the Board on quarterly basis.
There are no material individual transactions with related parties which are not in the normal course of business and material individual transactions with related parties or others which are not on an arm’s length basis.
The Company’s major related party transactions are generally with its holding company, subsidiary and joint venture.
Details of related party transactions have been disclosed in the Notes forming part of financial statements.
Accounting Treatment in Preparation of Financial Statements
The guidelines/ accounting standards as defined by the Institute of Chartered Accountants of India (ICAI) and notified by the
Companies (Accounting Standards) Rules, 2006 have been followed in preparation of the financial statements of the Company.
Compliances by the Company
There has neither been any non-compliance nor any penalty, stricture imposed by the stock exchanges or SEBI or any other authority, on any matters related to capital market during the last three years. Insider Trading
In compliance with the SEBI regulation on prevention of insider trading, the Company has instituted an insider trading policy for its directors, management and other officers, who may reasonably have access to the Company’s price sensitive information.
The Policy lays down procedures to be followed and disclosures to be made, while dealing with the shares of the Company and cautioning them on the consequences of non-compliances.
Whistle Blower Policy
Consistent with the Company’s commitment to maintain the highest standards of integrity, compliance with the law and its Code of Conduct, the Company has institutionalized a whistle blower policy. The policy has been designed to allow and encourage employees to bring to management’s notice anything that is unethical or unprofessional in the Company.
This policy establishes guidelines and procedures for handling whistle blower claims. By appropriately responding to allegations by employees, suppliers, customers or contractors that the Company or its officials are not meeting the legal obligations, the
Company can better support an environment where compliance is the norm and thereby, avoid a diminution in shareholder value.
This policy helps the management to ensure timely and appropriate action thereby ensuring higher levels of transparency in the organization.
Disclosure pursuant to Clause 5A of Listing Agreement
As required under clause 5A of Listing Agreement, the details in respect of the shares lying in the demat account “Bharti
Infratel Limited – Unclaimed Suspense Account” till March 31, 2013 is as under:
S. No.
(i)
(ii)
(iii)
(iv)

Description
Aggregate number of shareholders and the outstanding shares in the initiation of suspense account
Number of shareholders who approached for transfer of shares from suspense account during the year 2012-13
Number of shareholders to whom shares were transferred from suspense account during the year 2012-13
Aggregate number of shareholders and the outstanding shares in the suspense account lying as on March 31, 2013

No. of Cases
03

No. of Shares
1000

02

950

02

950

01

50

Voting rights in respect of the aforesaid shares will remain frozen till the time such shares are claimed by the concerned
Shareholders.

40

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

DETAILS OF COMPLIANCES WITH MANDATORY REQUIREMENTS OF LISTING AGREEMENT
Particulars

Clause of Listing Agreement

Compliance Status

I.
(A)
(B)
(C)
(D)
II.
(A)
(B)
(C)
(D)
(E)
III.
IV.
(A)
(B)

Board of Directors
Composition of Board
Non-executive Directors’ compensation & disclosures
Other provisions as to Board and Committees
Code of Conduct
Audit Committee
Qualified & Independent Audit Committee
Meeting of Audit Committee
Powers of Audit Committee
Role of Audit Committee
Review of Information by Audit Committee
Subsidiary Companies
Disclosures
Basis of related party transactions
Disclosure of Accounting Treatment

49(I)
49 (IA)
49 (IB)
49 (IC)
49 (ID)
49 (II)
49 (IIA)
49 (IIB)
49 (IIC)
49 (IID)
49 (IIE)
49 (III)
49 (IV)
49 (IVA)
49 (IVB)

(C)
(D)

Board Disclosures
Proceeds from public issues, rights issues, Preferential issues, etc.
Remuneration of Directors
Management
Shareholders
CEO/CFO Certification
Report on Corporate Governance
Compliance

49 (IVC)
49 (IVD)

Complied
No different treatment is followed Complied
Complied

49 (IVE)
49 (IVF)
49 (IVG)
49 (V)
49 (VI)
49 (VII)

Complied
Complied
Complied
Complied
Complied
Complied

(E)
(F)
(G)
V.
VI.
VII.

Complied
Complied
Complied
Complied
Complied
Complied
Complied
Complied
Complied
Complied

DETAILS OF COMPLIANCES WITH NON - MANDATORY REQUIREMENTS OF LISTING AGREEMENT
1.
• • •

The Board
Non-executive Chairman’s Office
The Chairman of the Company is a non–executive director. Chairman is not entitled to any compensation for holding office.
Tenure of Independent director not to exceed 9 years
As per the policy, tenure for the independent director is three terms of three years each.
Qualification of the Independent directors
All the Independent directors of the Company have the requisite qualifications and experience which enable them to contribute effectively to the Company.

2. Remuneration Committee The Company has a HR & ESOP Compensation Committee which also undertakes the functions of remuneration Committee.
The composition and other details of the same have been given in the preceding pages of this report under the Board
Committee section.
3. Shareholders’ Rights The Company has a policy of announcement of the audited quarterly results. The results as approved by the Board of Directors (or committees thereof) are first submitted to the stock exchanges within 15 minutes of the approval of the results. Once taken on record by the stock exchanges, the same is communicated to the media by way of press release. The quarterly financial statements are published in newspapers and uploaded on Company’s website www.bharti-infratel.com. 4. Audit Qualifications During the previous financial year, none of the auditors’ reports on quarterly results were qualified.
5. Training of Board members In the course of Board/ Audit Committee meetings, the directors are provided information on business model etc.
6. Mechanism for evaluating non-executive Board members The Company has not adopted any mechanism for evaluation of individual performance of non-executive directors.
41

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

7. Whistle Blower Policy The Company has a whistle blower policy. A note has been given in the preceding pages of this report.

MEANS OF COMMUNICATION
The quarterly audited results are published in the leading dailies like ‘Mint’ (English Daily all editions) and ‘Hindustan’
(vernacular newspaper) and are also posted on our website for the information of shareholders/Investors. We organize an earnings call with analysts and investors on the day of announcement of results and the transcript is posted on the website soon after.
Up-to-date financial results, annual reports, shareholding patterns, official news releases, financial analysis reports and other general information about the Company are available on the Company’s website www.bharti-infratel.com.
Since the time of listing of shares, we have adopted a practice of releasing a quarterly report, which contains financial and operating highlights, key industry and Company developments, results of operations, stock market highlights etc. The quarterly reports are posted on our website and are also submitted to the stock exchanges where the shares of the Company are listed.

GENERAL SHAREHOLDERS INFORMATION
Annual General Meeting
The Seventh (7th) annual general meeting of the Company is scheduled to be held as under:
Date :
Day :
Time:
Venue:

July 3, 2013
Wednesday
11:30 a.m. IST
Sri Sathya Sai International Centre,
Pragati Vihar, Lodhi Road,
New Delhi-110 003

Financial Year
April 1 – March 31
Financials announced during this financial year*:
Period to which results pertains
Quarter ended on December 31, 2012
Quarter ended on March 31, 2013

Financial Result announced on
January 31, 2013
April 30, 2013

*Company got listed on December 28, 2012. Hence, results for Q1 & Q2 although duly adopted were not announced during respective period.

Date of Book Closure
Saturday, June 22, 2013 to Wednesday, July 3, 2013 (both days inclusive).
Dividend Payment Date
The Board has recommended a dividend @ ` 3.00 per Equity Share of ` 10 each fully paid up (i.e. 30%) for the financial year
2012-13, which shall be paid on or after July 3, 2013 (within the statutory time limit of 30 days i.e. up to August 1, 2013), subject to approval by shareholders.
The Company has paid interim dividend(s) for the financial year 2012-13 @ ` 2.50 per equity share of ` 10 each fully paid up
(comprising of ` 1.50 per equity share paid out of accumulated profits up to March 31, 2012 and @ ` 1.00 per equity share paid out of current year profits) on September 7, 2012.

42

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Listing on Stock Exchanges
As on March 31, 2013, the equity shares of the Company are listed on following stock exchanges:
Name of the Stock Exchange
BSE Ltd. (BSE)

Address
Phiroze Jeejeebhoy Towers, Dalal Street,
Mumbai-400 001
Exchange Plaza, Plot No. C/1,
G-Block, Bandra Kurla Complex, Bandra
(East), Mumbai-400 051

National Stock Exchange of India Ltd.
(NSE)

Scrip Code
534816
INFRATEL

Listing fee for the Financial Year 2013-14 has been duly paid to the respective stock exchanges.
Stock Market Data
The Company’s Equity shares are listed and traded on BSE and NSE w.e.f. December 28, 2012. The price movement is provided
December 2012 onwards for this financial year. The monthly high & low during each month, in last financial year, is as below:
Month

NSE

BSE

High (`)
200.85
216.00
211.90
197.95

December 2012
January 2013
February 2013
March 2013

Low (`)
188.25
194.00
175.55
136.60

High (`)
200.00
215.50
211.50
197.55

Source: www.nseindia.com

Low (`)
184.90
192.85
175.50
163.00

Source: www.bseindia.com

Performance in comparison to broad based indices such as BSE Sensex and NSE Nifty is as under

150

5800

100

5700
5600

50

5500
5400
27-Dec

200

0
10-Jan

24-Jan

7-Feb

NSE Nifty

21-Feb

7-Mar

Infratel Share price

21-Mar

19500

150

19000

100

18500

50

18000
17500
27-Dec

Share Price (`)

NSE Nifty Index

5900

250

200

6000

20500
20000
BSE Sensex

250

6100

Share Price (`)

6200

0
10-Jan

24-Jan

7-Feb

BSE Sensex

21-Feb

7-Mar

21-Mar

Infratel Share price

Registrar and Transfer Agents (RTA)
All the work related to share registry, both in physical and electronic form, is handled by the Company’s Registrar & Transfer
Agent at the following address:
Karvy Computershare Private Limited
(Unit: Bharti Infratel Limited)
Plot No. 17-24, Vittal Rao Nagar,
Madhapur, Hyderabad 500 081
Ph No.: 040 23420815-821
Fax No.: 040 23420814 einward.ris@karvy.com Website: www.karvy.com
Toll Free No. 1-800-3454001

43

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Share Transfer System
Approximately 100% of the equity shares of the Company are held in electronic format. These shares can be transferred through the depositories without any involvement of the Company.
Transfer of shares in physical form is normally processed within 15 days from the date of receipt, provided the documents are complete in all respect.
Pursuant to Clause 47(C) of the listing agreement, we obtain certificate from a practicing company secretary on half-yearly basis to the effect that all the transfers are completed in the statutory stipulated period. A copy of the certificate so received is submitted to both stock exchanges, where the shares of the Company are listed.
Distribution of Shareholding
By number of shares held as on March 31, 2013
S. No.

Category (by no. of shares)

1

No. of shareholders

1-5000

42,068

% to holders

No. of shares

99.56 %

6,642,336

% of shares
0.35 %

2

5001-10000

16

0.04 %

109,537

0.01 %

3

10001-20000

25

0.06 %

348,300

0.02 %

4

20001-30000

9

0.02 %

209,650

0.01 %

5

30001-40000

5

0.01 %

181,485

0.01 %

6

40001-50000

12

0.03 %

541,002

0.03 %

7

50001-100000

13

0.03 %

847,567

0.04 %

8

100001 and above

106

0.25 %

1,879,863,177

99.53 %

Total

42,254

100.00 %

1,888,743,054

100.00 %

By Category of holders as on March 31, 2013
S. No.

Category

I

No. of shares

%age of holding

1,500,000,000

79.42 %

Promoter and Promoter Group
(i)
(ii)

Indian Promoters
Foreign Promoters
Total Promoters shareholding

II

Nil

Nil

1,500,000,000

79.42 %

Public Shareholding
(A)

Institutions

(i)

Mutual Funds

(ii)

Financial Institution/ Banks

851,737

0.05 %

6,959,946

0.37 %

(iii)

Foreign Institutional Investors

176,795,564

9.36 %

(iv)

Investment Fund

14,422,272

0.76 %

(v)

Private Equity

18,027,840

0.95 %

(B)

Non-Institutions

(i)

Bodies Corporate

(ii)

Individuals

(iii)

Non Resident Indians

(iv)

Clearing Members
Total Public shareholding
Total Shareholding

44

161,825,269

8.57 %

6,609,088

0.35 %

151,915

0.01 %

3,099,423

0.16 %

388,743,054

20.58 %

1,888,743,054

100.00 %

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Dematerlisation of Shares and Liquidity
The shares of the Company are compulsorily traded in dematerialized form and are available for trading with both the depositories i.e. National Securities Depositories Limited (NSDL) and Central Depository Services (India) Limited (CDSL). The shareholders can hold shares with any of the depository participants registered with these depositories. As on March 31, 2013,
1,888,743,052 equity shares are in demat form with the Depositories. ISIN for the Company’s shares is INE121J01017.
Communication Address
For Corporate Governance and Other Secretarial Related Matters
Anupam Garg
Company Secretary and Compliance Officer
Bharti Crescent, 1, Nelson Mandela Road, Vasant Kunj, Phase-II, New Delhi 110 070
Telephone No: 011-46666100
Fax No.: 011-41666137
Email: compliance.officer@bharti-infratel.in
Website: www.bharti-infratel.com
For Investor Relations Matters
Harjeet Kohli
Head – Group Investor Relations
Bharti Crescent, 1, Nelson Mandela Road, Vasant Kunj, Phase-II, New Delhi 110 070
Telephone No: 011-46666100
Fax No.: 011-41666137
Email: ir@bharti.in
For Corporate Communications and Related Matters
Raza Khan
Head – Group Corporate Communications
Bharti Crescent, 1, Nelson Mandela Road, Vasant Kunj, Phase-II, New Delhi 110 070
Telephone No: 011-46666100
Fax No.: 011-41666137
Email: corporate.communication@bharti.in

45

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Annexure I
DECLARATION
I hereby confirm that the Company has obtained from all the members of the Board and Senior Management team, affirmation of compliance with the Code of Conduct for Directors and Senior Management in respect of financial year ended March 31, 2013.
For Bharti Infratel Limited
D S Rawat
Chief Executive Officer
Place: New Delhi
Date: April 30, 2013

Annexure II
CERTIFICATION
We, Akhil Gupta - Managing Director, D S Rawat - Chief Executive Officer and Pankaj Miglani - Chief Financial Officer of Bharti
Infratel Limited, to the best of our knowledge and belief hereby certify that:
(a) We have reviewed financial statements and the cash flow statement for the year ended March 31, 2013 and: (i) these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading; (ii) these statements together present a true and fair view of the company’s affairs and are in compliance with existing accounting standards, applicable laws and regulations.
(b) There are, no transactions entered into by the company during the year that are fraudulent, illegal or violative of the company’s code of conduct.
(c) We accept responsibility for establishing and maintaining internal controls for financial reporting and that we have evaluated the effectiveness of internal control systems of the company pertaining to financial reporting and we have disclosed to the auditors and the audit committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies.
(d) We have indicated to the auditors and the Audit Committee

(i) significant changes in internal control over financial reporting during the year;
(ii) significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial statements; and
(iii) Instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an employee having a significant role in the company’s internal control system over financial reporting.

Akhil Gupta
Managing Director
Place: New Delhi
Date: April 30, 2013

46

D S Rawat
Chief Executive Officer

Pankaj Miglani
Chief Financial Officer

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Secretarial Audit Report
To,
The Board of Directors
Bharti Infratel Limited
Bharti Crescent,
1, Nelson Mandela Road
Vasant Kunj, Phase II,
New Delhi – 110070
We have examined the registers, records and documents of Bharti Infratel Limited (the Company) for the financial year ended
31st March 2013 in the light of the provisions contained in•





The Companies Act, 1956 and the Rules made thereunder;
The Depositories Act, 1996 and the Regulation made thereunder;
The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;
The Securities and Exchange Board of India (Prohibition of Insider Trading Regulations), 1992; and
The listing agreement with the National Stock Exchange of India Limited and BSE Ltd.

A. Based on our examination and verification of the records made available to us and according to the clarifications and explanations given to us by the Company, we report that the Company has, in our opinion, complied with the applicable provisions of the Companies Act, 1956 and the rules made thereunder and of the various Acts and the Rules, Regulations and Guidelines made thereunder, listing agreement as mentioned above and of the Memorandum and Articles of Association of the Company, with regard to:
1. Maintenance of various statutory and non-statutory registers and documents and making necessary changes therein as and when the occasion demands.
2. Filing with the Registrar of Companies the Forms, returns and resolutions.
3. Service of the requisite documents by the Company on its members, Registrar and Stock Exchanges.
4. Composition of the Board, appointment, retirement and resignation of directors.
5. Remuneration of executive and non executive directors.
6. Service of notice and agenda of Board Meetings and Meetings of the committee of directors.
7. Meeting of the Board and its Committees.
8. Holding Annual General Meeting and production of the various registers thereat.
9. Recording the minutes of proceedings of board meetings, committee meetings and general meetings.
10. Appointment and remuneration of Auditors.
11. The Company has declared dividend and paid to the eligible shareholders in compliance with the provisions of section
205 of the Act during the year.
12. Registration of transfer of shares held in physical mode.
13. Dematerialisation and Rematerialisation of shares.
14. Execution of contracts, affixation of common seal, registered office and the name of the Company.
15. Requirement of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) regulations,
2011.
16. Requirement of the Securities and Exchange Board of India (Prohibition of Insider Trading regulations), 1992.
17. Requirements set out in the listing agreement with the aforementioned stock exchanges.
B. We further report that the Company has complied with various requirements relating to disclosures, declarations made by the Directors with respect to directorships, memberships of committees of the Board of Companies of which they are directors, their shareholding and interest of concern in the contracts entered into by the Company in the pursuing its normal business.
For Chandrasekaran Associates
Company Secretaries

Place: New Delhi
Date: April 25, 2013

Dr. S Chandrasekaran
Senior Partner
FCS: 1644
CP : 715
47

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Standalone Financial Statements with Auditors’ Report
INDEPENDENT AUDITORS’ REPORT
To
The Board of Directors of Bharti Infratel Limited
We have audited the accompanying financial statements of Bharti Infratel Limited (“the Company”), which comprise the
Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 (“the Act”). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;
(b) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor’s Report) Order, 2003 (“the Order”) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, we report that:
(a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
(b) In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;
(c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting
Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;
(e) On the basis of written representations received from the directors as on March 31, 2013, and taken on record by the
Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.
For S.R. Batliboi & Associates LLP
Chartered Accountants
Firm’s Registration Number: 101049W per Nilangshu Katriar
Partner
Membership Number: 58814
Place of Signature: Gurgaon
Date: April 30, 2013

48

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Annexure referred to in our report of even date
Re: [Bharti Infratel Limited] (‘the Company’)
i.

(a) The Company has maintained proper records showing full particulars including quantitative details and situation with respect to most of its fixed assets, however is in the process of updating the location of certain category of assets.
(b) The Company has a physical verification program of covering all fixed assets once in three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, during the year, a substantial portion of planned physical verification of fixed assets and capital work in progress has been conducted by the management. As informed, no material discrepancies were noticed on such verification.
(c ) Fixed assets disposed-off during the year were not substantial and, therefore, do not affect the going concern assumption. ii.
Considering the nature of business of the Company, provisions of Clause 4 (ii) of the Companies (Auditor’s Report)
Order, 2003 (as amended) pertaining to physical verification of inventory and records maintained for inventory are not applicable to the Company. iii. informed, the Company has neither granted nor taken any loans, secured or unsecured to or from Companies, firms
As
or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, Clauses
(iii) (b), (iii) (c), (iii) (d),(iii) (e), (iii) (f) and (iii) (g) of the Companies (Auditor’s Report) Order, 2003, as amended by (the
Companies (Auditor’s Report) (Amendment) Order, 2004 are not applicable to the Company. iv. our opinion and according to the information and explanations given to us, there is an adequate internal control
In
system commensurate with the size of the Company and the nature of its business, for the purchase of fixed assets and for the sale of services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system of the Company.

Considering the nature of business of the Company, provision of Clause 4 (iv) of the Companies (Auditor’s Report) Order,
2003 (as amended) to the extent pertaining to internal control system for purchase of inventory is not applicable to the
Company.

v. informed, there are no parties that require to be listed in the register maintained under section 301 of the Companies
As
Act, 1956. Therefore, the provisions of clause 4(v) of the Order are not applicable to the Company and hence not commented upon. vi. The Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA of the
Companies Act, 1956 and rules framed there under. vii. our opinion, the Company has an internal audit system commensurate with the size and nature of its business.
In
viii. have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central
We
Government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956, related to the provision of telecommunication services, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. ix. (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted and accrued in respect of undisputed statutory dues including provident fund, employees’ state insurance, income- tax, sales-tax, wealth-tax, service tax, customs duty, cess and other material statutory dues applicable to it are regularly deposited with appropriate authorities.
(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees’ state insurance, income-tax, wealth-tax, service tax, salestax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.
(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows:

49

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Name of the statute

Nature of dues

Income Tax Act, 1961

Income Tax

Assam, Bihar, Orissa, Rajasthan, U.P.,
Himachal Pradesh, M.P., Chattisgarh,
JK Entry Tax Act
Karnataka VAT Act
MP VAT Act
UP Trade Act
Andhra Pradesh CST Rules
UP VAT Act
Building & Labor Welfare Cess

Entry Tax

Sales Tax
Sales Tax
Sales Tax
Sales Tax
Sales Tax
Building &
Labour Welfare
Cess

Amount
Period to which amount
(` ’000) relates 1,053,884 FY 2008-09 to 2012-13
1,257,211 FY 2007-08 Onwards

227,606
83,316
21,154
3,153
2,346
14,995

FY 2009-10 to FY 2010-11
FY 2009-10
FY 2007-08, 2008-09
FY 2008-09
FY 2008-09 Onwards
FY 2007-08

Forum where dispute is pending
ITAT, CIT Appeals, Assessing
Authority.
Supreme Court, High Court
Appellate Authority.
JCCT Appeals
M.P. High Court
Additional Commissioner Appeals
D.C. Appeals
D.C. Appeals
Building & Labor Welfare Cess
Tribunal

The above mentioned figures represent the total disputed cases without any assessment of Probable, Possible and Remote, as done in case of Contingent Liabilities.
Of the above mentioned cases, total amount deposited in respect of Entry Tax, Income Tax, Karnataka VAT, UP Trade Act, UP VAT and Building & Labor Welfare
Cess is ` 833 Mn, ` 13 Mn, ` 114 Mn, ` 4 Mn, ` 1 Mn and 15 Mn respectively.,

x.

The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year. xi. Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders. xii. According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. xiii. In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor’s Report) Order, 2003 (as amended) are not applicable to the Company. xiv. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments.
Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor’s Report) Order, 2003 (as amended) are not applicable to the Company. xv. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions. xvi. The Company did not have any term loans outstanding during the year. xvii. According to the information and explanations given to us and on an overall examination of the balance sheet of the
Company, we report that no funds raised on short-term basis have been used for long-term investment. xviii. The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956. xix. The Company did not have any outstanding debentures during the year. xx. We have verified that the end use of money raised by public issue is as disclosed in the notes to the financial statements. xxi. According to information and explanations furnished by management, which have been relied upon by us, there were no frauds on or by the Company noticed or reported during the course of our audit except as identified by the management pertaining to few cases of fraud on Company amounting to ` 10.6 million pertaining to electricity payments and asset pilferage for which appropriate provision for loss was recognized. The Company has initiated recovery proceedings and taken steps to strengthen controls.
For S.R. Batliboi & Associates LLP
Chartered Accountants
Firm’s Registration Number: 101049W per Nilangshu Katriar
Partner
Membership Number: 58814
Place of Signature: Gurgaon
Date: April 30, 2013

50

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Balance Sheet as at March 31, 2013
(` Millions)
Notes

As at
March 31, 2013

As at
March 31, 2012

EQUITY AND LIABILITIES
Shareholders' funds Share capital Reserves and surplus

3
4

18,887
157,837
176,724

5,808
141,537
147,345

Non-current liabilities Long-term borrowings Deferred tax liabilities (net) Other long-term liabilities Long-term provisions

5
6
7
8

4,087
4,777
3,275
12,139

1
4,205
5,354
1,884
11,444

9
10
11

1,687
21,679
6,708
30,074

1,443
19,548
71
21,062

218,937

179,851

71,097
19
771
59,922
5,268
12,320
149,397

72,798
65
659
59,922
4,404
9,990
147,838

37,021
2,045
772
28,220
1,482
69,540
218,937

801
2,415
178
27,873
746
32,013
179,851

Current liabilities Trade payables Other current liabilities Short-term provisions

Total equity and liabilities
ASSETS
Non-current assets Fixed assets Tangible assets Intangible assets Capital work-in-progress Non-current investments Long-term loans and advances Other non-current assets

13
14
15

Current assets
Current investments
Trade receivables
Cash and bank balances
Short-term loans and advances
Other current assets

16
17
18
19
20

12

Total assets
Summary of significant accounting policies

2.1

The accompanying notes are an integral part of the financial statements
As per our report of even date
For S. R. Batliboi & Associates LLP
Firm Registration No.: 101049W
Chartered Accountants per Nilangshu Katriar
Partner
Membership No: 58814
Place : New Delhi
Date :
April 30, 2013

For and on behalf of the board

Akhil Gupta
Managing Director

D S Rawat
Chief Executive Officer

Anupam Garg
Company Secretary

Sarvjit Singh Dhillon
Director

Pankaj Miglani
Chief Financial Officer

51

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Statement of Profit and Loss for the year ended March 31, 2013

(` Millions, except per share data)

Notes
Year ended

March 31, 2013 Income Revenues
21
44,601 Other income
22 6,558

Expenses Power and fuel Rent Employee benefits expenses Other expenses

Year ended
March 31, 2012
41,582
1,110

51,159

42,692

23 16,942
24
2,382
25 2,087
26 5,418

15,647
2,184
2,003
5,392

26,829

25,226

Earnings before interest, tax, depreciation and amortization (EBITDA)

Depreciation and amortization expense
27

Less: adjusted with general reserve in accordance with the Scheme of arrangement with Bharti Airtel Limited (note 44)

24,330

17,466

11,888

11,510

(802)

(922)

11,086 10,588

Finance costs
28
Charity and donation

7
52

10
1

11,145
10,599

Profit before exceptional items and tax 6,867
13,185

Exceptional items (note 46)
(31)
Profit before tax
13,216
6,867
Tax expenses Current tax
2,993
2,105 Deferred tax
125
270
Total tax expense
3,118

Profit for the year 10,098 Earnings per equity share (nominal value of share ` 10 each,
29
March 31, 2012 - ` 10 each) Basic
5.666

Diluted
5.653

2,375
4,492

2.578
2.572

Summary of significant accounting policies
2.1

The accompanying notes are an integral part of the financial statements
As per our report of even date
For S. R. Batliboi & Associates LLP
Firm Registration No.: 101049W
Chartered Accountants per Nilangshu Katriar
Partner
Membership No: 58814
Place : New Delhi
Date :
April 30, 2013

52

For and on behalf of the board

Akhil Gupta
Managing Director

D S Rawat
Chief Executive Officer

Anupam Garg
Company Secretary

Sarvjit Singh Dhillon
Director

Pankaj Miglani
Chief Financial Officer

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Cash Flow Statement for the year ended March 31, 2013
(` Millions)

Year ended
March 31, 2013

Year ended
March 31, 2012

Cash flows from operating activities
Profit before taxation
13,216

6,867

Adjustments for -
Depreciation and amortization expense
Interest income
Dividend income
Interest expense
Net gain on sale of current investments
Employee stock compensation expense
Revenue equalization
Rent equalization
Provision for doubtful debts and advances
Provision for capital work in progress
Loss / (profit) on sale of fixed assets (net)

