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Directors Report of Bharti Airtel Ltd.

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the 20th Board Report on the Company's business and operations, together with audited financial statements and accounts for the financial year ended March 31, 2015.

Company Overview

Bharti Airtel continued to be among the top four# mobile service providers globally with presence in 20 countries, including India, Sri Lanka, Bangladesh and 17 countries in the African continent. The Company's diversified service range includes mobile, voice and data solutions, using 2G, 3G and 4G technologies. Its service portfolio comprises an integrated suite of telecom solutions to its customers, besides providing long-distance connectivity in India, Africa and the rest of the world. The Company also offers Digital TV and IPTV services in India. All these services are rendered under a unified brand 'airtel', either directly or through subsidiary companies.

The Company also deploys and manages passive infrastructure pertaining to telecom operations through its subsidiary, Bharti Infratel Limited, which also owns 42% of Indus Towers Limited. Together, Bharti Infratel and Indus Towers are the largest passive infrastructure service providers in India.

# Subsequent to the date of this report, Bharti Airtel has become third largest mobile operator in the world in terms of subscribers.

Financial Results

In line with the statutory guidelines, the Company has adopted International Financial Reporting Standards (IFRS) for accounts consolidation, from FY 2010-11. The Company publishes its standalone accounts according to Indian Generally Accepted Accounting Principles (IGAAP). The consolidated and standalone financial highlights of the Company's operations are as follows:

Consolidated Financial Highlights (IFRS)

FY 2014-15 FY 2013-14

Particulars Rs. USD Rs. USD Millions Millions* Millions Millions*

Gross revenue 920,394 15,064 857,461 14,151

EBITDA before 314,517 5,148 278,430 4,595 exceptional items

Cash profits from 285,280 4,669 241,813 3,991 operations

Earning before taxation 107,130 1,753 78,643 1,298

Net Income / (Loss) 51,835 848 27,727 458

*1 USD = Rs. 61.10 Exchange Rate for the financial year ended March 31, 2015. (1 USD = Rs. 60.59 Exchange Rate for the financial year ended March 31, 2014)

Standalone Financial Highlights (IGAAP)

FY 2014-15 FY 2013-14

Particulars Rs. USD Rs. USD Millions Millions* Millions Millions*

Gross revenue 554,964 9,083 499,185 8,239

EBITDA before 246,241 4,030 171,522 2,831 exceptional items

Cash profits from 232,150 3,799 158,158 2,610 operations

Earning before taxation 156,553 2,562 83,774 1,383

Net Income / (Loss) 132,005 2,160 66,002 1,089

*1 USD = Rs. 61.10 Exchange Rate for the financial year ended March 31, 2015.

(1 USD = Rs. 60.59 Exchange Rate for the financial year ended March 31, 2014)

The financial results and the results of operations, including major developments have been further discussed in detail in the Management Discussion and Analysis section.

Share Capital

During the year, there was no change in the Company's issued, subscribed and paid-up equity share capital. On March 31, 2015, it stood at Rs. 19,987 Mn, divided into 3,997,400,102 equity shares of Rs.5/- each.

General Reserve

The Company has not transferred any amount to the General Reserve for the financial year ended March 31, 2015.

Dividend

Your Directors have recommended a final dividend of Rs. 2.22 per equity share of Rs. 5 each (44.4 % of face value) for FY 2014-15. The total final dividend payout will amount to Rs. 8,874 Mn, excluding tax on dividend. The payment of final dividend is subject to the approval of shareholders in the Company's ensuing Annual General Meeting (AGM).

During the year, the Company had also paid an interim dividend ofRs. 1.63 (32.6% of face value) per equity share of Rs. 5 each amounting to a total interim dividend payout of Rs. 6,515 Mn excluding tax on dividend. The total dividend appropriation (excluding dividend tax) for FY 2014-15 is Rs. 15,390 Mn.

Transfer of amount to Investor Education and Protection Fund

Since the Company declared its maiden dividend in August 2009 for FY 2008-09, no unclaimed dividend is due for transfer to Investor Education and Protection Fund.

Deposits

The Company has not accepted any deposits and, as such, no amount of principal or interest was outstanding, as on the balance sheet closure date.

Capital Market Ratings

As on March 31, 2015, the Company was rated by two domestic rating agencies, namely CRISIL and ICRA and three international rating agencies, namely Fitch Ratings, Moody's and S&P.

CRISIL and ICRA maintained their long-term ratings of the Company. Currently, they rate the Company at [CRISIL] AA / [ICRA] AA , with a stable outlook. Short-term ratings were maintained at the highest end of the rating scale at [CRISIL] A1 / [ICRA] A1 . Fitch, Moody's and S&P also maintained the ratings at BBB-/ Stable, BBB-/Stable and Baa3/Stable, respectively.

As on March 31, 2015, the Company was rated 'Investment Grade' with a 'Stable' outlook by all three international credit rating agencies.

Employee Stock Option Plan

At present, the Company has two Employee Stock Option (ESOP) schemes, namely the Employee Stock Option Scheme 2001 and the Employee Stock Option Scheme 2005. Besides attracting talent, the schemes also helped retain talent and experience. The HR and Nomination Committee administers and monitors the Company's ESOP schemes.

Both the ESOP schemes are currently administered through Bharti Airtel Employees Welfare Trust (ESOP Trust), whereby shares held by the Trust are transferred to the employee, upon exercise of stock options as per the terms of the Scheme.

Pursuant to the SEBI (Share Based Employee Benefits) Regulations, 2014 (the ESOP Regulations), issued by SEBI on October 28, 2014, the Company has obtained approval of members through postal ballot, authorising the ESOP Trust to acquire the Company's shares from secondary market, for implementation of ESOP scheme 2005.

A disclosure with respect to ESOP Schemes of the Company as on March 31, 2015 is annexed as Annexure A to this report.

A certificate from M/s. S. R. Batliboi & Associates LLP, Chartered Accountants, Statutory Auditors, with respect to the implementation of the Company's ESOP schemes, would be placed before the shareholders at the ensuing AGM. A copy of the same will also be available for inspection at the Company's registered office.

Material changes and commitments affecting the financial position between the end of financial year and date of report after the balance sheet date

Subsequent to the end of the financial year, the Company has filed the Order of Hon'ble High Court of Bombay with Registrar of Companies ('ROC'), approving amalgamation of Airtel Broadband Services Private Limited ('ABSPL'), a wholly- owned subsidiary with the Company, on April 9, 2015, which is the effective date and the appointed date of amalgamation. From the filing of the said Order with the ROC, ABSPL ceased to exist.

However, the Scheme has not been given effect to in the financial statements as the appointed date of amalgamation was subsequent to the balance sheet date.

Directors and Key Managerial Personnel

Inductions, Re-appointments, Retirements & Resignations

In line with the Company's policy on Independent Directors, Mr. Ajay Lal has retired from the Board w.e.f. January 22, 2015. Mr. Tsun-yan Hsieh and Mr. Manoj Kohli resigned from the Company's Board w.e.f. September 1, 2014 and February 04, 2015, respectively. The Directors place on record their appreciation for help, guidance and contribution made by the outgoing Directors during their tenure on the Board.

Mr. Shishir Priyadarshi was appointed as an Independent Additional Director on the Board w.e.f. February 04, 2015 for a term of five years, subject to approval of the members in the ensuing AGM. The Company has received requisite notice from a member under Section 160 of the Companies Act, 2013, proposing the appointment of Mr. Shishir Priyadarshi as the Company's Non-Executive Independent Director. In the opinion of the Board, Mr. Priyadarshi fulfils the conditions specified in the Companies Act, 2013 and the rules made thereunder and is independent of the management and accordingly, the Board recommends his appointment.

Ms. Tan Yong Choo will retire by rotation at the ensuing AGM and being eligible, has offered herself for re-appointment.

Brief resume, nature of expertise, details of directorships held in other companies excluding foreign companies of the Directors proposed to be appointed / re-appointed, along with their shareholding in the Company, as stipulated under Secretarial Standard 2 and Clause 49 of the Listing Agreement with the Stock Exchanges, is appended as an Annexure to the Notice of the ensuing AGM.

Mr. Mukesh Bhavnani, Group General Counsel and Company Secretary has resigned w.e.f. March 31, 2015. The Directors place on record their appreciation for the contribution made by him during his tenure. The Board in its meeting held on April 28, 2015 has appointed Mr. Rajendra Chopra as the Company Secretary and Compliance Officer of the Company.

Declaration by Independent Directors

The Company has received declarations from all Independent Directors of the Company confirming that they meet with the criteria of independence, as prescribed under Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The Independent Directors have also confirmed that they have complied with the Company's code of conduct.

Board Diversity and Policy on Director's Appointment and Remuneration

The Company believes that building a diverse and inclusive culture is integral to its success. A diverse Board, among others, will enhance the quality of decisions by utilising different skills, qualifications, professional experience and knowledge of the Board members necessary for achieving sustainable and balanced development. Accordingly, the Board has adopted a policy on 'Nomination, Remuneration and Board Diversity', which sets out the criteria for determining qualifications, positive attributes and independence of a Director. The detailed policy is available on the Company's website at www.airtel.in/wps/wcm/connect/92b49e0e- 8810-497a-9c3e-9b80657a3688/Policy-on-Remuneration- Nomination-and-Board-Diversity.pdfRs.MOD=AJPERES and is also annexed as Annexure B to this report.

Annual Board Evaluation and Familiarisation Programme for Board Members

A note on the familiarisation programme adopted by the Company for orientation and training of the Directors, and the Board evaluation process undertaken in compliance with the provisions of the Companies Act, 2013 and Listing Agreement is provided in the Report on Corporate Governance, which forms part of this Report.

Committees of Board, Number of Meetings of the Board and Board Committees

The Board of Directors met five times during the previous financial year. As on March 31, 2015, the Board has seven committees, namely, Audit & Risk Management Committee, HR and Nomination Committee, Corporate Social Responsibility ('CSR') Committee, Technology Committee (Dissolved w.e.f. April 28, 2015), Stakeholders' Relationship Committee, Committee of Directors and Airtel Corporate Council.

A detailed update on the Board, its composition, detailed charter including terms and reference of various Board committees, number of Board and Committee meetings held during FY 2014-15 and attendance of the Directors at each meeting is provided in the Report on Corporate Governance, which forms part of this Report.

Subsidiary, Associate and Joint Venture Companies

As on March 31, 2015, your Company has 114 subsidiaries, 3 associates and 4 joint ventures, as set out in page no. 266 of the Annual Report (for Abridged Annual Report please refer page no. 95).

During FY 2014-15, Wynk Limited was incorporated as a subsidiary and FireFly Networks Limited became joint venture of the Company. Bharti Airtel Acquisition Holdings B.V., Bharti Airtel Cameroon B.V., Bharti DTH Services Zambia Limited, Airtel DTH Services Tanzania Limited and Rwanda Towers Limited ceased to be subsidiaries of the Company.

There was no change in the associate companies during the previous financial year.

Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of Companies (Accounts of Companies) Rules, 2014, a statement containing salient features of financial statements of subsidiary, associate and joint venture companies is annexed on page no. 103 of the Abridged Annual Report and page no. 273 of the full version Annual Report. The statement also provides the details of performance and financial position of each of the subsidiary, associate and joint venture.

The audited financial statements of each of its subsidiary, associate and joint venture companies are available for inspection at the Company's registered office and also at registered offices of the respective companies.

Copies of the annual accounts of the subsidiary, associate and joint venture companies will also be made available to the investors of Bharti Airtel and those of the respective companies upon request.

Abridged Annual Report

In terms of the provision of Section 136(1) of the Companies Act, 2013, Rule 10 of Companies (Accounts of Companies) Rules, 2014 and Clause 32 of the Listing Agreement, the Board of Directors has decided to circulate the Abridged Annual Report containing salient features of the balance sheet and statement of profit and loss and other documents to the shareholders for FY 2014-15, who have not registered their e-mail id. The Abridged Annual Report is being circulated to the members excluding the 'disclosure on ESOPs', 'Policy on Nomination, Remuneration and Board Diversity', 'Secretarial Audit Report', 'Annual Report on Corporate Social Responsibility u/s 135 of the Companies Act, 2013', 'Business Responsibility Report', 'Report on Corporate Governance and Auditors' Certificate on compliance of conditions of Corporate Governance, 'Extract of Annual Return', 'Note on Energy conservation, Technology Absorption and Foreign Exchange Earning and Outgo' and 'Disclosure relating to remuneration u/s 197(12) read with Rule 5(1) and Rule 5(2) of the Companies (Appointment and Remuneration of managerial Personnel), Rules, 2014'.

Members who desire to obtain the full version of the report may write to the Company Secretary at the registered office address and will be provided with a copy of the same. Full version of the Annual Report will also be available on the Company's website, www.airtel.com.

Auditors and Auditors' Report

Statutory Auditors

In terms of the provisions of Section 139 of the Companies Act, 2013, M/s. S. R. Batliboi & Associates, LLP were appointed as the Company's Statutory Auditors by the shareholders in the AGM held on September 1, 2014, for a period of three years i.e. till the conclusion of 22nd AGM.

The said appointment is subject to ratification by the members at every AGM. Accordingly, the appointment of M/s. S. R. Batliboi & Associates, LLP, Chartered Accountants, as the Company's Statutory Auditors, is placed for ratification by the members. The Company has received certificate from the Auditors to the effect that ratification of their appointment, if made, shall be in accordance with the provisions of Section 141 of the Companies Act, 2013.

The Board has duly examined the Statutory Auditors' Report to the accounts, which is self-explanatory. Clarifications, wherever necessary, have been included in the Notes to Accounts section of the Annual Report.

