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Directors Report of Bharti Infratel Ltd.

Mar 31, 2016

Dear Members,

The Directors are pleased to present the Tenth Board''s Report on the business and operations of the Company together with the audited financial statements for the financial year ending March 31, 2016.

Business Overview

Bharti Infratel is a provider of tower and related infrastructure sharing services. On a consolidated basis, we are one of the largest PAN India tower infrastructure providers, based on the number of towers owned and operated by Bharti Infratel and Indus Towers, which are represented by Bharti Infratel''s 42% equity interest in Indus Towers. The business of Bharti Infratel and Indus Towers is to acquire, build, own and operate towers and related infrastructure. Bharti Infratel and Indus Towers provide access to their towers primarily to wireless telecommunication service providers on a shared basis under long-term contracts. Our three largest customers are Bharti Airtel (together with Bharti Hexacom), Vodafone India and Idea Cellular, which are the three leading wireless telecommunication service providers in India by wireless revenue.

We have a nationwide presence with operations in all 22 telecommunication circles in India, with Bharti Infratel and Indus Towers having operations in 4 overlapping circles.

As of March 31, 2016, Bharti Infratel owned and operated 38,458 towers with 81,632 co-locations in 11 telecommunication circles while Indus Towers operated 119,881 towers with 270,006 co-locations in 15 telecommunication circles. With Bharti Infratel''s towers and its 42% interest in Indus Towers, we have an economic interest in the equivalent of 88,808 towers and 195,035 co-locations in India as of March 31, 2016.

We have entered into Master Service Agreements (MSAs) with our customers. The MSAs are long-term contracts which set out the terms on which access is provided to Bharti Infratel''s and Indus''s Towers, with all service providers being offered substantially the same terms and receiving equal treatment at towers where they have installed their active infrastructure. Under the MSAs, Bharti Infratel and Indus Towers enter into service contracts in respect of individual towers. The MSAs and service contracts govern Bharti Infratel''s and Indus''s relationship with their customers, the services provided, the applicable charges and incorporate annual escalation clauses in respect of the applicable charges. This provides stability to our business and provides visibility with regard to future revenues.

Financial Highlights

A. Consolidated financial results as per Indian Generally Accepted Accounting Principles

(Rs. Millions)

Year ended Year ended March 31, 2016 March 31, 2015

Revenue1 123,084 116,683

EBITDA 54,031 50,108

Profit before Tax 36,207 30,515

Profit after Tax 23,820 19,924

1Revenue & EBITDA are excluding other income

B. Standalone financial results as per Indian Generally Accepted Accounting Principles

(Rs. Millions)

Year ended Year ended March 31, 2016 March 31, 2015

Revenue1 55,957 53,889

EBITDA 25,378 24,007

Profit before Tax 19,843 32,737

Profit after Tax 13,234 27,252

1Revenue & EBITDA are excluding other income

Share Capital

During the year, the Company has allotted 2,897,776 equity shares under the ESOP Scheme 2008. Thus, the paid up share capital of the Company has increased from Rs. 18,937,692,930 to Rs. 18,966,670,690 represented by 1,896,667,069 equity shares of Rs. 10 each fully paid up as on March 31, 2016.

Transfer to Reserves

The Company has not transferred any amount to the General Reserve for the financial year ended March 31, 2016.

Dividend

The Board has recommended a dividend of Rs. 3 per equity share of Rs. 10 each fully paid up (30% of face value) for FY 2015-16 amounting to Rs. 5,690 Mn (excluding tax on dividend).

The payment of dividend is subject to the approval of the shareholders at the ensuing annual general meeting of the Company.

Material Changes and Commitment Affecting the Financial Position Between the End of the Financial Year and Date of Report of the Balance Sheet

Buy-Back of Equity Shares

The Board of Directors, at its meeting held on April 26, 2016, approved the Buy-back of fully paid-up equity shares of the Company (''Equity Shares'') at a price not exceeding Rs. 450/- per Equity Share payable in cash for a total consideration not exceeding Rs. 2,000 Crores (Rupees Two Thousand Crores Only) excluding transaction costs viz. brokerage, applicable taxes such as securities transaction tax, service tax, stamp duty, etc., which is 19.3% of the total paid-up equity capital and free reserves as per the audited financial statement of the Company for the financial year ended March 31, 2016, through the Tender Offer route.

The Buy-back is subject to regulatory and other approvals, if any, including the shareholders'' approval by way of special resolution through Postal Ballot.

The Board has authorised the Committee of Directors to finalise the terms of Buy-back and administer the Buy-back procedure.

Deposits

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

Details of Utilisation of IPO Proceeds

Pursuant to the Initial Public Offer in December, 2012, the Company has received Rs. 31,657 Mn (net of selling shareholders'' proceeds). The Company had, in terms of Prospectus, proposed to utilise the IPO Proceeds towards objects of the Issue by March 31, 2016. Whilst the Company had made best efforts to utilise the IPO proceeds as per the terms of the Issue, Rs. 9,403 Mn was pending utilisation as on December 31, 2015 for which the Company has obtained approval of the shareholders'' by way of special resolution through Postal Ballot for variation in terms of the Objects of the Issue.

For details of utilisation of IPO proceeds subsequent to approval of the shareholders'', please refer note no. 39 of the standalone financial statements for the year ended March 31, 2016 on page 224.

Directors and Key Managerial Personnel

Inductions, Re-appointments, Retirements & Resignations

In line with the Company''s policy on Independent Directors, Mr. Vinod Dhall has retired from the Board w.e.f. September 2, 2015. Further, during the previous financial year, Mr. Rakesh Bharti Mittal, Non-Executive Director resigned from the Board w.e.f. January 27, 2016. The Board placed on record its'' sincere appreciation for help, guidance and contribution made by the outgoing Directors during their tenure on the Board.

Mr. Rajan Bharti Mittal was appointed as a Non-Executive Additional Director on the Board w.e.f. January 27, 2016. The Company has received requisite notice from a member under Section 160 of the Companies Act, 2013, along with deposit of Rs. 1,00,000/- proposing the appointment of Mr. Rajan Bharti Mittal as the Company''s Non-Executive Director, liable to retire by rotation at the ensuing AGM.

Pursuant to the provisions of the Companies Act, 2013, Mr. Mark Chin Kok Chong, Director of the Company, is liable to retire by rotation at the forthcoming AGM and being eligible, has offered himself for re-appointment.