11,086
(1,861)
(4,160)
1
(532)
106
(2,126)
199
251
(54)
(205)

10,588
(1,078)
(26)
249
(2,161)
200
399
35
(51)

Operating profit before working capital changes

15,921

15,022

Increase / (Decrease) in trade payables
Increase / (Decrease) in other current liabilities
Increase / (Decrease) in short-term provisions
Increase / (Decrease) in other long-term liabilities
Increase / (Decrease) in long-term provisions
(Increase) / Decrease in trade receivables
(Increase) / Decrease in short-term loans and advances
(Increase) / Decrease in other current assets
(Increase) / Decrease in long-term loans and advances
(Increase) / Decrease in other non-current assets

244
2,062
8
(776)
10
293
9,278
(1,332)
(119)
(204)

63
(577)
(9)
252
24
581
314
(508)
(52)
(125)

Cash generated from operations

25,385

14,985

Income tax paid (net of refunds)

(2,957)

(1,762)

Net cash flow from operating activities (A)

22,428

13,223

Cash flows from investing activities Purchase of fixed assets Proceeds from sale of fixed assets Loan given to parent company Loan repaid by parent company Loan given to subsidiary company Loan repaid by subsidiary company Purchase of current investments Proceeds from sale of current investments Interest received

Dividend received

(9,030)
369
(13,500)
3,670
(1,150)
400
(109,723)
74,035
1,724
4,160

(7,890)
146
(11,460)
6,100
(610)
(17,205)
16,680
1,151
-

Net cash flow (used in) investing activities (B) (49,045)

(13,088)

Cash flows from financing activities

Repayment of borrowings Proceeds from issue of share capital Share issue expenses Proceeds from exercise of stock options Interest paid Interim dividend paid Tax on Interim dividend paid

(1)
32,303
(771)
11
(1)
(4,356)
(707)

-

Net cash flow from financing activities (C)

26,478

-

53

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

(` Millions)

Year ended
March 31, 2013

Net (decrease) / increase in cash and cash equivalents during the year (A+B+C)
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year (refer note 18)
Components of cash and bank balances
Cash and cash equivalents
Balance with scheduled banks: Current account

Fixed deposits with maturity less than three months

Year ended
March 31, 2012

(139)
178
39

135
43
178

39 78
-
100

Total cash and cash equivalents
39
Other bank balances Earmarked balances with banks
733

178

Total Cash and bank balances

178

-

772

2.1

Summary of significant accounting policies

The accompanying notes are an integral part of the financial statements
Notes :
1 The above Cash flow statement has been prepared under the indirect method set out in AS-3 ‘Cash Flow Statements’ notified pursuant to the Companies (Accounting Standards) Rules, 2006 (as amended).
2. Figures in brackets indicate cash outflow.
As per our report of even date
For S. R. Batliboi & Associates LLP
Firm Registration No.: 101049W
Chartered Accountants per Nilangshu Katriar
Partner
Membership No: 58814
Place : New Delhi
Date :
April 30, 2013

54

For and on behalf of the board

Akhil Gupta
Managing Director

D S Rawat
Chief Executive Officer

Anupam Garg
Company Secretary

Sarvjit Singh Dhillon
Director

Pankaj Miglani
Chief Financial Officer

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Notes to the Financial Statements
1. CORPORATE INFORMATION
Bharti Infratel Limited (‘the Company’ or ‘BIL’) incorporated on November 30, 2006 with the object of, inter-alia, setting up, operating and maintaining wireless communication towers. The Company received the certificate of commencement of business on April 10, 2007 from the Registrar of Companies. The Registered office of the Company is situated at Bharti Crescent, 1,
Nelson Mandela Road, Vasant Kunj, Phase – II, New Delhi – 110070.
The Company has entered into a joint venture agreement with Vodafone India Limited and Aditya Birla Telecom Limited to provide passive infrastructure services in 16 Telecom circles of India and formed Indus Towers Limited for such purpose. The
Company and Vodafone India Limited are holding approximately 42% each in Indus Towers Limited and the balance 16% is held by Aditya Birla Telecom Limited. Indus Towers Limited is incorporated in India.

2. BASIS OF PREPARATION
The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in
India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the
Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis except in case of assets for which fair valuation is carried out. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.
2.1. Summary of significant accounting policies
a. Use of estimates
The preparation of financial statements is in conformity with generally accepted accounting principles (Indian GAAP) and requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates.
b. Tangible fixed assets
Fixed assets are stated at cost of acquisition, except for assets acquired under the Scheme of Arrangement from Bharti Airtel
Limited (refer note 44), which are stated at fair values as per the Scheme, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises cost of acquisition, including taxes and duties (net of CENVAT credit), freight and other incidental expenses related to acquisition and installation.
Site restoration cost obligations are capitalized when it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made.
Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure are charged to the statement of profit and loss for the period during which such expenses are incurred.
Gains or losses arising from de-recognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognised.
c. Depreciation on tangible fixed assets
Depreciation on fixed assets is calculated on a straight-line basis using the rates arrived at based on the useful lives estimated by the management, or those prescribed under the Schedule XIV to the Companies Act, 1956, whichever is higher. The Company has used the following rates to provide depreciation on its fixed assets:

55

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Useful lives

Plant and machinery

3 to 20 years

Furniture and fixtures

5 years

Vehicles
Office equipments
Computers
Leasehold improvements

5 years
2 years/ 5 years
3 years
Period of lease or useful life, whichever is less

The site restoration cost obligation capitalized as part of plant and machinery is depreciated over the period of the useful life of the related asset.
d. Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. Software is capitalized at the amounts paid to acquire the respective license for use and is amortized over the period of licence, generally not exceeding three years.
Amortization is recognized in statement of profit and loss on a straight-line basis over the estimated useful economic lives of intangible assets from the date they are available for use. The amortization period and the amortization method are reviewed at each balance sheet date. If the expected useful life of the asset is significantly different from previous estimates, the amortization period is changed accordingly.
Gains or losses arising from de-recognition of intangible assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognised.
e. Leases
Where the Company is lessee
Finance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased asset, are capitalized at the inception of the lease term at the lower of the fair value of the leased asset and present value of minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized as finance costs in the statement of profit and loss.
A leased asset is depreciated on a straight-line basis over the useful life of the asset or the useful life envisaged in Schedule
XIV to the Companies Act, 1956, whichever is lower. However, if there is no reasonable certainty that the Company will obtain the ownership by the end of the lease term, the capitalized asset is depreciated on a straight-line basis over the shorter of the estimated useful life of the asset, the lease term or the useful life envisaged in Schedule XIV to the Companies Act, 1956.
Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item are classified as operating leases. Operating lease payments are recognized as an expense in the statement of profit and loss on a straightline basis over the non-cancellable lease term.
Where the Company is lessor
Leases in which the Company does not transfer substantially all the risks and benefits of ownership of the asset are classified as operating leases. Assets subject to operating leases are included in fixed assets. Lease income on an operating lease is recognized in the statement of profit and loss on a straight-line basis over the non-cancellable lease term. Costs, including depreciation, are recognized as an expense in the statement of profit and loss.
f. Borrowing costs
Borrowing costs include interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.

56

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset.
All other borrowing costs are expensed in the period they occur.
g. Impairment of tangible and intangible assets
The carrying amounts of assets are reviewed at each balance sheet date for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the assets’ carrying amount exceeds its recoverable amount. The recoverable amount is the higher of the assets’ fair value less costs to sell and value in use. Impairment losses are recognized in the statement of profit and loss under the caption depreciation and amortization expense.
For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units).
h. Investments
Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as non-current investments.
Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis. Non-current investments are carried at cost, except for investment in Bharti Infratel Ventures Limited (BIVL), which is stated at fair value as per the BIVL Scheme of Arrangement (refer note 42). However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.
On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.
i. Revenue recognition and receivables
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.
Revenues
Revenues include revenue from the use of sites and energy charges received from customers. Revenue is recognized as and when services are rendered. If the payment terms in the service agreements include fixed escalations, the effect of such increases is recognized on a straight-line basis over the fixed, non-cancellable term of the agreement, as applicable.
Unbilled receivables represent revenues recognized from the last invoice raised to customer to the period end. These are billed in subsequent periods based on the terms of agreement with the customers. The Company collects service tax on behalf of the
Government of India and therefore, it is not an economic benefit flowing to the Company. Hence it is excluded from revenue.
Interest
Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head “other income” in the statement of profit and loss.
Dividends
Dividend income is recognized when the Company’s right to receive dividend is established by the reporting date.
Provision for doubtful debts
The Company provides for amounts outstanding for more than 105 days from the invoice date in case of site sharing debtors other than from the parent company or in specific cases where management is of the view that the amounts for certain customers are not recoverable.
j. Foreign currency transactions and balances
Initial recognition
Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

57

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Conversion
Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date. Non- monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction. Non-monetary items, which are measured at fair value or other similar valuation denominated in a foreign currency, are translated using the exchange rate at the date when such value was determined.
Exchange differences
Exchange differences arising on settlement of monetary items or on restatement of the Company’s monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements, are taken to the statement of profit and loss.
k. Retirement and other employee benefits
Short term employee benefits are recognized in the period during which the services have been rendered.
All employees of the Company are entitled to receive benefits under the provident fund, which is a defined contribution plan.
Contribution to provident fund is recognized as and when the services are rendered. Both the employee and the employer make monthly contributions to the plan at a predetermined rate of the employees’ basic salary. These contributions are made to the fund administered and managed by the Government of India. In addition, some employees of the Company are covered under the employees’ state insurance schemes, which are also defined contribution schemes recognized and administered by the Government of India.
The Company’s contributions to both these schemes are expensed in the statement of profit and loss. The Company has no further obligations under these plans beyond its monthly contributions.
The Company provides for Gratuity obligations through a defined benefit retirement plan covering all employees. The cost of providing benefits under this plan is determined on the basis of actuarial valuation at each reporting period end. Actuarial valuation is carried out using the projected unit credit method. Actuarial gains and losses are recognized in full in the period in which they occur in the statement of profit and loss.
The Company also provides other benefits in the form of deferred compensation and compensated absences. The employees of the Company are entitled to compensated absences based on the unavailed leave balance as well as other long term benefits.
The Company records liability based on actuarial valuation computed under projected unit credit method. Actuarial gains / losses are immediately taken to the statement of profit and loss and are not deferred. The Company presents the entire leave encashment liability as a current liability in the balance sheet, since the Company does not have an unconditional right to defer its settlement for more than 12 months after the reporting date.
l. Income taxes
Tax expense comprises current and deferred tax.
Current income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax
Act, 1961 enacted in India and tax laws prevailing in the respective tax jurisdiction where the Company operates. The tax rates and tax laws used to compute the amount are those that are enacted at the reporting date. Current income tax relating to items recognized directly in equity is recognized in equity and not in the statement of profit and loss.
Deferred income taxes reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date. Deferred income tax relating to items recognized directly in equity is recognized in equity and not in the statement of profit and loss.
Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets are recognized for deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.
At each reporting date, the Company re-assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax asset to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realized.
58

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

The carrying amount of deferred tax assets are reviewed at each reporting date. The Company writes-down the carrying amount of deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.
Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set-off current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the same taxable entity and the same taxation authority.
Minimum alternate tax (MAT) paid in a year is charged to statement of the profit and loss as current tax. The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during the specified period, ie. the period for which MAT credit is allowed to be carried forward. In the year in which the Company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit
Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the statement of profit and loss and shown as “MAT Credit Entitlement”. The Company reviews the “MAT credit entitlement” asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period.
m. Employee stock compensation cost
Employees of the Company receive remuneration in the form of share based payment transactions, whereby employees render services as consideration for options to buy equity instruments (equity-settled transactions).
In accordance with the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the Guidance Note on Accounting for Employee Share-based Payments, the cost of equity-settled transactions is measured using the Black Scholes / Lattice Valuation option pricing model and the fair value is recognized as an expense over the period in which the options vest, on a straight line basis, together with a corresponding increase in the “Stock options outstanding account” in reserves. The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Company’s best estimate of the number of options to buy equity instruments that will ultimately vest. The expense or credit recognized in the statement of profit and loss for a period represents the movement in cumulative expense recognized as at the beginning and end of that period and is recognized in employee benefits expense.
Where the terms of an equity-settled transaction award are modified, the minimum expense recognized is the expense as if the terms had not been modified, if the original terms of the award are met. An additional expense is recognized for any modification that increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the employee as measured at the date of modification.
n. Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
o. Provisions
A provision is recognized when the Company has a present obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.
p. Contingent liabilities
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent
59

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements.
q. Cash and cash equivalents
Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.
r. Measurement of EBITDA
As permitted by the Guidance Note on the Revised Schedule VI to the Companies Act, 1956, the Company has elected to present earnings before interest, tax, depreciation and amortization (EBITDA) as a separate line item on the face of the statement of profit and loss. In its measurement, the Company does not include depreciation and amortization expense, finance costs and tax expense.

3. SHARE CAPITAL
(` Millions)

As at March 31, 2013 Authorised shares 3,500,000,000 (March 31, 2012 - 600,000,000) equity shares of ` 10 each
35,000

As at
March 31, 2012
6,000

Issued, subscribed and fully paid-up shares 1,888,743,054 equity shares of ` 10 each fully paid up
(March 31, 2012 - 580,802,910 equity shares of ` 10 each)
18,887
5,808
18,887

5,808

a. Reconciliation of the equity shares outstanding at the beginning and at the end of the reporting period

As at
As of March 31, 2013
March 31, 2012

No.
` Mn
No.
At the beginning of the year
Issued during the year - Bonus issue
Issued during the year - Initial public offer
Issued during the year - ESOP
Outstanding at the end of the year

580,802,910
1,161,605,820
146,234,112
100,212
1,888,743,054

5,808
11,616
1,462
1
18,887

580,802,910
-
-
-
580,802,910

` Mn
5,808
5,808

b. Terms/ rights attached to equity shares

The Company has only one class of equity shares having par value of ` 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees.

During the quarter ended September 30, 2012, the Company has declared and paid Interim dividend for the financial year
2012-2013 @ ` 2.50 per equity share to all the existing shareholders as on September 6, 2012, comprising of ` 1.50 per share paid out of accumulated profits up to Mar 31, 2012 and ` 1.00 per share paid out of current year profits.

The Board of Directors have proposed a final dividend of ` 3.00 per equity share to all the existing shareholders for the year ended March 31, 2013. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing general meeting.

60

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

c. Shares held by holding Company

As at
As at March 31, 2013
March 31, 2012

No.
` Mn No.
Bharti Airtel Limited

1,500,000,000

15,000

500,000,000

` Mn
5,000

d. Aggregate number of bonus shares issued and shares issued for consideration other than cash during the period of five years immediately preceding the reporting date:

During the year ended March 31, 2009, the Company allotted 540,445,950 equity shares as fully paid bonus shares by capitalization of securities premium account.

On August 23, 2012, the Company further allotted 1,161,605,820 equity shares as fully paid bonus shares by capitalization of securities premium account.

During the year ended March 31, 2013, the Company made an Initial Public Offering (IPO) through book building process of
188,900,000 equity shares of ` 10 each in December 2012. The issue comprised of fresh issue of 146,234,112 equity shares and offer for sale of 42,665,888 equity shares by the existing shareholders. The Company has raised ` 32,303 Mn from fresh issue of shares and incurred share issue expenses of ` 771 Mn (net of tax ` 527 Mn, which have been adjusted with
Securities premium account in line with requirements of Sec 78 of Companies Act, 1956). The Company’s equity shares got listed on Dec 28, 2012 on both the Stock Exchanges (BSE & NSE).

On March 19, 2013, the Company allotted 100,212 equity shares of ` 10 each to its employees on exercise of stock options under the Employee Stock Option Plan 2008 wherein part consideration was received in form of employee services.

e. Details of shareholders holding more than 5% shares in the Company:

As at
As at March 31, 2013
March 31, 2012

No.
% holding No.
% holding Equity shares of ` 10 each fully paid Bharti Airtel Limited
1,500,000,000
79.42%
500,000,000
86.09%

f. Shares reserved for issue under options:
For details of shares reserved for issue under the employee stock option plan (ESOP) of the Company, please refer note 31.

61

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

4. RESERVES AND SURPLUS
(` Millions)
Particulars

As at April 1, 2011
Profit for the year
Add: amount arising under the Scheme of arrangement (note 42)
Less: amount transferred to statement of profit and loss during the year in accordance with the Scheme of arrangement with
Bharti Airtel Limited (note 44)
Add: gross compensation for options granted during the year
Less: deferred employee stock compensation
As at March 31, 2012
Profit for the year
Add: addition during the year [note 3(d)]
Less: utilization towards share issue expenses
(net of tax of ` 242 Mn) [note 3(d)]
Less: utilization during the year for bonus issue
[note 3(d)]
Less: amount transferred to statement of profit and loss during the year in accordance with the Scheme of arrangement with
Bharti Airtel Limited (note 44)
Less: Appropriations Interim dividend on equity shares
(amount ` 2.5 per share) Tax on Interim dividend on equity shares Proposed final dividend on equity shares
(amount ` 3 per share) Tax on Proposed final dividend on equity shares Transfer to General reserve*
Add: amount transferred from stock options outstanding
Add: gross compensation for options granted during the year
Less: gross compensation for options forfeited/ exercised during the year
Less: deferred employee stock compensation
As at March 31, 2013

Securities premium account

General reserve 47,585
-

Employee stock options outstanding 1,534
-

74,957
4,439
(922)

Surplus/
(deficit) in the statement of profit and loss
8,919
4,492
747
-

47,585
47,585

Total

132,995
4,492
5,186
(922)

18
1,552
(232)
1,320

78,474
78,474

14,158
14,158

18
141,769
(232)
141,537

30,865
(527)

-

-

10,098
-

10,098
30,865
(527)

(11,616)

-

-

-

(11,616)

-

-

(919)

-

(919)

-

-

-

(4,356)

(4,356)

-

-

-

(707)
(5,666)

(707)
(5,666)

-

9
(135)

2,426
71
-

(963)
(2,426)
-

(963)
71
9
(135)

66,307
66,307

1,426
(86)
1,340

80,052
80,052

10,138
10,138

157,923
(86)
157,837

* During the year ended March 31, 2013 the Company has transferred 10% of accumulated profits up to March 31, 2013 to General Reserve in accordance with
Companies (Transfer of Profits to Reserves) Rules, 1975.

5. LONG-TERM BORROWINGS
(` Millions)
Particulars
As at

March 31, 2013 Vehicle loan from banks
-

-

As at
March 31, 2012
1
1

”Vehicle loan” as at March 31, 2012 represent loan from banks which are secured by hypothecation of vehicles of the Company at a fixed rate of interest of 10.1% per annum. The loan has been repaid during the year ended March 31, 2013.
62

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

6. DEFERRED TAX LIABILITIES (NET)
(` Millions)
As at
March 31, 2013
Deferred tax liability
Depreciation claimed as deduction under Income Tax Act but chargeable in the financial statements in future years
Revenue equalization (net) charged in financial statements but allowed as deduction under the Income Tax Act in future years on actual payment basis
Gross deferred tax liability
Deferred tax asset
Provision for doubtful debts/ advances charged in financial statements but allowed as deduction under the Income Tax Act in future years (to the extend considered realisable) Expenses allowed as deduction under Sec 35D of Income Tax Act in future years
Other expenses claimed as deduction in the financial statements but allowed as deduction under Income Tax Act in future year on actual payment (net)
Gross deferred tax asset
Net deferred tax liability

As at
March 31, 2012

2,069

2,544

3,374

2,596

5,443

5,140

521

416

242
593

519

1,356

935

4,087

4,205

As of March 31, 2013 the above deferred tax assets and liabilities have been calculated using substantively enacted rates of
33.99% as per Finance Bill 2013.

7. OTHER LONG TERM LIABILITIES
(` Millions)

Security deposits received
Lease equalization
Unearned revenue

As at
March 31, 2013
3,296
1,384
97
4,777

As at
March 31, 2012
4,050
1,186
118
5,354

“Security deposits received” include ` 2,208 Mn (March 31, 2012 - ` 3,004 Mn) received from related parties. For details, refer note 35.

8. LONG TERM PROVISIONS
(` Millions)
As at
March 31, 2013
Provision for employee benefits (note 30) Gratuity Long-term service award
Asset retirement obligation (note 33)

As at
March 31, 2012

52
10
62
3,213
3,275

44
8
52
1,832
1,884

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BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

9. TRADE PAYABLES
(` Millions)
As at
March 31, 2012
1,443

1,687

Trade creditors (refer note 40 for details of dues to micro and small enterprises)

As at
March 31, 2013
1,687

1,443

10. OTHER CURRENT LIABILITIES
(` Millions)

Equipment supply payables
Dues to employees
Accrued expenses
Other taxes payable
Contribution to employee funds
Unearned revenue
Security deposit
Payable to subsidiary company

As at
March 31, 2013
2,745

As at
March 31, 2012
2,676

189
8,900
92
9
22
72
9,650
21,679

162
6,979
50
9
22
9,650
19,548

11. SHORT-TERM PROVISIONS
(` Millions)
As at
March 31, 2013

As at
March 31, 2012

23
56
5,666
963
6,708

9
44
18
71

Provision for employee benefits (note 30) Gratuity Leave encashment Deferred bonus
Proposed dividend (note 3(b))
Tax on proposed dividend

64

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

12. FIXED ASSETS
(` Millions)
Particulars

Cost
As at April 1, 2011
Additions
Disposals
Transfer/ Adjustment under the Scheme of arrangement As at March 31, 2012
Additions
Disposals
As at March 31, 2013
Depreciation
As at April 1, 2011
Charge for the year
Disposals
Transfer/ Adjustment under the Scheme of arrangement As at March 31, 2012
Charge for the year*
Disposals
As at March 31, 2013
Net block
As at March 31, 2013
As at March 31, 2012

Land

Plant and equipment Office furniture and equipment Vehicles

Computers

Leasehold improvements Tangible assets Total

Computer
Software

Intangible assets Total

5
-

176,598
7,049
(5,105)
(69,238)

52
16
-

4
2
-

572
51
-

212
24
-

177,443
7,142
(5,105)
(69,238)

217
3
-

217
3
-

5
5

109,304
10,557
(1,817)
118,044

68
32
100

6
6

623
34
657

236
40
276

110,242
10,663
(1,817)
119,088

220
3
223

220
3
223

-

47,242
11,210
(1,771)
(19,860)

21
13
-

2
1
-

336
183
-

35
32
-

47,636
11,439
(1,771)
(19,860)

84
71
-

84
71
-

-

36,821
11,923
(1,536)
47,208

34
21
55

3
1
4

519
99
618

67
39
106

37,444
12,083
(1,536)
47,991

155
49
204

155
49
204

5
5

70,836
72,483

45
34

2
3

39
104

170
169

71,097
72,798

19
65

19
65

*”Charge for the year” includes depreciation of ` 244 Mn considered under exceptional items in the Statement of Profit and Loss (refer note 46).

“Plant and equipment” comprise of assets given on operating lease. For details, refer note 32(b)(i).
“Disposals” under “Plant and equipment” for the year ended March 31, 2012 includes assets transferred to the subsidiary company, Bharti Infratel Ventures Limited, the gross block of which is ` 4,635 Mn and accumulated depreciation is ` 1,408
Mn. For details, refer note 43.
“Transfer/ Adjustment under the Scheme of arrangement” under “Plant and equipment” represents assets transferred to
Bharti Infratel Ventures Limited pursuant to the Scheme of arrangement approved by the Hon’ble High Court of Delhi. For details, refer note 42.
During the year ended March 31, 2008, pursuant to the Scheme of Arrangement with Bharti Airtel Limited under Sections
391 to 394 of the Companies Act, 1956, the telecom infrastructure undertaking of Bharti Airtel Limited was transferred to the
Company at Nil value. Pursuant to the Scheme, the Company recorded the assets under “Plant and Equipment” at fair values of
` 89,601 Mn determined on the basis of then active market prices adjusted for any difference in nature, location or condition of specific asset. Accordingly the assets were recorded at increased value of ` 89,601 Mn with a corresponding impact on General
Reserve. As per the Scheme depreciation on excess of fair value over the original historical cost in the books of Bharti Airtel
Limited is being set off with the reserves created from the Scheme. Accordingly ` 6,053 Mn has been adjusted till March 31,
2013 with the General Reserve (` 802 Mn for the year ended March 31, 2013).
During the year ended March 31, 2013, the Company has revised its estimate for site restoration obligation of sites which has resulted in increase in the estimated obligation by ` 1,263 Mn. Had the Company not changed its estimate regarding the cost to be incurred for restoration of sites, depreciation for the year ended March 31, 2013 would have been lower by ` 54 Mn and profit after tax for year ended March 31, 2013 would have been higher by ` 36 Mn (net of tax) respectively (refer note 33).
65

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

13. NON-CURRENT INVESTMENTS
(` Millions)
As at
March 31, 2013
Trade investments
Investment in equity, Unquoted
Subsidiary - Bharti Infratel Ventures Limited: 50,000 (March 31, 2012 - 50,000) equity shares of ` 10 each fully paid up (note 41)
Joint venture - Indus Towers Limited: 500,000 (March 31, 2012 - 500,000) equity shares of ` 1 each fully paid up
Aggregate Amount of unquoted investments

As at
March 31, 2012

59,921

59,921

0.5

0.5

59,922
59,922

59,922
59,922

14. LONG-TERM LOANS AND ADVANCES
(` Millions)

Unsecured, considered good unless otherwise stated
Capital advances Unsecured, considered good Unsecured, considered doubtful Less: Provision
Security deposits Unsecured, considered good Unsecured, considered doubtful Less: Provision
Other loans and advances MAT credit receivable Advance income-tax (net of provision for taxation) Advance fringe benefit tax (net of provision)

As at
March 31, 2013

As at
March 31, 2012

30
29
(29)
30

72
14
(14)
72

991
5
(5)
991

850
850

4,245
2
5,268

356
3,124
2
4,404

“Security deposits” include Nil and ` 27 Mn as at March 31, 2013 and March 31, 2012 respectively, given to the joint venture company. For details, refer note 35.