As regards the comments under para i(a) of the Annexure 1 to the Independent Auditors' Report regarding updation of quantitative and situation details relating to certain fixed assets, the Company is in the process of executing a comprehensive project with the involvement of technical experts, for deploying automated tools and processes which will enable near real-time tracking of fixed assets and reconciliation thereto. This project is expected to be completed by next year. Additionally, with regard to the comments under para i(b) of the Annexure 1 to the Independent Auditors' Report regarding reconciliation of the quantitative and situation details of the physical verification results with the records maintained by the Company, the same is in progress and we believe that the impact is not expected to be material.

Cost Auditors

The Board, on the recommendation of the Audit & Risk Management Committee has approved the appointment of M/s. R. J. Goel & Co., Cost Accountants, as Cost Auditor, for the financial year ending March 31, 2016. The Cost Auditors will submit their report for the financial year ending 2014-15 on or before the due date.

In accordance with the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, since the remuneration payable to the Cost Auditors is required to be ratified by the shareholders, the Board recommends the same for approval by shareholders at the ensuing AGM.

Secretarial Auditor

The Company had appointed M/s. Chandrasekaran Associates, Company Secretaries, New Delhi, to conduct its Secretarial Audit for the financial year ended March 31, 2015. The Secretarial Auditors have submitted their report, confirming compliance by the Company of all the provisions of applicable corporate laws. The Report does not contain any qualification, reservation or adverse remark. The Secretarial Audit Report is annexed as Annexure C to this report.

The Board has reappointed M/s. Chandrasekaran Associates, Company Secretaries, New Delhi, as Secretarial Auditor of the Company for FY 2015-16.

Sustainability Journey

Sustainability initiatives have been integral to Bharti Airtel's journey, since inception. In last four years the Company added a more comprehensive and structured sustainability plan with active cooperation of its stakeholders. Bharti Airtel's aim is to benefit the planet and the community through its operations and engagements. The Company is putting focus on diverse issues like climate change, employee engagement, waste management, digital inclusion and impact on communities, among others. The Company is committed to maintain the highest standards of governance, safety and environmental performance across the value chain.

An update on the Company's sustainability journey forms part of the Corporate Social Responsibility and Sustainability report. The detailed sustainability report of the Company is available on the Company's website at www.airtel.in/ sustainability.

Corporate Social Responsibility (CSR)

At Bharti Airtel, Corporate Social Responsibility (CSR) encompasses much more than social outreach programmes. It lies at the heart of the Company's business operations. Over the years, the Company has aligned its business processes and goals to make a more deep-rooted impact on the society's sustainable development.

In accordance with the requirements of Section 135 of the Companies Act, 2013, the Company has constituted a CSR Committee. The composition and terms of reference of the CSR Committee is provided in the Report on Corporate Governance, which forms part of this Report.

The Company has also formulated a Corporate Social Responsibility Policy, which is available on the Company's website at www.airtel.in/wps/wcm/connect/ fd7b3172-02e5-4e25-af7e-51d64cc17534/CSR Policy. pdfRs.MOD=AJPERES&ContentCache=NONE

During FY 2014-15, the Company has spent Rs. 411 Mn towards the CSR activities. Being the initial year, the Company was in the process of evaluating the focus areas / locations of intervention for CSR activities to cater to the pressing needs of society and deliver optimal impact. As a socially responsible Company, your Company is committed to increase its CSR impact and spend over the coming years, with its aim of playing a larger role in India's sustainable development by embedding wider economic, social and environmental objectives.

A detailed update on the CSR initiatives of the Company is provided in the Corporate Social Responsibility and Sustainability Report, which forms part of the Annual Report.

The Annual Report on Corporate Social Responsibility u/s 135 of the Companies Act, 2013 is annexed as Annexure D to this Report.

Business Responsibility Report

As stipulated under the Listing Agreement, the Business Responsibility Report, describing the initiatives taken by the Company from environmental, social and governance perspective forms a part of the Annual Report.

Management Discussion and Analysis Report

The Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section, forming part of the Annual Report.

Corporate Governance

A detailed report on Corporate Governance, pursuant to the requirements of Clause 49 of the Listing Agreement, forms part of the Annual Report.

A certificate from M/s. S. R. Batliboi & Associates LLP, Chartered Accountants, Gurgaon, the Statutory Auditors of the Company, confirming compliance of conditions of Corporate Governance, as stipulated under Clause 49, is annexed as Annexure H to this report.

Risk Management

Risk management is embedded in Bharti Airtel's operating framework. The Company believes that managing risks goes hand-in-hand with maximising returns. To this effect, there is a robust process in place to identify key risks across the Group and prioritise relevant action plans to mitigate these risks. Risk Management framework is reviewed periodically by the Board and the Audit & Risk Management Committee, which includes discussing the management submissions on risks, prioritising key risks and approving action plans to mitigate such risks.

During the year, a Risk Management Policy has been approved by Audit & Risk Management Committee and the Board. The objective of this Policy is to have a well- defined approach to risk. The Policy lays broad guidelines for the appropriate authority so as to be able to do timely identification, assessment, and prioritisation of risks affecting the Company in the short and foreseeable future. The Policy suggests framing an appropriate response action for the key risks identified, so as to make sure that risks are adequately compensated or mitigated.

The Internal Audit function is responsible to assist the Audit & Risk Management Committee on an independent basis with a full status of the risk assessments and management.

Operationally, risk is being managed at the top level by Management Boards (AMB and Africa Exco) and at operating level by Executive Committees of Circles in India and Operating Companies in the international operations.

Detailed discussion on Risk Management has been given as a part of Management Discussion & Analysis under the section 'Risks and Concerns', which forms part of this Annual Report.

Internal Financial Control

The Company has in place adequate tools, procedures and policies, ensuring orderly and efficient conduct of its business, including adherence to the Company's policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records, and timely preparation of reliable financial information. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.

Other Statutory Disclosures

Vigil Mechanism

The Code of Conduct and vigil mechanism applicable to Directors and Senior Management of the Company is available on the Company's website at www.airtel.in/about- bharti/investor-relations/corporate-governance.

A brief note on the highlights of the Whistle Blower Policy and compliance with Code of Conduct is also provided in the Report on Corporate Governance, which forms part of this Annual Report.

Extract of Annual Return

In terms of provisions of Section 92, 134(3)(a) of the Companies Act, 2013 read with Rule 12 of Companies (Management And Administration) Rules, 2014, the extracts of Annual Return of the Company in form MGT-9 is annexed herewith as Annexure E to this report.

Significant and material orders

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future.

Particulars of loans, guarantees or investments

Particulars of loans, guarantees and investments form part of Note no. 18 & 24, 26 and 17 & 20 respectively to the financial statements provided in the full version of the Annual Report.

Related Party Transactions

A detailed note on procedure adopted by the Company in dealing with contracts and arrangements with Related Parties is provided in the Report on Corporate Governance, which forms part of this Annual Report.

All arrangements / transactions entered by the Company with its related parties during the year were in ordinary course of business and on an arm's length basis. During the year, the Company had not entered into any arrangement / transaction with related parties which could be considered material in accordance with the Company's Policy on Related Party Transactions and accordingly, the disclosure of Related Party Transactions in Form AOC 2 is not applicable. However, names of Related Parties and details of transactions with them have been included in Note no. 48 to the financial statements provided in the full version of the Annual Report and Note no. 24 of the financial statements provided in abridged version of the Annual Report under Accounting Standard 18.

The Policy on the Related Party Transactions is available on the Company's website at www.airtel.in/wps/wcm/ connect/36a5305d-f0ba-490c-9eff-152ef6811917/BALPolicy- on-Related-Party-Transactions.pdfRs.MOD=AJPERES

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo

The details of energy conservation, technology absorption and foreign exchange earnings and outgo as required under Section 134(3) of the Companies Act, 2013, read with the Rule 8 of Companies (Accounts of Companies) Rules, 2014 is annexed herewith as Annexure F to this report.

Particulars of Employees

Disclosures relating to remuneration of Directors u/s 197(12) read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as Annexure G to this report.

The information, as required to be provided in terms of Section 197(12) of the Companies Act, 2013, read with Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, has been enclosed with this report.

Directors' Responsibility Statement

Pursuant to Section 134 of the Companies Act, 2013, the Directors, to the best of their knowledge and belief, confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed, along with proper explanation relating to material departures;

b) the Directors had 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 and of the profit and loss of the Company for that period;

c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors had prepared the annual accounts on a going concern basis;

e) the Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Acknowledgements

Your Directors wish to place on record their appreciation to the Department of Telecommunications (DoT), the Central Government, the State Governments in India, Government of Bangladesh, Government of Sri Lanka and Governments in the 17 countries in Africa, Company's bankers and business associates, for the assistance, co-operation and encouragement they extended to the Company.

The Directors also extend their appreciation to the employees for their continuing support and unstinting efforts in ensuring an excellent all-round operational performance. The Directors would like to thank various partners, viz., Bharti Telecom Limited, Singapore Telecommunications Ltd. and other shareholders for their support and contribution. We look forward to their continued support in future.

For and on behalf of the Board

Date: April 28, 2015 Sunil Bharti Mittal

Place: New Delhi Chairman


Mar 31, 2014

Dear Shareholders,

The Directors have pleasure in presenting the 19th Annual Report on the Company''s business and operations, together with audited financial statements and accounts for the financial year ended March 31, 2014.

Company Overview

Bharti Airtel continued to be among the top four mobile service providers globally with presence in 20 countries, including India, Sri Lanka, Bangladesh and 17 countries in the African continent. The Company''s diversified service range includes mobile, voice and data solutions using 2G, 3G and 4G technologies. Its service portfolio also comprises an integrated suite of telecom solutions to its customers, besides providing long-distance connectivity in India, Africa and rest of the world. The Company also offers Digital TV and IPTV services in India.

All these services are rendered under a unified brand ''airtel'', either directly or through subsidiary companies. The Company also deploys, owns and manages passive infrastructure pertaining to telecom operations through its subsidiary, Bharti Infratel Limited, which also owns 42% of Indus Towers Limited. Together, Bharti Infratel and Indus Towers is the largest passive infrastructure service provider in India.

Financial Results

In line with the statutory guidelines, the Company has adopted International Financial Reporting Standards (IFRS) for accounts consolidation from FY 2010-11. The Company publishes its standalone accounts according to India''s Generally Accepted Accounting Principles (IGAAP). The consolidated and standalone financial highlights of the Company''s operations are as follows:

Consolidated Financial Highlights (IFRS)

FY 201-14 FY 2012-13 Particulars Rs. USD Rs. USD Millions Millions* Millions Millions*

Gross revenue 857,461 14,151 769,045 14,129

EBITDA before 277,770 4,584 232,579 4,273 exceptional items

Cash profit from 241,813 3,991 195,643 3,594 operations before derivatives and forex fluctuations (before exceptional items)

Earnings before taxation 78,643 1,298 47,853 879

Net Income / (loss) 27,727 458 22,757 418

* 1 USD = Rs. 60.59 Exchange Rate for financial year ended March 31, 2014 (1 USD = Rs. 54.43 for financial year ended March 31, 2013)

Standalone Financial Highlights (IGAAP)

FY 201-14 FY 2012-13 Particulars Rs. USD Rs. USD Millions Millions* Millions Millions*

Gross revenue 499,185 8,239 453,509 8,332

EBITDA before 171,522 2,831 149,338 2,744 exceptional items

Cash profit from 158,158 2,610 132,815 2,440 operations after derivatives and forex fluctuations (after exceptional items)

Earnings before taxation 83,774 1,383 64,548 1,186

Net Income / (loss) 66,002 1,089 50,963 936

* 1 USD = Rs. 60.59 Exchange Rate for financial year ended March 31, 2014

(1 USD = Rs. 54.43 for financial year ended March 31, 2013)

The financial results and the results of operations including major developments have been further discussed in detail in the Management Discussion and Analysis section.

Share Capital

During the year, the Company allotted 199,870,006 fully paid up equity shares of face value of Rs. 5/- each to Three Pillars Pte. Limited, Singapore an affiliate of Qatar Foundation Endowment SPC (belonging to non-promoter category) at an issue price of Rs. 340/- per equity share (including premium of Rs. 335/- per equity share) for an aggregate consideration of Rs. 67,955.80 Mn (Rupees sixty seven billion nine hundred and fifty five million eight hundred and two thousand and forty only) on preferential basis.

Accordingly, the issued, subscribed and paid-up equity share capital of the Company increased from Rs. 18,987.65 Mn divided into 3,797,530,096 equity shares of Rs. 5/- each as on March 31, 2013 to Rs. 19,987 Mn divided into 3,997,400,102 equity shares of Rs. 5/- each as on March 31, 2014.

General Reserve

Pursuant to Section 123 of the Companies Act, 2013, the Company is not mandatorily required to transfer any amount to the General Reserve. Accordingly, the Company has not transferred any amount to the General Reserve.

Dividend

The Board recommends a final dividend of Rs. 1.80 per equity share of Rs. 5 each (36% of face value) for the FY 2013-14. The total dividend payout will amount to Rs. 7,195 Mn excluding tax on dividend. The payment of dividend is subject to the approval of the shareholders in the Company''s ensuing Annual General Meeting.

Transfer of amount to Investor Education and Protection Fund

Since the Company declared its maiden dividend in August 2009 for the FY 2008-09, no unclaimed dividend is due for transfer to Investor Education and Protection Fund.

Fixed Deposits

The Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding, as on the balance sheet closure date.

Capital Market Ratings

As on March 31, 2014, the Company was rated by two domestic rating agencies, namely CRISIL and ICRA, and three international rating agencies, namely Fitch Ratings, Moody''s and S&P.

—- CRISIL and ICRA maintained their long-term ratings of the Company. Currently, they rate the Company at [CRISIL] AA / [ICRA] AA with a stable outlook. Short- term ratings were reaffirmed at the highest end of the rating scale at [CRISIL] A1 / [ICRA] A1 .

-— During the year, Moody''s, an international credit rating agency, initiated ratings coverage on the Company and assigned it a rating of Baa3, with a stable outlook. As of March 31, 2014, the Company continued to be rated at the same level by Moody''s.