A brief resume, nature of expertise, details of other directorships and other information of the Directors proposed to be appointed/ re-appointed as stipulated in Secretarial Standard 2 and Regulation 36 of the Listing Regulations is appended as an annexure to the notice of ensuing AGM.

During the year, Mr. R P Singh was appointed as an Independent Director on the Board w.e.f. July 15, 2015 and his tenure was fixed by the members at the last AGM held on August 11, 2015.

Mr. Anupam Garg, Company Secretary has resigned w.e.f. July 22, 2015. The Directors placed on record their appreciation for the contribution made by him during his tenure. The Board in its meeting held on July 22, 2015 has appointed Ms. Shweta Girotra as the Company Secretary and Compliance Officer of the Company w.e.f. July 23, 2015.

Declaration by Independent Directors

The Company has received declarations from all the 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 the Listing Regulations. The Independent Directors have also confirmed that they have complied with the Company''s code of conduct.

Policy on Nomination, Remuneration and Board Diversity

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.bharti-infratel.com and is annexed as Annexure A 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 the Listing Regulations is provided in the Report on Corporate Governance, which forms part of this Annual Report.

Board Meetings

During FY 2015-16, the Board of Directors met 4 (four) times on April 27, 2015; July 22, 2015; October 23, 2015 and January 27, 2016. The period between any two consecutive meetings of the Board of Directors of the Company was not more than 120 days.

The details regarding composition, number of board meetings held and attendance of the Directors during FY 2015-16 are set out in the Report on Corporate Governance, which forms part of this Annual Report.

Board Committees

The Company has several Committees which have been established as a part of the best corporate governance practices and are in compliance with the requirements of the relevant provisions of applicable laws and statutes. As on March 31, 2016, the Board has 5 Committees, namely, Audit and Risk Management Committee; HR, Nomination and Remuneration Committee; Corporate Social Responsibility (CSR) Committee; Stakeholders'' Relationship Committee and Committee of Directors. The details with respect to the compositions, powers, roles, terms of reference, no. of meetings etc. of the Committees held during the FY 2015-16 and attendance of the Directors at each meeting is provided in the Report on Corporate Governance which forms part of this Annual Report.

Subsidiary / Associate and Joint Venture Company

During the FY 2015-16, Smartx Services Limited was incorporated as a wholly owned subsidiary Company. Bharti Infratel Services Limited, another wholly owned subsidiary Company has applied to the Registrar of Companies for striking-off its name from the register of Companies.

Company has a joint venture in the name of Indus Towers Limited, there was no change in the joint venture during the financial year under review.

In accordance with Section 129(3) of the Companies Act, 2013, the Company has prepared consolidated financial statements of the Company, its subsidiaries and joint venture, which forms part of the Annual Report. A statement in Form AOC - 1, containing the salient features of the financial statements of the subsidiaries and Joint Venture Company is annexed as Annexure B to this report. The statement also provides the details of performance and financial position of each of the subsidiary and joint venture.

Audited financial statements of Smartx Services Limited for FY 2015-16 and Statement of Accounts of Bharti Infratel Services Limited as on March 30, 2016 have been placed on the website of the Company, www.bharti-infratel.com. The audited financial statements of the subsidiaries are available for inspection at the Company''s registered office and registered office of respective companies. Shareholders interested in obtaining a copy of the audited financial statements of subsidiaries may write to the Company Secretary at the Company''s registered office.

Human Resources

At Bharti Infratel, our workforce is fundamental to the business strategy and its success. We venture to offer an encouraging, empowering and engaging environment where employees are ardent towards achieving customer excellence and realising the vision of the Company.

We commenced FY 2015-16 with an endeavour to fortify our stature as ''Employer of Choice''. In order to deliver on this agenda, we undertook various initiatives.

In order to satisfy our jobs with continuous improvement, we launched the concept of ''Infratel DNA'', to provide our leadership a direction towards achieving the corporate vision. This DNA forms the anchor of our Talent Acquisition, Performance Management, Leadership Development and our Succession planning processes.

A second initiative was the launch of the ''Applause Online'' program, which aims at recognising teams and individuals who deliver superior performance with imbibed Infratel values. This portal provides real time recognition to our human resources.

A major aspect of our success is also from the initiative of iLearn. This is wrapped around the theme of ''Own Your Development'', where employees have a marketplace for all their learning needs. This builds a culture where the workforce is responsible for their career, development and a holistic growth.

To ensure relentlessly exceeding business targets, we introduced the ''360° Feedback'', to provide a holistic feedback to our middle and senior management. To foster the culture of safety and to ensure compliance of safety norms, we also launched the ''Consequence Management Guidelines''.

Finally, to take workforce diversity to a new high, we not only organised a ''Women in Business'' Conclave, but also introduced the initiative of ''Bits n Bytes''. This platform provides high women connect network in all circles. We also conducted the Gender Sensitisation Workshop for all our employees, to ensure employee integrity, at every level.

Employees Stock Option Plan

To retain, promote and motivate the best talent in the Company and to develop a sense of ownership among employees, the Company has instituted two ESOP schemes i.e. Employee Stock Option Scheme 2008 (ESOP Scheme 2008) and Employee Stock Option Scheme 2014 (ESOP Scheme, 2014) with the approval of shareholders. The said schemes are in compliance with the SEBI (Share based Employee Benefits) Regulation, 2014, (ESOP Regulations) The HR, Nomination and Remuneration Committee administers and monitors the Company''s ESOP schemes.

During FY 2015-16, the Company has allotted 2,897,776 equity shares pursuant to exercise of stock options under ESOP Scheme, 2008.

In accordance with the ESOP Regulations, 2014, the Company had set up Bharti Infratel Employees'' Welfare Trust (ESOP Trust) for the purpose of implementation of employees'' stock option schemes. Since October, 2015, both the ESOP schemes are administered through 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. In terms of ESOP Regulations, neither the ESOP Trust nor any of its trustees shall exercise voting rights in respect of the shares of the Company held by the ESOP Trust.

During the year, Company has formulated LTI Plan - 2015 under ESOP Scheme, 2014 and has granted 90,261 stock options under the said Plan. A detailed report with respect to options exercised, vested, lapsed, exercise price, vesting period etc. under ESOP Scheme, 2008 and ESOP Scheme, 2014 is disclosed on the website of the Company at http:// www.bharti-infratel.com/cps-portal/web/shares.html.