15. OTHER NON-CURRENT ASSETS
(` Millions)
As at
March 31, 2013

As at
March 31, 2012

Revenue equalization

11,360

9,234

Others, considered good
Others, considered doubtful
Less: Provision

960
9
(9)
960
12,320

756
9
(9)
756
9,990

Unsecured, considered good unless otherwise stated

“Others” comprise of payments made under protest to the Government authorities. For details, refer note 37(ii).
66

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

16. CURRENT INVESTMENTS
(` Millions)
As at
March 31, 2013

As at
March 31, 2012

37,021
37,021
37,021

801
801
801

Current investments (at lower of cost and market value)
Investments in mutual funds
Aggregate amount of unquoted investments

Details of investments are provided below:
(` Millions)

Axis Liquid Fund - Daily Dividend
Baroda Pioneer Liquid Fund Plan A- Daily Dividend
BSL Cash Plus - Daily Dividend - Reinvestment
BSL Income Plus - Growth
DSP Black Rock Liquidity Fund - Institutional Plan-Daily
Dividend
DWS Insta Cash Plus Fund Super Institutional Plan - Daily
Dividend
HDFC Income Fund Growth
HDFC Short Term Plan-Dividend
ICICI Prudential Income Plan-Regular - Growth
ICICI Prudential Liquid Plan - Regular Daily Dividend
ICICI Prudential Liquid super Institutional Plan - Growth
ICICI Prudential Short Term Plan- Regular Monthly Dividend
IDFC Dynamic Bond Fund-Quarterly Dividend-(regular plan)
IDFC Super Saver Income Fund-Short Term Plan-Monthly
Dividend-(regular plan)
JPMorgan India Liquid Fund Super Inst.Daily Dividend
Kotak Bond (short term)-Monthly Dividend
Kotak Bond Scheme Plan A-Growth
Kotak Liquid Scheme Plan A-Daily Dividend
L074G SBI Dynamic Bond Fund-Regular Plan-Growth
Reliance Income Fund-Growth Plan-Growth Option
Reliance Liquidity Fund-Daily Dividend Reinvetsment Option
Religare Liquid Fund - Daily Dividend
Religare Liquid Fund - Super Institutional Growth
Tata Liquid Fund Plan A-Daily Dividend
TATA Liquid Super High Inv.Fund - Appreciation
Templeton India Income Opportunities Fund- Growth
Total

As at
March 31, 2013
No.
Amount
357,263
357
1,252,646
1,253
3,763,287
377
66,774,310
3,539
355,711
356

As at
March 31, 2012
No.
Amount
-

2,562,251

257

-

-

167,496,335
227,007,058
122,528,068
2,249,915
251,659,171
97,998,515
206,301,679

4,513
2,344
4,540
225
3,010
998
2,079

1,893,593
-

300
-

22,326,393
99,351,304
118,736,484
397,972
137,780,607
51,792,003
401,157
353,661
535,988
156,594,311
1,738,576,089

223
1,004
4,020
487
2,021
1,999
401
354
597
2,067
37,021

237,674
76,587
2,207,854

350
151
801

67

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

17. TRADE RECEIVABLES
(` Millions)

Unsecured, considered good unless otherwise stated
Outstanding for a period exceeding six months from the date they are due for payment Unsecured, considered good Unsecured, considered doubtful Less: Provision for doubtful receivables
Other receivables Unsecured, considered good Unsecured, considered doubtful Less: Provision for doubtful receivables

As at
March 31, 2013

As at
March 31, 2012

118
1,064
(1,064)
118

80
849
(849)
80

1,927
211
(211)
1,927
2,045

2,335
349
(349)
2,335
2,415

“Trade receivables” include receivables from related parties amounting to ` 1,573 Mn (March 31, 2012 - ` 1,753 Mn) respectively.
For details, refer note 35.

18. CASH AND BANK BALANCES
(` Millions)

Cash and cash equivalents Balances with banks on current accounts Fixed deposits less than three months
Other bank balances Earmarked balances with banks

As at
March 31, 2013

As at
March 31, 2012

39
-

78
100

733
772

178

“Earmarked balances with banks” comprise of amounts held in Escrow account payable towards share issue expenses.

19. SHORT-TERM LOANS AND ADVANCES
(` Millions)

Loans and advances to related parties Unsecured, considered good
Advances recoverable in cash or kind Secured, considered good Unsecured, considered good Unsecured, considered doubtful Less: Provision for doubtful advances
MAT credit receivable

68

As at
March 31, 2013

As at
March 31, 2012

25,468

24,496

272
2,305
267
(267)
2,577
175
28,220

288
2,113
105
(105)
2,401
976
27,873

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

“Loans and advances to related parties” includes interest bearing loan to parent company and subsidiary company amounting to ` 22,990 Mn as at March 31, 2013 (March 31, 2012 - ` 13,160 Mn) and ` 1,363 Mn as at March 31, 2013 (March 31, 2012 ` 611 Mn) respectively. It further includes non interest bearing loans and advances to joint venture company amounting to
` 1,108 Mn as at March 31, 2013 (March 31, 2012 - ` 10,719 Mn). Refer note 35 for details.
“Advances recoverable in cash or kind” are secured to the extent they are backed by bank guarantees.

20. OTHER CURRENT ASSETS
(` Millions)

Unsecured, considered good unless otherwise stated
Unbilled revenue (net)
Interest accrued

As at
March 31, 2013

As at
March 31, 2012

1,267
215
1,482

668
78
746

“Unbilled revenue (net)” is net of provisions amounting to ` 1,162 Mn as at March 31, 2013 (March 31, 2012 - ` 1,425 Mn) considered for penalties, deductions etc. and includes revenues from related parties amounting to ` 1,418 Mn as at March 31,
2013 (March 31, 2012 - ` 157 Mn). Refer note 35 for details.
“Interest accrued” comprise of interest accrued on loan to parent company and subsidiary company amounting to ` 101 Mn and ` 114 Mn as at March 31, 2013 (March 31, 2012 - ` 61 Mn and ` 17 Mn) respectively. Refer note 35 for details.

21. REVENUES
(` Millions)

Rent
Energy and other reimbursements

Year ended
March 31, 2013
27,441
17,160
44,601

Year ended
March 31, 2012
26,083
15,499
41,582

22. OTHER INCOME
(` Millions)

Interest income on:
- Bank deposits
- Loans to group companies
- Others
Dividend income:
- Investment in joint venture
- Current investments
Net gain on sale of current investments
Miscellaneous income

Year ended
March 31, 2013

Year ended
March 31, 2012

3
1,850
8

1
1,074
3

4,050
110
532
5
6,558

26
6
1,110

69

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

23. POWER & FUEL
(` Millions)

Network
Others

Year ended
March 31, 2013
16,920
22
16,942

Year ended
March 31, 2012
15,630
17
15,647

24. RENT
(` Millions)

Network
Others

Year ended
March 31, 2013
2,263
119
2,382

Year ended
March 31, 2012
2,072
112
2,184

25. EMPLOYEE BENEFIT EXPENSES
(` Millions)

Salaries, wages and bonus
Contribution to provident and other funds
Employee stock option scheme
Staff welfare expenses
Others

Year ended
March 31, 2013
1,764
59
106
84
74
2,087

Year ended
March 31, 2012
1,550
53
249
74
77
2,003

“Salaries, wages and bonus” includes gratuity and other post employment benefits. For details, refer note 30.
Further, for details of employee stock option scheme, refer note 31.

26. OTHER EXPENSES
(` Millions)

Insurance
Repair and maintenance
- Plant and Machinery
- Building
- Others
Traveling and conveyance
Communication costs
Legal and professional
IT expenses
Provision for doubtful debts and advances
Provision for fixed assets/ capital work in progress
Fixed assets written off#
Loss on sale of fixed assets (net)
Miscellaneous expenses
- Network
- Others

70

Year ended
March 31, 2013
46

Year ended
March 31, 2012
29

3,135
5
938
130
126
192
186
251
(54)
(205)

2,664
3
951
84
108
187
176
399
35
(51)

549
119
5,418

712
95
5,392

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Payment to auditor

Audit fee*^
Other services*
Reimbursement of expenses*^

Year ended
March 31, 2013
14
1
15

Year ended
March 31, 2012
5
1
1
7

# “Fixed assets written off” for the year ended March 31, 2013 and March 31, 2012 is net of ` 117 Mn and Nil respectively adjusted with General Reserve in accordance with the Scheme of arrangement. For details, refer note 44.
* Excluding service tax
^ Includes payment with respect to audit services in connection with the Company’s Initial Public Offering amounting to ` 8 Mn for the year ended March 31,
2013 adjusted against securities premium.

27. DEPRECIATION AND AMORTIZATION EXPENSE
(` Millions)

Depreciation of tangible assets
Amortization of intangible assets
Less: adjusted with general reserve in accordance with the Scheme of Arrangement with Bharti Airtel Limited (note 44)

Year ended
March 31, 2013
11,839
49
11,888
(802)

Year ended
March 31, 2012
11,439
71
11,510
(922)

11,086

10,588

28. FINANCE COSTS
(` Millions)

Interest
Bank charges

Year ended
March 31, 2013
1
6
7

Year ended
March 31, 2012
10
10

29. EARNINGS PER SHARE (EPS)
(` Millions)

Nominal value of equity shares (`)
Profit attributable to equity shareholders for computing Basic and Dilutive EPS (A)
(` Million)
Weighted average number of equity shares outstanding during the year for computing Basic EPS (B)
Dilutive effect on weighted average number of equity shares outstanding during the year* Weighted average number of equity shares and equity equivalent shares for computing Diluted EPS (C)
Basic earnings per share (A/B) (`)
Diluted earnings per share (A/C) (`)

Year ended
March 31, 2013
10
10,098

Year ended
March 31, 2012
10
4,492

1,782,075,524

1,742,408,730

4,246,946

3,941,928

1,786,322,470

1,746,350,658

5.666
5.653

2.578
2.572

* Diluted effect on weighted average number of equity shares and profit attributable is on account of Employee Stock Option Plan (ESOP).

71

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Earnings per share calculations are in accordance with Accounting Standard 20 - Earnings per share, notified under the
Companies (Accounting Standards) Rules 2006, as amended. As per AS 20, in case of bonus shares, the number of equity shares/ potential equity shares outstanding before the event is adjusted for the proportionate change in the number of equity shares outstanding as if the event has occurred at the beginning of the earliest period reported. The Company, on August 23, 2012, issued bonus shares in the ratio of two shares for every one share held to the existing shareholders by way of capitalization of securities premium account. Weighted average number of equity shares outstanding during current period and previous period reported have been considered accordingly.

30. EMPLOYEE BENEFITS
During the period, the Company has recognized the following amounts in the statement of profit and loss:
Defined contribution plans
(` Millions)

Employer’s contribution to provident fund
Employer’s contribution to ESI
Total

Year ended
March 31, 2013
59
59

Year ended
March 31, 2012
53
53

Defined benefit obligations
Gratuity liability is defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each reporting period. The plan is not funded by the Company.
i. Amount charged to the statement of profit and loss:
(` Millions)
Particulars
Current service cost
Interest cost
Actuarial (gain)/ loss
Net gratuity cost

Gratuity#
Year ended
March 31, 2013
21
6
2
29

Year ended
March 31, 2012
18
3
5
26

Gratuity#
Year ended
March 31, 2013
8.50%
10.00%
24.95

Year ended
March 31, 2012
8.00%
9.00%
25.07

# included in Salaries, wages and bonus (refer note 25).

ii. The assumptions used to determine the benefit obligations are as follows:
Particulars
Discount rate
Expected rate of increase in compensation levels
Expected average remaining working lives of employees (years)

72

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

iii. Reconciliation of opening and closing balances of benefit obligations:
(` Millions)
Gratuity#
As at
March 31, 2013
53
21
6
(7)
2

Particulars
Projected benefit obligation at beginning of year
Current service cost
Interest cost
Benefits paid
Actuarial (gain)/ loss
Projected benefit obligation at end of year
Net amount recognized

As at
March 31, 2012
35
18
3
(8)
5

75
(75)

53
(53)

iv. The discount rate is based on the average yield on government bonds at the accounting date with a term that matches that of the liabilities.
v. The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. vi. Estimated amounts of benefits payable within next year are ` 33 Mn (March 31, 2012 – ` 26 Mn). vii. The table below illustrates experience adjustment disclosure as per para 120 (n) (ii) of Accounting Standard 15, ‘Employee Benefits’.
(` Millions)

As at
March 31, 2013
75

As at
March 31, 2012
53

(75)
(2)

(53)
(5)

Gratuity
As at
March 31, 2011
35
(35)
(5)

-

-

Particulars

Defined benefit obligation
Plan assets
Surplus/ (deficit)
Experience adjustments on plan liabilities
(loss)/ gain
Experience adjustments on plan assets
(loss)/ gain

As at
March 31, 2010
22

As at
March 31, 2009
12

(22)
(4)

(12)
-

-

-

viii. Movement in provision for deferred bonus plan
(` Millions)

Opening balance
Add: addition during the year
Less: paid during the year
Total

As at
March 31, 2013
18
2
(20)
-

As at
March 31, 2012
37
14
(33)
18

31. EMPLOYEE STOCK OPTION PLANS
Pursuant to the board resolution dated July 22, 2008 and the resolution of the shareholders in extraordinary general meeting dated August 28, 2008, the Company instituted the Employee Stock Option Plan.
The Company has granted additional stock options in the ratio of two options for every one option outstanding as on August
23, 2012. The total number of additional options granted is 6,165 thousand.
Under the Plan 9,947 thousand options have been awarded to directors, officers and employees of the Company (including
Group Companies) till date including the additional grants pursuant to bonus issue, out of which 34 thousand options have been granted during the year ended March 31, 2013.
73

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Type of Arrangement

Date of Grant

Options outstanding*
(in thousand)

Contractual Life

Senior management Stock option
A.
B.
C.

September 1, 2008
January 1, 2009
July 1, 2010

Executive stock option
A.
B.
C.
D.

Vesting Conditions

6,000
636
860

7 Years
7 Years
7 Years

Date of appointment

April 1, 2010
July 1, 2010
August 10, 2010
August 8, 2011

85
3
124
91

7 Years
7 Years
7 Years
7 Years

Date of appointment

General employee stock option
A.
B.
C.
D.
E.

January 1, 2009
July 1, 2009
January 1, 2010
July 1, 2010
August 1, 2011

167
127
458
448
148

7 Years
7 Years
7 Years
7 Years
7 Years

One year of continuous employment Long term incentive plan
A.

August 28, 2012

20

7 Years

Band 3 or above, performance based

* Represents the number of options outstanding as on March 31, 2013 after considering the impact of bonus issue in August 2012. The weighted average remaining contractual life for options outstanding at the end of year is 2.4 to 6.4 years.

The weighted average fair value per option based on Black Scholes valuation model is ` 475 on the original grants. The fair value is being amortized over the vesting period of 36 and 60 months, respectively on a graded vesting basis.
All options are planned to be settled in equity at the time of exercise and have maximum period of 7 years from the date of respective grants. The options under this plan have an exercise price of ` 329 per equity share and vest on a graded basis.
The exercise price of ` 329 per equity share has been diluted to one third pursuant to the bonus issue in August 2012. Further the options granted under ‘Long term incentive plan’ are at ` 10 per equity share.
Vesting period from the grant date
For options with a vesting period of 36 months:
On completion of 12 months
On completion of 24 months
On completion of 36 months
For options with a vesting period of 48 months:
On completion of 12 months
On completion of 24 months
On completion of 36 months
On completion of 48 months
For options with a vesting period of 60 months:
On completion of 12 months
On completion of 24 months
On completion of 36 months
On completion of 48 months
On completion of 60 months

74

Vesting schedule
30%
30%
40%
15%
20%
30%
35%
20%
20%
20%
20%
20%

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Information concerning the stock options granted and outstanding at the year end is as follows:
Particulars

Number of shares under option:
Outstanding at beginning of the year (a)
Cancelled or expired or forfeited up to the date of bonus issue (b)
Options outstanding as at the date of bonus issue (a-b)
Bonus issue in the ratio of 1:2
Granted
Exercised*
Cancelled or expired or forfeited
Outstanding at the year end
Exercisable at end of the year
Weighted average grant date fair value per option for options granted during the year at less than market value

As at March 31, 2013
"Number of
"Weighted
stock options average exercise
(In '000)" price (`)"

As at March 31, 2012
"Number of
Weighted
stock options average exercise
(In '000)" price (`)

3,333
251

329
329

3,336
-

329
-

3,082
6,165
34
100
14
9,167
6,431
34

329
110
10
110
10
10-110
110
258

80
83
3,333
1,631
80

329
329
329
329
475

*The weighted average share price at the exercise date was ` 199 per share for options exercised during the year ended March 31, 2013.

The weighted average fair value of stock options granted during the year was ` 258 per share. The fair value of the options granted was estimated on the date of grant using the Black Scholes / Lattice Valuation model with the following assumptions:

Risk free interest rates
Vesting period
Weighted average share price(`)
Weighted average remaining contractual life
Volatility
Dividend yield

Year ended
March 31, 2013
8.37% to 8.62%
36 months
219
6.4 years
52.42% to 52.43 %
0.00%

Year ended
March 31, 2012
8.37% to 8.62%
48 months
658
6.4 years
52.42% to 52.43 %
0.00%

The balance of deferred stock compensation as on March 31, 2013 is ` 86 Mn (March 31, 2012 – ` 232 Mn) and total employee stock compensation expense recognized for the year ended March 31, 2013 and March 31, 2012 is ` 106 Mn and
` 249 Mn respectively.
Note:
Bharti Airtel Limited has given stock options to certain employees of the Company. Bharti Airtel Limited has not charged the compensation cost relating to the stock options granted to the Company. Besides this, the Company has also given stock options to certain employees of Bharti Airtel Limited and has considered the related compensation cost in its books.

32. LEASES
(a) Operating lease: Company as a lessee
The lease rentals paid under non-cancelable leases relating to rent of building premises and sites as per the agreements with escalations rates ranging from 0% to 7 % per annum and the maximum obligation on long-term non-cancellable operating leases are as follows:
(` Millions)
Particulars
Lease rental charged to statement of profit and loss
Obligation on non-cancelable lease:
Not Later than one year
Later than one year but not later than five years
Later than five years
Total

As at
March 31, 2013
2,382

As at
March 31, 2012
2,184

2,179
8,981
17,243
28,403

1,948
8,137
17,063
27,148

75

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

The lease rentals include rent equalization of ` 199 Mn and ` 200 Mn for the year ended March 31, 2013 and March 31, 2012 respectively. (b) Operating lease: Company as a lessor
(i) The Company has given sites on operating lease to telecom operators. As per the agreements with the operators the escalation rates range from 0% to 2.5% per annum. The service charges recognized as income during the year ended March
31, 2013 and March 31, 2012 for non cancelable arrangements relating to provision for passive infrastructure sites as per the agreements is ` 27,937 Mn and ` 26,853 Mn respectively, excluding IRU income covered in (b) (ii) below.
(` Millions)
Particulars
Future minimum lease payment receivable:
Not Later than one year
Later than one year but not later than five years
Later than five years
Total

As at
March 31, 2013

As at
March 31, 2012

26,779
113,503
129,385
269,667

23,729
100,615
139,016
263,360

Revenue includes revenue equalization of ` 2,126 Mn and ` 2,161 Mn for the year ended March 31, 2013 and March 31, 2012 respectively. (ii) The Company has entered into a non-cancelable lease arrangement to provide access to the Passive Infrastructure located at 12 Circles on indefeasible right of use (IRU) basis for a period of two years to its Joint Venture Company, Indus
Towers Limited from January 1, 2009. The term has been further extended till June 30, 2014. The IRU has been assigned to Bharti Infratel Ventures Limited pursuant to the Scheme of arrangement. The Company has credited lease rental to the statement of profit and loss on a straight-line basis over the lease term amounting to Nil and ` 206 Mn for the year ended
March 31, 2013 and March 31, 2012 respectively.

33. ASSET RETIREMENT OBLIGATION
The Company uses various premises on lease to install plant and equipment. A provision is recognized for the costs to be incurred for the restoration of these premises at the end of the lease period. It is expected that this provision will be utilized at the end of the lease period of the respective sites as per the respective lease agreements. The movement of Provision in accordance with AS–29 on ‘Provisions, Contingent liabilities and Contingent Assets’, as per Companies Accounting Standard
Rules, 2006, is given below:
(` Millions)
Particulars
Opening Balance
Additions during the year (refer note below)
Less: Reversed in accordance with the Scheme of arrangement (note 42)
Less: Reversed during the year (note 43)
Closing Balance

As at
March 31, 2013
1,832
1,381
3,213

As at
March 31, 2012
3,730
29
(1,816)
(111)
1,832

During the year ended March 31, 2012, the Company has reversed ARO amounting to ` 1,816 Mn pursuant to the Scheme of arrangement approved by the Hon’ble High Court of Delhi (for details, refer note 42). Further during the year ended March 31,
2012, the Company has transferred ARO amounting to ` 111 Mn to Bharti Infratel Ventures Limited (for details, refer note 43).
During the year ended March 31, 2013, the Company has revised its estimate for site restoration obligation which has resulted in increase in the estimated obligation by ` 1,263 Mn. Had the Company not changed its estimate regarding the cost to be incurred for restoration of sites, the depreciation for the year ended March 31, 2013 would have been lower by
` 54 Mn and the profit after tax for year ended March 31, 2013 would have been higher by ` 36 Mn (net of tax) respectively.

76

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

34. INTEREST IN JOINT VENTURE
The Company holds 42% interest in Indus Towers Limited, a jointly controlled entity which is involved in providing passive infrastructure to telecom companies.
The Company’s share of the assets, liabilities, income and expense of the jointly controlled entity as at and for the year ended
March 31, 2013 and March 31, 2012 respectively are as follows:
(` Millions)
Particulars
EQUITY AND LIABILITIES
Shareholders' funds
Share capital
Reserves and surplus
Non-current liabilities
Long-term borrowings
Deferred tax liabilities (net)
Other long-term liabilities
Long-term provisions
Current liabilities
Short-term borrowings
Trade payables
Other current liabilities
Short-term provisions

Total equity and liabilities
ASSETS
Non-current assets
Fixed assets
Tangible assets
Intangible assets
Capital work-in-progress
Long-term loans and advances
Other non-current assets
Current assets
Current investments
Trade receivables
Cash and bank balances
Short-term loans and advances
Other current assets
Total assets

As at
March 31, 2013

As at
March 31, 2012

0.5
948
949

0.5
4,428
4,429

32,296
2,072
5,838
2,910
43,116

23,888
1,802
8,310
1,362
35,362

863
9,781
14,534
2,590
27,768

12,768
4,764
12,820
25
30,377

71,833

70,168

50,873
173
952
5,444
2,423
59,865

47,693
204
1,197
4,070
2,182
55,346

1,890
1,290
480
2,395
5,913
11,968
71,833

2,562
2,373
301
4,534
5,052
14,822
70,168

77

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

(` Millions)
Year ended
March 31, 2013

Profit before tax and exceptional items
Exceptional items
Profit before tax
Tax expenses
Current tax
Less: MAT credit entitlement
Deferred tax
Total tax expense
Profit for the year
Capital commitments
Contingent liabilities

902
(594)
1,053
1,361
2,888

491
1,836

Earnings before interest, tax, depreciation and amortization (EBITDA)
Depreciation and amortization expense
Finance costs

17,971
10,234
1,093
6,570
35,868
14,966
6,657
4,060
10,717
4,249
4,249

1,710
270
1,980
3,796

EXPENSES
Power and fuel
Rent
Employee benefits expenses
Other expenses

50,481
353
50,834

21,074
10,373
1,252
6,812
39,511
16,594
6,870
3,939
10,809
5,785
(9)
5,776

INCOME
Revenues
Other income

Year ended
March 31, 2012

55,387
718
56,105

Particulars

912
1,537

35. RELATED PARTY DISCLOSURES
In accordance with the requirements of Accounting Standards (AS) - 18 on Related Party Disclosures, the names of the related parties where control exists and/ or with whom transactions have taken place during the period and description of relationships, as identified and certified by the management are as below:
A. List of related parties
1. Key management personnel Akhil Kumar Gupta
2. Related parties where control exists irrespective of whether transactions have occurred or not Holding company
Bharti Airtel Limited Subsidiary company
Bharti Infratel Ventures Limited
3. Other related parties with whom transactions have taken place during the year
Name of the related party
Bharti Airtel Services Limited
Bharti Enterprises Limited
Bharti Foundation
Bharti Hexacom Limited
Bharti Telemedia Limited
Centum Learning Limited
Indus Tower Limited

78

Relationship
Fellow subsidiary
Entity having significant influence
Entity having significant influence
Fellow subsidiary
Fellow subsidiary
Fellow subsidiary
Joint Venture

-

2012

1,278

Trade receivables

23,755

Total

12,236

(2,512)

-

1,565

218

13,160

(195)

32,122

-

-

-

-

1,055

-

(54)

186

(131)

-

284

70

-

(37)

2,295

-

-

-

-

-

62

(9)

-

-

-

-

-

2,242

-

-

-

-

2013

(44)

(184)

-

177

-

-

(37)

1,988

-

-

-

-

-

-

(10)

-

(3)

-

-

-

2,029

(28)

-

-

-

2012

Bharti Hexacom
Limited

-

-

-

-

-

-

-

(3)

-

-

-

-

-

-

-

-

-

(3)

-

-

-

-

-

-

-

2013

-

-

-

-

-

-

-

(2)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

(104)

-

-

-

-

-

-

-

-

-

-

-

(104)

-

(2)

-

-

-

-

-

2013

(10)

-

-

-

-

-

(10)

(106)

-

-

-

-

-

-

-

-

-

-

-

(106)

-

-

-

-

-

2012

Bharti Enterprises
Limited

-

-

-

-

2012

Bharti Telemedia
Limited

(8,173)

-

-

-

114

1,363

(9,650)

860

-

-

-

-

108

(9,022)

-

-

-

17

611

(9,650)

629

-

-

-

-

19

-

-

-

-

-

-

-

-

-

-

-

-

610

2012

-

-

-

-

-

-

-

-

(400)

1,152

2013

Bharti Infratel
Ventures Limited

1

-

-

-

-

7

(6)

(26)

-

-

-

-

-

-

-

-

(26)

-

-

-

-

-

-

-

-

2013

(2)

-

-

-

-

7

(9)

(31)

-

-

-

-

-

-

-

-

(31)

-

-

-

-

-

-

-

-

2012

Centum Learning
Limited

(1)

-

-

-

-

-

(1)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

2013

(3)

-

-

-

-

-

(3)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

2012

Bharti Airtel
Services Limited

*Inclusive of service tax and exclusive of revenue equalization.
During the year ended March 31, 2013, the Company allotted 43,700 equity shares to relatives of certain directors of the Company during IPO.

Also refer note 43 and 44 below.

(1,769)

Security deposits received

-

1,449

Other current assets

Long-term loans and advances 22,990

(193)

37,185

-

Short-term loans and advances Trade payables and Other current liabilities

Balance outstanding:

Total

Donation given

(3,750)

-

Dividend paid

-

Interest income from loan given Dividend received

816

1,743

Security deposit refunded

Commission paid

(72)

Security deposit received

-

(131)

(169)

Procurement of services
-

(2)

(28)

Employee related expenses incurred on behalf of
Company

Salary

-

(9)

Reimbursement of expenses (15)

(4)

25,909

-

-

(6,100)

11,460

Expenses (other than employee related) incurred on behalf of Company

28,828

Purchase of fixed assets

Revenue from operations*

-

(3,670)

Loan repaid

Sale of fixed assets

13,500

2013

Bharti Airtel
Limited

Loan given

Nature of transaction

B. Related party transactions during the year ended March 31:

(46)

-

-

-

-

-

(46)

(70)

-

-

-

-

-

-

-

(70)

-

-

-

-

-

-

-

-

-

2013

(39)

-

-

-

-

-

(39)

-

-

-

-

-

-

-

(50)

(50)

(65)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

2013

-

-

4,050

(28)

-

-

-

-

-

-

(232)

-

-

-

-

(9,599)

-

2013

-

-

-

-

-

-

-

508

(308)

-

11

-

1,108

(303)

9,918

(308)

27

11

-

10,719

(531)

649

-

-

-

(13)

-

-

-

-

-

-

(375)

-

228

-

5

-

804

2012

Indus Towers
Limited

- (5,809)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

2012

Bharti
Foundation

-

-

-

-

-

-

(65)

-

-

-

-

-

-

-

-

-

2012

“Key
Management
Personnel”

(` Millions)

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

79

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Security deposits received as at March 31, 2013 does not reflect amount payable to the Joint Venture, Indus Towers Limited
(Indus), of ` 4,536 Mn (March 31, 2012 - ` 4,536 Mn) as this is now payable by the subsidiary company, Bharti Infratel Ventures
Limited, while as per the related party statement of the Joint Venture this amount is recoverable from the Company. In case the Company is required to pay to the Joint Venture, it will recover the said amount from the Subsidiary Company.