—- S&P upgraded its ratings to BBB- with a stable outlook during the year (BB / Stable earlier).

-— Fitch maintained its rating at BBB- but upgraded the outlook to Stable (BBB- / Negative earlier).

As on March 31, 2014, the Company was rated "Investment Grade" with a ''Stable'' outlook by all three international credit rating agencies.

Employee Stock Option Plan

The Company presently has two Employee Stock Option (ESOP) schemes, namely the Employee Stock Option Scheme 2001 and the Employee Stock Option Scheme 2005. Besides attracting talent, the Schemes also helped to retain talent and experience.

Both the above mentioned ESOP schemes are at present administered through a Trust, whereby the shares held / acquired by the Trust are transferred to the employee, upon exercises of stock options as per the terms of the Scheme.

In view of the Circular issued by SEBI, the Company stopped acquiring further shares from the open market towards appropriation of the same for the ESOP scheme 2005. The shares acquired / held by the Trust prior to the circular will be utilised to administer the above schemes in accordance with the applicable regulations.

In compliance with the provisions of Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (the SEBI Guidelines), HR & Nomination Committee administers and monitors the Company''s ESOP schemes. The applicable disclosures as stipulated under the SEBI Guidelines, as on March 31, 2014 are 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 implementation of the Company''s ESOP schemes, would be placed before the shareholders at the ensuing Annual General Meeting. A copy of the same will also be available for inspection at the Company''s registered office.

Directors

In line with the Company''s policy on Independent Directors, Mr. Pulak Prasad has retired from the Board w.e.f. September 5, 2013. Further, during the previous financial year, Mr. Nikesh Arora ceased to be the Director of the Company w.e.f. March 13, 2014. The Directors place on record their appreciation for help, guidance and contribution made by the outgoing Directors during their tenure on the Board.

Sheikh Faisal Thani Al-Thani, Mr. Ben Verwaayen, Mr. V. K. Viswanathan and Mr. D. K. Mittal were appointed as Additional Directors during the year. They will cease to hold office on the date of ensuing Annual General Meeting and are eligible for re-appointment. The Company has received notices from members under Section 160 of the Companies Act, 2013 (Corresponding section to Section 257 of the Companies Act, 1956), proposing the appointment of Sheikh Faisal Thani Al-Thani as the Company''s Non-Executive Director and appointment of Mr. Ben Verwaayen, Mr. V. K. Viswanathan and Mr. D. K. Mittal as the Company''s Non-Executive Independent Directors along with necessary deposit of Rs. 1,00,000/- for each Director. The Board recommends their appointment.

Ms. Chua Sock Koong and Mr. Rajan Bharti Mittal retire by rotation at the ensuing Annual General Meeting and being eligible, have offered themselves for re-appointment.

In terms of Section 149, 150 and 152 read with Schedule IV and any other applicable provisions, if any, of the Companies Act, 2013 and rules made thereunder and Clause 49 of the Listing Agreement, it is proposed to appoint Mr. Manish Kejriwal, Ms. Obiageli Ezekwesili and Mr. Craig Ehrlich as Independent Directors of the Company to hold office for the term as mentioned in the explanatory statement to item nos. 7 to 14 of notice of the Annual General Meeting.

Mr. Tsun-yan Hsieh, Independent Director has expressed his desire to step down from the Board effective from the conclusion of ensuing Annual General Meeting. Accordingly, his appointment as an Independent Director for a further term, as required under the provisions of Companies Act, 2013, is not being proposed to the shareholders at the ensuing Annual General Meeting.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges and in the opinion of the Board, all the Independent Directors proposed to be appointed fulfil the conditions specified in the Companies Act, 2013 and the rules made thereunder and are independent of the management. The Board recommends their appointment.

A brief resume, nature of expertise, details of directorships held in other public limited companies of the Directors proposed to be appointed / re-appointed, along with their shareholding in the Company, as stipulated under Clause49 of the Listing Agreement with the Stock Exchanges, is appended as an annexure to the Notice of the before ensuing Annual General Meeting.

Subsidiary Companies

As on March 31, 2014, your Company has 117 subsidiary companies, as set out in Page no. 242 of the Annual Report (for Abridged Annual Report please refer Page no. 92).

Pursuant to the 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 companies, for the year ended March 31, 2014.

The statement pursuant to the above referred circular is annexed on page no. 99 of the Abridged Annual Report and page no. 249 of the full version Annual Report.

The audited financial statements of each of its subsidiaries are available for inspection at the Company''s registered office and the registered office of the respected subsidiary companies. Copies of the annual accounts of the subsidiary companies will also be made available to the investors of Bharti Airtel and those of the subsidiary companies upon request.

Abridged Financial Statements

In terms of the provision of Section 219(1)(b)(iv) of the Companies Act, 1956 and Clause 32 of the Listing Agreement, the Board of Directors has decided to circulate the Abridged Annual Report containing salient features of the balance sheet and statement of profit & loss and other documents to the shareholders for the FY 2013-14, who have not registered their e-mail id. Full version of the Annual Report will be available on the Company''s website, www.airtel.com, and will also be made available to investors upon request. To support the green initiative of the Ministry of Corporate Affairs and in accordance with the provisions of Companies Act, 2013, the Company has also decided to send all future communications, including the Annual Report, through email to those shareholders, who have registered their email id with their depository participant / Company''s registrar and share transfer agent. If a shareholder wishes to receive a printed copy of such communications, he / she may please send a request to the Company, which will send a printed copy of the communication to the shareholder. The shareholders are hereby requested to kindly update their email ids with the Registrar and share transfer agent (RTA) and respective Depository Participants (DPs).

Management Discussion & Analysis Report

Management''s Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming a part of the Annual Report.

Corporate Governance

A detailed report on Corporate Governance, pursuant to the requirements of Clause 49 of the Listing Agreement, forms part of the Annual Report. However, in terms of the provision of Section 219(1)(b)(iv) of the Companies Act, 1956 and Clause 32 of the Listing Agreement, the Abridged Annual Report, excluding this report, has been sent to the Company''s members. Members who desire to obtain the full version of the report may write to the Company Secretary at the registered office address and will be provided with a copy of the same. A certificate from M/s. S. R. Batliboi & Associates LLP, Chartered Accountants, Gurgaon, the Statutory Auditors of the Company, confirming compliance of conditions of Corporate Governance, as stipulated under Clause 49, is annexed to the report as Annexure A.

Corporate Social Responsibility & Sustainability and Business Responsibility Report

At Bharti Airtel, Corporate Social Responsibility (CSR) encompasses much more than social outreach programmes. It lies at the heart of the Company''s business operations. Detailed information on the Company''s CSR initiatives is provided in this Annual Report''s CSR section and the Business Responsibility Report.

SEBI, vide its Circular CIR/CFD/DIL/8/2012 dated August 13, 2012, mandated the top 100 listed entities, based on market capitalisation at BSE and NSE, to include Business Responsibility Report as a part of the Annual Report describing the initiatives taken by the companies from Environmental, Social and Governance perspective.

Accordingly, a detailed report on Corporate Social Responsibility and Business Responsibility Report forms a part of the Annual Report. However, in terms of the Section 219(1)(b)(iv) of the Companies Act, 1956 and Clause 32 of the Listing Agreement, the Abridged Annual Report, excluding this report, will be sent to the Company''s members. Members who desire to obtain the full version of the report may write to the Company Secretary at the registered office address and will be provided with a copy of the same.

Sustainability Journey

Sustainability initiatives have been integral to the Company''s journey since inception. The last three years witnessed the Company adding a more comprehensive and structured sustainability plan with active co-operation of all stakeholders. The objective is to benefit our community and the planet through all our operations and engagements. Bharti Airtel is strengthening its efforts on issues like climate change, employee engagement, waste management, digital inclusion and impact on communities, among many others.

The Company is committed to maintain the highest standards of governance, safety and environmental performance across the value chain.

An update on the sustainability journey of the Company forms part of the Corporate Social Responsibility and Sustainability report. The detailed sustainability report for the year 2012-13 is available on the website of the Company and can be viewed by clicking the hyperlink "http://www.airtel.in/sustainability".

Statutory Auditors

The Company''s Statutory Auditors, M/s. S. R. Batliboi & Associates LLP, Chartered Accountants, Gurgaon, will retire at the conclusion of the ensuing Annual General Meeting.

In terms of provisions of Section 139 of the Companies Act, 2013 and Companies (Audit and Auditors) Rules, 2014, the Statutory Auditors (including Associate Audit Firm) can be appointed for a maximum term of 10 years which shall be inclusive of the existing tenure completed by such Statutory Auditors.

Since, M/s. S. R. Batliboi & Associates LLP, Chartered Accountants has completed 7 years as Statutory Auditors of the Company, it is proposed to re-appoint them for a further term of 3 consecutive years from the conclusion of the ensuing Nineteenth Annual General Meeting to the conclusion of Twenty-Second Annual General Meeting subject to ratification by the shareholders at every Annual General Meeting.

The Company has received letters from the Auditors to the effect that their appointment, if made, shall be in accordance with the conditions as prescribed in the rule 4 of the Companies (Audit and Auditors) Rules, 2014, and that they are not disqualified for appointment within the meaning of Section 139 and 141 of the Companies Act, 2013.

Auditors'' Report

The Board has duly examined the Statutory Auditors'' Report to the accounts, which is self-explanatory. Clarifications, wherever necessary, have been included in the Notes to Accounts section of the Annual Report.

As regards the comments under para i(a) of the annexure to the Independent Auditors'' Report regarding updation of quantitative and situation details relating to certain fixed assets, the Company has initiated a comprehensive project with the involvement of technical experts, to deploy automated tools and processes which will enable near real- time tracking and reconciliation of fixed assets. This project will be spread over two years.

Cost Auditors

The Board, on the recommendation of the Audit Committee and subject to the rules to be notified by the Ministry of Corporate Affairs (MCA) in this regard, has approved the appointment of M/s. R. J. Goel & Co., Cost Accountants, as Cost Auditor for the financial year ending March 31, 2015. The Cost Auditors will submit their report for the financial year ending 2013-14 on or before the due date.

In accordance with the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, since the remuneration payable to the Cost Auditors is required to be ratified by the shareholders, the Board recommends the same for the approval by the shareholders at the Annual General Meeting.

Secretarial Audit Report

The Company had appointed M/s. Chandrasekaran Associates, Company Secretaries, New Delhi, to conduct its Secretarial Audit for the financial year ended March 31, 2014. The Secretarial Auditors have submitted their report confirming the compliance with all the applicable provisions of various corporate laws. The Secretarial Audit Report is provided separately in the Annual Report. However, in terms of the provision of Section 219(1)(b)(iv) of the Companies Act, 1956 and Clause 32 of the Listing Agreement, the Abridged Annual Report, excluding this annexure, will be sent to the Company''s members. Members who desire to obtain this information may write to the Company Secretary at the registered office address and will be provided with a copy of the same.

Particulars of Employees

The information, as required to be provided in terms of Section 217(2A) of the Companies Act, 1956, read with Companies (Particular of Employees) Rules, 1975, have been set out in the enclosed annexure to this report. In terms of the provision of Section 219(1)(b)(iv) of the Companies Act, 1956 and Clause 32 of the Listing Agreement, the Abridged Annual Report that has been sent to the Company''s members does not contain the same. Members who desire to obtain this information may write to the Company Secretary at the registered office address and will be provided with a copy of the same.

Energy Conservation, Technology Absorption, and Foreign Exchange Earnings and Outgo

Being a service providing organisation, most of the information of the Company, 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 not applicable. However, the information, as applicable, has been given in Annexure B to this report.

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. The applicable accounting standards have been followed, along with proper explanation relating to material departures, in the preparation of the annual accounts for the year ended March 31, 2014.

II. They have selected and applied consistently and made judgments and estimates that are reasonable and prudent to give a true and fair view of the Company''s state of affairs and profits, as at the end of the financial year.

III. They have taken proper and sufficient care to maintain adequate accounting records in accordance with the provisions of the Companies Act, 1956, and to safeguard the Company''s assets and to prevent and detect fraud and other irregularities.

IV. They have prepared the annual accounts on a going concern basis.

Acknowledgements

Your Directors wish to place on record their appreciation to the Department of Telecommunications (DoT), the Central Government, the State Governments in India, Government of Bangladesh, Government of Sri Lanka and Governments in the 17 countries in Africa, Company''s Bankers and business associates, for the assistance, co-operation and encouragement they extended to the Company. The Directors also extend their appreciation to the employees for their continuing support and unstinting efforts in ensuring an excellent all-round operational performance. The Directors would like to thank various partners, viz. Bharti Telecom Limited, Singapore Telecommunications Ltd. and other shareholders for their support and contribution. We look forward to their continued support in future.

For and on behalf of the Board

Date: April 29, 2014 Sunil Bharti Mittal

Place: Gurgaon Chairman


Mar 31, 2013

Dear Shareholders,

The Directors have pLeasure in presenting the 18th AnnuaL Report on the Company''s business and operations, together with the audited financiaL statements for the year ended March 31, 2013.

Company Overview

Bharti AirteL continued to be among the top four mobiLe service providers gLobaLLy with presence in 20 countries, incLuding India, Sri Lanka, BangLadesh and 17 countries in the African continent. The Company''s diversified service range incLudes mobiLe, voice and data soLutions using 2G, 3G and 4G technoLogies. Its service portfoLio aLso comprises an integrated suite of teLecom soLutions to its customers, besides providing Long-distance connectivity in India, Africa and rest of the worLd. The Company aLso offers DigitaL TV and IPTV services in India.

ALL these services are rendered under a unified brand ''airteL'', either directLy or through subsidiary companies. The Company aLso depLoys, owns and manages passive infrastructure pertaining to teLecom operations through its subsidiary, Bharti InfrateL Limited, which owns 42% of Indus Towers Limited. Together, Bharti InfrateL and Indus Towers are the Largest passive infrastructure service providers in India.