A certificate from M/s S. R. Batliboi & Associates LLP Chartered Accountants, Statutory Auditors, with respect to ESOP Scheme, 2008 and ESOP Scheme, 2014 would be placed before the shareholders at the ensuing AGM and a copy of the same will also be available for inspection at the registered office of the Company.

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 Statutory Auditors of the Company by the shareholders in the 8th AGM held on August 4, 2014 for a period of three years i.e. up to the conclusion of the 11th AGM of the Company.

The said appointment is subject to ratification by the members at every AGM. Accordingly, the Board has recommended ratification of appointment of M/s S. R. Batliboi & Associates LLP, Chartered Accountants, by the shareholders at the forthcoming AGM. The Company has received a letter from M/s S. R. Batliboi & Associates LLP, Chartered Accountants, confirming their consent and eligibility under Section 139 and 141 of the Companies Act, 2013.

Auditors'' Report

The Board has duly examined the Statutory Auditor''s Report to the accounts, which is self-explanatory. The report does not contain any observations, disclaimer, qualification or adverse remarks.

Secretarial Auditors & Their 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, 2016. 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, observations, disclaimer 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 the FY 2016-17.

Corporate Social Responsibility (CSR)

At Bharti Infratel, Corporate Social Responsibility (CSR) encompasses much more than social outreach programmes. 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 http://www.bharti-infratel.com/cps-portal/web/ pdf/Corporate%20Social%20Responsibility%20Policy.pdf.

During FY 2015-16, the Company has spent Rs. 209.4 Mn. towards the CSR activities and a balance of Rs. 45.6 Mn was left unspent. The Company had increased/ scaled up the intervention for CSR activities as prescribed in the Company''s CSR policy and there was an increase of approx 22% in the total CSR spend vis-a-vis last year i.e. from Rs. 173 Mn in financial year 2014-15 to Rs. 209.4 Mn this year. As a socially responsible company, our 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. As the Company has added new projects and scaled up the existing ones, there will be increased CSR spend in coming years.

A detailed update on the CSR initiatives of the Company is provided in the Corporate Social Responsibility section, 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 Regulations, the Business Responsibility Report, describing the initiatives taken by the Company from environmental, social and governance perspective forms a part of this Annual Report.

Management Discussion and Analysis

The Management Discussion and Analysis Report for the year under review, as stipulated under the Listing Regulations, is presented in a separate section, forming part of this Annual Report.

Corporate Governance

Your Company is committed to benchmarking itself with global standards for providing good corporate governance. The Board constantly endeavours to take the business forward in such a way that it maximises long term value for the stakeholders. The Company has put in place an effective corporate governance system which ensures that the provisions of the Listing Regulations are duly complied with.

A detailed report on the corporate governance pursuant to the requirements of the Listing Regulations forms part of this Annual Report.

A certificate from the auditors of the Company, M/s S. R. Batliboi & Associates LLP, Chartered Accountants, confirming compliance of conditions of corporate governance as stipulated in the Listing Regulations is annexed as Annexure E to this report.

Risk Management

Risk management is embedded in the operating framework of Bharti Infratel. 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 Company and prioritise relevant action plans to mitigate these risks. Risk Management Framework is reviewed periodically by the Board and the Audit and Risk Management Committee which includes discussing the management submissions on risks, prioritising key risks and approving action plans to mitigate such risks.

The Company has a Risk Management Policy approved by Audit and 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 and Risk Management Committee on an independent basis with a full status of the risk assessment and management. Detailed discussion on Risk Management has been given as apart of Management Discussions Analysis under the section "Risks and Concerns", which forms part of this Annual Report.

Internal Finance Control

The Company has in place a robust and comprehensive internal financial control system for all the major financial transactions to ensure orderly and efficient conduct of its business, including adherence to Company''s policies and procedures, the safeguarding of its assets, the prevention and detection of frauds and errors and reliability of financial reporting. The Internal financial controls of the Company have been further discussed in detail in the Management Discussion and Analysis section.

Vigil Mechanism

The Code of Conduct and vigil mechanism of the Company is posted on the website of the Company at www.bharti- infratel.com.

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

Quality Control

The Company has established well-structured quality processes and systems at every stage of the Company''s work, from designs, materials, and workmanship at site, operations and maintenance throughout the lifecycle. The Company also undertake validation of passive assets, factory testing and regular quality checks. The Company is empowering quality team with PDA Tablets to ensure real time information and proper documentation for effective quality control.

The Company has adopted the following quality assurance practices stage-wise:

1. Pre-dispatch inspection of all major material such as tower components, DG sets, battery banks, power interface equipment;

2. On-site inspection during installation work in progress;

3. Quality audits post completion of work to ensure process completion;

4. Preventive maintenance audits during operation and maintenance of sites to ensure timely maintenance of equipment and basic site hygiene; and

5. Maintenance of tower and civil structures to ensure optimised utilisation of assets throughout their design life.

The Company has a Standard Quality Process and Guidelines for civil, tower and electrical works and a Quality Assurance Plan ("QAP") for pre-dispatch inspection for effective material verification at vendor premises. Regular project reviews, governance meetings and third party audits are conducted on a regular basis in order to encourage maintenance of quality and ensure that tower assets are strictly in accordance with Company''s approved specifications.

These quality assurance practices enable us to maintain high performance standards across the network, resulting in key long-term advantages:

a. Good asset life as per specifications and designs;

b. High network uptime for customers, with fewer network outages; and

c. High levels of customer satisfaction due to hassle-free active infrastructure installation.

Other Statutory Disclosures

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. Particulars of material related party transactions are given in form AOC- 2, annexed as Annexure F to this report.

Names of Related Parties and details of transactions with them have been included in Note no. 35 of the standalone financial statements for the year ended March 31, 2016 under Accounting Standard 18 on page 218.

The Policy on the Related Party Transactions is available on the Company''s website at www.bharti-infratel.com.

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

The details of loans given, investments made or guarantees given are provided in the standalone financial statement in Note no. 12,13,15 and 18.

Particulars of Employees

Disclosures relating to remuneration of Directors u/s 197(12) of the Companies Act, 2013 read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexures 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 is annexed as Annexures H to this report.

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 as Annexure I to this 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 as Annexure J to this report.