36. CAPITAL AND OTHER COMMITMENTS
(i) Capital commitment
(` Millions)

Estimated amount of contracts to be executed on capital account and not provided for in the financial statements (net of capital advances)
Under the IT Outsourcing agreement, the Company has commitment for capital purchases and service charges

As at
March 31, 2013
2,910

As at
March 31, 2012
1,763

1,663

1,916

4,573

3,679

(ii) Other commitments
For commitments relating to lease agreements, refer note 32.

37. CONTINGENT LIABILITIES
(i) Financial bank guarantees
(` Millions)

Total guarantees issued by banks and financials institutions on behalf of the
Company
Total

As at
March 31, 2013
427

As at
March 31, 2012
119

427

119

(ii) Claims against the Company not acknowledged as debt
(` Millions)

(i) Taxes, duties and other demands (under adjudication / appeal / dispute) - Sales tax (refer to a below) - Stamp duty (refer to b below) - Entry tax (refer to c below) - Municipal taxes (refer to d below)
(ii) Other claims under legal cases including arbitration matters (refer to f below)
(iii) Income tax matters (refer to e below)
Total

As at
March 31, 2013

As at
March 31, 2012

337
266
1,257
770
199
49
2,878

252
266
1,114
512
140
81
2,365

Unless otherwise stated below, the management believes that, based on legal advice, the outcome of these contingencies will be favorable and that a loss is not probable.
(a) Sales tax The claims for sales tax as of March 31, 2013 comprise of the cases relating to the right to use and sales tax demand on purchase of equipments against ‘C’ Form.

80

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

(b) Stamp Duty The Company has received demand in certain states for stamp duty on execution of Leave and License Agreement of Cell Sites.
(c) Entry tax In certain States an entry tax is levied on receipt of material from outside the State. This position has been challenged by the Company in the respective States, on the grounds that the specific entry tax is ultra vires the Constitution. Classification issues have been raised whereby, in view of the Company, the material proposed to be taxed is not covered under the specific category.
(d) Rates and taxes The Company is in the process of assessing the applicability and tenability of certain municipal levies which is an industry wide phenomenon and will also be representing to the authorities wherever required. The management does not consider the impact of such assessment to be material.
(e) Income tax The Company has received assessment order for the AY 2008-2009, wherein an initial demand of ` 13 Mn (March 31, 2012
- ` 13 Mn) has been raised by the authority. The Company has filed an appeal against the same. The contingent liability amount stated above further includes ` 36 Mn (March 31, 2012 - ` 68 Mn) relating to various TDS related matters.

During the year ended March 31, 2013, the Company has received assessment order for the AY 2010-2011, wherein an initial demand of ` 1,004 Mn has been raised by the authority. However, the same has not been acknowledged as claims by the Company.

(f) Others Others mainly include site related legal disputes.

38. UTILIZATION OF MONEY RAISED THROUGH PUBLIC ISSUE
During the year ended March 31, 2013, the Company has raised ` 31,657 Mn through public issue (net of ` 646 Mn retained in
Escrow account towards share issue expenses). As on March 31, 2013, pending utilization of issue proceeds, the entire funds have been deployed in Mutual funds investments amounting to ` 31,657 Mn.

39. (a) Expenditure in foreign currency (cash basis)
(` Millions)

Legal and professional*
IT expenses

As at
March 31, 2013
59
1
60

As at
March 31, 2012
19
5
24

* Comprise of payments made to Legal counsels towards professional services rendered in connection with the Company’s Initial Public Offering amounting to
` 59 Mn for the year ended March 31, 2013 adjusted against securities premium.

(b) Dividend remitted in foreign currency
(` Millions)

Number of non - resident shareholders to whom dividend was due
Number of equity shares held on which dividend was due ( in Mn)
Amount remitted (` in Mn)
Amount remitted ( USD in Mn)

As at
March 31, 2013
4
50
124
2

As at
March 31, 2012
-

Interim Dividend of ` 2.50 per equity share (Face value per share ` 10) was declared and paid for the financial year 2012-13.
In addition to above, interim dividend amounting to ` 482 Mn has been paid to other non-resident shareholders in Indian Rupees.

81

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Particulars of unhedged foreign currency exposure as at March 31, 2013:Other current liabilities - Accrued expenses
Nil (March 31, 2012 – US$ 0.2 Mn) Nil (March 31, 2012 – ` 1 Mn)
(c) Value of imports calculated on CIF basis is Nil as at March 31, 2013 (March 31, 2012 - Nil).

40. DETAILS OF DUES TO MICRO AND SMALL ENTERPRISES AS DEFINED UNDER THE MSMED ACT, 2006
(` Millions)

The principal amount and the interest due thereon remaining unpaid to any supplier as at the end of each accounting year
Principal amount due to micro and small enterprises
Interest due on above
The amount of interest paid by the buyer in terms of section 16 of the Micro Small and
Medium Enterprise Development Act, 2006, along with the amounts of the payment made to the supplier beyond the appointed day during each accounting year
The amount of interest due and payable for the period of delay in making payment
(which have been paid but beyond the appointed day during the period/ year) but without adding the interest specified under Micro Small and Medium Enterprise
Development Act, 2006
The amount of interest accrued and remaining unpaid at the end of each accounting year
The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise for the purpose of disallowance as a deductible expenditure under section 23 of the Micro Small and Medium Enterprise Development Act, 2006

As at
March 31, 2013

As at
March 31, 2012

33
33

52
52

10

3

41. Since the Company’s business activity falls within a single business and geographical segment of providing passive

infrastructure, there are no additional disclosure to be provided under Accounting Standard - 17 ‘Segment reporting’ other than those already provided in the financial statements.

42. SCHEME OF ARRANGEMENT FOR TRANSFER OF TELECOM INFRASTRUCTURE IN CERTAIN SPECIFIED
TELECOM CIRCLES TO BHARTI INFRATEL VENTURES LIMITED
The Scheme of Arrangement for transfer of passive telecom infrastructure undertaking (BIVL Scheme) in certain specified telecom circles to BIVL was approved by the Hon’ble High Court of Delhi on March 29, 2011 and became effective on May
05, 2011 on filing of High court order with the Registrar of Companies. As per the terms of the BIVL Scheme, the Company transferred the passive telecom infrastructure in certain specified telecom circles on the appointed date (April 1, 2009) worth
` 59,921 Mn to Bharti Infratel Ventures Limited at Nil value by debiting to profit and loss account on the appointed date.
In accordance with the scheme, Investment in Bharti Infratel Ventures Limited has been fair valued at ` 59,921 Mn with a corresponding credit to Reserve for Business Restructuring.
Fair Value of Assets as on April 01, 2009
(` Millions)
Fixed assets
Long-term loans & advances
Short-term loans & advances
Deffered tax liabilities (net)
Amount recognised as investment

60,932
1,376
19
(2,406)
59,921

The Reserve for Business Restructuring arising there on has been transferred to the statement of profit and loss as on the appointed date. Further, the lease equalization reserve pertaining to demerged passive infrastructure amounting to
` 939 Mn (net of deferred tax liability of ` 484 Mn) and asset retirement obligations amounting to ` 552 Mn (net of deferred tax asset of ` 284 Mn) respectively, have been transferred to free reserve/ Reserve for Business Restructuring. Further,
82

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

the adjustment to reserves earlier considered by the Company, with respect to depreciation on the excess fair values over the original book value of assets transferred by Bharti Airtel Limited (Refer Note 44) and pertaining to the telecom infrastructure transferred to Bharti Infratel Ventures Limited for the period April 1, 2009 till March 31, 2011 amounting to
` 2,948 Mn has been reversed in the books of the Company. The cumulative net impact of the above amounting to ` 4,439 Mn has been included under Reserve and surplus as at March 31, 2012.
Losses for the period April 1, 2009 till March 31, 2011 pertaining to the operations of the passive infrastructure assets transferred to
Bharti Infratel Ventures Limited amounting to ` 747 Mn have also been included under Reserve and surplus as at March 31, 2012.
The above treatment has been followed in accordance with the treatment prescribed in the Scheme sanctioned by the Hon’ble
High Court. Generally Accepted Accounting Principles in India (Indian GAAP) do not permit fair valuation of investment, creation of Reserve for Business Restructuring and the transfer of same to Profit and Loss Account and adjusting the asset retirement obligation and lease equalization reserve with Reserve for Business Restructuring. Accordingly, had the Company accounted for above as per generally accepted accounting principles instead of as per the Scheme, the value of Investments,
General Reserve and net surplus in the statement of profit and loss would have been lower by ` 59,921 Mn, ` 1,491 Mn (net of deferred tax of ` 768 Mn) and ` 58,430 Mn respectively.

43. During the year ended March 31, 2012, the Company has entered into an agreement with Bharti Infratel Ventures Limited for transfer of certain assets and liabilities relating to certain specified telecom circles. Pursuant to this the following assets and liabilities have been transferred to Bharti Infratel Ventures Limited as at December 31, 2011:(` Millions)
Other long-term liabilities
Long-term provisions
Fixed assets, (net)
Trade receivables
Short-term loans and advances
Other current liabilities

4,584
111
(3,227)
(137)
(1,320)
(11)

44. During the year ended March 31, 2008, pursuant to the Scheme of Arrangement with Bharti Airtel Limited under sections

391 to 394 of the Companies Act, 1956, the telecom infrastructure undertaking of Bharti Airtel Limited was transferred to the
Company. Pursuant to the Scheme, the depreciation charged by the Company on the excess of the fair values over the original book values of the assets transferred by Bharti Airtel Limited is being off-set against General Reserve. Had the Company followed generally accepted accounting principles in India (IGAAP), General Reserve as at March 31, 2013 and March 31, 2012 would have been higher by ` 6,170 Mn and ` 5,251 Mn respectively and depreciation for the year ended March 31, 2013 and
March 31, 2012 would have been higher and profit for year ended March 31, 2013 and March 31, 2012 would have been lower by ` 802 Mn and ` 922 Mn respectively. Also, other expenses for the year ended March 31, 2013 would have been higher and profit for the same period would have been lower by ` 117 Mn.

45. On May 31, 2011, the subsidiary company ‘Bharti Infratel Ventures Limited’ filed a Scheme of Arrangement (Scheme) under Section 391 to 394 of the Companies Act, 1956 before Hon’ble High Court of Delhi whereby the subsidiary company was to merge with Indus Towers Limited, with appointed date as April 1, 2009.
On April 18, 2013, the Hon’ble High Court has sanctioned the said Scheme which provides for transfer of all assets and liabilities of subsidiary company to Indus Towers Limited and winding-up of the subsidiary company subject to the final order in another appeal pending before the Division bench of Delhi High Court and any other orders in any further proceedings thereafter. The said Scheme shall be effective on filing of certified copy of Order of Hon’ble High Court of Delhi with the
Registrar of Companies (ROC). As on the date of approval of these financial statements the said order has not been filed with
ROC. Accordingly, the scheme has not been given effect to in these financial statements.

46. During the year ended March 31, 2013, a customer has exited from specified tenancies resulting in the Company recovering
` 360 Mn from the customer. Further, the Company has provided for revenue equalization reserve and loss in value of fixed assets amounting to ` 85 Mn and ` 244 Mn respectively. The Company considers the aforesaid exit as an exceptional item and has accordingly disclosed the net amount of ` 31 Mn as exceptional item.
47. During the year ended March 31, 2013, the Joint Venture Company has declared and paid Interim dividend for the financial year 2012-2013 @ ` 8,100 per equity share of ` 1 each to all the shareholders.
48. Previous year figures have been regrouped/ reclassified where necessary to conform to the current year’s classifications.
83

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Consolidated Financial Statements with Auditors’ Report
INDEPENDENT AUDITOR’S REPORT
To
The Board of Directors of Bharti Infratel Limited
We have audited the accompanying consolidated financial statements of Bharti Infratel Limited (“the Company”) and its subsidiary and joint ventures, collectively the (“Group”), which comprise the consolidated Balance Sheet as at March 31, 2013, and the consolidated Statement of Profit and Loss and consolidated Cash Flow Statement year then ended, and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation of these consolidated financial statements that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Company in accordance with accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the consolidated financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and presentation of the consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India:
(a) in the case of the consolidated Balance Sheet, of the state of affairs of the Company as at March 31, 2013;
(b) in the case of the consolidated Statement of Profit and Loss, of the profit for the year ended on that date; and
(c) in the case of the consolidated Cash Flow Statement, of the cash flows for the year ended on that date.
Other matters
We did not audit the financial statements of Indus Towers Limited, a joint venture of Company, whose audited financial statements reflect total assets of ` 166,185 million as at March 31, 2013, the total revenue of ` 133,741 million and cash outflows
(net) amounting to ` 423 million for year then ended, on the basis of amounts reflected in the audited financial statements of the joint-venture and before elimination of the inter-company transactions between the Group and the joint venture on consolidation. These financial statements and other financial information have been audited by other auditors whose report has been furnished to us, and our opinion on the consolidated financial statements, to the extent they have been derived from such financial statements is based solely on the report of such other auditors.
For S.R. Batliboi & Associates LLP
Chartered Accountants
Firm’s Registration Number: 101049W per Nilangshu Katriar
Partner
Membership Number: 58814
Place of Signature: Gurgaon
Date: April 30, 2013
84

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Consolidated Balance Sheet as at March 31, 2013
(` Millions)
Notes

As at
March 31, 2013

As at
March 31, 2012

EQUITY AND LIABILITIES
Shareholders' funds Share capital Reserves and surplus

3
4

18,887
153,038
171,925

5,808
139,433
145,241

Non-current liabilities Long-term borrowings Deferred tax liabilities (net) Other long-term liabilities Long-term provisions

5
6
7
8

32,296
7,610
15,570
8,806
64,282

23,889
7,275
18,520
5,138
54,822

9
10
11
12

7,106
26,520
7,097
40,723

7,704
4,147
22,657
96
34,604

276,930

234,667

163,047
192
1,723
11,176
14,743
190,881

166,934
268
1,856
11,296
12,173
192,527

38,911
8,554
1,267
30,022
7,295
86,049
276,930

3,363
6,824
481
25,679
5,793
42,140
234,667

Current liabilities
Short-term borrowings
Trade payables
Other current liabilities
Short-term provisions

Total equity and liabilities
ASSETS
Non-current assets Fixed assets Tangible assets Intangible assets Capital work-in-progress Long-term loans and advances Other non-current assets

14
15

Current assets
Current investments
Trade receivables
Cash and bank balances
Short-term loans and advances
Other current assets

16
17
18
19
20

13

Total assets
Summary of significant accounting policies

2.1

The accompanying notes are an integral part of the consolidated financial statements
As per our report of even date
For S. R. Batliboi & Associates LLP
Firm Registration Number: 101049W
Chartered Accountants per Nilangshu Katriar
Partner
Membership Number: 58814
Place : New Delhi
Date : April 30, 2013

For and on behalf of the board

Akhil Gupta
Managing Director

D S Rawat
Chief Executive Officer

Anupam Garg
Company Secretary

Sarvjit Singh Dhillon
Director

Pankaj Miglani
Chief Financial Officer

85

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Consolidated Statement of Profit and Loss account for the year ended
March 31, 2013

(` Million, except per share data)

Notes
Year ended

March 31, 2013 Income Revenues
21
102,720 Other income
22 3,127

Expenses Power and fuel Rent Employee benefits expenses Other expenses

Year ended
March 31, 2012
94,521
1,450

105,847

95,971

23 38,016
24
10,876
25 3,341
26 12,133

33,619
10,611
3,096
11,851

64,366

59,177

41,481

36,794

Earnings before interest, tax, depreciation and amortization (EBITDA)

Depreciation and amortization expense
27

Less: adjusted with general reserve in accordance with the Scheme (note 41 and 42)

24,402

23,807

(2,203)

(2,369)

22,199 21,438
3,945
52

4,073
1

26,196 Profit before exceptional items and tax
15,285

Exceptional items (note 44)
(22)

25,512

Finance costs
28
Charity and donation

11,282
-

Profit before tax
15,307
11,282
Tax expenses Current tax
4,778
3,051 Less: MAT credit entitlement
(75)
(639) Deferred tax
579
1,379
Total tax expense
5,282

Profit for the year 10,025 Earnings per equity share (nominal value of share ` 10 each)
29

Basic
5.625

Diluted
5.612

3,791
7,491
4.299
4.290

Summary of significant accounting policies
2.1

The accompanying notes are an integral part of the consolidated financial statements.
As per our report of even date
For S. R. Batliboi & Associates LLP
Firm Registration No.: 101049W
Chartered Accountants per Nilangshu Katriar
Partner
Membership No: 58814
Place : New Delhi
Date :
April 30, 2013

86

For and on behalf of the board

Akhil Gupta
Managing Director

D S Rawat
Chief Executive Officer

Anupam Garg
Company Secretary

Sarvjit Singh Dhillon
Director

Pankaj Miglani
Chief Financial Officer

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Consolidated Cash Flow Statement for the year ended March 31, 2013
(` Millions)

Year ended
March 31, 2013

Year ended
March 31, 2012

Cash flows from operating activities
Profit before taxation
15,307

11,282

Adjustments for - Depreciation and amortization expense Interest income Dividend income Interest expense Amortization of loan origination fee Net gain on sale of current investments Employee stock compensation expense Revenue equalization Rent equalization Provision for doubtful debts and advances Provision for capital work in progress Fixed assets written off Loss / (profit) on sale of fixed assets (net)

22,199
(2,015)
(132)
3,717
218
(753)
103
(2,590)
468
341
58
85
(235)

21,438
(1,140)
3,805
254
(145)
296
(2,677)
551
646
125
26
52

Operating profit before working capital changes Increase / (Decrease) in trade payables Increase / (Decrease) in other current liabilities Increase / (Decrease) in short-term provisions Increase / (Decrease) in other long-term liabilities Increase / (Decrease) in long-term provisions (Increase) / Decrease in trade receivables (Increase) / Decrease in short-term loans and advances (Increase) / Decrease in other current assets (Increase) / Decrease in long-term loans and advances (Increase) / Decrease in other non-current assets

36,771
2,959
3,625
(2)
(3,408)
26
(1,875)
4,680
(2,236)
(250)
(56)

34,513
4,464
(838)
(2)
222
41
(397)
(90)
(1,641)
(430)
(220)

Cash generated from operations Income tax paid (net of refunds)

40,234
(3,722)

35,622
(3,629)

Net cash flow from operating activities (A)

36,512

31,993

Cash flows from investing activities Purchase of fixed assets Purchase of intangible assets Proceeds from sale of fixed assets Loan given to parent company Loan repaid by parent company Purchase of current investments Proceeds from sale of current investments Interest received Dividend received

(16,784)
(47)
658
(13,500)
3,670
(165,196)
130,401
1,975
132

(15,713)
(73)
536
(11,460)
6,100
(63,527)
62,764
1,229
-

Net cash flow (used in) investing activities (B) (58,691)

(20,144)

Cash flows from financing activities

Proceeds from issue of share capital

Share issue expenses paid Proceeds from exercise of stock options Repayment of borrowings Proceeds from borrowings Interest paid Loan origination fee paid Interim dividend paid Tax on interim dividend

32,303
(771)
11
(41,985)
42,210
(3,715)
(101)
(4,357)
(1,364)

(9,868)
2,237
(3,803)
(72)
-

Net cash flow from/ (used in) financing activities (C)

22,231

(11,506)

87

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

(` Millions)

Year ended
March 31, 2013

Year ended
March 31, 2012

Net increase in cash and cash equivalents during the year (A+B+C)
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year

52
468
520

343
125
468

Components of cash and bank balances
Cash and cash equivalents
Balance with scheduled banks: Current account Cheques in hand Fixed deposits with maturity less than three months

98
27
395

160
44
264

Total cash and cash equivalents
520
Other bank balances Deposit more than three months but less than twelve months
14

Earmarked balances with banks
733
Total Cash and bank balances

468
13
-

1,267 481

2.1

Summary of significant accounting policies

The accompanying notes are an integral part of the consolidated financial statements.
Notes :
1 The above consolidated cash flow statement has been prepared under the indirect method set out in AS-3 ‘Cash Flow Statements’ notified pursuant to the Companies (Accounting Standards) Rules, 2006 (as amended).
2. Figures in brackets indicate cash outflow.
As per our report of even date
For S. R. Batliboi & Associates LLP
Firm Registration No.: 101049W
Chartered Accountants per Nilangshu Katriar
Partner
Membership No: 58814
Place : New Delhi
Date :
April 30, 2013

88

For and on behalf of the board

Akhil Gupta
Managing Director

D S Rawat
Chief Executive Officer

Anupam Garg
Company Secretary

Sarvjit Singh Dhillon
Director

Pankaj Miglani
Chief Financial Officer

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Notes to the Consolidated Financial Statements
1. CORPORATE INFORMATION
Bharti Infratel Limited (‘the Company’ or ‘BIL’) incorporated on November 30, 2006 with the object of, inter-alia, setting up, operating and maintaining wireless communication towers. The Company received the certificate of commencement of business on April 10, 2007 from the Registrar of Companies. The Registered office of the Company is situated at Bharti Crescent, 1,
Nelson Mandela Road, Vasant Kunj, Phase – II, New Delhi – 110070.
The Company has entered into a joint venture agreement with Vodafone India Limited and Aditya Birla Telecom Limited to provide passive infrastructure services in 15 specified telecom circles of India and formed Indus Towers Limited for such purpose.
The Company and Vodafone India Limited are holding approximately 42% each in Indus Towers Limited and the balance 16% is held by Aditya Birla Telecom Limited. Indus Towers Limited is incorporated in India.
The Company together with its wholly owned subsidiary, Bharti Infratel Ventures Limited, and joint venture is hereinafter referred to as ‘the Group’. The Group is a leading telecom passive infrastructure service provider in India.

2. BASIS OF PREPARATION
These consolidated financial statements have been prepared under the historical cost convention on the accrual basis of accounting and reporting requirements of Accounting Standard (‘AS-21’) ‘Consolidated Financial Statements’ and (‘AS-27’)
‘Financial Reporting of Interest in Joint Venture’ notified under Companies (Accounting Standards) Rules, 2006, (‘as amended’) and consolidated as detailed below for the year ended March 31, 2013. The accounting policies as presented in paragraph 2.1 below have been consistently applied by the Group and are consistent with those used in the previous year.
These financial statements represent consolidated accounts of the Company and its subsidiary and joint venture as follows:
Entity
Indus Towers
Limited
Bharti Infratel
Ventures Limited

Country of
Incorporation
India
India

Principal Service

Relationship
Joint Venture

Shareholding as at 31-Mar-13
42%

Shareholding as at 31-Mar-12
42%

Passive
Infrastructure
Services
Passive
Infrastructure
Services

Subsidiary

100%

100%

The Group’s interests in jointly controlled entities are accounted for by proportionate consolidation. The Group combines its share of the joint ventures’ individual income, expenses, assets and liabilities on a line-by-line basis with similar items in the
Group’s financial statements.
Inter-Company balances have been eliminated on consolidation for Subsidiary. For elimination of transaction between joint venture and the Company is done to the extent of proportionate share. The consolidated financial statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances.
2.1. Summary of significant accounting policies
a. Use of estimates
The preparation of consolidated financial statements is in conformity with generally accepted accounting principles Indian
GAAP and requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the consolidated financial statements and the results of operations during the reporting period. Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates.
b. Tangible fixed assets
Fixed assets are stated at cost of acquisition, except for assets acquired under the Scheme of Arrangement (refer note 41 and
42), which are stated at fair values as per the Scheme, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises cost of acquisition, including taxes and duties (net of CENVAT credit), freight and other incidental expenses related to acquisition and installation.
89

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Site restoration cost obligations are capitalized when it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made.
Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure are charged to the statement of profit and loss for the period during which such expenses are incurred.
Gains or losses arising from de-recognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognised.
c. Depreciation on tangible fixed assets
Depreciation on fixed assets is calculated on a straight-line basis using the rates arrived at based on the useful lives estimated by the management, or those prescribed under the Schedule XIV to the Companies Act, 1956, whichever is higher. The Group has used the following lives to provide depreciation on its fixed assets:

Useful lives

Plant and machinery

3 to 20 years

Furniture and fixtures

5 years

Vehicles
Office equipments
Computers
Leasehold improvements

5 years
2 years/ 5 years
3 years
Period of lease or useful life, whichever is less

The site restoration cost obligation capitalized as a part of plant and machinery is depreciated over the period of the useful life of the related asset.
d. Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. Software is capitalized at the amounts paid to acquire the respective license for use and is amortized over the period of licence, generally not exceeding three years.
Amortization is recognized in statement of profit and loss on a straight-line basis over the estimated useful economic lives of intangible assets from the date they are available for use. The amortization period and the amortization method are reviewed at each balance sheet date. If the expected useful life of the asset is significantly different from previous estimates, the amortization period is changed accordingly.
Gains or losses arising from de-recognition of intangible assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognised.
e. Leases
Where the Group is lessee
Finance leases, which effectively transfer to the Group substantially all the risks and benefits incidental to ownership of the leased asset, are capitalized at the inception of the lease term at the lower of the fair value of the leased asset and present value of minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized as finance costs in the statement of profit and loss.
A leased asset is depreciated on a straight-line basis over the useful life of the asset or the useful life envisaged in Schedule
XIV to the Companies Act, 1956, whichever is lower. However, if there is no reasonable certainty that the Group will obtain the ownership by the end of the lease term, the capitalized asset is depreciated on a straight-line basis over the shorter of the estimated useful life of the asset, the lease term or the useful life envisaged in Schedule XIV to the Companies Act, 1956.
Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item are classified as operating leases. Operating lease payments are recognized as an expense in the statement of profit and loss on a straightline basis over the lease term.
90

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Where the Group is lessor
Leases in which the Group does not transfer substantially all the risks and benefits of ownership of the asset are classified as operating leases. Assets subject to operating leases are included in fixed assets. Lease income on an operating lease is recognized in the statement of profit and loss on a straight-line basis over the lease term. Costs, including depreciation, are recognized as an expense in the statement of profit and loss.
f. Borrowing costs
Borrowing costs include interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset.
All other borrowing costs are expensed in the period they occur.
g. Impairment of tangible and intangible assets
The carrying amounts of assets are reviewed at each balance sheet date for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the assets’ carrying amount exceeds its recoverable amount. The recoverable amount is the higher of the assets’ fair value less costs to sell and value in use. Impairment losses are recognized in the statement of profit and loss under the caption depreciation and amortization expense.
For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units).
h. Investments
Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as non-current investments.
Current investments are carried in the consolidated financial statements at lower of cost and fair value determined on an individual investment basis. Non-current investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.
On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.
i. Revenue recognition and receivables
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured.
Revenues
Revenues include revenue from the use of sites and energy charges received from customers. Revenue is recognized as and when services are rendered. If the payment terms in the service agreements include fixed escalations, the effect of such increases is recognized on a straight-line basis over the fixed, non-cancellable term of the agreement, as applicable.
Unbilled receivables represent revenues recognized from the last invoice raised to customer to the period end. These are billed in subsequent periods based on the terms of agreement with the customers. The Group collects service tax on behalf of the Government of India and therefore, it is not an economic benefit flowing to the Group. Hence it is excluded from revenue.
Interest
Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head “other income” in the statement of profit and loss.
Dividends
Dividend income is recognized when the Group’s right to receive dividend is established by the reporting date.