Financial Results

In Line with the statutory guideLines, the Company has adopted InternationaL FinanciaL Reporting Standards (IFRS) for accounts consoLidation from FY 2010-11. ConsoLidated and standaLone financiaL highLights of the Company''s operations are as foLLows:

Consolidated Financial Highlights (IFRS)

Particulars FY 2012-13 FY 2011-12

Rs. Millions USD Millions* Rs. Millions USD Millions*

Gross revenue 803,112 14,754 714,508 14,937

EBITDA 248,704 4,569 237,123 4,957

Cash profit from operations before derivatives and forex fluctuations 208,008 3,821 204,836 4,282

Earnings before taxation 49,820 915 65,183 1,363

Net profit 22,757 418 42,594 890

* 1 USD = Rs. 54.43 Exchange Rate for financiaL year ended March 31, 2013 (1 USD = Rs. 47.84 for financiaL year ended March 31, 2012).

Standalone Financial Highlights (IGAAP)

Particulars FY 2012-13 FY 2011-12

Rs. Millions USD Millions* Rs. Millions USD Millions*

Gross revenue 453,509 8,332 416,038 8,696

EBITDA 149,633 2,749 143,016 2,989

Cash profit from operations after derivatives and forex fluctuations 132,815 2,440 128,722 2,691

Earnings before taxation 64,548 1,186 69,562 1,454

Net profit 50,963 936 57,300 1,198

* 1 USD = Rs. 54.43 Exchange Rate for financial year ended March 31, 2013 (1 USD = Rs. 47.84 for financial year ended March 31, 2012).

The financial results and the results of operations have further been discussed in detail in the Management Discussion and Analysis section.

Share Capital

During the year, there was no change in the Company''s issued, subscribed and paid-up equity share capital. On March 31, 2013, it stood at Rs. 18,987,650,480, divided into 3,797,530,096 equity shares of Rs. 5 each.

General Reserve

An amount of Rs. 3,830 Mn has been transferred to the General Reserve out of Bharti Airtel''s total standalone profit of Rs. 50,963 Mn for the financial year ended March 31, 2013.

Dividend

The Board recommends a final dividend of Rs. 1 per equity share of Rs. 5 each (20% of face value) for the financial year 2012-13. The total dividend payout will amount to Rs. 3,798 Mn excluding tax on dividend. The payment of dividend is subject to the approval of the shareholders in the Company''s ensuing Annual General Meeting.

Transfer of Amount to Investor Education and Protection Fund

Since the Company declared its maiden dividend in August 2009 for the FY 2008-09, no unclaimed dividend is due for transfer to Investor Education and Protection Fund.

Fixed Deposits

The Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding, as on the balance sheet closure date.

Capital Market Ratings

As on March 31, 2013, Bharti Airtel is rated by two domestic rating agencies, namely CRISIL and ICRA, and two international rating agencies, viz. Fitch Ratings and S&P.

- CRISIL and ICRA revised their long-term ratings of the Company. Currently, they rate the Company at [CRISIL] AA /[ICRA] AA with a stable outlook. Short-term ratings were reaffirmed at the highest end of the rating scale at [CRISIL] A1 /[ICRA] A1

- Fitch Ratings and S&P reaffirmed their respective ratings at BBB- with negative outlook and BB with stable outlook

Employee Stock Option Plan

The Company presently has two Employee Stock Option (ESOP) schemes, namely the (Employee Stock Option Scheme 2001) and the Employee Stock Option Scheme 2005. Besides attracting talent, the Schemes also helped to retain talent and experience.

Both the above mentioned ESOP schemes are presently administered through a Trust, whereby the shares held/ acquired by the Trust are transferred to the employees upon exercises of stock options as per the terms of the Scheme.

In view of the recent CircuLar issued by SEBI, the Company stopped acquiring further shares from the open market toward appropriation of the same for the ESOP scheme 2005. The shares acquired/heLd by the Trust prior to the circuLar wiLL be utiLised to administer the above schemes in accordance with the appLicabLe reguLations.

The ESOP Compensation Committee, constituted in accordance with the Securities and Exchange Board of India (EmpLoyee Stock Option Scheme and EmpLoyee Stock Purchase Scheme) GuideLines, 1999 (the SEBI GuideLines), administers and monitors the Company''s ESOP schemes. The appLicabLe discLosures as stipuLated under the SEBI GuideLines, as on March 31, 2013, are 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 impLementation of the Company''s ESOP schemes, wouLd be pLaced before the sharehoLders at the ensuing AnnuaL GeneraL Meeting. A copy of the same wiLL aLso be avaiLabLe for inspection at the Company''s registered office.

Branding

FY 2012-13 was marked by significant achievements on the brand front. Strategic repositioning of brand airteL was acceLerated to make it younger, LiveLier and better connected. The brand foLLowed a coherent strategy for a younger and fresher brand anchored in the ''Friendship'' communication territory.

In India, various advertisement campaigns, incLuding Har Friend Zaroori, Jo Mera Hai TV CommerciaL and others enhanced the popuLarity of brand airteL further. AirteL Rising Stars gained more popuLarity in 2012, as it engaged the youth across India, Sri Lanka and BangLadesh. Our association with Manchester United was Leveraged, aLLowing young peopLe to go for training at the Manchester Soccer SchooL Academy, UK. In 2012, Bharti AirteL heLped ingrain the Love for F1 sport in the minds of the Indian audience through the stars MichaeL Schumacher and Nico Rosberg.

In Africa, Innovative trade branding tooLkits were successfuLLy roLLed out in aLL countries. During the year, over 650,000 square metres of waLL branding were compLeted, and Picture of Success (PICOS) roLLed out in over 231,000 retaiL outLets, 625 express shops and about 6,000 pan-Africa extra outLets. The Company aLso created airteL Smartphones Logo for device merchandising, which was impLemented in 13 countries. ARS Africa Championship, the Largest and first-of-its-kind youth soccer tournament for boys and girLs in the continent, was successfuLLy inaugurated in Nairobi, Kenya. As many as 15 countries participated in the event, which was endorsed and flagged off by the Kenyan Prime Minister. The Company roLLed out airteL FootbaLL TV Show on DSTV, which premiered on the popuLar SuperSport channeL. It aLso Launched digitaL pLatforms for consumer engagement via airteL-footbaLL.com and facebook.com/AirteLFootbaLL.

The Company compLeteLy revamped its internet and sociaL media presence. This initiative heLped increase its community sizes by more than 600% to over 7 Mn and created one of India''s buzziest and most engaging sociaL media brands.

Brand airteL was ranked as No. 1 among the service brands in 2012 by Brand Equity''s Most Trusted Brand Survey. It aLso won severaL awards, incLuding seven Abbies at GoaFest, four Effies, three BLoomberg Brand Leadership awards, CNN- IBN''s Brand of the Year award, Yahoo''s 360 Campaign of the Year award, agency faq''s third Buzziest Indian Brand and so on. Bharti AirteL captured the numero uno position among teLecom brands in Economic Times'' Brand Trust ratings. It aLso entered the FinanciaL Times London''s List of Top 100 GLobaL Brands. The Nigeria HaLf DoLLar campaign was Listed as a finaList in the Facebook Studio Awards.

Major Agreements and Alliances

The Company signed the foLLowing key agreements/aLLiances in the year under review with:

- Ericsson for Access Agnostic Packet Core catering to 2G, 3G and, in Future, 4G customers in aLL countries of Africa

- HP to provide CLoud-enabLed pLatform (CLEP) to offer CLoud-based services across aLL geographies in Africa

- Ceragon, NSN and Ericsson for suppLy and instaLLation of Trunk Microwave to create high-capacity backbones across aLL geographies in Africa

- Huawei and Ericsson for IN system to impLement Latest features, hardware modernisation and geographicaL redundancy in India

- Cisco and ALcateL Lucent (using Ruckus technoLogy) to depLoy Wi-Fi hotspots in high footfaLL areas in top Indian cities

- Spirent, AgiLent TechnoLogies, Rohde & Schwarz, JDSU and IXIA WirteL to augment our state-of-the-art, in- house vaLidation Laboratory capabiLities for India

- Microsoft to Launch Office 365 (O365) product for its subscribers in India through airteL CLoud EnabLement PLatform

- TURNER for two new advertisement-free channeLs on airteL digitaL TV in India, nameLy HBO Hits and HBO Defined, to deLiver a new, premium movie-viewing experience to the subscribers

- SAREGAMA and Timbre Media to provide 12 radio channeLs for iMusicspace service on airteL digitaL TV to enabLe genre-wise music-Listening experience to the subscribers

New Products/Initiatives

During the year under review, the Company Launched various new and innovative products and services, directLy as weLL as through its subsidiaries. These offerings enabLed it to strengthen its Leadership in an intenseLy competitive market. Some of the key Launches/initiatives across geographies during the year in retrospect are discussed beLow.

India

Superior customer experience has been at the heart of aLL initiatives and products that were Launched during the year. The Company''s presence across pLatforms - 2G, 3G, 4G and DSL - enabLes our customers to experience data across screens. For improved data experience, we Launched near reaL-time GPRS usage monitoring tooL and, thereby reduced customer compLaints.

To improve pLatinum and soLitaire customer satisfaction, the Company initiated severaL focused programmes Like priority access at caLL centres and offering attractive deaLs and discounts.

With our focus on customer convenience, adding non-traditionaL channeLs of contact became a focus area. We have estabLished our presence across popuLar sociaL networking sites and onLine forums.

During 2012-13, we undertook several key initiatives including the following:

- Launched 4G services in Pune, foLLowed by Chandigarh, taking the totaL number of cities with 4G services to four (BangaLore, KoLkata, Pune and Chandigarh)

- DeveLoped Apps and Games Store with APPIA, which is ranked third gLobaLLy as an Apps and games Store, and heLped consumers downLoad data; a maximum of 100,000 downLoads were performed in a day

- Launched HD gaming, offering high-definition games for smartphones Like android and 3G devices

- Launched airteL Live Wap portaL in Hindi to open up the worLd of internet for even a Larger number of consumers

- CoLLaborated strategicaLLy with Opera Browser to enhance MobiLe Internet browsing experience on 2G networks

- Integrated BiLLing API with Nokia Store to heLp customers pay from their airteL waLLet and downLoad apps and games from Nokia Store

- Launched mBazaar, a unique service, which uses an innovative business modeL of Lead generation to provide a market pLace to customers and enabLes an unLimited search and deaLs at the Location nearest to them at a very nominaL price

- Introduced RuraL PortaL - a first-of-its-kind innovative service catering to the ruraL segment

- Launched the unique Emergency ALerts service to enabLe subscribers send instant and automatic aLerts

- Introduced new innovative services in the DTH business; added recording faciLity on High Definition (HD) boxes to heLp a customer record content on USB drives, whiLe watching his/her favourite channeL on High Definition (HD) Set Top Boxes and DigitaL Video Recorders (DVR) with 3D capabiLities

- Introduced iExam with content on Bank PO, MBA, MedicaL, CLass 8th, 9th and 10th exams

- Opened up money transfer through airteL money to any bank account in India on the non-KYC Express waLLet, aLong with P2P transfers to any other airteL money account

- Partnered with Axis Bank to Launch the Super Account in May 2012 to heLp customers save and earn interest on their airteL money account, as weLL as cash-out according to their requirement

Africa

- Implemented Cloud Portal (without Billing) for Nigeria

- Introduced 64K SIM Standardisation in 14 countries to ensure higher capacity SIM card avaiLabiLity to increase VAS content for the subscriber and to standardise SIM card profiLes across the African countries

- ImpLemented Doctor on CaLL in MaLawi to give customers the opportunity to consuLt doctors over mobiLe phone

- Launched BB10 in Nigeria, making it the first country to introduce this BLackBerry device that offers new Look and feeL and provides a different BLackBerry experience; the operator''s infrastructure, as weLL as the way the BLackBerry services wiLL be packaged and commerciaLised are aLso different

Other Developments

During the year, Bharti InfrateL Limited, the Company''s subsidiary, made an InitiaL PubLic Offering (IPO) through book buiLding process. The subsidiary raised Rs. 32,303 Mn from the fresh issue of 146.2 Mn equity shares at an average price of Rs. 220.90 per share of face vaLue Rs. 10 each. Bharti InfrateL''s shares were Listed on December 28, 2012, on NSE and BSE.

Directors

During the year under review w.e.f. September 06, 2012, Lord Evan Mervyn Davies and H.E. Dr. SaLim Ahmed SaLim and w.e.f. September 26, 2012, Mr. AkhiL Gupta, Mr. Rakesh Bharti MittaL and Mr. Hui Weng Cheong ceased to be the Directors and Mr. N. Kumar retired from the Board w.e.f. February 01, 2013. The Directors pLace on record their appreciation for the heLp, guidance and contribution made by them during their tenure as Directors.

Ms. ObiageLi EzekwesiLi and Mr. Manish KejriwaL were appointed as AdditionaL Directors w.e.f. September 26, 2012. They wiLL cease to hoLd office at the forthcoming AnnuaL GeneraL Meeting and are eLigibLe for re-appointment. The Company has received notices from members under Section 257 of the Companies Act, 1956, proposing the appointment of Ms. ObiageLi EzekwesiLi and Mr. Manish KejriwaL as the Company''s Non-Executive Directors. The Board recommends their appointment.

Mr. Manoj KohLi and Mr. GopaL VittaL were aLso appointed as Managing Director and Joint Managing Director, respectiveLy, of the Company for a period of five years w.e.f. February 01, 2013. The approvaL of the members was obtained for this through postaL baLLot notice dated February 1, 2013.