Directors'' Responsibility Statement

Pursuant to Section 134(5) of the Companies Act, 2013, the Directors to the best of their knowledge and belief confirm that:

I. In the preparation of the annual accounts for the year ended March 31, 2016, the applicable accounting standards had been followed and there is no material departure from the same;

II. 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 ended March 31, 2016 and of the profit of the Company for the year ended on that date;

III. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

IV. The Directors had prepared the annual accounts on a ''going concern basis'';

V. The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;

VI. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and are operating effectively.

Acknowledgements

The Directors wish to place on record their appreciation for the assistance and co-operation extended by customers, strategic investors, bankers, vendors, business partners, various agencies and departments of Government of India and State Governments where Company''s operations are existing, supporting the Company''s various projects.

The Directors would also like to place on record their sincere appreciation for the valuable contribution, unstinted efforts and the spirit of dedication shown by the employees of the Company at all levels in ensuring an excellent all round operational performance.

For and on behalf of the Board

Akhil Gupta

Date : April 26, 2016 Chairman

Place: Gurgaon DIN: 0028728


Mar 31, 2013

Dear Shareholders,

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

OVERVIEW

The business of Bharti Infratel Limited and Indus Towers Limited (Indus) is to acquire, build, own and operate tower and related infrastructure. We have a nationwide presence with operations in all 22 telecommunication circles in India, with Bharti Infratel and Indus having operations in 4 overlapping circles.

In order to capitalize on the opportunities for tower sharing in the Indian telecommunications market, Bharti Airtel, Bharti Infratel, Vodafone India and Idea Cellular agreed to establish Indus as an independently managed joint venture that provides non-discriminatory shared tower services to all wireless telecommunication service providers. Bharti Infratel, Vodafone India and Aditya Birla Telecom hold 42%, 42% and 16% shareholding interest in Indus, respectively. Subject to certain exceptions, Bharti Infratel and Indus do not compete with each other in any telecommunication circle, they do not have any conflicts of interest in this regard and are able to work closely with each other and benefit from the synergies generated by the nationwide coverage and large scale of their operations.

Bharti Infratel and Indus provide access to their towers primarily to wireless telecommunication service providers on a shared basis, under long-term contracts. Bharti Infratel''s and Indus'' three largest customers are Bharti Airtel (together with Bharti Hexacom), Vodafone India and Idea Cellular, which are the three leading wireless telecommunication service providers in India by wireless revenue.

On a consolidated basis, we are one of the largest tower infrastructure providers in India, based on the number of towers that Bharti Infratel owns and operates and the number of towers owned or operated by Indus, that are represented by Bharti Infratel''s 42% equity interest in Indus.

As of March 31, 2013, Bharti Infratel owned and operated 35,119 towers with 63,573 co-locations in 11 telecommunication circles while Indus operated 111,819 towers with 221,511 co-locations in 15 telecommunication Circles. With Bharti Infratel''s towers and Bharti Infratel''s 42% interest in Indus, we have an economic interest in the equivalent of 82,083 towers and 156,608 co-locations in India as of March 31, 2013.

Your Company achieved success during the year in gaining its share of the market from all leading telecom operators in its circles of operations, despite several regulatory and business developments, which impacted the telecom industry. The Company observed significant improvement in network uptime delivery during the year, recording the highest ever uptime.

The directors are pleased to inform that the Customer Satisfaction Scores, based on an independent survey, reflect that the Company has excelled on all customer satisfaction aspects as is evident from the higher customer satisfaction scores. Our Network Health Report, a monthly update on overall health of the network, is well received and appreciated by most customers.

On May 31, 2011, the Subsidiary Company "Bharti Infratel Ventures Limited" filed a ''Scheme of Arrangement'' before Hon''ble High Court of Delhi whereby the Subsidiary Company will merge with Indus, with appointed date as April 1, 2009. The Hon''ble High Court of Delhi vide its order dated April 18, 2013 has sanctioned the said Scheme of Arrangement. The Scheme will be effective on filing the Hon''ble High Court''s order with Registrar of Companies (RoC).

FINANCIAL RESULTS AND RESULTS OF OPERATION

Financial highlights of operations of the Company as on March 31, 2013 are as follows:

A. Consolidated financial results as per Indian Generally Accepted Accounting Principles

(Figures in Rs. Mn) Particulars Year ended Year ended March 31, 2013 March 31, 2012

Revenue1 102,720 94,521

EBITDA1 38,354 35,344

Profit before Tax 15,307 11,282

Profit after Tax 10,025 7,491

1 Revenue and EBITDA are excluding other income.

B. Standalone financial results as per Indian Generally Accepted Accounting Principles

Particulars Year ended Year ended March 31, 2013 March 31, 2012

Revenue1 44,601 41,582

EBITDA1 17,772 16,356

Profit before Tax 13,216 6,867

Profit after Tax 10,098 4,492

1 Revenue and EBITDA are excluding other income.

GENERAL RESERVE

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

DIVIDEND

The Board has recommended a final Dividend of Rs. 3.00 per equity share of the face value of Rs. 10 each fully paid up (i.e. 30%) for the financial year 2012-13, amounting to Rs. 6,629 Mn (inclusive of Rs. 963 Mn as tax on Dividend). The payment of dividend is subject to the approval of the shareholders at the ensuing annual general meeting of the Company. The Company has paid interim dividend(s) on September 7, 2012 @ Rs. 2.50 per equity share of Rs. 10 each fully paid up comprising of:

a. dividend of Rs. 1.50 per equity share of Rs. 10 each fully paid up (i.e. 15%), amounting to Rs. 3,038 Mn (inclusive of Rs. 424 Mn as tax on Dividend) out of the accumulated profits earned up to March 31, 2012 and

b. dividend of Rs. 1.00 per equity share of Rs. 10 each fully paid up (i.e. 10%), amounting to Rs. 2,025 Mn (inclusive of Rs. 283 Mn as tax on Dividend) out of profits of the Company for the current year i.e. FY 2012-13.

SHARE CAPITAL

During the year, the share capital of your Company was altered as follows:

a. The authorised share capital was increased from Rs. 6 Bn to Rs. 35 Bn by creation of 2.90 Bn equity shares of Rs. 10 each.

b. 1,161,605,820 equity shares of Rs. 10 each were allotted on August 23, 2012 as Bonus shares in the ratio of 2:1.

c. 146,234,112 equity shares of Rs. 10 each were allotted on December 22, 2012 under the initial public offering at a premium of Rs. 210.90.

d. 100,212 equity shares of Rs. 10 each were allotted on March 19, 2013 under the ESOP scheme at a premium of Rs. 99.67.