91

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Provision for doubtful debts
The Group provides for amounts outstanding for more than 105 days from the invoice date in case of site sharing debtors other than from the parent company or in specific cases where management is of the view that the amounts for certain customers are not recoverable.
j. Foreign currency transactions and balances
Initial recognition
Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.
Conversion
Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date. Non- monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction. Non-monetary items, which are measured at fair value or other similar valuation denominated in a foreign currency, are translated using the exchange rate at the date when such value was determined.
Exchange differences
Exchange differences arising on settlement of monetary items or on restatement of the Group’s monetary items at rates different from those at which they were initially recorded during the period, or reported in previous consolidated financial statements, are taken to the statement of profit and loss.
k. Retirement and other employee benefits
Short term employee benefits are recognized in the period during which the services have been rendered.
All employees of the Group are entitled to receive benefits under the provident fund, which is a defined contribution plan.
Contribution to provident fund is recognized as and when services are rendered. Both the employee and the employer make monthly contributions to the plan at a predetermined rate (presently 12%) of the employees’ basic salary. These contributions are made to the fund administered and managed by the Government of India. In addition, some employees of the Group are covered under the employees’ state insurance schemes, which are also defined contribution schemes recognized and administered by the Government of India.
The Group’s contributions to both these schemes are expensed in the statement of profit and loss as and when they are due.
The Group has no further obligations under these plans beyond its monthly contributions.
The Group provides for Gratuity obligations through a defined benefit retirement plan covering all employees. The cost of providing benefits under this plan is determined on the basis of actuarial valuation at each reporting period end. Actuarial valuation is carried out using the projected unit credit method. Actuarial gains and losses are recognized in full in the period in which they occur in the statement of profit and loss.
The Group also provides other benefits in the form of deferred compensation and compensated absences. The employees of the Group are entitled to compensated absences based on the unavailed leave balance as well as other long term benefits.
The Group records liability based on actuarial valuation computed under projected unit credit method. Actuarial gains / losses are immediately taken to the statement of profit and loss and are not deferred. The Group presents the entire leave encashment liability as a current liability in the balance sheet, since the Company does not have an unconditional right to defer its settlement for more than 12 months after the reporting date.
l. Income taxes
Tax expense comprises current and deferred tax.
Current income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax
Act, 1961 enacted in India and tax laws prevailing in the respective tax jurisdiction where the Group operates. The tax rates and tax laws used to compute the amount are those that are enacted at the reporting date. Current income tax relating to items recognized directly in equity is recognized in equity and not in the statement of profit and loss.
Deferred income taxes reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates

92

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

and the tax laws enacted or substantively enacted at the reporting date. Deferred income tax relating to items recognized directly in equity is recognized in equity and not in the statement of profit and loss.
Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets are recognized for deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the Group has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.
At each reporting date, the Group re-assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax asset to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realized.
The carrying amount of deferred tax assets are reviewed at each reporting date. The Group writes-down the carrying amount of deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.
Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set-off current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the same taxable entity and the same taxation authority.
Minimum alternate tax (MAT) paid in a year is charged to statement of the profit and loss as current tax. The Group recognizes
MAT credit available as an asset only to the extent that there is convincing evidence that the Group will pay normal income tax during the specified period, i.e. the period for which MAT credit is allowed to be carried forward. In the year in which the Group recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum
Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the statement of profit and loss and shown as “MAT Credit Entitlement”. The Group reviews the “MAT credit entitlement” asset at each reporting date and writes down the asset to the extent the Group does not have convincing evidence that it will pay normal tax during the specified period.
m. Employee stock compensation cost
Employees of the Group receive remuneration in the form of share based payment transactions, whereby employees render services as consideration for options to buy equity instruments (equity-settled transactions).
In accordance with the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the Guidance Note on Accounting for Employee Share-based Payments, the cost of equity-settled transactions is measured using the Black Scholes / Lattice Valuation option pricing model and the fair value is recognized as an expense over the period in which the options vest, on a straight line basis, together with a corresponding increase in the “Stock options outstanding account” in reserves. The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of options to buy equity instruments that will ultimately vest. The expense or credit recognized in the statement of profit and loss for a period represents the movement in cumulative expense recognized as at the beginning and end of that period and is recognized in employee benefits expense.
Where the terms of an equity-settled transaction award are modified, the minimum expense recognized is the expense as if the terms had not been modified, if the original terms of the award are met. An additional expense is recognized for any modification that increases the total intrinsic value of the share-based payment transaction, or is otherwise beneficial to the employee as measured at the date of modification.
n. Earnings per share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
93

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

o. Provisions
A provision is recognized when the Group has a present obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.
p. Contingent liabilities
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Group does not recognize a contingent liability but discloses its existence in the consolidated financial statements.
q. Cash and cash equivalents
Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.
r. Measurement of EBITDA
As permitted by the Guidance Note on the Revised Schedule VI to the Companies Act, 1956, the Group has elected to present earnings before interest, tax, depreciation and amortization (EBITDA) as a separate line item on the face of the statement of profit and loss. In its measurement, the Group does not include depreciation and amortization expense, finance costs and tax expense.

3. SHARE CAPITAL
(` Millions)

As at March 31, 2013 Authorised shares 3,500,000,000 (March 31, 2012 - 600,000,000) equity shares of ` 10 each
35,000

As at
March 31, 2012
6,000

Issued, subscribed and fully paid-up shares

1,888,743,054 equity shares of ` 10 each fully paid up
(March 31, 2012 - 580,802,910 equity shares of ` 10 each)
18,887
5,808
18,887

5,808

a. Reconciliation of the equity shares outstanding at the beginning and at the end of the reporting period

As at
As of March 31, 2013
March 31, 2012

No.
` Mn
No.
At the beginning of the year
Issued during the year - Bonus issue
Issued during the year - Initial public offer
Issued during the year - ESOP
Outstanding at the end of the year

94

` Mn

580,802,910

5,808

580,802,910

5,808

1,161,605,820

11,616

-

-

146,234,112

1,462

-

-

100,212

1

-

-

1,888,743,054

18,887

580,802,910

5,808

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

b. Terms/ rights attached to equity shares

The Company has only one class of equity shares having par value of ` 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees.

During the quarter ended September 30, 2012, the Company has declared and paid Interim dividend for the financial year
2012-2013 @ ` 2.50 per equity share to all the existing shareholders as on September 6, 2012, comprising of ` 1.50 per share paid out of accumulated profits up to Mar 31, 2012 and ` 1.00 per share paid out of current year profits.

The Board of Directors have proposed a final dividend of ` 3.00 per equity share to all the existing shareholders for the year ended March 31, 2013. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing general meeting.

c. Shares held by holding Company

As at
As at March 31, 2013
March 31, 2012

No.
` Mn
No.
Bharti Airtel Limited

1,500,000,000

15,000

500,000,000

` Mn
5,000

d. Aggregate number of bonus shares issued and shares issued for consideration other than cash during the period of five years immediately preceding the reporting date:

During the year ended March 31, 2009, the Group allotted 540,445,950 equity shares as fully paid bonus shares by capitalization of securities premium account.

On August 23, 2012, the Group further allotted 1,161,605,820 equity shares as fully paid bonus shares by capitalization of securities premium account.

During the year ended March 31, 2013, the Company made an Initial Public Offering (IPO) through book building process of
188,900,000 equity shares of ` 10 each in December 2012. The issue comprised of fresh issue of 146,234,112 equity shares and offer for sale of 42,665,888 equity shares by the existing shareholders. The Company has raised ` 32,303 Mn from fresh issue of shares and incurred share issue expenses of ` 771 Mn (net of tax ` 527 Mn, which have been adjusted with
Securities premium account in line with requirements of Sec 78 of Companies Act, 1956). The Company’s equity shares got listed on December 28, 2012 on both the Stock Exchanges (BSE & NSE).

On March 19, 2013, the Company allotted 100,212 equity shares of ` 10 each to its employees on exercise of stock options under the Employee Stock Option Plan 2008 wherein part consideration was received on form of employee services.

e. Details of shareholders holding more than 5% shares in the Company:

As at
As at March 31, 2013
March 31, 2012

No.
% holding
No.
% holding Equity shares of ` 10 each fully paid Bharti Airtel Limited
1,500,000,000
79.42%
500,000,000
86.09%

f. Shares reserved for issue under options:
For details of shares reserved for issue under the employee stock option plan (ESOP) of the Group, please refer note 31.

95

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

4. RESERVES AND SURPLUS
(` Millions)
Particulars

As at April 1, 2011

Securities premium account

Employee stock options outstanding General reserve Surplus/
(deficit) in the statement of profit and loss

Total

47,585

1,687

74,957

10,409

134,638

Profit for the year

-

-

-

7,491

7,491

Add: amount arising under the Scheme of arrangement (note 42)

-

-

-

(9)

(9)

Less: amount transferred to statement of profit and loss during the year in accordance with the Scheme (note 41 and 42)

-

-

(2,369)

-

(2,369)

Add: gross compensation for options granted during the year

-

55

-

-

55

Less: reclassification to provision for payment of stock option

-

(141)

-

-

(141)

47,585

1,601

72,588

17,891

139,665

-

(232)

-

-

(232)

47,585

1,369

72,588

17,891

139,433

Less: deferred employee stock compensation
As at March 31, 2012
Profit for the year

-

-

-

10,025

10,025

30,865

-

-

-

30,865

(527)

-

-

-

(527)

(11,616)

-

-

-

(11,616)

-

-

(2,513)

-

(2,513)

Interim Dividend on equity shares (amount ` 2.5 per share)

-

-

-

(4,357)

(4,357)

Tax on Interim dividend on equity shares

-

-

-

(1,364)

(1,364)

(5,666)

(5,666)

-

-

-

(1,337)

(1,337)

Add: addition during the year [note 3(d)]
Less: utilization towards share issue expenses (net of tax of ` 242
Mn) [note 3(d)]
Less: utilization during the year for bonus issue [note 3(d)]
Less: amount transferred to statement of profit and loss during the year in accordance with the Scheme (note 41 and 42)
Less: Appropriations

Proposed final dividend on equity shares (amount ` 3 per share)
Tax on Proposed final dividend on equity shares
Transfer to General reserve*

-

-

3,248

(3,248)

-

Add: amount transferred from stock options outstanding

-

-

125

-

125

Add: gross compensation for options granted during the year

-

14

-

-

14

Less: gross compensation for options forfeited/ exercised during the year

-

(190)

-

-

(190)

66,307

1,425

73,448

11,944

153,124

-

(86)

-

-

(86)

66,307

1,339

73,448

11,944

153,038

Less: deferred employee stock compensation
As at March 31, 2013

*During the year ended March 31, 2013, the Company has transferred 10% of accumulated profits up to March 31, 2013 to General Reserve in accordance with
Companies (Transfer of Profits to Reserves) Rules, 1975.

96

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

5. LONG-TERM BORROWINGS
(` Millions)
Particulars
As at

March 31, 2013 Term Loan - secured* - from banks
14,200

- from others
18,096
Vehicle loan: - from banks
-

32,296

As at
March 31, 2012
17,950
5,938
1
23,889

*In addition to amount shown above ` 2,935 Mn (March 31, 2012 - ` 3,413 Mn) has been disclosed under ‘Other current liabilities’ as it is repayable within one year.

”Vehicle loan” as at March 31, 2012 represent loan from banks which are secured by hypothecation of vehicles of the Company at a fixed rate of interest of 10.1% per annum. The loan has been repaid during the year ended March 31, 2013.
The joint venture company has entered into following borrowing arrangements with several lenders. The security interest set out below ranks pari-passu amongst all secured lenders.
The terms and conditions of all the long-term borrowings are similar.
As at March 31, 2013*

As at March 31, 2012

(i) a mortgage and first charge of all the JV Company’s freehold immovable properties and assets, present and future;

(i) a mortgage and first charge of all the JV Company’s freehold immovable properties and assets, present and future;

(ii) a first charge by way of hypothecation of the JV Company’s entire movable plant and machinery, including tower assets, related equipment and spares, tools and accessories, furniture, fixtures, vehicles and all other movable assets, present and future;

(ii) a first charge by way of hypothecation of the JV Company’s entire movable plant and machinery, including tower assets, related equipment and spares, tools and accessories, furniture, fixtures, vehicles and all other movable assets, present and future;

(iii) a charge on JV Company’s cash flows, receivables, book debts, revenues of whatsoever nature and wherever arising, present and future subject to prior charge in favour of working capital facilities with working capital facility limits not exceeding ` 10,000 Mn
(amount in absolute figures) including funded facilities;

(iii) a charge on JV Company’s cashflows, receivables, book debts, revenues of whatsoever nature and wherever arising, present and future subject to prior charge in favour of working capital facilities with working capital facility limits not exceeding ` 10,000
Mn (amount in absolute figures) including funded facilities not exceeding ` 5,000 Mn (amount in absolute figures) ;

(iv) an assignment and first charge of all the rights, title, interest, benefits, claims and demands whatsoever of the JV Company in the IRU agreements, Master Service Agreements together with service contracts, all as amended, varied or supplemented from time to time duly acknowledged and consented to by the relevant counter-parties to such contracts (if required) and Insurance
Contracts, all as amended, varied or supplemented from time to time and subject to Applicable Law, all the rights, title, interest, benefits, claims and demands whatsoever of the JV Company in the Clearances;

(iv) an assignment and first charge of all the rights, title, interest, benefits, claims and demands whatsoever of the Company in the documents related to telecom tower rollout and upgradation of existing towers (except the Master Services Agreement), duly acknowledged and consented to by the relevant counter-parties to such documents, all as amended, varied or supplemented from time to time. (b) subject to Applicable Law, all the rights, title, interest, benefits, claims and demands whatsoever of the JV
Company in the Clearances and (c) all the rights, title, interest, benefits, claims and demands whatsoever of the Company in any letter of credit, guarantee, performance bond, corporate guarantee, bank guarantee provided by any party to the project documents; (v) a first and exclusive charge over the amount in the Debt
Service Reserve Account and the Debt Service Account opened and maintained in accordance with the terms of this Agreement and the Debt Service Account Agreement.

(v) a first charge of all the rights, title, interest, benefits, claims and demands whatsoever of the Borrower in the Master Services
Agreements together with the Service Contracts, all as amended, varied or supplemented from time to time;
(vi) a first and exclusive charge over the amount in the Debt
Service Reserve Account and the Debt Service Account opened and maintained in accordance with the terms of this Agreement and the Debt Service Account Agreement;

*As per the agreement signed for the new loan facility availed in the month of March 2013, the Company is yet to create charge for loan amounting to ` 2,520 Mn mentioned as above, as it has 90 days for the same from the date of first disbursement of loan.

97

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

The interest rate varies from approximately 10.50 % - 11.20 % per annum (As of March 31, 2012: 10.25% - 12.00% per annum) on term loans from banks and financial institutions.
Repayment of loan#
As at March 31, 2013***
Loan outstanding ` 16,611 Mn
As per the repayment schedule in the Common loan agreement, the
JV Company has to repay loans amounting to ` 16,611 availed from other parties in 27 equated quarterly installments, with first date for repayment falling due in February 2014.
Loan outstanding ` 5,600 Mn
As per the repayment schedule in the Syndicated Common loan agreement, the JV Company has to repay loans amounting to
` 5,600 availed from banks in 16 equated quarterly installments’ first date for repayment falling due in November 2012.
Loan outstanding ` 4,200 Mn
As per the repayment schedule in the common loan agreement, the
JV Company has to repay loans amounting to ` 4,200 availed from bank and other parties (NBFC) in 19 equated quarterly installments’ with first date for repayment falling due in May 2014.
Loan outstanding ` 2,520 Mn
As per the repayment schedule in the loan agreement, the JV
Company has to repay loans amounting to ` 2,520 availed from bank in 14 equated quarterly installments’ with first date for repayment falling due in May 2013.

As at March 31, 2012**
Loan outstanding ` 27,300 Mn
The JV Company has to repay the loan in 16 equated quarterly installments; first date for repayment would fall due on
November 2012 as per repayment schedule specified in the loan agreement. The JV Company may voluntarily prepay all or any portion of the disbursed loan on certain specified event and subject to the condition laid out in the loan agreement.

For all the above loans the JV Company may voluntarily prepay all or any portion of the disbursed loans based on certain specified clauses and subject to the condition laid out in the loan agreement.
Loan outstanding ` 6,300 Mn
As per the repayment schedule in the loan agreement, the JV
Company has to repay loans amounting to ` 6,300 availed from bank in 19 equated quarterly installments’ with first date for repayment falling due in May 2014.
The JV Company has option to voluntarily prepay all or any portion of the disbursed loan.
#Amount represents 42% of JV Company as consolidated.
** The loan outstanding as at March 31, 2012 has been fully re-paid by the JV Company during the year ended March 31, 2013.
*** During the quarter ended March 31, 2013 the JV Company has made prepayment of loan amounting to ` 32,967 Mn and availed new loan of ` 42,210 Mn.

98

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

6. DEFERRED TAX LIABILITIES (NET)
(` Millions)

Deferred tax liability
Depreciation claimed as deduction under Income Tax Act but chargeable in the financial statements in future years
Revenue equalization (net) charged in financial statements but allowed as deduction under the Income Tax Act in future years on actual payment basis
Unamortised loan origination fees
Gross deferred tax liability
Deferred tax asset
Provision for doubtful debts/ advances charged in financial statements but allowed as deduction under the Income Tax Act in future years (to the extent considered realisable) Carry forward unabsorbed depreciation and unabsorbed business losses

As at
March 31, 2013

As at
March 31, 2012

6,409

6,598

3,129

2,299

24
9,562

60
8,957

656

516

293

514

Expenses allowed as deduction under Sec 35D of Income Tax Act in future years

242

-

Other expenses claimed as deduction in the financial statements but allowed as deduction under Income Tax Act in future years on actual payment (net)
Gross deferred tax asset

761

652

1,952

1,682

Net deferred tax liability

7,610

7,275

As of March 31, 2013 the above deferred tax assets and liabilities have been calculated using substantively enacted rates of
33.99 % as per Finance Bill 2013-14.

7. OTHER LONG TERM LIABILITIES
(` Millions)

Security deposits received
Lease equalization
Unearned revenue
Provision for payment of stock options

As at
March 31, 2013
10,920
4,535
97
18
15,570

As at
March 31, 2012
14,293
4,066
118
43
18,520

“Security deposits received” include ` 6,344 Mn (March 31, 2012 - ` 8,010 Mn) amounts received from related parties. For details, refer note 35.

8. LONG TERM PROVISIONS
(` Millions)

Provision for employee benefits (note 30) Gratuity Leave encashment Long-term service award
Asset retirement obligation (note 33)

As at
March 31, 2013

As at
March 31, 2012

89
51

69
47

10
150
8,656
8,806

8
124
5,014
5,138

99

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

9. SHORT-TERM BORROWINGS
(` Millions)

Unsecured

As at
March 31, 2013

As at
March 31, 2012

-

5,604

Loans repayable on demand: from related parties from others
Secured
Term loan*

2,100
7,704

The JV Company has repaid loans amounting to ` 5,604 Mn during the year ended March 31, 2013.
* These loans were taken from banks and financial institutions on an interest rate varying from 10.5% to 11.08% per annum approximately. These loans have been repaid by the JV Company during the year ended March 31, 2013.

10. TRADE PAYABLES
(` Millions)
As at
March 31, 2012
4,147

7,106

Trade creditors

As at
March 31, 2013
7,106

4,147

Details of dues to micro and small enterprises as defined under the MSMED Act, 2006
(` Millions)
As at
March 31, 2013
The principal amount and the interest due thereon remaining unpaid to any supplier as at the end of each accounting year
Principal amount due to micro and small enterprises
Interest due on above
The amount of interest paid by the buyer in terms of section 16 of the Micro Small and
Medium Enterprise Development Act, 2006, along with the amounts of the payment made to the supplier beyond the appointed day during each accounting year
The amount of interest due and payable for the period of delay in making payment
(which have been paid but beyond the appointed day during the period/ year) but without adding the interest specified under Micro Small and Medium Enterprise
Development Act, 2006
The amount of interest accrued and remaining unpaid at the end of each accounting year The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise for the purpose of disallowance as a deductible expenditure under section 23 of the Micro Small and Medium Enterprise Development Act, 2006

100

As at
March 31, 2012

90
6
96
6

66
66
-

3

1

12

3

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

11. OTHER CURRENT LIABILITIES
(` Millions)
As at
March 31, 2013
5,449
405
16,109
128
4
404
9
22
2,935
322
733
26,520

Equipment supply payables
Dues to employees
Accrued expenses
Book overdraft
Interest accrued but not due
Other taxes payable
Contribution to employee funds
Unearned revenue
Current portion of long-term borrowings (note 5)
Security deposits
Provision for payment of stock options
Other Liabilities

As at
March 31, 2012
4,735
263
13,394
64
2
109
14
22
3,413
121
107
413
22,657

12. SHORT-TERM PROVISIONS
(` Millions)
As at
March 31, 2013
30
64
5,666
1,337
7,097

Provision for employee benefits (note 30) Gratuity Leave encashment Deferred bonus
Proposed Dividend (refer note 3(b))
Tax on Proposed Dividend

As at
March 31, 2012
18
60
18
96

13. FIXED ASSETS
(` Millions)
Particulars

Cost
As at April 1, 2011
Additions
Disposals
Other adjustments
As at March 31, 2012
Additions
Disposals
As at March 31, 2013
Depreciation
As at April 1, 2011
Charge for the year
Disposals
As at March 31, 2012
Charge for the year*
Disposals
As at March 31, 2013
Net block
As at March 31, 2013
At March 31, 2012

Land

Plant and equipment Office furniture and equipment Vehicles

Computers

Leasehold improvements Tangible assets Total

Computer
Software

Intangible assets Total

6
6
6

233,315
14,896
(1,399)
(41)
246,771
21,399
(3,489)
264,681

167
25
192
56
(4)
244

5
3
8
8

740
60
800
53
(16)
837

407
71
(4)
474
48
(5)
517

234,640
15,055
(1,403)
(41)
248,251
21,556
(3,514)
266,293

490
73
563
47
610

490
73
563
47
610

-

57,814
23,336
(734)
80,416
24,296
(2,618)
102,094

62
40
102
46
(3)
145

2
1
3
2
5

406
223
629
136
(16)
749

95
75
(3)
167
90
(4)
253

58,379
23,675
(737)
81,317
24,570
(2,641)
103,246

163
132
295
123
418

163
132
295
123
418

6
6

162,587
166,355

99
90

3
5

88
171

264
307

163,047
166,934

192
268

192
268

*Charge for the year includes depreciation of ` 291 Mn considered under exceptional items in the statement of profit and loss (refer note 44).

101

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

“Plant and equipment” comprise of assets given on operating lease. For details, refer note 32(b)(i).
“Other adjustments” under “Plant and equipment” during the year ended March 31, 2012 includes reclassification of fixed assets to security deposit.
During the year ended March 31, 2008, pursuant to the Scheme of Arrangement with Bharti Airtel Limited under Sections
391 to 394 of the Companies Act, 1956, the telecom infrastructure undertaking of Bharti Airtel Limited was transferred to the
Company at Nil value. Pursuant to the Scheme, the Company recorded the assets under “Plant and Equipment” at fair values of
` 89,601 Mn determined on the basis of then active market prices adjusted for any difference in nature, location or condition of specific asset. Accordingly the assets were recorded at increased value of ` 89,601 Mn with a corresponding impact on General
Reserve. As per the Scheme depreciation on excess of fair value over the original historical cost in the books of Bharti Airtel
Limited is being set off with the reserves created from the Scheme. Accordingly ` 6,053 Mn has been adjusted till March 31,
2013 with the General Reserve (` 802 Mn for the year ended March 31, 2013).
During the year ended March 31, 2012, pursuant to the Scheme of Arrangement with Bharti Infratel Ventures Limited (BIVL), the Company transferred passive telecom infrastructure in certain specified telecom circles to BIVL at Nil value. Pursuant to the Scheme, BIVL recorded the assets under “Plant and Equipment” at fair values of ` 60,932 Mn determined on the basis of then active market prices adjusted for any difference in nature, location or condition of specific asset. Accordingly the assets were recorded at increased value of ` 60,932 Mn with a corresponding impact on General Reserve (` 1,401 Mn for the year ended March 31, 2013).
As per the Scheme depreciation on excess of fair value over the original historical cost in the books of Bharti Airtel Limited is being set off with the reserves created from the Scheme. Accordingly ` 5,795 Mn has been adjusted till March 31, 2013 with the General Reserve.
During the year ended March 31, 2013, the Group has revised its estimate for site restoration obligation of sites which has resulted in increase in the estimated obligation by ` 3,322 Mn. Had the Group not changed its estimate regarding the cost to be incurred for restoration of sites, depreciation for the year ended March 31, 2013 would have been lower by
` 144 Mn and profit after tax for year ended March 31, 2013 would have been higher by ` 96 Mn (net of tax) respectively
(refer note 33).

14. LONG-TERM LOANS AND ADVANCES
(` Millions)

Unsecured, considered good unless otherwise stated
Capital advances Unsecured, considered good Unsecured, considered doubtful Less: Provision
Security deposits Unsecured, considered good Unsecured, considered doubtful Less: Provision MAT credit receivable Advance income-tax (net of provision for taxation) Advance fringe benefit tax (net of provision)

As at
March 31, 2013

As at
March 31, 2012

35
29
(29)
35

91
14
(14)
91

3,842
77
(77)
3,842

3,559
53
(53)
3,559

1,295
6,002
2
11,176

1,099
6,545
2
11,296

“Security deposits” include Nil and ` 16 Mn given to the joint venture company as at March 31, 2013 and March 31, 2012 respectively. For details, refer note 35.

102

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

15. OTHER NON-CURRENT ASSETS
(` Millions)

Revenue equalization
Unamortised debt origination cost
Others, considered good
Others, considered doubtful
Less: Provision

As at
March 31, 2012

13,693
43

11,078
144

1,007
9
(9)
1,007

951
9
(9)
951

14,743

Unsecured, considered good unless otherwise stated

As at
March 31, 2013

12,173

“Others” comprise of payments made under protest to the Government authorities. For details, refer note 37(ii)(c).

16. CURRENT INVESTMENTS
(` Millions)

Current investments (at lower of cost and market value)
Investments in mutual funds
Aggregate amount of unquoted investments

As at
March 31, 2013

As at
March 31, 2012

38,911
38,911
38,911

3,363
3,363
3,363

17. TRADE RECEIVABLES
(` Millions)

Outstanding for a period exceeding six months from the date they are due for payment Unsecured, considered good Unsecured, considered doubtful Less: Provision for doubtful receivables
Other receivables Unsecured, considered good Unsecured, considered doubtful Less: Provision for doubtful receivables

As at
March 31, 2012

4,108
1,406
(1,406)
4,108

827
970
(970)
827

4,446
211
(211)
4,446

5,997
502
(502)
5,997

8,554

Unsecured, considered good unless otherwise stated

As at
March 31, 2013

6,824

“Trade receivables” includes receivables from related parties amounting to ` 7,350 Mn (March 31, 2012 - ` 6,237 Mn) respectively.
For details, refer note 35.