Ms. Tan Yong Choo, Mr. Ajay LaL and Mr. PuLak Prasad retire by rotation at the forthcoming AnnuaL GeneraL Meeting. Ms. Tan Yong Choo and Mr. Ajay LaL, being eLigibLe, have offered themseLves for re-appointment. In terms of the poLicy on Independent Directors adopted by the Board, Mr. PuLak Prasad, Independent Director, has compLeted his term of office and does not seek re-appointment for succeeding term in the ensuing AnnuaL GeneraL Meeting.

A brief resume of the Directors proposed to be appointed/ re-appointed, as stipulated under CLause 49 of the Listing Agreement with the Stock Exchanges, is appended as an annexure to the Notice of the ensuing Annual General Meeting.

Subsidiary Companies

As on March 31, 2013, your Company has 119 subsidiary companies, as set out in page no. 227 of the Annual Report (for abridged Annual Report please refer page no. 87).

Pursuant to the 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 companies, for the year ended March 31, 2013.

Annual accounts of these subsidiary companies, along with related information, are available for inspection at the Company''s registered office and the registered office of the respected subsidiary companies. Copies of the Annual Report of the subsidiary companies will also be made available to the investors of Bharti Airtel and those of the subsidiary companies upon request.

The statement pursuant to the above referred circular is annexed on page no. 93 of the Abridged Annual Report and page no. 234 of the fuU version Annual Report.

Abridged Financial Statements

In terms of the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Board of Directors has decided to circulate printed copy of the Abridged Annual Report containing salient features of the balance sheet and the statement of profit & Loss to the shareholders for the financial year 2012-13, who have not registered their email id. Full version of the Annual Report will be available on the Company''s website, www.airtel.com, and wiU be sent to the investors by email. To support the green initiative of the Ministry of Corporate Affairs, the Company has also decided to send all communications, including the Annual Report, through email to those shareholders, who have registered their email id with their depository participant/Company''s registrar and share transfer agent. If a shareholder wishes to receive a printed copy of such communications, he/she may please send a request to the Company, the same wiU be sent a printed copy of the communication.

Management Discussion & Analysis Report

Management''s Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming a part of the Annual Report.

Corporate Governance

The Company is committed to maintain the highest standards of Corporate Governance. The Company adhere to the requirements set out by SEBI''s Corporate Governance practices. The Company has implemented aU the stipulations prescribed.

A detailed report on Corporate Governance, pursuant to the requirements of Clause 49 of the Listing Agreement, forms a part of the Annual Report. However, in terms of the provisions of Section 219(1)(b)(iv) of the Act and Clause 32 of the Listing Agreement, the abridged Annual Report, excluding this report, wiU be sent to the Company''s members. Members who desire to obtain the fuU version of the report may write to the Company Secretary at the registered office address and will be provided with a copy of the same. A certificate from the Company''s Auditors, M/s. S. R. BaUiboi & Associates LLP, Chartered Accountants,Gurgaon, confirming compliance of conditions of Corporate Governance, as stipulated under Clause 49, is annexed to the report as Annexure A.

Corporate Social Responsibility and Business Responsibility Report

At Bharti Airtel, Corporate Social Responsibility (CSR) encompasses much more than social outreach programmes. It lies at the heart of the Company''s business operations. Detailed information on the Company''s CSR initiatives is provided in this Annual Report''s CSR section and the Business Responsibility Report.

SEBI, vide its Circular CIR/CFD/DIL/8/2012 dated August 13, 2012, mandated the top 100 listed entities, based on market capitalisation at BSE and NSE, to include Business Responsibility Report as a part of the Annual Report describing the initiatives taken by the companies from Environmental, Social and Governance perspective.

Accordingly, a detailed report on Corporate Social Responsibility and Business Responsibility Report forms a part of the Annual Report. However, in terms of the provisions of Section 219(1)(b)(iv) of the Act and Clause 32 of the Listing Agreement, the Abridged Annual Report, excluding this report, wiU be sent to the Company''s members. Members who desire to obtain the fuU version of the report may write to the Company Secretary at the registered office address and wiH be provided with a copy of the same.

Sustainability Journey

Sustainability initiatives have been integral to the Company''s journey since inception. The last two years witnessed the Company adding a more comprehensive and structured sustainability plan with active cooperation of all stakeholders. The objective is to benefit our community and the planet through all our operations and engagements. Bharti Airtel is strengthening its efforts on issues like climate change, employee engagement, waste management, digital inclusion and impact on communities, among many others. The Company is committed to maintain the highest standards of governance, safety and environmental performance across the value chain. The Company released its first sustainability report 2012 highlighting its various initiatives. The Company''s first sustainability report is available on the website of the Company and can be accessed at http://www. airtel.in/sustainability/

Statutory Auditors

The Company''s Statutory Auditors, M/s. S. R. BatLiboi & Associates LLP, Chartered Accountants, Gurgaon, retire at the conclusion of the Company''s ensuing Annual General Meeting and have confirmed their willingness and eligibility for re-appointment.

The Company has received letters from the Auditors to the effect that their re-appointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956, and that they are not disqualified for re-appointment within the meaning of Section 226 of the said Act.

Auditors'' Report

The Board has duly examined the Statutory Auditors'' Report to the accounts, which is self explanatory. Clarifications, wherever necessary, have been included in the Notes to Accounts section of the Annual Report.

As regards the comments under para i(a) of the annexure to the Independent Auditors'' Report regarding updation of quantitative and situation details relating to certain fixed assets, the Company has strengthened its processes whereby the fixed assets register for new assets is being updated for the quantitative and situation details on a real time basis. The Company has made significant progress in updation of the situation details for majority of the sites for past period capitalisation, and intends to complete the site wise updation of quantitative details as per the ongoing physical verification plan.

Cost Auditors

Pursuant to the direction of the Central Government, the Company has appointed M/s. R. J. Goel & Co., Cost Accountants, as Cost Auditors for FY 2013-14. The Cost Auditors wiU submit their report for FY 2012-13 to the Government on or before the due date.

Secretarial Audit Report

The Company has appointed M/s. Chandrasekaran Associates, Company Secretaries, New Delhi, to conduct its Secretarial Audit for the financial year ended March 31, 2013. The Auditors have submitted their report confirming compliance with all the applicable provisions of various corporate laws. The Secretarial Audit Report is provided separately in the Annual Report. In terms of the provisions of Section 219(1)(b)(iv) of the Act and Clause 32 of the Listing Agreement, the abridged Annual Report, excluding this annexure, wiU be sent to the Company''s members. Members who desire to obtain this information may write to the Company Secretary at the registered office address and wiU be provided with a copy of the same.

Particulars of Employees

The information, as required to be provided in terms of Section 217(2A) of the Companies Act, 1956, read with Companies (Particular of Employees) Rules, 1975, have been set out in the annexure to this report. In terms of the provisions of Section 219(1)(b)(iv) of the Act and Clause 32 of the Listing Agreement, the Abridged Annual Report, excluding this annexure, wiU be sent to the Company''s members. Members who desire to obtain this information may write to the Company Secretary at the registered office address and will be provided with a copy of the same.

Energy Conservation, Technology Absorption, and Foreign Exchange Earnings and Outgo

Being a service providing organisation, most of the information of the Company, 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 not applicable. However, the information, as applicable, has been given in Annexure B to this report.

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. The applicable accounting standards have been followed, along with proper explanation relating to material departures, in the preparation of the annual accounts for the year ended March 31, 2013.

II. They have selected and applied consistently and made judgments and estimates that are reasonable and prudent to give a true and fair view of the Company''s state of affairs and profits, as at the end of the financial year.

III. They have taken proper and sufficient care to maintain adequate accounting records in accordance with the provisions of the Companies Act, 1956, and to safeguard the Company''s assets and to prevent and detect fraud and other irregularities.

IV. They have prepared the annual accounts on a going concern basis.

Acknowledgements

Your Directors wish to place on record their appreciation to the Department of Telecommunications (DoT), the Central Government, the State Governments in India, Government of Bangladesh, Government of Sri Lanka and Governments in the 17 countries in Africa, Company''s Bankers and business associates, for assistance, co-operation and encouragement they extended to the Company. The Directors also extend their appreciation to the employees for their continuing support and unstinting efforts in ensuring an excellent all- round operational performance. The Directors would like to thank various partners, viz. Bharti Telecom, Singapore Telecommunications Ltd. and other shareholders for their support and contribution. We look forward to their continued support in future. For and on behalf of the Board

Date: May 2, 2013 Sunil Bharti Mittal

Place: New Delhi Chairman


Mar 31, 2012

The Directors have pleasure in presenting the seventeenth annual report on the business and operations of the Company together with the audited financial statements for the year ended March 31, 2012.

OVERVIEW

Bharti Airtel is one of the world's leading providers of telecommunication services with presence in 20 countries including India, Sri Lanka, Bangladesh and 17 countries in the African continent. The Company served an aggregate of 251.65 Mn customers as on March 31, 2012 providing mobile, voice and data solutions using 2G, 3G and 4G technologies. In terms of number of wireless customers, the Company is among the top 5 in the world. The Company provides fixed line voice and data solutions to 3.3 Mn customers in 87 cities in India. The Company also offers an integrated suite of telecom solutions to its enterprise customers, in addition to providing long distance connectivity in India, Africa and rest of the world. The Company also offers Digital TV and IPTV Services in India.

All these services are rendered under a unified brand "airtel" either directly or through subsidiary companies. The Company also deploys, owns and manages passive infrastructure pertaining to telecom operations under its subsidiary, Bharti Infratel Limited that owns 42% of Indus Towers Limited. Together, Bharti Infratel and Indus Towers are the largest passive infrastructure service providers in India.

FINANCIAL RESULTS AND RESULTS OF OPERATIONS

In line with the amended statutory guidelines, the Company has adopted IFRS (International Financial Reporting Standards) for consolidation of accounts from the financial year 2010-11 onwards. Consolidated and Standalone financial highlights of the operations of the Company are as follows:

Consolidated Financial Highlights

(Rs Millions)

Particulars Financial Year Y-o-Y Growth 2011-12 2010-11

Gross revenue 714,508 595,383 20%

EBITDA 237,123 200,718 18%

Cash profit from operations 198,939 178,905 11%

Earnings before taxation 65,183 76,782 -15%

Net profit/(loss) 42,594 60,467 -30%

The Company publishes its standalone accounts as per Indian Generally Accepted Accounting Principles.

Standalone Financial Highlights:

(Rs Millions)

Particulars Financial Year Y-o-Y Growth 2011-12 2010-11

Gross revenue 416,038 380,177 9%

Cash profit from operations 128,722 133,374 -3%

Earnings before taxation 69,562 87,258 -20%

Net profit/(loss) 57,300 77,169 -26%

LIQUIDITY

The Company generates healthy operational cash flows and maintains sufficient cash and financing arrangements to meet its strategic objectives. It deploys a robust cash management system to ensure timely servicing of its liquidity obligations. The Company has also been able to arrange for adequate liquidity at an optimized cost to meet its business requirements and has minimized the amount of funds tied-up in the current assets.

As of March 31, 2012, the Company has cash and cash equivalents of Rs. 20,300 Mn and short term investments of Rs. 18,132 Mn. During the year ended March 31, 2012, the Company generated operating free cash flow of Rs. 101,319 Mn. The net debt - EBITDA ratio as on March 31, 2012 was at 2.56 and the net debt - equity ratio was at 1.29. The net debt in USD terms decreased from USD 13,427 Mn as on March 31, 2011 to USD 12,714 Mn as on March 31, 2012.

The Company manages the short-term liquidity to generate optimum returns by deploying surpluses albeit only in the debt and money market instruments including in high rated liquid and income debt fund schemes, fixed maturity plans, bank fixed deposits and other similar instruments.

The Company is comfortable with its present liquidity position and foreseeable liquidity needs. It has adequate facilities in place and robust cash flows to meet liquidity requirements for executing its business plans and meeting with any evolving requirements. The Company also enjoys strong access to capital markets across debt, equity and hybrids.

GENERAL RESERVE

Out of the total profit of Rs. 57,300 Mn on a standalone basis of Bharti Airtel Limited for the financial year ended March 31, 2012, an amount of Rs. 4,300 Mn has been transferred to the General Reserve.

DIVIDEND

The Board recommends a final dividend of Rs. 1 per equity share of Rs. 5 each (20% of face value) for the financial year 2011-12. The total dividend payout inclusive of Rs. 616 Mn as tax on dividend, will amount to Rs. 4,414 Mn. The payment of dividend is subject to the approval of the shareholders at the ensuing annual general meeting of the Company.

SUBSIDIARY COMPANIES

As on March 31, 2012, the Company has 123 subsidiaries as set out in page no. 225 of the annual report (for abridged annual report please refer page no. 73).

Pursuant to the 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 companies for the year ended March 31, 2012.

Annual accounts of these subsidiary companies, along with related information are available for inspection at the Company's registered office and the registered office of the respective subsidiary companies. Copies of the annual accounts of the subsidiary companies will also be made available to Bharti Airtel's investors and subsidiary companies' investors upon request.

The statement pursuant to the above referred circular is annexed as part of the Notes to Consolidated Accounts of the Company on page no. 231 of the annual report (for abridged annual report please refer page no. 77).

ABRIDGED FINANCIAL STATEMENTS

In terms of the provisions of section 219(1)(b)(iv) of the Companies Act, 1956, the Board of Directors have decided to circulate the abridged annual report containing salient features of the balance sheet and statement of profit & loss to the shareholders for the financial year 2011-12. Full version of the annual report will be available on Company's website www.airtel.in and will also be made available to investors upon request.

In support of the green initiative of the Ministry of Corporate Affairs, the Company has also decided to send the annual report through email to those shareholders who have registered their email id with their depository participant/Company's registrar & share transfer agent. In case a shareholder wishes to receive a printed copy, he/she may please send a request to the Company, which will send a printed copy of the annual report to the shareholder.