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

INITIAL PUBLIC OFFER

Bharti Infratel has listed its equity shares on the NSE and BSE in India on Friday, December 28, 2012. The issue, comprising of 146.23 Mn fresh equity shares and 42.67 Mn equity shares on offer for sale (OFS) by the selling shareholders, opened for subscription during December 11-14, 2012 was oversubscribed 1.26 times. The reserved portion of Qualified Institutional Buyers (QIBs) was oversubscribed 2.84 times.

The Company raised Rs. 32,303 Mn from the public issue excluding Rs. 9,425 Mn pertaining to the OFS by the selling shareholders, namely Compassvale Investments Pte. Ltd., GS Strategic Investments Limited, Anadale Limited and Nomura Asia Investment (IB) Pte. Ltd.

The Company intends to use issue proceeds from the IPO for the installation of new towers, upgradation and replacement on existing towers, green initiatives at tower sites and general corporate purposes.

Bharti Infratel has been included in the FTSE Global Equity Indices starting January 7, 2013. Bharti Infratel was added to FTSE All-World Index (Large Cap) with an investability weighting of 9% and also to FTSE All-Emerging Index.

FTSE''s flagship global benchmark, the FTSE All-World, is used by investors worldwide to structure and benchmark their international equity portfolios. The FTSE global equity universe covers over 7,400 securities in 47 different countries and captures 98% of the world''s investable market capitalization.

The stock has also been shifted from category B to category A Stock of BSE.

FIXED DEPOSITS

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

SUBSIDIARY COMPANY

As on March 31, 2013, the Company has one wholly owned subsidiary (100%), viz, Bharti Infratel Ventures Limited. The statement of Company''s interest in its wholly owned subsidiary, Bharti Infratel Ventures Limited under Section 212(1)(e) of the Companies Act, 1956 is annexed herewith and forms part of the Directors'' Report.

Pursuant to General Circular No. 2/2011 dated February 8, 2011 issued by the Ministry of Corporate Affairs, Government of India, the Board of Directors have consented for not attaching the balance sheet, statement of profit & loss and other documents as set out in section 212(1) of the Companies Act, 1956 in respect of its subsidiary company for the year ended March 31, 2013. The statement pursuant to the circular is annexed as part of the notes to the consolidated accounts of the Company on page 121 of the Annual Report.

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

AUDITORS

The Statutory Auditors of the Company M/s. S.R. Batliboi & Associates LLP (formerly known as M/s. S.R. Batliboi & Associates), Chartered Accountants shall retire at the conclusion of forthcoming annual general meeting. They have given the Company a notice regarding their unwillingness to be reappointed.

M/s. S.R. Batliboi & Co. LLP, Chartered Accountants, have given their consent to act as statutory auditors of the Company and a certificate confirming therein that their appointment, if made, will be within the limits prescribed u/s 224(1B) of the Companies Act, 1956 has been received from them.

M/s. S.R. Batliboi & Co. LLP, Chartered Accountants, is an independent audit firm and none of your directors are related or interested in it, whether directly or indirectly.

AUDITORS'' REPORT

The Board has duly examined the statutory auditors'' report on accounts and clarifications, wherever necessary, have been included in the Notes to Accounts section of the Annual Report.

As regards the comment under para xxi of the annexure to the independent auditors'' report to address the issues of fraud pertaining to electricity payments and asset pilferage, the company has taken appropriate steps including legal action against the external parties involved etc. The Company is further strengthening its internal control systems to reduce the probability of occurrence of such events in future.

SECRETARIAL AUDIT REPORT

Keeping with the high standards of corporate governance adopted by the Company and also to ensure proper compliance with the provisions of various corporate laws, the regulations and guidelines issued by the Securities and Exchange Board of India and the listing agreement, the Company has voluntarily started Secretarial Audit from a practicing company secretary firm.

M/s. Chandrasekaran Associates have been conducting the Secretarial Audit of the Company on continuous basis. They have submitted their report confirming the compliances with all the applicable provisions of various corporate laws. The Secretarial Audit Report is provided separately in the Annual Report.

DIRECTORS

Pursuant to the provisions of the Companies Act, 1956, Mr. Akhil Gupta, Director of the Company, is liable to retire by rotation at the forthcoming annual general meeting and being eligible, offers himself for re-appointment. Further, the term of Mr. Akhil Gupta as Managing Director will expire on July 31, 2013. Your Board, based on the recommendations of the HR & ESOP Compensation Committee, proposes the re-appointment of Mr. Akhil Gupta for a further period of 5 years as per the terms and conditions mentioned in the Notice of ensuing annual general meeting and in terms of the articles of association of the Company. Mr. Akhil Gupta would not be liable to retire by rotation.

Since the date of last Directors'' Report Mr. Rakesh Bharti Mittal, Mr. Bharat Sumant Raut, Mr. Jitender Balakrishnan, Mr. Vinod Dhall and Mr. Sanjay Nayar were appointed w.e.f. September 3, 2012 and Mr. Murray Philip King and Ms. Leena Srivastava were appointed w.e.f. November 5, 2012 as additional director(s) of the Company to hold office up to the date of forthcoming annual general meeting.

The Company has received notices under section 257 of the Companies Act, 1956 proposing the appointment of Mr. Rakesh Bharti Mittal, Mr. Bharat Sumant Raut, Mr. Jitender Balakrishnan, Mr. Vinod Dhall, Mr. Sanjay Nayar, Mr. Murray Philip King and Ms. Leena Srivastava as Director(s) liable to retire by rotation.

Your Board recommends their appointment/ re-appointment at the ensuing annual general meeting.

A brief resume, nature of expertise, details of directorships held in other public limited companies and other information of the directors proposing appointment/re-appointment pursuant to clause 49 of the Listing Agreement with the Stock Exchanges is appended as an annexure to the notice of ensuing annual general meeting.

Mr. Sunil Bharti Mittal, Mr. Rohit Sipahimalani and Mr. Inder Walia resigned from the Board on September 3, 2012. The Board places on record its sincere appreciation for the guidance rendered by Mr. Mittal, Mr. Sipahimalani and Mr. Walia.

CORPORATE GOVERNANCE

Your Company is committed to benchmarking itself with global standards for providing good corporate governance. The Chairman and Directors constantly endeavour to take the business forward in such a way that it maximizes long term value for the stakeholders. The Company has put in place an effective corporate governance system which ensures that the provisions of Clause 49 of the listing agreement are duly complied with.