103

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

18. CASH AND BANK BALANCES
(` Millions)

Cash and cash equivalents Balances with banks on current accounts Cheques on hand Fixed deposits with maturity less than three months
Other bank balances Fixed deposits
- Deposit more than three months but less than twelve months Earmarked balances with banks

As at
March 31, 2013

As at
March 31, 2012

98
27
395
520

160
44
264
468

14
733
1,267

13
481

”Other bank balances” includes margin money of ` 1 Mn (March 31, 2012 - ` 1 Mn) against various guarantees issued by banks on behalf of the JV company in favour of sales tax authorities. The amount also includes fixed deposit of ` 13 Mn (March 31,
2012 - ` 12 Mn) issued in favour of Municipal Corporation of Delhi. These deposits are not available for use by the JV company.
“Earmarked balances with banks” comprise of amounts held in Escrow account payable towards share issue expenses.

19. SHORT-TERM LOANS AND ADVANCES
(` Millions)

Loans and advances to related parties Unsecured, considered good
Advances recoverable in cash or kind Secured, considered good Unsecured, considered good Unsecured, considered doubtful Less: Provision for doubtful advances Other loans and advances

Minimum alternate tax recoverable

As at
March 31, 2013

As at
March 31, 2012

24,858

20,770

272
3,956
286
(286)
4,228

288
3,050
121
(121)
3,338

936
30,022

1,571
25,679

“Loans and advances to related parties” includes interest bearing loan to parent company amounting to ` 22,990 Mn as at
March 31, 2013 (March 31, 2012 - ` 13,160 Mn). It further includes non interest bearing loans and advances to joint venture company amounting to ` 1,861 Mn as at March 31, 2013 (March 31, 2012 - ` 7,587 Mn).
“Advances recoverable in cash or kind” are secured to the extent they are backed by bank guarantees.

20. OTHER CURRENT ASSETS
(` Millions)

Unsecured, considered good unless otherwise stated
Unbilled revenue (net)
Interest accrued
Revenue equalization
Unamortised loan origination fee
Other receivables

104

As at
March 31, 2013

As at
March 31, 2012

6,462
101
49
26
657
7,295

4,608
61
73
42
1,009
5,793

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

“Other current assets” includes amount receivable from related parties amounting to ` 3,614 Mn as at March 31, 2013 (March
31, 2012 - ` 218 Mn).
“Unbilled revenue (net)” is net of provisions considered for penalties, deductions etc.
* Balance as at March 31, 2012 includes ` 210 Mn receivable from various mutual funds for which redemption requests had been filed on March 31, 2012.

21. REVENUES
(` Millions)

Rent
Energy and other reimbursements

Year ended
March 31, 2013
63,847
38,873
102,720

Year ended
March 31, 2012
60,661
33,860
94,521

22. OTHER INCOME
(` Millions)
Year ended
March 31, 2013
Interest income on:
- Bank deposits
- Loans to group companies
- Others
Dividend income
Net gain on sale of current investments
Miscellaneous income

Year ended
March 31, 2012

10
1,742
263
132
753
227
3,127

6
1,055
79
145
165
1,450

23. POWER & FUEL
(` Millions)

Network
Others

Year ended
March 31, 2013
37,972
44
38,016

Year ended
March 31, 2012
33,585
34
33,619

24. RENT
(` Millions)

Network
Others

Year ended
March 31, 2013
10,655
221
10,876

Year ended
March 31, 2012
10,395
216
10,611

105

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

25. EMPLOYEE BENEFIT EXPENSES
(` Millions)

Salaries, wages and bonus
Contribution to provident and other funds
Employee stock option scheme
Staff welfare expenses
Others

Year ended
March 31, 2013
2,892
98
103
133
115
3,341

Year ended
March 31, 2012
2,501
85
296
103
111
3,096

“Salaries, wages and bonus” includes gratuity and other post employment benefits. For details, refer note 30.
Further, for details of employee stock option scheme, refer note 31.

26. OTHER EXPENSES
(` Millions)

Insurance
Repair and maintenance - Plant and Machinery - Building - Others
Traveling and conveyance
Communication costs
Legal and professional
IT expenses
Provision for doubtful debts and advances
Provision for fixed assets/ capital work in progress
Fixed assets written off*
Loss on sale of fixed assets (net)
Miscellaneous expenses - Network - Others

Year ended
March 31, 2013
102

Year ended
March 31, 2012
70

6,921
19
1,883
249
163
267
302
341
58
85
(235)

6,153
3
2,015
174
144
244
271
646
125
26
52

1,686
292
12,133

1,724
204
11,851

* “Fixed assets written off” for the year ended March 31, 2013 and March 31, 2012 is net of ` 310 Mn and Nil respectively adjusted with General Reserve in accordance with the Scheme of arrangement. For details, refer note 41 and 42.

27. DEPRECIATION AND AMORTIZATION EXPENSE
(` Millions)

Depreciation of tangible assets
Amortization of intangible assets
Less: adjusted with general reserve

106

Year ended
March 31, 2013
24,279
123
24,402
(2,203)
22,199

Year ended
March 31, 2012
23,675
132
23,807
(2,369)
21,438

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

28. FINANCE COSTS
(` Millions)

Interest
Amortisation of loan origination fee
Bank charges

Year ended
March 31, 2013
3,717
218
10
3,945

Year ended
March 31, 2012
3,805
254
14
4,073

29. EARNINGS PER SHARE (EPS)
(` Millions)

Nominal value of equity shares (`)
Profit attributable to equity shareholders for computing Basic and Dilutive EPS (A)
(` Million)
Weighted average number of equity shares outstanding during the year for computing Basic EPS (B)
Dilutive effect on weighted average number of equity shares outstanding during the year* Weighted average number of equity shares and equity equivalent shares for computing Diluted EPS (C)
Basic earnings per share (A/B) (`)
Diluted earnings per share (A/C) (`)

Year ended
March 31, 2013
10
10,025

Year ended
March 31, 2012
10
7,491

1,782,075,524

1,742,408,730

4,246,946

3,941,928

1,786,322,470

1,746,350,658

5.625
5.612

4.299
4.290

* Diluted effect on weighted average number of equity shares and profit attributable is on account of Employee Stock Option Plan (ESOP).

Earnings per share calculations are in accordance with Accounting Standard 20 - Earnings per share, notified under the
Companies (Accounting Standards) Rules 2006, as amended. As per AS 20, in case of bonus shares, the number of equity shares/ potential equity shares outstanding before the event is adjusted for the proportionate change in the number of equity shares outstanding as if the event has occurred at the beginning of the earliest period reported. The Company, on August 23, 2012, issued bonus shares in the ratio of two shares for every one share held to the existing shareholders by way of capitalization of securities premium account. Weighted average number of equity shares outstanding during current year and previous year reported have been considered accordingly.

30. EMPLOYEE BENEFITS
During the period, the Group has recognized the following amounts in the consolidated statement of profit and loss:
Defined contribution plans
(` Millions)

Employer’s contribution to Provident Fund
Employer’s contribution to ESI
Total

Year ended
March 31, 2013
97
97

Year ended
March 31, 2012
85
85

Defined benefit obligations
Gratuity liability is defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each reporting period. The plan is not funded by the Group.
107

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Gratuity
i. Amount charged to the consolidated statement of profit and loss:
(` Millions)
Particulars
Current service cost
Interest cost
Actuarial (gain)/ loss
Net gratuity cost

Gratuity#
Year ended
March 31, 2013
34
9
3
46

Year ended
March 31, 2012
29
6
6
41

Gratuity#
Year ended
March 31, 2013
8.50%
10.00%
NA
24.89

Year ended
March 31, 2012
8.00%
9.00%
NA
25.07

Gratuity#
Year ended
March 31, 2013
8.40%
First 2 years- 10% and 7% thereafter

Year ended
March 31, 2012
8.40%
First 2 years- 10% and 7% thereafter

# included in Salaries, wages and bonus (refer note 25).

ii. The assumptions used to determine the benefit obligations are as follows:
Company
Particulars
Discount rate
Expected rate of increase in compensation levels
Expected rate of return on plan assets
Expected average remaining working lives of employees (years)

Joint Venture
Particulars
Discount rate
Expected rate of increase in compensation levels

iii. Reconciliation of opening and closing balances of benefit obligations:
(` Millions)
Particulars
Projected benefit obligation at beginning of year
Current service cost
Interest cost
Benefits paid
Actuarial (gain)/ loss
Projected benefit obligation at end of year
Net amount recognized

As at
March 31, 2013
87
34
9
(14)
3

As at
March 31, 2012
59
33
3
(13)
5

119
(119)

87
(87)

iv. The discount rate is based on the average yield on government bonds at the accounting date with a term that matches that of the liabilities.
v. The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
108

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

vi. Estimated amounts of benefits payable within next year are ` 33 Mn (March 31, 2012 – ` 26 Mn). vii. The table below discloses experience adjustment disclosure as per para 120 (n) (ii) of Accounting Standard 15, ‘Employee
Benefits’.
(` Millions)

As at
March 31, 2013
119
(119)
(1)

As at
March 31, 2012
87
(87)
(7)

Gratuity
As at
March 31, 2011
60
(60)
(3)

As at
March 31, 2010
38
(38)
(4)

As at
March 31, 2009
23
(23)
-

-

-

-

-

-

Particulars

Defined benefit obligation
Surplus/ (deficit)
Experience adjustments on plan liabilities
(loss)/ gain
Experience adjustments on plan assets
(loss)/ gain

viii. Movement in provision for deferred bonus plan
(` Millions)

Opening balance
Add: addition during the year
Less: paid during the year
Total

As at
March 31, 2013
18
2
(20)
-

As at
March 31, 2012
37
14
(33)
18

31. EMPLOYEE STOCK OPTION PLANS
Pursuant to the board resolution dated July 22, 2008 and the resolution of the shareholders in extraordinary general meeting dated August 28, 2008, the Company instituted the Employee Stock Option Plan.
The Company has granted additional stock options in the ratio of two options for every one option outstanding as on August
23, 2012. The total number of additional options granted is 6,165 thousand.
Under the Plan 9,947 thousand options have been awarded to directors, officers and employees of the Company (including
Group Companies) till date including the additional grants pursuant to bonus issue, out of which 34 thousand options have been granted during the year ended March 31, 2013.
On September 1, 2009, the Joint Venture Company (Indus Towers Limited) announced an Employee stock option plan (‘ESOP’ or ‘plan’) for eligible employees. During the quarter ended March 31, 2013 the Joint venture company has cancelled the ESOP
Plan 2009 and has announced new Stock Appreciation Rights (SAR) Scheme for its employees.
The following table provides an overview of all existing stock option plans of the Group:

109

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Scheme

Plan

Stock options outstanding* (in thousands)

Year of
Issuance

Vesting period
(years)

Contractual term (years)

Weighted average exercise price (`)

Classification/ accounting treatment

Company
Infratel Plan

2008 Plan

6,803

2008-09

1 - 5/1 - 4

7

110 Equity settled

Infratel Plan

2008 Plan

585

2009-10

1-4

7

110 Equity settled

Infratel Plan

2008 Plan

1,520

2010-11

1 - 5/1 - 4

7

110 Equity settled

Infratel Plan

2008 Plan

239

2011-12

1 - 5/1 - 4

7

110 Equity settled

Infratel Plan

Long term incentive plan

20

2012-13

1-3

7

10 Equity settled

Indus Plan

SAR Plan -1

0.4

2012-13

Refer note below 7

249,300 Cash settled

Indus Plan

SAR Plan -2

0.01

2012-13

1-3

7

249,300 Cash settled

Joint Venture

* Represents the number of options outstanding as on March 31, 2013 after considering the impact of bonus issue in August 2012. The weighted average remaining contractual life for options outstanding at the end of year for company and JV Company is 2.4 to 6.4 years and 3.86 years respectively.

The vesting schedule of SAR Plan-1 stipulates vesting as applicable under the scheme or as determined by the HR and
Remuneration committee and communicated through award letters.
Company
The weighted average fair value per option based on Black Scholes / Lattice Valuation model is ` 475 on the original grants.
The fair value is being amortized over the vesting period of 36 and 60 months, respectively on a graded vesting basis.
All options are planned to be settled in equity at the time of exercise and have maximum period of 7 years from the date of respective grants. The options under this plan have an exercise price of ` 329 per equity share and vest on a graded basis.
The exercise price of ` 329 per equity share has been diluted to one third pursuant to the bonus issue in August 2012. Further the options granted under ‘Long term incentive plan’ are at ` 10 per equity share.
Joint Venture
During the quarter ended March 31, 2013 the Joint Venture Company has announced new Employee Stock Appreciation Right
Scheme (the- “Scheme”) SAR Plan 1 and SAR Plan 2 for eligible employees. In accordance with this plan, the value of each
SAR at respective Exercise dates will be determined by dividing the valuation of the Company for the relevant period by the total number of Stock Units (i.e. 1,190,470 Stock Units). The fair value of the option determined using Black Scholes Option
Pricing Model. The fair value of options granted after applying an estimated forfeiture rate is amortised over the vesting period. During the year ended March 31, 2013, the JV Company has cancelled ESOP Plan 2009 and transferred the Employee Stock
Option Outstanding Account (ESOP Reserve) to General Reserve account amounting to ` 54 Mn and Provision for payment stock options have been written back to Statement of Profit and Loss amounting to ` 173 Mn.

110

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Vesting period from the grant date

Vesting schedule

Company
For options with a vesting period of 36 months:
On completion of 12 months
On completion of 24 months
On completion of 36 months

30%
30%
40%

For options with a vesting period of 48 months:
On completion of 12 months
On completion of 24 months
On completion of 36 months
On completion of 48 months

15%
20%
30%
35%

For options with a vesting period of 60 months:
On completion of 12 months
On completion of 24 months
On completion of 36 months
On completion of 48 months
On completion of 60 months

20%
20%
20%
20%
20%

Joint Venture
SAR Plan 1

As determined by HR and Remuneration committee

SAR Plan 2
For options with a vesting period of 36 months: At the end of 5 months or 1 year At the end of 1 year and 5 months or 2 years At the end of 2 years and 5 months or 3 years

30%
30%
40%

Information concerning the stock options granted and outstanding at the year end is as follows:
Particulars

As at March 31, 2013
Number of stock options (In '000)

As at March 31, 2012

Weighted average exercise price (`)

Number of stock options (In '000)

Weighted average exercise price (`)

Company
Outstanding at beginning of the year

3,333

329

3,336

329

251

329

-

-

Options outstanding as at the date of bonus issue (a-b)

3,082

329

-

-

Bonus issue in the ratio of 1:2

Cancelled or expired or forfeited up to the date of bonus issue (b)

6,165

110

-

-

Granted

34

10

80

329

Exercised

100

110

-

-

14

10

83

329

Outstanding at the year end

9,167

10-110

3,333

329

Exercisable at end of the year

6,431

110

1,631

329

34

258

80

475

Cancelled or expired or forfeited

Weighted average grant date fair value per option for options granted during the year at less than market value

111

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Particulars

As at March 31, 2013
Number of
Weighted
stock average exercise options (In '000) price (`)

Joint Venture
ESOP Plan 2009 (OLD Scheme)
Number of shares under option*
Outstanding at beginning of the year
Granted
Exercised
Forfeited
Outstanding at the end of year
Exercisable at end of the year
Weighted average grant date fair value per option for options granted during the year at less than market value

0.91
0.91
-

Stock Appreciation Rights Scheme (Plan 1)
Number of shares under option*
Outstanding at beginning of the year
Granted
Exercised
Forfeited
Outstanding at the end of year
Exercisable at end of the year
Weighted average grant date fair value per option for options granted during the year at less than market value

0.87
0.45
0.42
0.02
0.87

Stock Appreciation Rights Scheme (Plan 2)
Number of shares under option*
Outstanding at beginning of the year
Granted
Exercised
Forfeited
Outstanding at the end of year
Exercisable at end of the year
Weighted average grant date fair value per option for options granted during the year at less than market value

0.01
0.01
0.01

249,300
249,300
-

As at March 31, 2012
Number of
Weighted
stock average exercise options (In '000) price (`)

1.00
0.08
0.17
0.91
0.21
0.08

249,300
249,300
249,300
249,300
249,300
273,703

249,300
249,300
-

-

-

Re 1
Re 1
-

-

-

249,300
249,300

*Represents Company’s share of 42% of the Joint Venture Company.

The weighted average share price at the exercise date was ` 199 per share for options exercised during the year ended March
31, 2013.
The weighted average fair value of stock options granted by the Company during the year ended March 31, 2013 was ` 258 per share. The fair value of the options granted was estimated on the date of grant using the Black Scholes Valuation model with the following assumptions:

112

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Year ended
March 31, 2013
Company
Risk free interest rates
Vesting period
Weighted average share price (`)
Weighted average remaining contractual life
Volatility
Dividend yield
Joint Venture
ESOP 2009 Plan
Risk free interest rates
Vesting period
Weighted average share price (`)
Weighted average remaining contractual life
Volatility
Dividend yield
SAR Plan 1 and Plan 2
Risk free interest rates
Vesting period
Weighted average share price (`)
Weighted average remaining contractual life
Volatility
Dividend yield

Year ended
March 31, 2012

8.37% to 8.62%
36 months
219
6.4 years
52.42% to 52.43 %
0.00%

8.37% to 8.62%
48 months
658
6.4 years
52.42% to 52.43 %
0.00%

Scheme cancelled

7.83%
36 months
471000
3.86 years
25.31%
-

7.9% to 8.86%
48 months
422000 to 423000
4.925 years
35.88% to 46%
0.00%
-

The balance of deferred stock compensation as on March 31, 2013 is ` 86 Mn (March 31, 2012 – ` 232 Mn) and total employee stock compensation expense recognized for the year ended March 31, 2013 and March 31, 2012 is ` 103 Mn and ` 296 Mn respectively. Note:
Bharti Airtel Limited has given stock option to certain employees of the Company. Bharti Airtel Limited has not charged the compensation cost relating to the stock option granted to the Company.

32. LEASES
(a) Operating lease: Company as a lessee
The lease rentals during the period for 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:
(` Millions)
Particulars
Lease rental charged to statement of profit and loss
Obligation on non-cancelable lease:
Not Later than one year
Later than one year but not later than five years
Later than five years
Total

As at
March 31, 2013
10,876

As at
March 31, 2012
10,611

8,701
28,519
43,808
81,028

7,986
26,998
44,848
79,832

113

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

The lease rentals include rent equalization of ` 468 Mn and ` 551 Mn for the year ended March 31, 2013 and March 31, 2012 respectively. (b) Operating lease: Group as a lessor
(i) The group has given sites on operating lease to telecom operators. As per the agreements with the operators the escalation rates range from 0% to 2.5% per annum.
The service charges recognized as income during the period for non-cancellable arrangements relating to provision for passive infrastructure sites as per the agreements is ` 61,813 Mn and ` 60,074 Mn for the year ended March 31, 2013 and
March 31, 2012 respectively, excluding IRU income covered in (b)(ii) below.
(` Millions)
Particulars
Future minimum lease payment receivable:
Not Later than one year
Later than one year but not later than five years
Later than five years
Total

As at
March 31, 2013

As at
March 31, 2012

69,729
157,720
152,937
380,386

40,139
139,996
166,749
346,884

Revenue includes revenue equalization of ` 2,590 Mn and ` 2,677 Mn for the year ended March 31, 2013 and March 31, 2012 respectively. (ii) The group has entered into a non-cancellable lease arrangement to provide access to the Passive Infrastructure located at
12 Circles on indefeasible right of use (IRU) basis for a period of two years to its Joint Venture Company, Indus Towers Limited from January 1, 2009. The term has been further extended till June 30, 2014. The Group has credited lease rental receivable to the statement of profit and loss on a straight-line basis over the lease term amounting to ` 4,822 Mn and ` 4,822 Mn for the year ended March 31, 2013 and March 31, 2012 respectively.

33. ASSET RETIREMENT OBLIGATION
The Group uses various premises on lease to install plant and equipment. A provision is recognized for the costs to be incurred for the restoration of these premises at the end of the lease period. It is expected that this provision will be utilized at the end of the lease period of the respective sites as per the respective lease agreements. The movement of Provision in accordance with AS–29 on ‘Provisions, Contingent liabilities and Contingent Assets’, as per Companies Accounting Standard
Rules, 2006, is given below:
(` Millions)
Particulars
Opening Balance
Additions during the year
Less: utilised/ adjusted during the year
Closing Balance

As at
March 31, 2013
5,014
3,681
(39)
8,656

As at
March 31, 2012
4,908
154
(48)
5,014

During the year ended March 31, 2013, the Group has revised its estimate for site restoration obligation which has resulted in increase in the estimated obligation by ` 3,322 Mn. Had the Group not changed its estimate regarding the cost to be incurred for restoration of sites, the depreciation for the year ended March 31, 2013 would have been lower by ` 144 Mn and the profit after tax for year ended March 31, 2013 would have been higher by ` 96 Mn (net of tax) respectively.

114

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

34. INTEREST IN JOINT VENTURE
The Group’s share of the assets, liabilities, income and expense of the jointly venture company, which has been proportionately consolidated in the consolidated financial statements, before elimination of transactions between the group and the joint venture are as follows:(` Millions)
Particulars
EQUITY AND LIABILITIES
Shareholders' funds
Share capital
Reserves and surplus
Non-current liabilities
Long-term borrowings
Deferred tax liabilities (net)
Other long-term liabilities
Long-term provisions
Current liabilities
Short-term borrowings
Trade payables
Other current liabilities
Short-term provisions

Total equity and liabilities
ASSETS
Non-current assets
Fixed assets
Tangible assets
Intangible assets
Capital work-in-progress
Long-term loans and advances
Other non-current assets
Current assets
Current investments
Trade receivables
Cash and bank balances
Short-term loans and advances
Other current assets
Total assets

As at
March 31, 2013

As at
March 31, 2012

0.5
948
949

0.5
4,428
4,429

32,296
2,072
5,838
2,910
43,116

23,888
1,802
8,310
1,362
35,362

863
9,781
14,534
2,590
27,768

12,768
4,764
12,820
25
30,377

71,833

70,168

50,873
173
952
5,444
2,423
59,865

47,693
204
1,197
4,070
2,182
55,346

1,890
1,290
480
2,395
5,913
11,968
71,833

2,562
2,373
301
4,534
5,052
14,822
70,168

115

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

(` Millions)
Particulars
INCOME
Revenues
Other income

Year ended
March 31, 2013

Year ended
March 31, 2012

55,387
718
56,105

50,481
353
50,834

21,074
10,373
1,252
6,812
39,511

17,971
10,234
1,093
6,570
35,868

16,594
6,870
3,939
10,809
5,785
(9)
5,776

14,966
6,657
4,060
10,717
4,249
4,249

1,710
270
1,980
3,796

902
(594)
1,053
1,361
2,888

491
1,836

912
1,537

EXPENSES
Power and fuel
Rent
Employee benefits expenses
Other expenses

Earnings before interest, tax, depreciation and amortization (EBITDA)
Depreciation and amortization expense
Finance costs
Profit before tax and exceptional items
Exceptional items
Profit before tax
Tax expenses
Current tax
Less: MAT credit entitlement
Deferred tax
Total tax expense
Profit for the year
Capital commitments
Contingent liabilities

35. RELATED PARTY DISCLOSURES
In accordance with the requirements of Accounting Standards (AS) - 18 on Related Party Disclosures, the names of the related parties where control exists and/ or with whom transactions have taken place during the year and description of relationships, as identified and certified by the management are as below:
A. List of related parties
1. Key management personnel Akhil Kumar Gupta
2. Related parties where control exists irrespective of whether transactions have occurred or not Holding Company
Bharti Airtel Limited Joint Venture Company
Indus Towers Limited
3. Other related parties with whom transactions have taken place during the period
Name of the related party
Bharti Airtel Services Limited
Bharti Enterprises Limited
Bharti Hexacom Limited
Bharti Telemedia Limited
Centum Learning Limited
Bharti Foundation

116

Relationship
Fellow subsidiary
Entity having significant influence
Fellow subsidiary
Fellow subsidiary
Fellow subsidiary
Entity having significant influence

Procurement of services

1,709

Trade receivables

24,618

Total

(1)

11,869

(4,916)

-

3,602

218

13,160

(195)

48,403

-

-

-

-

1,055

-

(125)

-

(131)

(2)

213

(204)

-

283

171

-

(37)

3,219

-

-

-

-

-

97

(17)

-

-

-

-

-

3,139

-

-

-

-

2013

42

(284)

-

363

-

-

(37)

2,733

-

-

-

-

-

-

(13)

-

(3)

-

-

-

2,777

(28)

-

-

-

2012

Bharti Hexacom
Limited

-

-

-

-

-

-

-

(3)

-

-

-

-

-

-

-

-

-

(3)

-

-

-

-

-

-

-

2013

-

-

-

-

-

-

-

(2)

-

-

-

-

-

-

-

-

-

(2)

-

-

-

-

-

-

-

2012

Bharti Telemedia
Limited

-

-

-

-

-

-

-

(104)

-

-

-

-

-

-

-

-

-

-

-

(104)

-

-

-

-

-

2013

(10)

-

-

-

-

-

(10)

(106)

-

-

-

-

-

-

-

-

-

-

-

(106)

-

-

-

-

-

2012

Bharti Enterprises
Limited

1

-

-

-

-

7

(6)

(26)

-

-

-

-

-

-

-

-

(26)

-

-

-

-

-

-

-

-

2013

(2)

-

-

-

-

7

(9)

(31)

-

-

-

-

-

-

-

-

(31)

-

-

-

-

-

-

-

-

2012

Centum Learning
Limited

(1)

-

-

-

-

-

(1)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

2013

(3)

-

-

-

-

-

(3)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

2012

Bharti Airtel
Services Limited

*Inclusive of service tax and exclusive of revenue equalization.
During the year ended March 31, 2013, the Company allotted 43,700 equity shares to relatives of certain directors of the Company during IPO.

(3,331)

Security deposits received

-

3,443

Other current assets

Long-term loans and advances

22,990

(193)

56,007

-

Short-term loans and advances Trade payables and Other current liabilities

Balance outstanding:

Total

Donation given

(3,750)

-

Dividend paid

-

Interest income from loan given Dividend received

1,743

Security deposit refunded

Commission paid

(152)
1,732

Security deposit received

-

(169)

Employee related expenses incurred on behalf of Company

Salary

(8)
(28)

Reimbursement of expenses

(15)

(4)

Expenses (other than employee related) incurred on behalf of Company

42,262

46,813

Revenue from operations*

Purchase of fixed assets

-

(6,100)

-

(3,670)

2012
11,460

13,500

2013

Bharti Airtel
Limited

Sale of fixed assets

Loan repaid

Loan given

Nature of transaction

B. Related party transactions during the year ended March 31:

(46)

-

-

-

-

-

(46)

(70)

-

-

-

-

-

-

-

(70)

-

-

-

-

-

-

-

-

-

2013

(39)

-

-

-

-

-

(39)

(65)

-

-

-

-

-

-

-

(65)

-

-

-

-

-

-

-

-

-

2012

Key Management
Personnel

-

-

-

-

-

-

-

(50)

(50)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

2013

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

2012

Bharti Foundation

7,279

(4,844)

-

9,238

-

3,208

(323)

(515)

-

-

4,050

(28)

-

-

-

-

-

-

(216)

-

5,418

-

262

(10,001)

-

2013

11,650

(4,844)

27

3,917

-

13,081

(531)

6,791

-

-

-

(13)

-

-

-

-

-

-

(375)

-

5,319

-

654

-

1,206

2012

Indus Towers
Limited

(` Millions)

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

117

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Security deposits received as at March 31, 2013 does not reflect amount payable to the Joint Venture, Indus Towers Limited
(Indus), of ` 4,536 Mn (March 31, 2012 - ` 4,536 Mn) as this is now payable by the subsidiary company, Bharti Infratel Ventures
Limited, while as per the related party statement of the Joint Venture this amount is recoverable from the Company. In case the Company is required to pay to the Joint Venture, it will recover the said amount from the Subsidiary Company.