QUALITY

Deeply embedded in Bharti's DNA, operational excellence is pivotal to reinforce competitive advantage through a culture of process enhancements and elimination of non-conformances. Bharti has set a strong culture emphasizing quality based on foundations of constant customer focus, profitability and stability.

The quest for operational excellence is further strengthened by the unique strategy-to-success framework, comprising of six inter-related quality initiatives that accelerate process re-engineering through radical process re-design based on customer voice.

All our processes are continually assessed by external consultants leading to Certifications like TL9000, BCP DR (Business Continuity Process & Data Redundancy), ISO 27001, OHSAS (Occupational Health and Safety Advisory Services).

The Company's zest towards operational and business excellence has been recognized through Golden Peacock award for corporate excellence established by the Institute of Directors in 1992 to honour and recognize unique achievements in corporate excellence.

BRANDING

The year 2011-12 was marked by significant achievements on the brand front as airtel strengthened its position as a youth brand. The Company yet again captured the imagination of the nation with the high impact Har Friend Zaroori Hai (HFZ) brand campaign that was launched in August 2011. Apart from positioning airtel, the jingle touched the right chord with the customers across demographics and geographies. The brand theme positively impacted the Top of Mind Awareness scores (ToMA) and Brand preference scores. The campaign generated massive online engagement and was later enhanced in January 2012 with 20 new online commercials.

In line with the international brand positioning, Sri Lanka launched an outstanding Sinhala adaptation of HFZ, including a flash mob outside Colombo Railway Station. The campaign was also embraced by Bangladesh and built a significant connect with audiences there as well.

The association with Formula One TM for the 2011 airtel Grand Prix of India was another first for airtel. The airtel Delhi Half Marathon (ADHM) 2011 enabled us to further augment our brand position.

Moving towards epitomizing our service superiority, during the year we launched our new service campaigns, signifying our differentiated services - *121#, Instant help 24 x 7 and My Airtel My Offer customized offers.

Further at the end of the year, the pan-India launch of airtel money with the tag line- 'baat sirf paison kinahin hai' - continued airtel's quest to enrich lives of millions.

The various initiatives undertaken this year took brand airtel to greater heights and the success is evident from being named India's most trusted mobile services brand in the Economic Times Brand Equity 2011 survey. Airtel was also awarded third position in the list of top 100 Indian brands.

In Africa, we have re-positioned the brand airtel in line with the global brand strategy, to focus on the youth and to be committed to delivering fresh and exciting products and great customer experience. The first step in bringing this positioning to life has been achieved through the launch of exciting youth campaigns rolled out using local insights. More specifically, in Kenya we have rolled out the Mi ni 254 campaign, (I am '254' which is the international dialing code for Kenya). In Nigeria, we launched Club 10; in DRC, Lobo Nayo Club 10, in Burkina Faso, The Airtel Choco, in Tanzania Supa 5 campaign, and in Gabon Ndoss. All the campaigns were very youth oriented and delivered an exciting youth proposition, built around a strong CUG (Closed User Group) that offered voice, SMS and data value. The key agenda for these campaigns was to drive brand equity among this core target.

In our drive to be the market Leader on data in Africa, Airtel Africa has Launched 3G in 8 countries within a 9-month period. Airtel 3G's key communication objective was to own the Mobile Internet experience in the minds and hearts of our customers in Africa. Airtel 3G provides our customers with new ways to communicate, access to information, conduct business, learn, be entertained, live and experience different facets of their lives. We are now delivering a superior internet experience like no other in our markets and have gone a step further and introduced an innovative new product - the data recharge voucher, in Nigeria. This is a first in Africa from Airtel.

Airtel Money is the first m-commerce service in many of our markets in Africa. The communication message was simplified as: Airtel Money: Simple. Secure. Instant, and this platform was used in our educational drive to ensure customers understood what Airtel Money can do. In addition to this, we have also supported Airtel Money with a strong emotive campaign promise for the more advanced M-Commerce markets in Africa which was : with Airtel Money, we can help your money do more. This message is in line with the transformational impact of this product on the daily lives of our consumers.

In partnership with Manchester United, the Company also successfully completed the launch of Airtel Rising Stars (ARS). This is an expansive grassroots initiative for under 17s and is a tangible demonstration of our commitment to empowering the youth in Africa, by providing them with the platform to showcase their skills. Given Africa's strong support of the English Premier League, Airtel has also partnered with Arsenal Football Club to cater to the fans in Nigeria, Ghana, Rwanda, Zambia and Uganda. This second partnership, in addition to our Africa Rising Stars platform, will ensure that Airtel owns football in the minds and hearts of our consumers in Africa.

MAJOR AGREEMENT AND ALLIANCES

The Company has signed the following key agreements/alliances this year:

- With Nokia Siemens Networks, Huawei and ZTE for TD-LTE (popularly known as 4G) networks in the telecom circles of Maharashtra, Karnataka and Kolkata respectively. This would also enable a seamless data network cover between existing and this new technology.

- With Nokia Siemens Networks, Huawei and Cisco for "Unified Packet Core" in India. This high capacity packet core is access agnostic and caters to 2G, 3G, LTE (4G) customers across the country.

- With Ericsson and Nokia Siemens Networks for the Unified Managed Services contract. This has been awarded to Ericsson in 15 circles and for a part of Bangladesh; and Nokia Siemens Networks in 8 telecom circles. This will ensure seamless operations and maintenance of the mobile networks.

- With Nokia Siemens Network for Mobile Internet Browsing Solution (MIBS) and Multi Media Messaging solutions (MMSC) across all countries in Africa.

- With Alcatel Lucent, Huawei and ZTE for Carrier Ethernet (CEN - Version 2) with capability to handle IP & E1/STM Backhaul in India; with Alcatel Lucent for IP - MPLS core across all countries in Africa

- With HP to Launch Cloud Enabled Platform (CLEP).

- Extension of Managed Services contract for CRBT with Comviva and Onmobile to 9 and 7 countries in Africa, respectively. Also, Managed Services contract for VAS nodes with Comviva extended for all countries in Africa.

- With Infosys as the technology partner for m-commerce Platform in India and with Comviva for Africa.

- With Universal Music and On Mobile to Launch 'My Song My Story' on Airtel, enabling its customers to Listen to Live concerts nationally.

- With Voice Tap to Launch "Live Customer Counseling" and "NCERT Solution" on Airtel enabling students to get career counseling from experts through IVR and access NCERT study material through WAP.

NEW PRODUCTS/INITIATIVES

During the year, the Company Launched various new and innovative products and services, directly and through its subsidiaries, which enabled it to strengthen its Leadership in an intensely competitive market. Some of the key Launches of the year included:

- 3G footprint expanded to over 1,100 cities in India at end of March 2012 including 7 service areas with ICR arrangements.

- 4G services in Kolkata, based on TD-LTE technology, making India one of the first countries in the world to commercially deploy this cutting-edge technology.

- Airtel money (Semi Closed Wallet) launched nationally in February 2012, in over 300 towns across 20,000 retail outlets with an acceptance network across 7,500 merchant establishments.

- CEM (Customer Experience Management), a proactive diagnosis tool that provides a multi-dimensional end-to-end view encompassing network, device, service insights and usage behaviour.

- Prepaid Web launched on a pan India basis wherein customers can now visit www.airtel.in to access their account details including online activation, deactivation of value added services & data plans, and to raise and track service requests.

- SmartByte - 'GB on Demand'Service, where a user gets an option to buy chunks of GBs as per his/her requirement. With this service, any customer whose speed gets throttled beyond FUP (Fair Usage Policy) limit, can buy additional high speed quota on the go and enjoy browsing at a higher speed for a longer time.

- Twitter on USSD, Facebook on USSD, an innovative way of accessing Twitter/Facebook, first time in India, where airtel customers can access their Twitter/Facebook accounts for nominal charges per day even without activating data services.

- Infotainment Portal on *789#, a USSD portal which is a single destination for over 200 types of content across 40 genres.

- MO Sports, an integrated mobile sports entertainment service comprising of WAP, video, voice and MMS on subscription as well as a pay-per-consume basis.

- Comedy FM, first of its kind service innovation that empowers mobile users with the ability to get radio experience on their devices anytime, anywhere, and allows them to choose from variety of comic shows.

- iPhone 4 & iPhone 4S along with bundled data plans.

- EOCN (End of Call Notification) for all our prepaid customers' pan-India. This enables the customer to know the data consumed and balance after every such data usage session.

- Interactive services launched on Digital TV platform including:

a) iExam - an interactive application focusing on competitive exams, targeting young school/college students

b) iKids - an interactive channel for kids

c) iKissan - offering real time access to crop prices, weather information and localized farming advice

d) iDarshan - enabling customers to enjoy Live Aarti from shrines

e) iDivine & iDD - mosaic applications designed to save satellite bandwidth wherein the customer sees 4 regional DD and 4 devotional channels respectively in a mosaic format and can further select a channel of his choice basis his language/region preference.

- Hello Tunes CRBT launched in 15 African countries which allows the Airtel customer to express his/her identity in different ways.

- Music on Demand (Airtel Radio) was launched in 4 African countries and it gives the customer the opportunity to listen to any genre of music that they like any time.

- Mobile Classifieds, launched in 5 African countries, allows customers to receive several kinds of ads (car sales, job opportunity, etc) on their mobile.

- Google SMS, launched in 4 African countries, allow Airtel customers to keep their chats going by sending texts from their Gmail account to any Airtel customer and receive an instant reply for free.

- Blackberry Crosby Tiers, launched in 5 African countries, provides a low priced Blackberry service to our customers compared to the traditional BIS and BES services. This already contributes to 38% of our Blackberry customer base.

- Airtel Credit Services were launched in 11 African countries. Airtel customers can easily access airtime, in areas where no airtime distributors are available or even after working hours when airtime distributors are closed, on credit and pay for it in the next recharge.

- Call Completion services, launched in 10 African countries, allow the Airtel customer to know who called you when you are not reachable via SMS (Missed call Alert) or Voicemail. This service also allows the customer to record a voice message, which is delivered via SMS on the specified day and time.

- DDS (Dynamic Discount Solution) allows us to discount customer voice rates to increase usage in selective under- utilized sites.

- Implementation of Easy Recharge in 6 African countries which reduces paper voucher costs by providing electronic vouchers and widen the distribution network for airtime across Airtel Africa.

- Roaming Suite products were implemented in 14 African countries over the last 8 months. These address cross border roaming issues in-roamer retention and welcome SMSes. Smart Call Assistant gives the roaming customer the opportunity to call by using their current phonebook with numbers that are saved in national format. Short code service allows the customers to use their home call center by dialing the home country customer care number.

- 3G footprint expanded to 7 African countries, which has increased data usage, grown customer base as well as data revenue.

- Mobile health tips were implemented in 5 African countries and allow the customer through daily, weekly and monthly subscription to get general health tips via SMS.

- Airtel messaging allows the Airtel Africa customer to access their emails, social networks and chat services independent of the actual mobile device. Already implemented in 11 African countries.

- Airtel Africa has been granted USD 400,000 by GSMA Development Fund for a 2 year Mobile Farmer pilot for Kenya. This product will provide weather, crop and advisory services to the farming community. This is an acquisition play product.

OTHER COMPANY DEVELOPMENTS

- Bharti Airtel has expanded its footprint on the African continent by launching its services in Rwanda taking the total count to 17 countries. The Company is now present in 20 countries across the globe.

- The Company re-organized the India operations into the B2C (Business to Consumer) and B2B (Business to Business) entities to leverage inherent synergies across multiple product lines.

AWARDS & RECOGNITIONS

The Company was conferred with many awards and recognitions during the year. Some of them are listed below:

- Ranked as the No.1 Service Brand and No.3 in the overall rankings in the annual Brand Equity's Most Trusted Brands Survey.

- Telecom Center of Excellence (TCOE) Award for Service Provider with customer focus for best delivery of Network Services - for the year 2011. Instituted by Telecom Centres of Excellence (TCOE) in association with the Department of Telecommunications (DoT) and other reputed industry bodies including COAI, AUSPI and FICCI, the award is a prestigious accolade.

- 4 awards at the Telecom Operator Awards 2012 - 'Best National Mobile Operator', 'Best VAS Provider', 'Best Enterprise Services Provider and 'Best Ad Campaign by an Operator'.

- Rated as one of the top 5 best employers, by Aon Hewitt's Best Employers in India 2011 study.

- SSON Excellence Award under 'Excellence in Culture Creation 'category for Airtel Center of Excellence-Finance, RA, HR and SCM Shared Services.

- Featured amongst the Top 25 Companies globally in a study by Fortune- AON Hewitt - on 'The Best Companies for Leaders'.

- airtel Digital TV (HD) recognized as 'Product of the year 2012', through an independent survey conducted by the research firm, AC Nielsen.

- Voted as India's Best Managed IT Services Brand for Large Enterprises & SMEs by the PC Quest's annual User's Choice Club Awards 2011.

- Adjudged as the 'Top Telecom Operator', 'Top Cellular Operator' and 'Top NLD Service Provider' at the Voice & Data (V&D) 100 Awards 2011.

- 'Golden Peacock National Quality Award' for the year 2011.

- DSCI (Data Security Council of India) Excellence Award 2011 for Security in Telecom.

- Awarded in 'Customer Experience Enhancement' and 'Innovative VAS Product' categories at the ET Telecom Awards 2011.

- Adjudged as 'Enterprise Telecom Service Provider of the year', 'Wholesale Data Service Provider of the year' and 'Mobile VAS provider of the year' at the Frost & Sullivan 2011 Asia Pacific ICT Awards.

- Adjudged as 'Innovative Broadband Provider' in the CMAI Awards 2011.

- Airtel's mobile commerce product, Airtel Money, was adjudged the 'Best Mobile Money Service' in Ghana at the Mobile World Ghana Telecoms Awards.

- At the 23rd Enugu International Trade Fair in Nigeria, the Company received three awards for its outstanding performance at the fair and contribution to the development and growth of the economy of the south east region.