A detailed report on the corporate governance pursuant to the requirements of clause 49 of the listing agreement forms part of the Annual Report. A certificate from the auditors of the Company, M/s. S. R. Batliboi & Associates LLP, Chartered Accountants, confirming compliance of conditions of corporate governance as stipulated in Clause 49 is annexed to the report as Annexure A.

BOARD COMMITTEES AND ITS COMPOSITION

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

CORPORATE SOCIAL RESPONSIBILITY (CSR)

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

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

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

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The statement as required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the report of the Board of Directors) Rules, 1988 as amended is given in Annexure B to this report.

HUMAN RESOURCES

At Bharti Infratel, we strongly believe that employee engagement is a key pillar towards building organisational effectiveness. The primary objective of achieving a high employee engagement is to create passion in all that we do and enable the workforce towards meeting and surpassing the performance expectations, leading to long-term success. We strongly believe that our people are our competitive advantage and the key to shaping our future.

Our people embody our core values and define who we are. We have 1,256 on roll employees on a standalone basis.

The Company believes in the values of pioneering, service orientation & continuous improvement, positive, passionate & involved and respect & fairness for all stakeholders aligned to the vision. To facilitate leadership development and groom individuals for larger leadership roles, the Company has developed a robust Leadership Competency Framework which defines the essential competencies and behavioural manifestations that are required for future development planning.

EMPLOYEES STOCK OPTION PLAN

Employees continue to be the key driving force of the organization and remain a strong source of our competitive advantage. Therefore, to develop a sense of ownership among the employees within the organization, the Company instituted an employee stock option scheme namely Employee Stock Option Scheme 2008 ("ESOP Scheme 2008"). The objective of ESOP Scheme 2008 is employee engagement and long term retention by providing employees of the Company an opportunity to participate in the Company''s anticipated valuation enhancement by contributing to superior performance and shareholder returns. The Company undertook a bonus issue of equity shares in the ratio of two equity shares for every one equity share held on August 23, 2012. Pursuant to the adjustment made as a result of this bonus issue, the total number of options that can be granted under ESOP Scheme 2008 is 16,215,000.

During the year under review, 100,212 equity shares were allotted to the employees upon exercise of stock options.

Disclosure in compliance with clause 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, as amended, is provided in Annexure C to this report.

A certificate from M/s. S.R. Batliboi & Associates LLP, Chartered Accountants, Statutory Auditors, with respect to the ESOP Scheme 2008 would be placed before the shareholders at the ensuing annual general meeting and a copy of the same will also be available for inspection at the registered office of the Company.

PARTICULARS OF EMPLOYEES

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

QUALITY CONTROL

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

- pre-dispatch inspection of all major material such as tower components, DG sets, shelters and battery banks;

- on-site inspection during works in progress such as civil, electrical and tower installation works;

- quality audits post completion of works to ensure process completion; and

- preventive maintenance audits during operation and maintenance of sites to ensure timely maintenance of equipment and basic site hygiene.

Your Company has a Standard Quality Process and Guidelines for civil, tower and electrical works and a Quality Assurance Plan ("QAP") for pre-dispatch inspection for effective material verification at vendor premises. Regular project reviews, governance meetings and third party audits are conducted on a regular basis in order to encourage maintenance of quality and ensure that towers are strictly in accordance with Company''s approved specifications.

These quality assurance practices enable us to maintain high performance standards across the network, resulting in key long-term advantages:

- good asset life as per specifications and designs;

- high network uptime for customers, with fewer network outages; and

- high levels of customer satisfaction due to hassle-free active infrastructure installation.

AWARDS & RECOGNITION

Recognising our strong business leadership within the telecom tower infrastructure space and our world-class service delivery, your Company was awarded the Top Infrastructure Company Award in the Telecom Infrastructure category at Dun & Bradstreet - Axis Bank Infra Awards 2012, for the second year in a row.

The Company was conferred the CIO 100 Efficient Enterprise Special Awards 2012 for using information technology in innovative ways to deliver business value, create competitive advantage, optimize business processes and enable overall growth.

Your Company won the PCQUEST Best IT Implementation of The Year Award 2012 for implementing Infratel Enterprise Suite (IES) that was designed to automate and align business processes within six value streams in the organization.

For enabling rural telecom penetration in the toughest terrains and remotest locations, your Company was awarded the 2012 - CNBC Essar Steel, Infrastructure Excellence Award as the "Telecom Infrastructure Company of the Year".

The Company was awarded the coveted CIO-APC Green IT Award 2012, for successfully consolidating and virtualising our data center and making significant reduction in carbon emissions.

Your Company won the globally acclaimed iCMG IT Architecture Award 2012 for its landmark end-to-end enterprise tool - Infratel Enterprise Suite. This first of its kinds IT platform within the telecom infrastructure industry, was awarded the Best Enterprise & IT Architecture Award in Telecom category, and was recognised for its intricate stack of technology platforms, integration with multiple applications and the significant cross-functional benefits which it has delivered. The category saw participation across 25 countries and over 100 global organisations.

DIRECTORS'' RESPONSIBILITY STATEMENT

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

I. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

II. we have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended March 31, 2013 and of the profit of the Company for that period;

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

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

ACKNOWLEDGEMENT

The Directors wish to place on record their appreciation for the assistance and co-operation extended by customers, strategic investors, bankers, vendors, business partners, various agencies and departments of Government of India and State Governments where Company''s operations are existing, supporting the Company''s various projects.

The Directors would also like to place on record their sincere appreciation for the valuable contribution, unstinted efforts and the spirit of dedication shown by the employees of the Company at all levels in ensuring an excellent all round operational performance.

For and on behalf of the Board

Place: New Delhi Rakesh Bharti Mittal

Date: April 30, 2013 Chairman


Mar 31, 2009

Dear Shareholders,

The Directors are pleased to present the Third Annual Report on the business and operations of the Company together with audited financial statement and accounts for the financial year ended March 31, 2009.

Business overview

The Company has been formed with the objective of creating an independent tower company, by taking over passive infrastructure of Bharti Airtel Ltd, which would provide passive infrastructure services to all telecom operators in India on a non-discriminatory basis.