36. CAPITAL AND OTHER COMMITMENTS
(i) Capital commitment
(` Millions)

Estimated amount of contracts to be executed on capital account and not provided for in the financial statements (net of capital advances)
Under the IT Outsourcing agreement, the Company has commitment for capital purchases and service charges

As at
March 31, 2013
3,401

As at
March 31, 2012
2,675

1,663

1,916

5,064

4,591

(ii) Other commitments
For commitments relating to lease agreements, refer note 32.

37. CONTINGENT LIABILITIES
(i) Financial bank guarantees
(` Millions)

Total guarantees issued by banks and financials institutions on behalf of the Group
Total

As at
March 31, 2013
427
427

As at
March 31, 2012
119
119

(ii) Claims against the group not acknowledged as debt
(` Millions)

(i) Taxes, duties and other demands (under adjudication / appeal / dispute)
- Sales tax (refer to a below)
- Stamp duty (refer to b below)
- Entry tax (refer to c below)
- Municipal taxes (refer to d below)
- Service tax (refer to e below)
(ii) Other claims under legal cases including arbitration matters (refer to f below)
(iii) Income tax matters (refer to g below)
Total

As at
March 31, 2013

As at
March 31, 2012

337
267
1,257
1,120
1,485
199
49
4,714

252
267
1,114
640
1,384
163
81
3,901

Unless otherwise stated below, the management believes that, based on legal advice, the outcome of these contingencies will be favorable and that a loss is not probable.
(a) Sales tax The claims for sales tax as of March 31, 2013 comprise of the cases relating to the right to use and sales tax demand on purchase of equipments against ‘C’ Form.

118

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

(b) Stamp Duty The Group has received demand in certain states for stamp duty on execution of Leave and License Agreement of Cell
Sites.
(c) Entry tax In certain States an entry tax is levied on receipt of material from outside the State. This position has been challenged by the
Group in the respective States, on the grounds that the specific entry tax is ultra vires the constitution. Classification issues have been raised whereby, in view of the Group, the material proposed to be taxed is not covered under the specific category.
(d) Municipal taxes The Group is in the process of assessing the applicability and tenability of certain municipal levies which is an industry wide phenomenon and will also be representing to the authorities wherever required. The management does not consider the impact of such assessment to be material.
(e) Service Tax The service tax demand as at March 31, 2013 relates to CENVAT claim on towers and related material.
(f) Others Others mainly include site related legal disputes.
(g) Income tax The Company has received assessment order for the AY 2008-2009, wherein an initial demand of ` 13 Mn (March 31, 2012
- ` 13 Mn) has been raised by the authority. The Company has filed an appeal against the same. The contingent liability amount stated above further includes ` 36 Mn (March 31, 2012 - ` 68 Mn) relating to various TDS related matters. During the year ended March 31, 2013, the Company has received assessment order for the AY 2010-2011, wherein an initial demand of ` 1,004 Mn has been raised by the authority. However, the same has not been acknowledged as claims by the Company.
(h) Certain disputed tax demand notices and queries relating to Indirect taxes amounting to ` 17,522 Mn (as at March 31, 2012
- ` 16,542 Mn) have neither been acknowledged as claims nor considered as contingent liabilities by the Joint Venture
Company, based on internal assessment and independent advice taken from tax experts. The JV Company is of the view that the possibility of any of these tax demands materializing is remote.

38. UTILIZATION OF MONEY RAISED THROUGH PUBLIC ISSUE
During the year ended March 31, 2013, the Company has raised ` 31,657 Mn through public issue (net of ` 646 Mn retained in Escrow account towards share issue expenses) (refer note 3.1(d) above). As on March 31, 2013, pending utilization of issue proceeds, the entire funds have been deployed in mutual funds investment amounting to ` 31,657 Mn.

39. (a) Expenditure in foreign currency (cash basis)
(` Millions)

Legal and professional*
IT expenses
Capital goods

As at
March 31, 2013
59
1
21
81

As at
March 31, 2012
19
5
13
37

* Comprise of payments made to Legal counsels towards professional services rendered in connection with the Company’s Initial Public Offering amounting to
` 59 Mn for the year ended March 31, 2013 adjusted against securities premium.

(b) Dividend remitted in foreign currency
(` Millions)

Number of non - resident shareholders to whom dividend was due
Number of equity shares held on which dividend was due ( in Mn)
Amount remitted (` in Mn)
Amount remitted ( USD in Mn)

As at
March 31, 2013
4
50
124
2

As at
March 31, 2012
-

119

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Interim Dividend of Company ` 2.50 per equity share (Face value per share `10) was declared and paid for the financial year
2012-13.
In addition to above, interim dividend amounting to ` 482 Mn has been paid to other non-resident shareholders in Indian
Rupees.
Particulars of unhedged foreign currency exposure as at March 31, 2013:Other current liabilities - Accrued expenses Nil (March 31, 2012 – US$ 0.2 Mn) Nil (March 31, 2012 – ` 1 Mn)
(c) Value of imports calculated on CIF basis ` 17 Mn as at March 31, 2013 (March 31, 2012 - ` 6 Mn).

40. Since the Group’s business activity falls within a single business and geographical segment of providing passive

infrastructure, there are no additional disclosure to be provided under Accounting Standard - 17 ‘Segment reporting’ other than those already provided in the consolidated financial statements.

41. During the year ended March 31, 2008, pursuant to the Scheme of Arrangement with Bharti Airtel Limited (BAL) (‘BAL

Scheme’) under sections 391 to 394 of the Companies Act, 1956, the telecom infrastructure undertaking of Bharti Airtel
Limited was transferred to the Company. Pursuant to the Scheme, the depreciation charged by the Company on the excess of the fair values over the original book values of the assets transferred by Bharti Airtel Limited is being off-set against General Reserve. Had the Company accounted for the above as per Indian GAAP, depreciation for the year ended
March 31, 2013 and March 31, 2012 would have been higher and profit for year ended March 31, 2013 and March 31, 2012 would have been lower by ` 802 Mn and ` 922 Mn respectively. Also, other expenses for the year ended March 31, 2013 would have been higher and profit for the same period would have been lower by ` 117 Mn.

42. SCHEME OF ARRANGEMENT FOR TRANSFER OF TELECOM INFRASTRUCTURE IN CERTAIN SPECIFIED
TELECOM CIRCLES TO BHARTI INFRATEL VENTURES LIMITED (‘BIVL SCHEME’)

The Scheme of Arrangement for transfer of passive telecom infrastructure undertaking (BIVL Scheme) in certain specified telecom circles to BIVL was approved by the Hon’ble High Court of Delhi on March 29, 2011 and became effective on
May 05, 2011 on filing of the High court order with the Registrar of Companies. As per the terms of the BIVL Scheme, the Company transferred the passive telecom infrastructure in certain specified telecom circles to BIVL on the appointed date (April 1, 2009).

The specified passive telecom infrastructure assets were recorded by BIVL at fair value of ` 59,921 Mn with a corresponding credit to General Reserve. The consolidated financial statements of the Group do not have significant impact of the above demerger as BIVL is consolidated into the Company.

Pursuant to the BIVL Scheme, the General Reserve can be utilized for adjusting depreciation on fair value in excess of original historical carrying value, accordingly, depreciation charge for the year ended March 31, 2013 and March 31,
2012 would have been higher by ` 1,401 Mn and ` 1,447 Mn respectively, other expenses for the year ended March 31,
2013 and March 31, 2012 would have been higher by ` 193 Mn and Nil respectively and deficit in the statement of profit and loss as at March 31, 2013 and March 31, 2012 higher by ` 7,479 Mn and ` 5,886 Mn respectively.

43. On May 31, 2011, the subsidiary company “Bharti Infratel Ventures Limited” filed a Scheme of Arrangement (Scheme)

under Section 391 to 394 of the Companies Act, 1956 before Hon’ble High Court of Delhi whereby the subsidiary company was to merge with Indus Towers Limited, with appointed date as April 1, 2009.

120

On April 18, 2013, the Hon’ble High Court has sanctioned the said Scheme which provides for transfer of all assets and liabilities of subsidiary company to Indus Towers Limited and winding-up of the subsidiary company subject to the final order in another appeal pending before the Division bench of Delhi High Court and any other orders in any further proceedings thereafter. The said Scheme shall be effective on filing of certified copy of Order of Hon’ble High Court of
Delhi with the Registrar of Companies (ROC). As on the date of approval of these financial statements the said order has not been filed with ROC. Accordingly, the scheme has not been given effect to in these financial statements.

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

44. During the year ended March 31, 2013, certain customers have exited from specified tenancies resulting in the Group recovering ` 457 Mn from such customers. Further, the Group has provided for revenue equalization reserve and loss in value of fixed assets amounting to ` 117 Mn and ` 318 Mn (including depreciation charge of ` 291 Mn) respectively.
The Group considers the aforesaid exit as an exceptional item and has accordingly disclosed the net amount of ` 22 Mn as exceptional item.

45. Previous year figures have been regrouped/ reclassified where necessary to conform to the current year’s classifications.
INFORMATION RELATING TO BHARTI INFRATEL VENTURES LIMITED, SUBSIDIARY COMPANY PURSUANT TO
SECTION 212 (8) OF THE COMPANIES ACT, 1956 FOR THE FINANCIAL YEAR ENDED ON MARCH 31, 2013
Particulars
(a) Capital
(b) Reserves

(` Million)
0.5
51,974.5

(c) Total assets

64,609.9

(d) Total liabilities

12,634.9

(e) Details of investment (except in case of investment in the subsidiaries)
(f) Turnover
(g) Profit before taxation

4,866.4
363.7

(h) Provision for taxation

183.5

(i) Profit after taxation

180.2

(j) Proposed dividend

-

121

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Notice of Annual General Meeting
Notice is hereby given that the seventh annual general meeting of the members of Bharti Infratel Limited will be held on Wednesday, the 3rd day of July 2013 at 11.30 a.m. at Sri Sathya Sai International Centre, Pragati Vihar, Lodhi Road,
New Delhi – 110 003 to transact the following business(es):ORDINARY BUSINESS:
1. To receive, consider and adopt the audited balance sheet of the Company as at March 31, 2013, the statement of profit & loss and the cash flow statement for the year ended on that date and the reports of the Board of Directors and auditors thereon. 2. To declare final dividend and confirm the interim dividend(s) of ` 1.50 per share and ` 1.00 per share for the year ended on March 31, 2013.
3. To appoint a Director in place of Mr. Akhil Gupta, who retires by rotation and being eligible offers himself for re-appointment. 4. To appoint S.R. Batliboi & Co. LLP, Chartered Accountants, Gurgaon (in place of S. R. Batliboi & Associates LLP, Chartered
Accountants, Gurgaon who have expressed their unwillingness to continue) as the statutory auditors of the Company who shall hold office from the conclusion of this annual general meeting until the conclusion of the next annual general meeting and to authorize the Board to fix their remuneration.
SPECIAL BUSINESS:
5. Appointment of Mr. Rakesh Bharti Mittal as a Director liable to retire by rotation

To consider and, if thought fit, to pass, with or without modification(s), the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 257 and other applicable provisions, if any, of the Companies Act,
1956, Mr. Rakesh Bharti Mittal, be and is hereby appointed as director of the Company, liable to retire by rotation.”

6. Appointment of Mr. Bharat Sumant Raut as a Director liable to retire by rotation

To consider and, if thought fit, to pass, with or without modification(s), the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 257 and other applicable provisions, if any, of the Companies Act,
1956, Mr. Bharat Sumant Raut, be and is hereby appointed as director of the Company, liable to retire by rotation.”

7. Appointment of Mr. Jitender Balakrishnan as a Director liable to retire by rotation

To consider and, if thought fit, to pass, with or without modification(s), the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 257 and other applicable provisions, if any, of the Companies Act,
1956, Mr. Jitender Balakrishnan, be and is hereby appointed as director of the Company, liable to retire by rotation.”

8. Appointment of Mr. Vinod Dhall as a Director liable to retire by rotation

To consider and, if thought fit, to pass, with or without modification(s), the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 257 and other applicable provisions, if any, of the Companies Act,
1956, Mr. Vinod Dhall, be and is hereby appointed as director of the Company, liable to retire by rotation.”

9. Appointment of Mr. Sanjay Nayar as a Director liable to retire by rotation

To consider and, if thought fit, to pass, with or without modification(s), the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 257 and other applicable provisions, if any, of the Companies Act,
1956, Mr. Sanjay Nayar, be and is hereby appointed as director of the Company, liable to retire by rotation.”

10. Appointment of Ms. Leena Srivastava as a Director liable to retire by rotation

To consider and, if thought fit, to pass, with or without modification(s), the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 257 and other applicable provisions, if any, of the Companies Act,
1956, Ms. Leena Srivastava, be and is hereby appointed as director of the Company, liable to retire by rotation.”

11. Appointment of Mr. Murray Philip King as a Director liable to retire by rotation

To consider and, if thought fit, to pass, with or without modification(s), the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 257 and other applicable provisions, if any, of the Companies Act,
1956, Mr. Murray Philip King, be and is hereby appointed as director of the Company, liable to retire by rotation.”

122

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

12. Re-appointment of Mr. Akhil Gupta as Managing Director

To consider and, if thought fit, to pass, with or without modification(s), the following resolution as a Special Resolution:

“RESOLVED THAT pursuant to the provisions of sections 198, 269, 309, 310, 311, Schedule XIII and other applicable provisions, if any, of the Companies Act, 1956, including any statutory modification or re-enactment thereof, or any other law and subject to such consent(s), approval(s) and permission(s) as may be necessary in this regard and subject to such conditions as may be imposed by any authority while granting such consent(s), permission(s) and approval(s) and as are agreed to by the Board of Directors (hereinafter referred to as the Board, which term shall unless repugnant to the context or meaning thereof, be deemed to include any committee thereof and any person authorised by the Board in this behalf), consent of the members be and is hereby accorded to re-appoint Mr. Akhil Gupta as Managing Director, not liable to retire by rotation, of the Company for a further period of five (5) years with effect from August 1, 2013 on a remuneration as set out in the explanatory statement of item no. 12.

RESOLVED FURTHER THAT pursuant to the provisions of Section 255, 256 and Article 113 of the Articles of Association of the Company Mr. Akhil Gupta will be a non-rotational Director of the Company.

RESOLVED FURTHER THAT the Board be and is hereby authorized to vary, alter and modify the terms and conditions of re-appointment including relating to remuneration/ remuneration structure of Mr. Akhil Gupta, within the limits prescribed in the explanatory statement to the item no. 12 without being required to seek any fresh approval of the members of the Company in this regard.

RESOLVED FURTHER THAT the Board be and is hereby authorised to do all such acts, deeds, matters and things as may be deemed necessary or incidental to give effect to above resolution.”

13. Payment of commission to Non-executive Director(s) of the Company

To consider and, if thought fit, to pass, with or without modification(s), the following resolution as a Special Resolution:

“RESOLVED THAT pursuant to the provisions of Section 198, 309, 310 and other applicable provisions, if any, of the
Companies Act, 1956 (“the Act”) and other laws for the time being in force, and in accordance with provisions of articles of association of the Company, consent of the members be and is hereby accorded for payment of commission to its nonexecutive directors a sum not exceeding one percent (1%) of the net profits of the Company, calculated in accordance with the provisions of Section 349 and 350 and other applicable provisions, if any, of the Act for each financial year, effective from April 1, 2013 in such manner as the Board of Directors (hereinafter referred to as the Board, which term shall unless repugnant to the context or meaning thereof, be deemed to include any committee thereof and any person authorised by the Board in this behalf), in its absolute discretion may decide from time to time.

RESOLVED FURTHER THAT the Board be and is hereby authorised to do all such acts, deeds and things as may be required to give effect to the above resolution.”

14. Amendment of the Articles of Association of the Company

To consider and, if thought fit, to pass, with or without modification(s), the following resolution as a Special Resolution:

“RESOLVED THAT pursuant to the provisions of Section 31 and other applicable provisions, if any, of the Companies Act,
1956 the existing set of articles of association of the Company, be and is hereby substituted with an amended set of articles of association comprising from Article No. 1 to Article No. 188 and the same be approved as the Articles of Association of the Company.

RESOLVED FURTHER THAT the Board be and is hereby authorised to do all such acts, deeds and things as may be required to give effect to the above resolution.”

Date: April 30, 2013 Registered Office:
Bharti Crescent,
1 Nelson Mandela Road,
Vasant Kunj, Phase – II
New Delhi – 110 070

By order of the Board
For Bharti Infratel Limited

Anupam Garg
Company Secretary

123

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

NOTES:
1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND
VOTE ON A POLL INSTEAD OF HIMSELF/HERSELF AND SUCH PROXY NEED NOT BE A MEMBER OF THE COMPANY.
PROXIES, IN ORDER TO BE EFFECTIVE, MUST BE RECEIVED AT THE REGISTERED OFFICE OF THE COMPANY, NOT LESS
THAN FORTY EIGHT HOURS BEFORE THE COMMENCEMENT OF MEETING. A PROXY FORM IS APPENDED WITH THE
ADMISSION SLIP.
2. The notice of the annual general meeting will be sent to those members/ beneficial owners whose names will appear in the register of members/list of beneficiaries received from the depositories as on Friday, May 24, 2013.

As a part of its green initiatives in corporate governance, the Ministry of Corporate Affairs vide its Circular No. 17/2011 and 18/2011 dated April 21, 2011 and April 29, 2011 respectively, has allowed the companies to send official confirmation and documents to its shareholders through e-mail. Accordingly, in cases where the members have registered their e-mail id with their depository participant/Company’s registrar and share transfer agent, the Company has decided to send all documents/ communications including notice of general meetings, annual reports, dividend intimations, etc. through e-mail. For other cases, the Company will send the printed annual reports in physical mode through post.

Members are requested to update their preferred e-mail ids with the Company/ depository participants, which will be used for the purpose of sending the official documents through e-mail.

Shareholder whose e-mail id is not registered with the Company will be sent a physical copy of this meeting’s notice along with the annual report at their registered address. Members whose e-mail ids are registered with the Company and who wish to receive physical copies of the annual report may also send their request to the Company at its registered office address or to the Company’s registrar and share transfer agent (RTA), Karvy Computershare Private
Limited at Plot No. 17-24, Vittal Rao Nagar, Madhupur, Hyderabad 500 081, Andhra Pradesh.

3. Annual Report is also available at the website of the Company at www.bharti-infratel.com in the investor relation section. 4. Final dividend of ` 3.00 per equity share of ` 10 each fully paid up has been recommended by the Board of Directors for the year ended March 31, 2013 and subject to the approval of the members at the ensuing annual general meeting, is proposed to be paid on and after July 3, 2013 (within the statutory time limit of 30 days i.e. up to the August 1, 2013).
Interim dividend(s) for the financial year 2012-13 @ ` 2.50 per equity share of ` 10 each fully paid up (comprising of
` 1.50 per equity share paid out of accumulated profits up to March 31, 2012 and ` 1.00 per equity share paid out of current year profits) was paid on September 7, 2012.
5. The Register of Members and Share Transfer books of the Company will remain closed from Saturday, June 22, 2013 to Wednesday, July 3, 2013 (both days inclusive), in terms of the provisions of the Companies Act, 1956 and the listing agreement with the stock exchanges where the equity shares of the Company are listed for the purpose of annual general meeting and determining the names of the members eligible for dividend on equity shares, if declared at the meeting. 6. The dividend, if declared at the meeting, will be paid on or before the 30th day from the date of declaration of dividend
i.e. August 1, 2013 to: • For shares held in physical form – those members whose names will appear in the Register of Members on the close of the day on June 21, 2013. • For shares held in dematerialized form – those beneficiaries, whose names are furnished by the National Securities
Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) as beneficial owner on the close of the day on June 21, 2013.
7. Members wishing to claim dividends, which remain unpaid, are requested to contact Company’s RTA. Members are requested to note that the dividend amount, which remains unclaimed/unpaid for a period of seven years from the date of declaration, will be transferred to the Investor Education and Protection Fund as per section 205A of the Companies
Act, 1956.
8. Members, who hold shares in the physical form and desirous of availing Electronic Clearance Scheme (ECS) facility for direct credit of dividend to their bank account, may submit their requisite request in the enclosed form to the
Company’s RTA. The ECS mandate, in order to be effective, should be submitted to the RTA on or before June 21, 2013.
Members are requested to utilize the ECS facility for receiving dividends. Any query related to dividend should be directed to the RTA of the Company.

124

In respect of members holding shares in electronic form, the bank details as furnished by the respective depositories to the Company will be used for the purpose of distribution of dividend through ECS. The Company/ RTA will not act on any direct request from members holding shares in dematerialized form for change in/ deletion of such bank details.

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

9. Members who are holding shares in physical form are requested to address all correspondence concerning registration of transfers and transmissions of shares or any other share related matters and/or change in address or updation thereof to the Company’s RTA. Members, whose shareholding is in electronic format, are requested to direct change of address notifications, registration of e-mail address and updation of bank account details to their respective depository participants. 10. To prevent fraudulent transactions, members are advised to exercise due diligence and notify the Company of any change in address or staying abroad or demise of any member as soon as possible. Members are also advised not to leave their demat account(s) dormant for long. Periodic statement of holdings should be obtained from the concerned depository and holdings should be verified.
11. The Securities and Exchange Board of India (SEBI) has mandated the submission of Permanent Account Number
(PAN) by every participant in securities market. Members holding shares in electronic form are, therefore, requested to submit the PAN to their depository participants with whom they are maintaining their demat accounts. Members holding shares in physical forms are requested to submit their PAN details to the Company.
12. Information regarding particulars of the directors to be appointed and the directors seeking re-appointment requiring disclosures in terms of the listing agreement and the explanatory statement pursuant to Section 173 of the Companies
Act, 1956, are annexed hereto. The directorship held by the directors considered for the purpose of disclosure do not include the directorships held in foreign companies, private limited companies, trust, alternate directorship and companies under Section 25 of the Companies Act, 1956 but include private limited companies in terms of Section
3(1)(iv)(c) of the Companies Act, 1956. The committee chairmanships/ memberships considered for the purposes of disclosure are those prescribed under clause 49(I)(C) of the listing agreement(s) viz. Audit Committee and Shareholders’/
Investors’ Grievance Committee of Indian public limited companies.
13. Corporate members are requested to send a duly certified copy of the board of directors’ resolution/ power of attorney authorizing their representative to attend and vote at the annual general meeting.
14.
Statutory registers, articles of association and documents referred to in the notice and explanatory statement, including certificate from Auditors of the Company under clause 14 of the SEBI (Employees Stock Option Scheme and
Employees Stock Purchase Scheme) Guidelines, 1999, are open for inspection at the registered office of the Company on all working days (Monday to Friday) between 11.00 a.m. and 1.00 p.m. up to the date of annual general meeting and will also be available for inspection at the meeting.
15. Members having any questions on financial statements or any agenda item proposed in the notice of annual general meeting are requested to send their queries at least ten days prior to the annual general meeting of the Company at its registered office address to enable the Company to collect the relevant information.
16. Members/proxies are requested to bring duly filled admission/attendance slips, sent herewith along with the copies of annual reports, at the meeting.
17. For the security and safety of the members, no article/ baggage including water bottles and tiffin boxes will be allowed at the venue of the meeting. The members/attendees are strictly requested not to bring any article/baggage etc. at the venue of the meeting.
MEMBERS MAY PLEASE NOTE THAT NO GIFTS/ GIFT COUPONS SHALL BE
DISTRIBUTED AT THE VENUE OF THE MEETING.

125

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT,
1956.
Item No. 5 - 11
Mr. Rakesh Bharti Mittal, Mr. Bharat Sumant Raut, Mr. Jitender Balakrishnan, Mr. Vinod Dhall and Mr. Sanjay Nayar were appointed as additional directors on the Board of the Company w.e.f September 3, 2012 and Ms. Leena Srivastava and Mr. Murray Philip King w.e.f. November 5, 2012. Pursuant to the provisions of Section 260 of the Companies Act, 1956 read with the articles of association of the Company, these directors hold office up to the date of seventh annual general meeting. The Company has received notices under Section 257 of the Companies Act, 1956 from members proposing the candidature of Mr. Rakesh Bharti Mittal, Mr. Bharat Sumant Raut, Mr. Jitender Balakrishnan, Mr. Vinod Dhall, Mr. Sanjay
Nayar, Ms. Leena Srivastava and Mr. Murray Philip King as directors of the Company, liable to retire by rotation along with the prescribed deposit of ` 500/- for each director.
None of the directors except Mr. Rakesh Bharti Mittal, Mr. Bharat Sumant Raut, Mr. Jitender Balakrishnan, Mr. Vinod Dhall,
Mr. Sanjay Nayar, Ms. Leena Srivastava and Mr. Murray Philip King are deemed concerned/ interested in their respective resolutions. The Board recommends the appointment of Mr. Rakesh Bharti Mittal, Mr. Bharat Sumant Raut, Mr. Jitender Balakrishnan,
Mr. Vinod Dhall, Mr. Sanjay Nayar, Ms. Leena Srivastava and Mr. Murray Philip King as directors liable to retire by rotation as set out in item nos. 5, 6, 7, 8, 9, 10 and 11 respectively.
Item No. 12
Mr. Akhil Gupta will be completing his current term as Managing Director of the Company on July 31, 2013. On the advice of HR & ESOP Compensation Committee, the Board recommends to the members, the re-appointment of Mr. Akhil Gupta as Managing Director for a further term of five years effective August 1, 2013 on the following terms:
Fixed Pay (inclusive of salary, allowance and retirement benefits) to be paid monthly:
Such sum as may be determined by the Board from time to time provided that the total fixed pay shall not exceed ` 8.00
Crores per annum.
Variable Pay (Performance linked incentive) to be paid annually after the end of the financial year:
Such sum as may be determined by the Board from time to time provided that the total variable pay shall not exceed
` 6.00 Crores per annum.
Perquisites:
a) Company provided car and reimbursement of expenses incurred on driver, fuel and maintenance at actual with respect to the said car.
b) Leave Encashment as per the Company policy and rules.
Employees Stock Options:
Such number of options as may be granted to him under any ESOP Scheme of the Company as applicable from time to time. The aggregate remuneration inclusive of fixed pay, variable pay, perquisites, allowances and other benefits payable to
Mr. Akhil Gupta as Managing Director shall not exceed the overall ceilings laid down in Sections 198, 309, 310, 311,
Schedule XIII and other applicable provisions of the Companies Act, 1956 or any other law for the time being in force, if any.
Mr. Akhil Gupta shall also be entitled to reimbursement of all legitimate expense incurred by him in performance of his duties and such reimbursement will not form part of his remuneration.
Minimum Remuneration
During his term as Managing Director, if the Company, in any financial year, incurs losses or its profits are inadequate, the
Company will continue to pay Mr. Akhil Gupta, the above remuneration as Minimum Remuneration by way of fixed pay, variable pay (Performance Linked Incentives), perquisites, allowances and other benefits payable subject to the Schedule
XIII of the Companies Act, 1956 and approvals as may be required.
The remuneration as proposed in the resolution for approval of shareholders is an enabling one and sets out the maximum amount that can be paid to Mr. Akhil Gupta over a period of 5 years i.e. until July 31, 2018. Within these limits now set out for approval, the Board is authorized to fix his remuneration.