- The Company received The Special Jury Award for Corporate Responsibility which was given for the first time as recognition of the tremendous work done by Airtel Africa in the sphere of education for the under-privileged. This award was received during the "Annual Changemaker Award 2011" Ceremony in February 2012 in New-Delhi.

- Airtel's music campaign 'One8' was the first runner-up in the MIDEM International Trade Fair Awards in the category of the most innovative and creative music campaign.

CAPITAL MARKET RATINGS

As at March 31, 2012, Bharti Airtel Limited is rated by two domestic rating agencies, viz. CRISIL and ICRA, and two international rating agencies, viz. Fitch Ratings and S&P.

- CRISIL and ICRA have rated the Company at the top end of their rating scales, both for short term (P1 /A1 ) as well as Long term (AAA/LAAA) with Negative outlook.

- Fitch Ratings maintained its rating at BBB - but moved the outlook to negative. S&P has reaffirmed its rating at BB with Stable outlook.

SHARE CAPITAL

During the year, there was no change in the authorised, issued, subscribed and paid-up equity share capital of the Company which stood at Rs. 18,987,650,480 divided into 3,797,530,096 equity shares of Rs. 5 each as at March 31, 2012.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

In accordance with the Listing agreement requirements, the Management Discussion & Analysis report is presented in a separate section forming part of the Annual Report.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance. The Directors adhere to the requirements set out by the Securities and Exchange Board of India's Corporate Governance Practices and have implemented all the stipulations prescribed.

A detailed report on Corporate Governance pursuant to the requirements of clause 49 of the Listing agreement forms part of the annual report. However, in terms of the provisions of section 219(1)(b)(iv) of the Act, the abridged annual report has been sent to the members of the Company excluding this report. A certificate from the auditors of the Company, M/s. S.R. Batliboi & Associates, Chartered Accountants, Gurgaon confirming compliance of conditions of corporate governance as stipulated under clause 49 is annexed to the report as Annexure A.

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, the Listing agreement, the Company has voluntarily started a practice of the secretarial audit from a practicing company secretary.

The Company has appointed M/s. Chandrasekaran Associates, Company Secretaries, New Delhi, to conduct secretariat audit of the Company for the financial year ended March 31, 2012, who has submitted their report confirming the compliance with all the applicable provisions of various corporate Laws. The Secretarial Audit Report is provided separately in the annual report. However, in terms of the provisions of section 219(1)(b)(iv) of the Act, the abridged annual report has been sent to the members of the Company excluding this report.

CORPORATE SOCIAL RESPONSIBILITY

At Bharti Airtel, Corporate Social Responsibility (CSR) encompasses much more than social outreach programs and is an integral part of the way the Company conducts its business. Detailed information on the initiatives of the Company towards CSR activities is provided in the Corporate Social Responsibility section of the annual report.

DIRECTORS

Ms. Chua Sock Koong, Mr. Craig Edward Ehrlich, Mr. Nikesh Arora, Mr. Rajan Bharti Mittal and Mr. Rakesh Bharti Mittal retire by rotation at the forthcoming annual general meeting and being eligible, offer themselves for re-appointment.

A brief resume, nature of expertise, details of directorships held in other public limited companies, of the directors proposing re-appointment along with their shareholding in the Company as stipulated under clause 49 of the listing agreement with the stock exchanges is appended as an annexure to the notice of the ensuing annual general meeting. The Board recommends their appointment.

Lord Evan Mervyn Davies has expressed his inability to continue as a director on the Board of the Company from the conclusion of the ensuing annual general meeting. In addition, in line with the Policy of Independent Directors adopted by the Board, H.E. Dr. Salim Ahmed Salim, independent director, has completed his term of office and will step down from the Board from the conclusion of the ensuing annual general meeting. The Board would appoint new directors in their place in due course in compliance with the statutory requirements.

FIXED DEPOSITS

The Company has not accepted any fixed deposits and as such, no amount of principal or interest was outstanding as of the balance sheet date.

AUDITORS

The Statutory Auditors of the Company, M/s. S. R. Batliboi & Associates, Chartered Accountants, Gurgaon, retire at the conclusion of the ensuing annual general meeting of the Company and have confirmed their willingness and eligibility for re-appointment and have also confirmed that their re-appointment, if made, will be within the limits under Section 224(1B) of the Companies Act, 1956. The Board recommends their re-appointment for the next term.

AUDITORS' REPORT

The Board has duly examined the Statutory Auditors' report to the accounts, which is self explanatory and clarifications wherever necessary, have been included in the Notes to Accounts section of the annual report.

As regards the comments under paras i(a) and i(b) of the annexure to the Independent Auditors' Report regarding updation of quantitative and situation details relating to certain fixed assets in the Fixed Assets Register and reconciliation of the physical verification results, the Company has strengthened its process for periodic updation of the Fixed Assets Register at frequent intervals and a time bound plan has been put in place to complete the pending updation of the physical verification results in the Fixed Assets Register. Further, the financial impact of the physical verification has been given effect to in the books of accounts.

As regards the comment under para xxi of the annexure to the Independent Auditors' Report to address the issues of fraud by employees and external parties, the Company has taken appropriate steps including issuance of warning letters, termination of service of the errant employees, termination of the contract/agreements with the external parties, legal action against the external parties involved, blacklisting the contractors, etc. The Company is further strengthening its internal control systems to reduce the probability of occurrence of such events in future.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

For the Company, being a service provider organization, most of the information 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 not applicable. However, the information as applicable has been given in Annexure B to this report.

EMPLOYEES STOCK OPTION PLAN

The Company values its employees and is committed to adopt the best HR practices. The employees of the Company are presently eligible for two ESOP schemes under 2001 and 2005 Employee Stock Option Policy. Besides attracting talent, the Schemes also help in retention of talent and experience.

The ESOP Scheme 2001 is administered through a Trust, whereby the shares held in the Trust are transferred to the employee as and when the concerned employee exercises stock options under the Scheme.

Till March 2010, under ESOP Scheme 2005, the employees were allotted new equity shares upon exercise of stock options. Post April 2010, the Company has started purchasing its equity shares up to the limit approved by the shareholders in the existing Trust and appropriates the same towards the Scheme. Accordingly, under the ESOP Scheme 2005, the Company now acquires shares from the secondary market in the Trust and transfers the same to the respective employees in lieu of allotment of fresh equity shares.

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, are provided in Annexure C to this report.

A certificate from M/s . S. R. Batliboi & Associates, Chartered Accountants, Statutory Auditors, with respect to the implementation of the Company Employee's Stock Option Schemes 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 are required to be provided in terms of section 217(2A) of the Companies Act, 1956 read with the Companies (Particular of Employees) Rules, 1975 have been set out in Annexure D to this report. In terms of the provisions of section 219(1)(b)(iv) of the Act, the abridged annual report that has been sent to the members of the Company does not contain this annexure.

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. The applicable accounting standards have been followed along with proper explanation relating to material departures, in the preparation of the annual accounts for the year ended March 31, 2012;

II. They have selected and applied consistently and made judgments and estimates that are reasonable and prudent to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Company for that period;

III. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 and for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

IV. They have prepared the annual accounts on a going concern basis.

ACKNOWLEDGEMENTS

Your directors wish to place on record their appreciation to the Department of Telecommunications (DoT), the Central Government, the State Governments in India, Government of Bangladesh, Government of Sri Lanka and Governments in the 17 countries in Africa, the Company's bankers and business associates, for the assistance, co-operation and encouragement they extended to the Company and also to the employees for their continuing support and unstinting efforts in ensuring an excellent all round operational performance. The directors would like to thank various partners viz. Bharti Telecom, Singapore Telecommunications Ltd., and other shareholders for their support and contribution. We look forward to their continued support in the future. For and on behalf of the Board

Date: May 2, 2012 Sunil Bharti Mittal

Place: New Delhi Chairman and Managing Director


Mar 31, 2010

The directors have pleasure in presenting the fifteenth annual report on the business and operations of the Company together with audited financial statements and accounts for theyear ended March 31,2010.

OVERVIEW

Bharti Airtel is one of Asias leading telecommunication service providers with presence in all the 22 licensed jurisdictions (known as Telecom Circles) in India and also in Sri Lanka and Bangladesh. The Company served an aggregate of 130.69 mn customers as on March 31, 2010 in India; including 127.62 mn customers using GSM services and 3.07 mn customers using fixed line and/or broadband (DSL) services. The Company offers an integrated suite of telecommunication services to enterprise customers, in addition to providing national and international long distance connectivity. The Company also deploys, owns and manages passive infrastructure for telecommunication services through its subsidiary company, Bharti Infratel Limited, which also owns 42% stake in Indus Towers Limited. Bharti Infratel and Indus Towers are the top two providers of passive infrastructure services in the country.

FINANCIAL RESULTS AND RESULTS OF OPERATIONS

Financial Highlights of Consolidated Statement of Operations of the Company

(Amount in Rs mn)

Particulars Financial Year Y-o-Y

2009-10 2008-09 Growth

Gross revenue 418,295 373,521 12%

EBITDA 168,473 152,858 10%

Cash profit from operations 174,728 135,769 29%

Earnings before taxation 108,954 85,910 27%

Net profit /(loss) 91,631 78,590 17%

Financial Highlights of Standalone Statement of Operations of the Company (Legal entity)

(Amount in Rs mn) Particulars Financial Year Y-o-Y

2009-10 2008-09 Growth

Gross revenue 356,095 340,143 5%

EBITDA 138,698 131,918 5%

Cash profit from operations 148,151 115,686 28%

Earnings before taxation 106,992 81,615 31%

Net profit/(loss) 94,262 77,438 22%

LIQUIDITY

The Company meets its working capital requirement by having suitable commercial agreement with its creditors and sufficient standby credit lines with banks and financial institutions. It deploys a robust cash management system to ensure timely availability of funds and its deployment. The Company has been able to optimise finance cost and generate funds for expansion by minimising the amount of funds tied-up in the current assets.

As on March 31, 2010, the Company has cash and bank balance of Rs 25,786 mn and marketable securities of Rs 51,512 mn. The Company actively manages the short-term liquidity to generate optimum returns by investments made in debt and money market instruments including liquid and income debt fund schemes, fixed maturity plans and other similar instruments.

The Company foresees liquidity requirements for funding the 3G spectrum and BWA spectrum auction fees. The strength of the Companys balance sheet has enabled the Company to adequately tie up funding for expected 3G and BWA liquidity requirements on favorable terms.

On March 30, 2010, the Company has also announced acquisition of Zain Africa B.V. in a USD 10.7 bn deal. The Company has tied up adequate funding to cover the deal.

The Company expects to maintain a comfortable liquidity position post payment of spectrum fees and closure of the acquisition.

GENERAL RESERVE

Out of total profit of Rs 94,262 mn for the financial year 2009-10, an amount of Rs 7,100 mn has been transferred to the General Reserve.

DIVIDEND

The Board has recommended a final dividend of Re 1 per equity share of Rs 5 each (20% of face value) for the financial year 2009-10. The total dividend payout will amount to Rs 4,443 mn, including Rs 645 mn as tax on dividend. The payment of dividend is subject to the approval of the shareholders in the ensuing annual general meeting of the Company.

SUBSIDIARY COMPANIES

As on the date of this report, the Company has twenty subsidiary companies namely (i) Bharti Airtel Services Limited (ii) Bharti Hexacom Limited (iii) Bharti Infratel Limited (iv) Bharti Infratel Ventures Limited (v) Bharti M Commerce Services Limited (vi) Bharti Telemedia Limited (vii) Bharti Airtel (Canada) Limited (viii) Bharti Airtel International (Mauritius) Limited (ix) Bharti Airtel International (Netherlands) B.V. (x) Bharti Airtel Holdings (Singapore) Pte. Limited (xi) Bharti Airtel (Hongkong) Limited (xii) Bharti Airtel (Japan) Kabushiki Kaisha (xiii) Bharti Airtel Lanka (Private) Limited (xiv) Bharti Airtel (Singapore) Private Limited (xv) Bharti Airtel (UK) Limited (xvi) Bharti Airtel (USA) Limited (xvii) Bharti Infratel Lanka (Private) Limited (xviii) Bharti International (Singapore) Pte. Limited (xix) Network i2i Limited and (xx) Warid Telecom International Limited.

Pursuant to the provisions of Section 212(8) of the Companies Act, 1956, the Central Government has vide letter No. 47/305/2010-CL-III dated April 27, 2010, granted an exemption to the Company from attachment of the balance sheet, profit & loss account and other documents as set out in section 212(1) of the Companies Act, 1956 in respect of the aforementioned subsidiary companies for the year ended on March 31,2010.

Annual accounts of these subsidiary companies, along with related information are available for inspection at the Companys registered office and are also being uploaded on the website of the Company, www.airtel.in. Copies of the annual accounts of subsidiary companies will be made available to Bharti Airtels investors and subsidiary companies investors upon request.

Since, Bharti International (Singapore) Pte. Limited and Bharti Airtel International (Netherlands) B.V. (both subsidiaries of Bharti Airtel Holdings (Singapore) Pte. Limited) were incorporated in March 2010 and their first financial year will conclude on March 31, 2011, no financial statements have been prepared till March 31, 2010. The Company has also incorporated Bharti M Commerce Services Limited, Bharti Airtel International (Mauritius) Limited and Bharti Airtel (Japan) Kabushiki Kaisha in April 2010 whose first financial year will conclude on March 31,2011.

The statement pursuant to the approval under section 212(8) of the Companies Act, 1956, is annexed as part of the Notes to Consolidated Accounts of theCompany on pageno. 158.