Bharti Infratel Limited deploys, owns and manages passive infrastructure in 11 telecom circles comprising of 18 states of the Union of India which comprises of Arunachal Pradesh, Assam, Bihar, Chattishgarh, Haryana, Himachal Pradesh, Jammu & Kashmir, Jharkhand, Madhya Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Orissa, Rajasthan, Tripura, Uttar Pradesh and Uttarakhand.

The Company also holds 42% share in Indus Towers Limited (a Joint Venture between Bharti Infratel, Vodafone & Idea Cellular). Indus Towers operates in 16 circles (4 circles common with Infratel, 12 circles on exclusive basis).

Bharti Infratel has 27,548 towers in 11 circles, excluding the 35,066 towers in 12 circles for which the right of use has been assigned to Indus with effect from 1st Jan 2009. Indus Towers has built 14,484 towers during the financial year ended March 09 and has a portfolio of 95,154 towers including the towers under right to use.

Your Company has implemented a system of robust quality checks. Each tower which is offered to the customer goes through a Total Quality Assurance (TQA) check to ensure that each technical specification is complied with. This audit is conducted by an independent agency. Further, the Company is in the process of implementing a system in place for regular audit of towers deployed across the country to ensure that the towers are maintained in the right condition at all times.

Bharti Infratel Limited has invested in state of the art automated processes and IT in partnership with IBM to enable and deliver world class infrastructure uptimes and deployment services. The Company is in the process of setting up own Tower Operating Center (TOC) with Multiprotocol Label Switching (MPLS) and General Packet Radio Service (GPRS) connectivity to all the sites. This TOC and the data centre will store live information on all the projects being executed across the country. It also tracks the uptime information and behavior of all the equipment online, which is processed for preventive action.

Bharti Infratel Limited is committed towards effective and efficient Energy management in line with its vision of Environment friendliness. The Company has pioneered several technical innovations in the country such as use of Green Shelters, Power Interface Units, Passive s Cooling Material to delay use of DGs, use of Battery Chillers for better energy efficiencies.

The Company is exploring opportunities and is developing strategy to enable it to participate in Clean Development Mechanism (CDM) Program and earn Carbon Credits.

Indus Towers Limited

Indus Towers Limited is a Joint Venture between Bharti Infratel Limited, Vodafone Essar Limited and Idea Cellular Limited to maintain and operate tower infrastructure business with an equity structure of 42:42:16 respectively. Indus Towers Ltd. (Indus) is engaged in the business of providing passive infrastructure at its various telecommunications sites, along with related operations and maintenance services to various telecom operators in India on a shared basis.

During last financial year, Indus has rolled out more than 14,000 new built sites. These sites have been built to cater to the needs of operators like Airtel, Vodafone, Idea and other telecom operators with respect to the requirements for rural coverage and to fulfill the capacity requirements in the existing coverage areas.

In addition to the above, Bharti Infratel, Vodafone and Idea Cellular would transfer approx. 80,000 sites to Indus by way of merger, which is underway. In the interim, the three shareholders in Indus have entered into an arrangement with Indus which gives Indus the right of use of such assets.

Indus is using state of art infrastructure technology, robust IT platform and is in the process of implementing a patented Tower Operating Centre (TOC), a novel concept used for first time in the world to manage its passive infrastructure elements like PIU, SMPS, battery bank and DG set remotely.

Indus has a large pool of domain experts in telecom infrastructure industry.

Financial Results and results of operation

(Figures in '000) Particulars Year ended/March Year ended-March 31,2009 31,2008

Income including other income 26,173,284 4,471,499

Profit/(Loss) before finance expenses, 15,046,539 2,497,779 depreciation & amortisation and taxation

Finance Expenses (Net) 1,115,982 (335,627)

Depreciation & Amortisation (11,788,098) (1,524,056)

Profit/(Loss) before Tax 4,374,423 638,096

Mat Credit 450,895 72,002

Tax Expenses (1.861,941) (291,496)

Net Profit/(Loss) after Tax 2,963,377 418,602

Profit/(Loss) brought forward from earlier 418,531 (71) years

Profit V(Loss) carried to Balance Sheet 3,381,908 418,531





Dividend

The directors believe in the incredible growth potential in the passive infrastructure sector and the Company should capitalize on these by expanding and strengthening its existing network. Keeping in view the Company's need for capital, its growth plans and the intent to finance those plans through internal accruals to maximum, the Directors do not recommend any dividend for the year ended March 31, 2009. The Directors believe this would increase shareholder value and eventually lead to a higher return threshold.

Fixed Deposits

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

Auditors

The Statutory Auditors of the Company M/s. S R Batliboi and Associates, Chartered Accountants shall retire at the conclusion of forthcoming Annual General Meeting and being eligible have offered themselves for re-appointment. A Certificate has been received from M/s. S R Batliboi and Associates confirming therein that their appointment, if made, will be within the limits prescribed u/s 224(1 B) of the Companies Act, 1956.

To have effective governance and internal control mechanism, the Company has appointed 'Control Solutions International' as internal auditors of the Company for the financial year 2008- 2009.

Auditors' Report

The Board has duly examined the statutory auditor's report on accounts and there is no reservation, qualification or adverse remark contained in the said report.

Directors

Since the date of last Directors' Report, Mr. Sunil Bharti Mittal and N. Kumar were appointed as additional director(s) of the Company on 29th April 2008 which have been regularised, as director liable to retire by rotation, in the last annual General Meeting of the Company held on 22nd July, 2008. Mr. N Kumar is an Independent Director.

During the year under review, Mr. Akhil Gupta has been appointed as Managing Director of the Company for a period of five years with effect from 1st August 2008 with remuneration.

Mr. Ashok Juneja has resigned from the services of the board of the Company. The Board places on record its sincere appreciation for the services rendered by Mr. Ashok Juneja during his tenure on the Board.

Pursuant to the provisions of the Companies Act, 1956, Ms. Vijaya Sampath and Mr. Inder Walia, Directors of the Company, are liable to retire by rotation at the forthcoming Annual General Meeting and being eligible, offers themselves for re-appointment.

Subsidiary Company

As on 31st March, 2009 the Company has one wholly owned subsidiary (100%), viz, Bharti Infratel Ventures Limited for the purpose of demerger of the undertaking comprising of the passive infrastructure of the Company in 12 Circles viz. Mumbai, Kolkata, Maharashtra, Tamil Nadu, Kerala, Gujarat, Delhi, Chennai, Kamataka, Andhra Pradesh, Punjab & West Bengal, and subsequent merger thereof with Indus Towers Limited.