126

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

The Board recommends resolution for the appointment of Mr. Akhil Gupta as Managing Director not liable to retire by rotation as set out in item no. 12 for approval of members as a Special Resolution.
The terms as set out in the resolution and explanatory statement may be treated as an abstract of the terms of appointment pursuant to Section 302 of the Companies Act, 1956.
None of the directors of the Company except Mr. Akhil Gupta himself (as the resolution relates to his appointment as
Managing Director) is concerned or interested in the proposed resolution.
Item No. 13
In terms of the approval accorded by the members at their meeting held on July 22, 2008, non-executive directors are entitled to yearly commission, in addition to the sitting fees paid to each of the board and committee meetings attended by them. The aforesaid approval was valid for a period of five years.
As the members are aware, the Board of Directors of the Company is benefited by the presence of non-executive directors who are persons of eminence, possessing wide and rich experience of managing affairs of large and successful corporations.
Also the prevalent corporate governance norms call for greater participation, involvement and commitment of these nonexecutive directors.
In terms of Section 309 and 310 of the Companies Act, 1956, with the approval of members by way of special resolution, a company may make payments by way of commission to its non-executive directors and such remuneration by way of commission cannot exceed 1% of the net profits of the Company.
In order to recognize the efforts of the non-executive directors, the board has recommended for approval of members, payment of annual commission to one or more of the non-executive directors of the Company, a sum not exceeding 1% of the net profits of the Company for each of the financial years in addition to the fees payable to them for attending the meeting of the board of directors or any committee(s) thereof or reimbursement of expenses, if any, to be paid and distributed amongst the non-executive directors, in such amount and proportion and in such manner as may be determined by the Board from time to time.
The said resolution is, therefore, proposed as an enabling resolution for giving requisite powers to the Board for making payment of commission to non-executive directors as it may deem fit and proper. The approval will be valid for a period of five years commencing for the financial year from 2013-2014 and can be renewed from time to time, for a further period not exceeding five years.
The Board recommends the passing of the resolution as set out in item no. 13 for approval of members as a Special
Resolution.
All the directors except Mr. Akhil Gupta may be deemed to be concerned or interested in the resolution to the extent of the payment that they may receive by way of commission on profits.
Item No. 14
The Articles of Association of the Company (“Articles”) comprises of two parts namely Part I, which covers the provisions applicable to a listed public company and Part II which includes rights and obligations of various investors prior to the initial public offer of the Company’s shares. Consequent upon listing of shares of the Company on BSE Limited and the
National Stock Exchange of India Ltd. on December 28, 2012, the provisions of Part II of the Articles have automatically terminated and ceased to have any force and effect.
Accordingly, it is proposed to amend the Articles to delete the provisions of Part II of the Articles.
None of the directors of the Company is deemed to be concerned or interested in the proposed resolutions.
The Board recommends the passing of the resolution as set out in item no. 14 for approval of members as a Special
Resolution.
Date: April 30, 2013 Registered Office:
Bharti Crescent,
1 Nelson Mandela Road,
Vasant Kunj, Phase – II
New Delhi – 110070

By order of the Board
For Bharti Infratel Limited

Anupam Garg
Company Secretary

127

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Information of directors seeking appointment/ re-appointment at the forthcoming annual general meeting (pursuant to clause 49 of the listing agreement):

Mr. Akhil Gupta
Date of Birth

December 22, 1955

Qualifications

• Certified Chartered Accountant and fellow member of ICAI
• Advanced Management Program from Harvard Business School,
Harvard University, USA

Experience and expertise in specific functional area

28 years

Shareholding in Bharti Infratel Limited

Nil

Directorship held in other public limited companies in India as on March 31, 2013









Membership/Chairmanship of committees in public limited companies in India as on March 31, 2013

• Bharti AXA General Insurance Company Limited – Audit Committee
(Member)
• Bharti Enterprises Limited – Audit Committee (Chairman)
• Bharti Infratel Limited – Shareholders’/ Investors’ Grievances
Committee (Member)
• Bharti Telecom Limited – Audit Committee (Member)
• Bharti Ventures Limited – Audit Committee (Chairman)
• Indus Towers Limited – Audit Committee (Chairman)

Bharti AXA General Insurance Company Limited
Bharti AXA Life Insurance Company Limited
Bharti Enterprises Limited
Bharti Infratel Ventures Limited
Bharti Telecom Limited
Bharti Ventures Limited
Indus Towers Limited

Mr. Rakesh Bharti Mittal
Date of Birth

September 18, 1955

Qualifications

Diploma in Electronics and Controls from Y.M.C.A. Institute of Engineering,
Faridabad

Experience and expertise in specific functional area

35 years

Shareholding in Bharti Infratel Limited

Nil

Directorship held in other public limited companies in India as on March 31, 2013










Membership/Chairmanship of committees in public limited companies in India as on March 31, 2013

• Bharti AXA General Insurance Company Limited – Audit Committee
(Member)
• Bharti Infratel Limited – Shareholders’/ Investors’ Grievances
Committee (Chairman)
• Bharti Ventures Limited – Audit Committee (Member)

128

Beetel Teletech Limited
Bharti AXA General Insurance Company Limited
Bharti AXA Life Insurance Company Limited
Bharti Telecom Limited
Bharti Ventures Limited
Centum Learning Limited
Comviva Technologies Limited
Indus Towers Limited

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Mr. Bharat Sumant Raut
Date of Birth

August 31, 1949

Qualifications

• Bachelors’ Degree in Law from University of Bombay
• Chartered Accountant and fellow member of ICAI

Experience and expertise in specific functional area

42 years

Shareholding in Bharti Infratel Limited

Nil

Directorship held in other public limited companies in India as on March 31, 2013






Membership/Chairmanship of committees in public limited companies in India as on March 31, 2013

• Bharti AXA Life Insurance Company Limited – Audit Committee
(Chairman)
• Bharti AXA General Insurance Company Limited – Audit Committee
(Chairman)
• Bharti Infratel Limited – Audit Committee (Chairman)

Bharti AXA Life Insurance Company Limited
Bharti AXA General Insurance Company Limited
IDFC AMC Trustee Company Limited
I-Flex Solutions Trustee Company Limited

Mr. Jitender Balakrishnan
Date of Birth

May 8, 1949

Qualifications

• Bachelors’ Degree in Mechanical Engineering from University of Madras
• Post graduate diploma in Industrial Management from University of
Bombay

Experience and expertise in specific functional area

39 years

Shareholding in Bharti Infratel Limited

Nil

Directorship held in other public limited companies in India as on March 31, 2013














Membership/Chairmanship of committees in public limited companies in India as on March 31, 2013






Aditya Birla Finance Limited
Bharti AXA Life Insurance Company Limited
Bharti AXA General Insurance Company Limited
Bhoruka Power Corporation Limited
Binani Industries Limited
Essar Steel India Limited
Essar Services India Limited
IL & FS Investment Managers Limited
India Glycols limited
Polyplex Corporation Limited
Sarda Energy & Minerals Limited
Usha Martin Limited

Bharti Infratel Limited - Audit Committee (Member)
Binani Industries Limited – Audit Committee (Member)
IL & FS Investment Managers Limited – Audit Committee (Member)
Sarda Energy & Minerals Limited – Investor Grievance Committee
(Member)
• Usha Martin Limited – Audit Committee (Chairman)

129

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Mr. Vinod Dhall
Date of Birth

February 20, 1944

Qualifications

• Bachelors’ Degree in Law from University of Delhi
• Masters’ Degree in Mathematics from University of Allahabad

Experience and expertise in specific functional area

27 years

Shareholding in Bharti Infratel Limited

Nil

Directorship held in other public limited companies in India as on March 31, 2013







Membership/Chairmanship of committees in public limited companies in India as on March 31, 2013

• Bharti Infratel Limited – Audit Committee (Member)
• ICICI Prudential Pension Fund Management Company Limited – Audit
Committee (Member)
• ICICI Prudential Trust Limited - Audit Committee (Member)
• Orient Cement Limited – Audit Committee (Chairman)
• Orient Cement Limited – Shareholders’/ Investors’ Grievance Committee
(Member)
• Schneider Electric Infrastructure Limited – Share Transfers and
Shareholders’/ Investors’ Grievance Committee (Chairman)
• Schneider Electric Infrastructure Limited – Audit Committee (Chairman)

Mr. Sanjay Nayar
Date of Birth
Qualifications
Experience and expertise in specific functional area
Shareholding in Bharti Infratel Limited
Directorship held in other public limited companies in India as on March 31, 2013

Membership/Chairmanship of committees in public limited companies in India as on March 31, 2013

130

ICICI Prudential Life Insurance Company Limited
ICICI Prudential Pension Funds Management Company Limited
ICICI Prudential Trust Limited
Orient Cement Limited
Schneider Electric Infrastructure Limited

October 13, 1960
• Bachelors’ Degree in Science (Mechanical Engineering) from University of Delhi
• Post graduate diploma in Management from IIM, Ahmedabad
29 years
Nil









Amalgamated Bean Coffee Trading Company Limited
Avantha Power & Infrastructure Limited
Dalmia Cement (Bharat) Limited
Dalmia Cement Ventures Limited
Grameen Capital India Limited
Magma Fincorp Limited
Avantha Power & Infrastructure Limited – Audit Committee (Member)
Avantha Power & Infrastructure Limited – Shareholders’ & Investors’
Grievance Committee (Chairman)
• Bharti Infratel Limited – Audit Committee (Member)
• Dalmia Cement Ventures Limited – Audit Committee (Member)

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Ms. Leena Srivastava
Date of Birth
Qualifications
Experience and expertise in specific functional area
Shareholding in Bharti Infratel Limited
Directorship held in other public limited companies in India as on March 31, 2013
Membership/Chairmanship of committees in public limited companies in India as on March 31, 2013
Mr. Murray Philip King
Date of Birth
Qualifications
Experience and expertise in specific functional area
Shareholding in Bharti Infratel Limited
Directorship held in other public limited companies in India as on March 31, 2013
Membership/Chairmanship of committees in public limited companies in India as on March 31, 2013
Date: April 30, 2013 Registered Office:
Bharti Crescent,
1 Nelson Mandela Road,
Vasant Kunj, Phase – II
New Delhi – 110070

September 7, 1960
Degree of Doctor of Philosophy from Indian Institute of Science, Bangalore
31 years
Nil
• TERI Technologies Limited
• Torrent Pharmaceuticals Limited
• Shree Cement Limited
Torrent Pharmaceuticals Limited – Audit Committee (Member)

January 31, 1959
• Bachelors’ Degree in Commerce from University of Queensland
• Member of the Institute of Chartered Accountants in Australia
32 years
Nil
Nil
Nil

By order of the Board
For Bharti Infratel Limited

Anupam Garg
Company Secretary

131

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Glossary
COMPANY RELATED
4 Overlapping Circles

Represents the telecommunication circles of Haryana, Rajasthan, Uttar Pradesh (East) and
Uttar Pradesh (West) wherein Bharti Infratel and Indus Towers have overlapping operations.
Bharti Infratel is not permitted to roll out any new towers in these telecommunications Circles, although it continues to own and operate its existing telecommunications towers in these
Circles, and add additional sharing operators to these towers. New tower rollout in these telecommunication circles is done by Indus.

7 Circles

Represents the telecommunications circles of Bihar, Madhya Pradesh and Chhattisgarh,
Orissa, Jammu and Kashmir, Himachal Pradesh, Assam and North East states wherein Bharti
Infratel operates on exclusive basis.

11 circles

Represents the 7 telecommunications circles of Bihar, Madhya Pradesh and Chhattisgarh,
Orissa, Jammu and Kashmir, Himachal Pradesh, Assam and North East states wherein Bharti
Infratel operates on exclusive basis and the 4 common circles of Haryana, Rajasthan, Uttar
Pradesh (East) and Uttar Pradesh (West) wherein Bharti Infratel and Indus Towers have overlapping operations.

15 circles

Represents the 11 telecommunication circles of Andhra Pradesh, Delhi, Gujarat, Karnataka,
Kerala, Kolkata, Maharashtra & Goa, Mumbai, Punjab, Tamil Nadu (including Chennai) and
West Bengal wherein Indus operates on exclusive basis and the 4 common telecommunication circles of Haryana, Rajasthan, Uttar Pradesh (East) and Uttar Pradesh (West) wherein Bharti
Infratel and Indus Towers have overlapping operations.

Average Co-locations

Average co-locations are derived by computing the average of the Opening and Closing colocations at the end of relevant period.

Average Sharing Factor

Average Sharing factor is calculated as the average of the opening and closing number of co-locations divided by average of the opening and closing number of towers for the relevant period. Average Towers

Average towers are derived by computing the average of the opening and closing towers at the end of relevant period.

BIVL

Bharti Infratel Ventures Limited

Bn

Billion

CapEx

It includes investment in gross fixed assets and capital work in progress for the relevant period.

Capital Employed

Capital Employed is defined as sum of equity attributable to equity share holders and net debt.

Cash Profit From
Operations

It is not an IGAAP measure and is defined as operating income adjusted for depreciation and amortization, revenue equalization, lease rent equalizations and finance costs.

Circle(s)

22 service areas that the Indian telecommunications market has been segregated into

Co-locations

Co-location is the total number of sharing operators at a tower, and where there is a single operator at a tower; ‘co-location’ refers to that single operator. Co-locations as referred to are revenue-generating co-locations.

Earnings Per Share - Basic It is computed by dividing net profit or loss attributable for the period to equity shareholders by the weighted average number of equity shares outstanding during the period.
Earnings Per Share Diluted

Diluted earnings per share is calculated by adjusting net profit or loss for the period attributable to equity share holders and the weighted average number of shares outstanding during the period for the effects of all dilutive potential equity shares.

EBIT

Earnings before interest, taxation excluding other income for the relevant period.

132

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

EBIT (Including Other
Income)

Earnings before interest, taxation including other income for the relevant period.

EBITDA

Earnings before interest, taxation, depreciation and amortization excluding other income for the relevant period. It is defined as operating income and does not include depreciation and amortization expense, finance cost and tax expense.

EBITDA (Including Other
Income)

Earnings before interest, taxation, depreciation and amortization including other income for the relevant period.

Enterprise Value (EV)

Calculated as sum of Market Capitalization plus Net Debt as at the end of the relevant period.

EV / EBITDA (times) (LTM)

Computed by dividing Enterprise Value as at the end of the relevant period (EV) by EBITDA for the preceding (last) 12 months from the end of the relevant period.

GAAP

Generally Accepted Accounting Principle

IGAAP

Indian Generally Accepted Accounting Principle

Incremental Return on
Capital Employed

For the full year, Incremental Return on Capital Employed is computed by dividing Incremental
EBIT during the relevant years by Incremental Average Capital Employed during the corresponding years.

Incremental Return on
Shareholder’s Equity

For the full year, Incremental Return on Equity is calculated by dividing Incremental Profit after Tax during the relevant years by Incremental Average Shareholder’s Equity during the corresponding years.

Intangibles

Comprises of acquisition cost of software.



Not ascertainable (infinite)

Interest Coverage Ratio
(LTM)

It is computed by dividing EBITDA for the preceding (last) 12 months from the end of relevant period by interest on borrowing for the preceding (last) 12 months.

IRU

Indefeasible right to use

Lease Rent Equalization

It represents the effect of fixed escalations (as per the terms of lease agreements with landlords) recognized on straight line basis over the fixed, non-cancellable term of the agreement, as applicable LTM

Last twelve (12) months

Market Capitalization

Number of issued and outstanding shares as at end of the period multiplied by closing market price (NSE) as at end of the period.

Mn

Million

MSA

Master Service Agreement

Net Debt

It is not a IGAAP measure and is defined as the long-term borrowing, short-term borrowings and current portion of long-term borrowings minus cash and cash equivalents, current investments and short term loan to the parent company as at the end of the relevant period.

Net Debt to EBITDA (LTM)

It is computed by dividing net debt as at the end of the relevant period by EBITDA for preceding
(last) 12 months from the end of the relevant period.

Operating Free Cash flow

It is not an IGAAP measure and is defined as EBITDA adjusted for Capex, revenue equalization
& lease rent equalization.

P/E Ratio

Price to Earnings ratio is calculated as closing market price (NSE) as at the end of relevant period, divided by diluted annual earnings per share. Annual Diluted Earnings per share is calculated by adding the preceding last four quarters diluted Earnings per share

ROC

Registrar of Companies

Return On Capital
Employed (ROCE) - (LTM)

For the full year, ROCE is computed by dividing the sum of EBIT for the period by average (of opening and closing) capital employed. For the quarterly computations, it is computed by dividing sum of EBIT for the preceding (last) 12 months from the end of the relevant period by average (of opening and closing) capital employed during the relevant periods.
133

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Return On Shareholder’s
Equity (ROE) (LTM)

For the full year, ROE is computed by dividing the sum of Profit after tax for the period by average (of opening and closing) equity shareholders funds. For the quarterly computations, it is computed by dividing sum of Profit after tax for the preceding (last) 12 months from the end of the relevant period by average (of opening and closing) equity shareholders funds during the relevant periods.

Revenue Equalization

It represents the effect of fixed escalations (as per the terms of service agreements with customers) recognized on straight line basis over the fixed, non-cancellable term of the agreement, as applicable.

SHA

Shareholders Agreement

Sharing Operator

A party granted access to a tower and who has installed active infrastructure at the tower

Sharing Revenue

It represents service revenue accrued during the relevant period and includes revenue equalization net of service level credits.

Sharing revenue per
Sharing Operator per month Is calculated on the basis of sharing revenues accrued during the relevant period divided by the average number of co-locations for the period, determined on the basis of opening and closing number of co-locations for the relevant period.

Sharing revenue per Tower Is calculated on the basis of sharing revenues accrued during the relevant period divided by per month the average number of towers for the period, determined on the basis of opening and closing number of towers for the relevant period.
Tax Holidays

Temporary reduction or elimination of tax under section 80IA of the Income Tax Act, 1961

Towers

Infrastructure located at a site which is permitted by applicable law to be shared, including, but not limited to, the tower, shelter, diesel generator sets and other alternate energy sources, battery banks, air conditioners and electrical works. Towers as referred to are revenue generating towers

Tower and Related
Infrastructure

Infrastructure Located at site which is permitted by applicable law to be shared, including, but not limited to, the tower, shelter, diesel generator sets and other alternate energy sources, battery banks, air conditioners and electrical works

REGULATORY RELATED
BSE

BSE Ltd. (formerly Bombay Stock Exchange Limited)

DoT

Department of Telecommunications

ESOP

Employees Stock Option Plan

FDI

Foreign Direct Investment

FTSE

Financial Times Stock Exchange

GSM

Global System for Mobile Communication

IMC

Inter Ministerial Committee

IPO

Initial Public Offering

IP1

Infrastructure Provider Category 1

MD

Managing Director

NSE

National Stock Exchange of India Limited

QIBs

Qualified institutional buyers as defined under Regulation 2(1)(zd) of the SEBI Regulations

SEBI

Securities and Exchange Board of India

TRAI

Telecom Regulatory Authority of India

TEC

Telecommunication Engineering Center – Department of Telecommunications

134

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

INDUSTRY RELATED
2G

Second generation mobile telecommunication

3G

Third generation mobile telecommunication

4G

Fourth generation mobile telecommunication

A-category
Telecommunication circles in the State of Andhra Pradesh, State of Gujarat and Union Territory telecommunication Circles of Daman and Diu, Silvassa (Dadra & Nagar Haveli), State of Karnataka, State of Maharashtra and Union Territory of Goa, excluding areas covered by Mumbai Metro Service Area, State of Tamil Nadu and Union Territory of Pondichery including Local Areas served by Chennai
Telephones, Maraimalai Nagar Export Promotion Zone, Minzur and Mahabalipuram Exchanges
B-category
Telecommunication circles in the Union Territory of Andaman & Nicobar Islands, State of telecommunication Circles West Bengal and the State of Sikkim excluding the areas covered by Kolkata Metro Service
Area, the State of Haryana except Panchkula town and the local areas served by Faridabad and Gurgaon Telephone exchanges, State of Kerala and Union Territory of Lakshadweep and
Minicoy, reorganized State of Madhya Pradesh as well as the newly created State of Chattisgarh pursuant to the Madhya Pradesh Reorganisation Act, 2000 (No:28 of 2000) dated August 25,
2000, State of Punjab and Union territory of Chandigarh and Panchkula Town of Haryana,
State of Rajasthan, Western Uttar Pradesh with the following as its boundary districts towards
Eastern Uttar Pradesh: Pilibhit, Bareilly, Badaun, Etah, Mainpuri and Etawah. It excludes the local telephone area of Ghaziabad and Noida. However, it includes the newly created State of
Uttaranchal pursuant to the Uttar Pradesh Reorganisation Act, 2000 (No.29 of 2000) dated
25th August, 2000 and Eastern Uttar Pradesh with the following as its boundary districts towards Western Uttar Pradesh Shahjahanpur, Farrukhabad, Kanpur and Jalaun
BTS

Base Transceiver Station

C-category
Telecommunication circles in the State of Assam, re-organised State of Bihar and newly telecommunication Circles created State of Jharkhand pursuant to the Bihar Reorganisation Act, 2000 (No.30 of 2000) dated August 25, 2000, State of Himachal Pradesh, State of Jammu & Kashmir including the autonomous council of Ladakh, States of Arunachal Pradesh, Meghalaya, Mizoram, Nagaland,
Manipur and Tripura and State of Orissa
DG

Diesel Generator

ECB

External commercial borrowings

EMF

Electro Magnetic Field

FCU

Free Cooling Unit

GBT

Ground Based Tower

IPMS

Integrated Power Management System

PPC

Plug and Play Cabinet

RESCO

Renewable Energy Service Company

RTT

Roof Top Tower

TAIPA

Tower And Infrastructure Providers Association

135

BHARTI INFRATEL LIMITED ANNUAL REPORT 2012-13

Office Locations
Head Office
Bharti Infratel Limited
901, Park Centra,
Sector 30, NH-8,
Gurgaon
Haryana – 122 001

Uttar Pradesh (East)
Bharti Infratel Limited,
410, 4th Floor, Ratan Square,
20-A, Vidhan Sabha Marg,
Lucknow
Uttar Pradesh – 226 001

Jammu & Kashmir
Bharti Infratel Limited,
4th Floor, Hotel TRG,
Rail Head Complex, Near Bahu Plaza,
Jammu
Jammu & Kashmir - 180 001

Bihar & Jharkhand
Bharti Infratel Limited,
2nd Floor,
Alankar Business Centre,
East Boring Canal Road,
Buddha Colony,
Patna
Bihar – 800 001

Haryana & Himachal Pradesh
Bharti Infratel Limited,
C/o FCS Software Solutions Ltd.,
Plot No. J-7, Ground Floor,
Chandigarh Technology Park,
Chandigarh – 160 101
Rajasthan
Bharti Infratel Limited,
6th Floor, Plot No. 8 & 9,
Corporate Park, Gopal Bari,
Ajmer Road,
Jaipur
Rajasthan – 302 006
Uttar Pradesh (West)
Bharti Infratel Limited,
9th Floor, A-8-A The 3C Building,
Knowledge Boulevard, Sector-62
Noida
Uttar Pradesh – 201 301

136

Madhya Pradesh & Chhattisgarh
Bharti Infratel Limited,
4th Floor, Metro Tower,
Scheme No. 54, Near Vijay Nagar Square,
A.B. Road, Indore
Madhya Pradesh – 452 010
North East States and Assam
Bharti Infratel Limited,
4th Floor, Nikita Office Complex,
Opposite Research Gate,
G.S Road, Khanapara,
Guwahati
Assam – 781 022
Odisha
Bharti Infratel Limited,
502 & 503, 5th Floor,
Forum Mart, Unit 3, Kharvel Nagar,
Bhubaneshwar
Odisha – 751 001

BHARTI INFRATEL LIMITED

Regd. Office: Bharti Crescent, 1, Nelson Mandela Road, Vasant Kunj, Phase-II, New Delhi - 110070

ADMISSION SLIP
Members or their proxies are requested to present this form for admission, duly signed in accordance with their specimen signatures registered with the Company.
DP Id

Client Id

Regd. Folio No.*

No. of Shares

Name(s) and address of the shareholder(s) in full …………......…………………………………………………………………………………………
………………………………………………………………………………………………………………………………………………………………………………
………………………………………………………………………………………………………………………………………………………………………………
I/WE HEREBY RECORD MY/OUR PRESENCE AT THE SEVENTH ANNUAL GENERAL MEETING OF THE COMPANY BEING HELD
ON WEDNESDAY, THE 3RD DAY OF JULY 2013 AT 11.30 A.M. AT SRI SATHYA SAI INTERNATIONAL CENTRE, PRAGATI VIHAR,
LODHI ROAD, NEW DELHI 110 003.
Please (3) in the box MEMBER
PROXY __________________________ Signature of Member/Proxy
*Applicable for investor holding shares in physical form.

#

BHARTI INFRATEL LIMITED

Regd. Office: Bharti Crescent, 1, Nelson Mandela Road, Vasant Kunj, Phase-II, New Delhi - 110070

PROXY FORM
DP Id

Client Id

Regd. Folio No.*

No. of Shares

I/We Name(s) and address of the shareholder(s) in full ……………………………………………………………………………………………...
………………………………………………………………………………………………………………………………………………………………………………
being a member of Bharti Infratel Limited, hereby appoint .....................................of ..........................................in the district of
..........................................or failing him/her......................................of ....................................in the district of ................................... as my/our Proxy to attend and vote for me/us on my/our behalf at the seventh annual general meeting of the Company scheduled to be held on Wednesday, the 3rd Day of July 2013 at 11.30 a.m. at Sri Sathya Sai International Centre, Pragati Vihar,
Lodhi Road, New Delhi 110 003 or/and at any adjournment thereof.
Dated: ........................................

*Applicable for investor holding shares in physical form.

Affix ` 1/Revenue
..........................................................
Stamp
Signature of the Shareholder

Notes: The Proxy form duly completed and signed should be deposited at the Registered Office of the Company situated at Bharti Crescent, 1 Nelson
Mandela Road, Phase-II, Vasant Kunj, New Delhi 110 070 not later than 48 hours before the commencement of the seventh annual general meeting.

ECS/E-MAIL MANDATE FORM

[APPLICABLE FOR SHARES HELD IN PHYSICAL FORM ONLY]
To,
Karvy Computershare Private Limited
Unit: Bharti Infratel Limited
Plot No. 17-24, Vittal Rao Nagar,
Madhapur, Hyderabad 500 081
Name of the First/ Sole Shareholder
Folio No.
PAN/ E-mail information
Income Tax Permanent Account Number (PAN)
(Please attach a photocopy of PAN Card)
E-mail ID
ECS mandate Form (for shares held in Physical mode)
Bank Name
Branch Name & Address

Bank Account Type (tick)

SB

Current

Others

Bank Account Number
9 Digit Code Number of the Bank and Branch appearing on the MICR Cheque issued by the Bank
(Please attach a photo copy of the Cheque)

I hereby declare that the particulars given above are correct and complete and also express my concurrence to receive information through e-mail/ receive dividend paid by the Company under the ECS mode.

___________________________________________
Signature of the 1st Registered Holder/ Sole Holder

Building and Sharing Vital Infrastructure

Building and Sharing Vital Infrastructure

Bharti Crescent, 1 Nelson Mandela Road
Vasant Kunj, Phase II, New Delhi - 110 070 www.bharti-infratel.com Annual Report 2012-13…...

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