QUALITY

Quality is an integral element of Bharti Airtels DNA. Lean Six Sigma, Process Standardisation, Performance Variance Reduction (PVR) and Knowledge Management are some of the quality initiatives which are deeply ingrained in Bharti Airtels processes. The Company continuously invests in training and development of its employees to champion these initiatives. It continually raises the benchmark by getting assessed by external quality agencies. In this regard, its ISO27001 implementation is among the largest in the world. Bharti Airtel isTL9000and PCI DSS compliant and its IT infrastructure and processes are compliant with COBIT and ITIL best practices.

BRANDING

Bharti Airtel has been rated as the Strongest Brand by the Economic Times - Brand FinanceBrand Power Rating. Brand Airtel was the only corporate brand to be awarded the AAA rating which means extremely strong and it improved its rating from the previous AA+. Airtel was also rated as the 7th Most Valuable Brand in India with a brand value of USD 2.5 bn and was the only telecom player to feature in the top 10 most valuable brands. Airtel also crossed the 100 mn customer base and extended its brand in DTH and IPTV services.

In mobile services, the overarching brand philosophy focused on celebrating the idea of people and relationships. It continued the segmented approach, which strengthened the brands relevance across various socio-economic segments of close to 600 mn mobile users in the country.

Airtel marked its milestone of crossing 100 mn customers with a thematic campaign on Together Good Things Happen. The concept acknowledged each individual as an accumulation of people, relationships and experiences. The refreshed logo used in the campaign comprised of faces of people - customers, employees and partners, who have made the brand what it is. The brand campaign was endorsed by the movie icon, Shahrukh Khan, who resonated with Airtels belief that his people and relationships define him. For urban centers, the brands belief in togetherness was extended to an on-ground manifestation through the ownership of the Airtel Delhi Half Marathon.

In the midst of hyper competition with new players in the market, Airtel offered multiple competitive advantages to its customers, most significant of which was a network with over 110 mn people on it, who could now talk with each other at 50 paise per minute, local and STD. Affordability as a proposition to the customer was further driven through consecutive campaigns on roaming at 60 paise per minute and 1 paise per second, and the recent value series featuring SharmanJoshi.

In the DTH segment, Airtel digital TV continued to gain a strong mindshare and market share in the year 2009-10 through key brand campaigns aimed at building differentiation based on technology and product superiority. A high decibel campaign featuring superstars Kareena and Saif along with former Miss India Sarah Jane Dias brought to the audience the advantage of "Picture clarity" which triggered faster adoption for DTH. This campaign was supported by MPEG 4 DVB S2 technology which only Airtel offered at that point of time. The next campaign announced the launch of digital TV "Recorder". Airtel was the second player to launch this product. To create a strong differentiation and consumer benefit, the campaign talked about the "Record from mobile" feature. With the "record from mobile" feature, one can record live TV with ease anytime, anywhere.

MAJOR AGREEMENTS AND ALLIANCES

During the year, the Company signed the following major agreements relating to operations, customer service, innovation and technology:

- With Alcatel Lucent to manage Bharti Airtels pan-India access network for broadband and telephone services through a joint venture company

- With Ericsson and Nokia Siemens extending network upgradation contract for 2 years for providing a superlative customer experience at a lower cost

- With Royal Government of Bhutan to launch a new terrestrial cable network to Bhutan to further the growth of the IT/ITES and Data Centre market in Bhutan

- With Cisco to create and launch unique products, including managed data services, hosted unified communications, connected branch services and Cisco Telepresence

- With HTMT and Firstsource, expanding the call center contracts to include two more partners, thereby achieving a capability to handle 1.4 bn minutes of customer calls

- With Limelight Networks for global content delivery network

- With global telcos in launching unity cable system to boost Trans-Pacific connectivity

- With global telcos to build and operate the Southeast Asia Japan Cable System rated among the highest capacity cable systems in the world

- With Twitter, allowing its customers to send and receive SMS tweets on Twitter

- With Dow Jones to launch The Wall Street Journal India mobile application providing the latest international and Indian financial and business news from The Wall Street Journal and Dow Jones Newswires, exclusively for Airtel customers on the mobile platform

- Investment in Asia America Gateway (AAG), Unity North, South East Asia Japan Cable system (SJC), India Middle East Western Europe (IMEWE), East African Submarine System (EASSy) cable systems with consortium partners for extending global reach to 50 countries across 5 continents

NEW PRODUCTS/ INITIATIVES

During the year, the Company launched various new and innovative products and services, which enabled it to strengthen its leadership position in an intensely competitive market. Few of the key launches of theyear included:

- Worlds first Windows-based Online Desktop powered by Microsoft and Nivio on Airtel broadband

- Indias first mobile application store - Airtel App Central which offers over 1,500 applications for download across 550+ devices categorised under 25 customer categories

- Airtel Hosted Mail - powered by Microsoft Exchange Server 2007, a corporate mailing solution for Small and Medium Business (SMB) across the country to offer a robust enterprise grade mailing solution with an inbox as big as 4 GB along with a wider range of communication tools enabling them to share email messages, contacts, calendars, work folders, task list and documents from either their PC or mobile phone

- HTC Smart, worlds first commercial 3G Smartphone based on brew MP platform in partnership with HTC and Qualcomm

- Ultra fast 50 MBPS broadband offering the fastest wire line broadband in the country. The service will be initially available in Delhi and Gurgaon, with phased roll-out in cities of Mumbai, Chennaiand Bengaluru

- "VPN in a box", a bundled product offering - MPLS bundled with last mile connective and customer premise hardware

- Website Builder for customers with 15,000 built-in templates, domain names and e-commercecapabilities

- Chek on voice, thereby expanding the range of mobile commerce application

- Digital Media Exchange (DMX) and Teleport services for integrated content delivery for Media customers thereby marking Airtels foray into the "4th screen" for digital cinema content delivery

- Airtel Digital TV Recorder, an enhanced Set Top Box (STB) with capability to record live television, anytime, anywhere

- Mobile Comics Portal on Airtel Live, allowing its subscribers to access more than 300 Indian and International com ics via WAP

- Freedom Plan, giving its customers to choose from a variety of plans based on usage and calling patterns and; Turbo Plan allowing its customers to enjoy substantial advantage while roam ing anywhere

- Far-East Connect Network to serve global wholesale by linking Singapore and US via Asia America Gateway (AAG) cable landing in Singapore

- Ethernet Services in more than 25 global cities across Asia, Europe, North America and Australia

- Mobile Application Tool for Enterprises (MATE) that enables mobile devices to become an integral part of enterprise network, by allowing seamless, secure and On-Demand access to enterprise business data from anywhere, anytime

CAPITAL MARKET RATINGS

As at March 31, 2010, Bharti Airtel Limited has outstanding ratings with four institutions, two of them domestic, viz. CRISIL and ICRA, and two international, viz. Fitch Ratings and S&P.

- CRISIL and ICRA have rated Airtel at the top end of their rating scales, both for short term (P1 + / A1 +) as well as long term (AAA/ LAAA)

- Both Fitch Ratings and S&P have rated Airtel at the level of the sovereign rating of India (BBB-)

Subsequent to March 31, 2010, and pursuant to the closure of the Zain transaction and related acquisition debt, while CRISIL, ICRA and Fitch Ratings have reaffirmed the above ratings, S&P has moved the rating to BB+.

SHARE CAPITAL

During the year, the Company issued 919,734 (sub-divided) equity shares of Rs 5 each upon exercise of stock options under ESOP Scheme 2005 of the Company.

Further, the Company also allotted 65,385 (pre-split) equity shares of Rs 10 each upon conversion of Foreign Currency Convertible Bonds (FCCBs) by their holders in May 2009.

In July 2009, the Company has sub-divided its 1 equity share of Rs 10 each into 2 equity shares of Rs 5 each.

Due to these corporate actions, the issued, subscribed and paid-up equity share capital of the Company increased from 3,796,479,592 (sub-divided) (March 31, 2009) to 3,797,530,096 equity shares as of March 31,2010.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

In accordance with the listing agreement requirements, the Management Discussion & Analysis report is presented in a separate section forming part of theAnnual Report.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance. The directors adhere to the requirements set out by the Securities and Exchange Board of Indias Corporate Governance Practices and have implemented all the stipulations prescribed.

A detailed report on 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, S.R. Batliboi & Associates, Chartered Accountants, Gurgaon confirming compliance of conditions of Corporate Governance as stipulated under clause 49 is annexed to this report as Annexure A.

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 applicable corporate laws, regulations and guidelines issued by the Securities and Exchange Board of India and other statutory authorities, the Company has voluntarily started a practice of secretarial audit from a practicing company secretary.

The Board had appointed M/s. Chandrasekaran Associates, Company Secretaries, New Delhi, to conduct secretarial audit of the Company for the financial year ended March 31, 2010, who has submitted their report confirming the compliance with all the applicable provisions of various corporate laws. The Secretarial Audit Report is provided separately in the annual report.

CORPORATE SOCIAL RESPONSIBILITY

At Bharti Airtel, Corporate Social Responsibility (CSR) encompasses much more than social outreach programs and is an integral part of the way the Company conducts its business. Detailed information on the initiatives of the Company towards CSR activities is provided in the Corporate Social Responsibility section of the annual report.

DIRECTORS

Since last Directors Report, Paul OSullivan, Quah Kung Yang and Mauro Sentinelli have resigned from the Board due to personal reasons and Bashir Currimjee has retired from the Board in terms of the policy on independent directors adopted by the Company. During the year. Tan YongChoo and Lim Chuan Poh were appointed as directors. The Board places on record its sincere appreciation for the services rendered by

Paul OSullivan, Quah Kung Yang, Mauro Sentinelli and Bashir Currimjee during their tenure on the Board.

Chua Sock Koong, Pulak Chandan Prasad, Rajan Bharti Mittal and Rakesh Bharti Mittal retire by rotation attheforthcoming annual general meeting and being eligible, offer themselves for re-appointment.

A brief resume containing nature of expertise, details of directorships held in other public limited companies of the directors proposing re-appointment along with their shareholding in the Company as stipulated under clause 49 of the listing agreement with the stock exchanges is appended as an annexure to the notice of ensuing annual general meeting.

FIXED DEPOSITS

The Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as on the balance sheet date.

AUDITORS

The Statutory Auditors of the Company, M/s. S. R. Batliboi & Associates, Chartered Accountants, Gurgaon, retire at the conclusion of the ensuing annual general meeting of the Company and have confirmed their willingness and eligibility for re-appointment and have also confirmed that their re-appointment, if made, will be within the limits under section 224(1 B) of the Companies Act, 1956.

AUDITORSREPORT

The Board has duly examined the Statutory Auditors report to accounts which is self explanatory and clarifications wherever necessary, have been included in the notes to accounts section of theannual report.

As regards the comment under para xxi of Annexure to the Auditors Report, to address the issues of fraud by employees and external parties, the Company has taken appropriate steps including issuance of warning letters, termination of service of the errant employees, termination of the contract/ agreements with the external parties, legal action against the external parties involved, blacklisting the contractors, etc. The Company is focused on further strengthening its internal control systems to reduce the probability of occurrence of such events in future.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

For the Company, being a service provider organisation, most of the information 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 not applicable. However, the information, as applicable, has been given in Annexure B to this report.

EMPLOYEES STOCKOPTION PLAN

The Company values its human resource and is committed to adopt the best HR practices. The employees of the Company are presently benefited from two ESOP schemes under 2001 and 2005 Employee Stock Option Policy. Besides attraction of new talent, the policies also helps in retention of well- performing employees, who are contributing to the growth of the Company.

The ESOP Scheme 2001 is administered through a trust, whereby the shares held in the trust are transferred to the employee as and when the concerned employee exercise stock options under the Scheme.

Under the ESOP Scheme 2005, the employees were allotted new equity shares upon exercise of stock options up to March 2010. In the board meeting held in April 2010, the Board has approved acquisition of the Companys equity shares up to the limit approved by the shareholders in the existing Trust and appropriate the same towards the Scheme. Accordingly, henceforth under the ESOP Scheme 2005, instead of allotment of fresh equity shares, the Company will transfer the shares so acquired from the trust to the respective employees. There will be no fresh allotment of equity shares under the ESOP Scheme.

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, if provided in AnnexureC to this report.

A certificate from M/s S. R. Batliboi & Associates, Chartered Accountants, Statutory Auditors, with respect to the implementation of the Company Employees Stock Option schemes would be placed before the shareholders at the ensuing annual general meeting and a copy of the same shall be available for inspection at the registered office of the Company.

PARTICULARS OF EMPLOYEES

The information as are required to be provided in terms of section 217(2A) of the Companies Act, 1956 read with Companies (Particular of Employees) Rules, 1975 have been setoutin theannexuretothis report. However, in terms of the provisions of section 219(1)(b)(iv) of the Act, the annual report has been sent to the members of the Company excluding these information. Members who desire to obtain this information may write to the Company Secretary at the registered office address and will be provided with a copy of the same.

DIRECTORSRESPONSIBILITY STATEMENT

Pursuant to section 217(2AA) of the Companies Act, 1956, the directors to the best of their knowledge and belief confirm that:

(i) the applicable accounting standards have been followed along with proper explanation relating to material departures, in the preparation of the annual accounts for theyear ended March 31,2010;

(ii) they have selected and applied consistently and made judgments and estimates that are reasonable and prudent to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Com pany for that period;

(iii)they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 and for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv)they have prepared the annual accounts on a going concern basis.

ACKNOWLEDGEMENTS

The directors wish to place on record their appreciation to the Department of Telecommunications (DOT), the Central Government, the State Governments, Government of Bangladesh, Sri Lanka and Africa, Companys Bankers and business associates; for the assistance, co-operation and encouragement they extended to the Company and also to the employees for their continuing support and unstinting efforts in ensuring an excellent all-round operational performance. The directors would also like to thank various partners viz. Bharti Telecom, Singapore Telecommunications Limited and other shareholders for their support and contribution. The Board looks forward to their continued support in future.

For and on behalf of the Board

Sunil Bharti Mittal Chairman and Managing Director

 
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