A copy of Balance Sheet, Profit and Loss Account, Directors Report and Auditors Report thereon of Bharti Infratel Ventures Limited is attached herewith and form integral part of this report.

The statement of Company's interest in its wholly owned subsidiary, Bharti Infratel Ventures Limited under Section 212(1)(e) of the Companies Act, 1956 is annexed herewith and forms part of the Directors' Report.

Board Committees and its Composition

Since the date of last Director's Report, the Board of Directors has constituted the following Committees of the Board:

1. Audit Committee

The Audit Committee of the Board was constituted by Board of Directors on 29th April, 2008 for analyzing, monitoring and reviewing various financial matters and to perform related activities. As on 31st March 2009, the composition of Audit Committee was as follows:

1. Mr. N. Kumar - Chairman

2. Mr. Akhil Gupta

3. Mr. Carl Ludwig Oliver Haarmann

4. Mr. Padmanabh Sinha

2. HR & ESOP Compensation Committee

The HR and ESOP Compensation Committee of the Board was constituted by Board of Directors on 29th April, 2008 for analyzing, monitoring and reviewing various HR and compensation related matters and to perform related activities. As on 31st March 2009, the composition of HR and ESOP Compensation Committee was as follows:

1. Mr. Inderjit Walia - Chairman

2. Mr. Carl Ludwig Oliver Haarmann

3. Mr. Padmanabh Sinha

3. Related Party Committee

The Related Party Committee of the Board was constituted by Board of Directors on 29m April, 2008 to review and approve all commercial transactions between a shareholder and/or affiliates and company and/or its subsidiary and all transactions regarded as related part transactions As on 31st March 2009, the composition of Related Party Committee was as follows:

1. Mr. Padmanabh Sinha - Chairman

2. Mr. N. Kumar

3. Mr. Carl Ludwig Oliver Haarmann

4. Borrowing Committee

The Board of Directors at their meeting held on 22nd July 2008 constituted the Borrowing Committee for borrowing any sum of money within the overall limit approved by the Board of Directors and shareholders. As on 31st March 2009, the composition of Borrowing Committee was as follows:

1. Mr. Akhil Gupta

2. Mr. InderjitWalia

3. Ms. Vijaya Sampath

Changes in the Capital Structure

Since the date of last Directors' Report, the Authorised Share Capital of the Company has been increased from INR 10,000,000 (INR Ten Million) to INR 6,000,000,000 (INR Six Billion) only.

The shareholders of the Company in the second annual general meeting held on 22nd July 2008, approved the issue of fully paid up bonus shares of Rs. 10/- each in proportion of 9,999 (Nine Thousand Nine Hundred Ninety Nine) bonus shares of Rs. 10/- each for every 1 (one) fully paid up equity share of Rs. 10/- each held by the members by capitalization of requisite sum standing to the credit of the Company's General Reserve/Securities premium account.

Pursuant to the said approval of the members 540,445,950 (Five Hundred Forty Million Four Hundred Forty Five Thousand and Nine Hundred Fifty Only) fully paid equity shares were allotted as bonus shares to the existing members of the Company on 21st August, 2008.

As a result of aforesaid allotment of shares, paid up share capital of the Company stand increased from Rs. 540,500/- (Rs. Five Hundred Forty Thousand and Five Hundred only) to Rs. 5,405,000,000,/- (Rupees Five Billion and Four Hundred Five Million Only).

The Company has appointed Karvy Computershare Pvt. Limited to as its Registrar and Transfer Agent. Equity shares and Compulsorily Convertible Debentures issued by Company are in electronic form.

Employees

Bharti Infratel has over 600 on roll employees and provides direct employment to over 3,000 people. This vast pool of human resource is continuously upgraded in terms of technical and leadership skills through various in house and outsourced training and development activities such as process and project management skills and technical skills such as preventive and breakdown maintenance of equipment. Significant effort and resources are also directed towards building a world class leadership pool to manage this highly distributed set of people across in a very tough environment.

The employees of the Company have contributed most significantly to the growth and development and have been the cornerstone of its success. Equally the Company has endeavored to remain an employer of choice, characterized by a progressive management style with fully empowered teams across the company.

The Company's HR department constantly works on launching various initiatives on an ongoing basis to attract and retain qualified, talented and competent personnel and ensures that the employees are motivated.

The Company values its human resource and is committed to adopt the best HR practices. With an objective of employee engagement and long term retention of the employees by providing them opportunity to participate in the Company's earnings Employee Stock Option Plan (ESOP) Policy has been formulated. The policy also helps in retention of well-performing employees who are contributing to the growth of the Company. The policy offers substantial discount on the fair value for exercise of the grants.

Secretarial Audit

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, the company has voluntarily started a practice of the Audit of Secretarial matters from a practicing company secretary.

Statutory statements

The Statement pursuant to Section 217(2A) of the Companies Act, 1956 read with Companies (Particular of Employees) Rules, 1975 is annexed hereto and forms part of the Report.

Energy Conservation. Technology Absorption and Foreign Exchange Earnings and Outgo

The Statement as required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the report of the Board of Directors) Rules, 1988 as amended is given in Annexure to this report.

Directors' Responsibility Statement - Section 217(2AA) __

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

i. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year ended 31st March, 2009 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, 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.

Awards and Recognitions

Bharti Infratel Ltd has been adjudged as the 'Telecom infrastructure Company of the year' at the Essar Steel Infrastructure Excellence Awards in association with CNBC-TV18. The awards recognize and felicitate infrastructure companies for their contribution to the economic development of India.

This, signifies the recognition of initiatives by the Company to provide passive infrastructure services even in the remotest corners of India which have been instrumental in expansion of mobile services and bridging the digital divide.

Corporate Social Responsibility

The Company has during the year donated an amount of Rs. 209,323 to the Prime Minister Relief Fund.

Acknowledgement

The Directors' wish to place on record appreciation for the assistance and co-operation extended by Strategic Investors, Bankers, Vendors, Business Partners, various Agencies and Departments of Government of India especially the Department of Telecommunications and State Governments where Company's operations are existing, supporting the company's various projects.

The Directors' would also like to place on record their sincere appreciation for the valuable contribution, unstinted efforts and the spirit of dedication shown by the employees of the Company at all levels.

For and on behalf of the Board

Sd/-

Place : New Delhi Sunil Bharti Mittal

Date : 28th April 2009 Chairman

 
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