B.K.

MAJUMDAR INSTITUTE OF BUSINESS ADMINISTRATION

FINANCIAL STATEMENT ANALYSIS BHARTI AIRTEL & IDEA CELLULAR

BY: CHARANJIT SIKH SYBBA-III (#359)

INDEX

INDEX Particulars
BRIEF ANALYSIS OF INDUSTRY & INDUSTRY TREND BRIEF INTRODUCTION TO THE COMPANY FINANCIAL HIGHLIGHTS ACCOUNTING POLICIES CAPITAL STRUCTURE ANALYSIS SHARE HOLDING PATTERN CASH FLOW STATEMENT ANALYSIS COMMON SIZE STATEMENT AWARDS , ACHIEVEMENT & CSR HUMAN RESOURCE ANALYSIS BIBLIOGRAPHY ANNEXURE (P & L A/C & BALANCE SHEET FOR LAST 3 YEARS)

Page No
4 7 19 28 46 52 56 60 66 74 76 78

BRIEF ANALYSIS OF INDUSTRY & INDUSTRY TREND

BRIEF ANALYSIS OF INDUSTRY & INDUSTRY TREND

Telecom industry in India has a big market potentiality and is a fast growing sector. Government of India is eager to reconstitute this telecom industry by enacting effective policies for more investments from foreign companies, which results in a very competitive and deregulated market in the world. Major services and market potentiality of Telecom industry in India Telecommunication sector in India is primarily subdivided into two segments, which are Fixed Service Provider (FSPs) and Cellular Services. Telecom industry in India constitutes some essential telecom services like telephone, radio, television and Internet. Telecom industry in India is specifically emphasizing on latest technologies like GSM( Global System for Mobile Communications), CDMA(Code Division Multiple Access), PMRTS(Public Mobile Radio Trunking Services), Fixed Line and WLL(Wireless Local Loop ). India has a prospering market specifically in GSM mobile service and the number of subscribers is growing very fast. Economic perspective of telecom industry in India Telecom industry in India has a major role in Indian economy. The Indian government is also enforcing some effective telecom policies and regulations for the infrastructural growth of this industry. Indian telecom market provides a tele-density of 8.5 percent as registered in the year 2004. A number of leading multinational telecommunication companies are approaching and showing their interest to invest for the telecom industry in India. Telecommunication industry of India ranked sixth among all the telecommunication sectors in the world. In the year 2004, the total number of telephone subscriptions were US$93.2. Leading telecommunication service providers of telecom industry in India Bharat Sanchar Nigam Limited, Mahanagar Telephone Nigam Limited (MTNL), Videsh Sanchar Nigam Limited (VSNL), Bharti Airtel, Tata Teleservices, SIFY Ltd. are the major telecommunications service providers in India.

Bharti Airtel is one of the most valued company of India. It is also the leading telecom provider in India. Reliance Communications follows Airtel in market capitalization. Interestingly the same order holds good for the total number of subscribers these telecom companies has. Bharti has a subscriber base of 91.1 million and added 2.7 million subscribers in Feb 2009. Reliance added 3.3 million new subscribers in FEB 2009 to take the total to 69.6 million. Reliance rolled out its GSM operations late last year following which there was a surge in the number of new subscribers. It also added more subscribers than Airtel in a month. Following MTNL is the list of other telecom providers in infrastructure, equipment and value added services. Vodafone-Essar which has 66 million subscribers is not listed on the Indian Bourses. BSNL is also not listed and that is the reason why it is not in the list. If listed it could be one of the top companies. There is a lot of things happening around BSNLs IPO even before the recession started. Now, that the recession has started the IPO plans were postponed. But, BSNL will dilute 10% stake sooner than later. *Market valuations as on 20 MAR 2009.

TOP 10 TELECOM CO. IN INDIA

Company Name Bharti Airtel Reliance Communications Idea Cellular Tata Communications Tata Teleservices Spice Communications MTNL GTL GTL Infrastructure OnMobile Global

Market Cap in Crores 108066.23 32683.44 14368.92 13181.25 4393.06 4136.13 4044.6 2475.12 2210.49 1403.52

BRIEF INTRODUCTION TO BHARTI AIRTEL

Managing director of Bharti Airtel.

BRIEF INTRODUCTION TO THE COMPANY

BHARTI AIRTEL
Sunil Bharti Mittal founded the Bharti Group. In 1983, Sunil Mittal was into an agreement with Germany's Siemens to manufacture the company's push-button telephone models for the Indian market. 8

 In 1986, Sunil Bharti Mittal incorporated Bharti Telecom Limited (BTL) and his company became the first in India to offer push-button telephones, establishing the basis of Bharti Enterprises. This first-mover advantage allowed Sunil Mittal to expand his manufacturing capacity elsewhere in the telecommunications market. By the early 1990s, Sunil Mittal had also launched the country's first fax machines and its first cordless telephones. In 1992, Sunil Mittal won a bid to build a cellular phone network in Delhi. In 1995, Sunil Mittal incorporated the cellular operations as Bharti TeleVentures and launched service in Delhi. In 1996, cellular service was extended to Himachal Pradesh. In 1999, Bharti Enterprises acquired control of JT Holdings, and extended cellular operations to Karnataka and Andhra Pradesh. In 2000, Bharti acquired control of Skycell Communications, in Chennai. In 2001, the company acquired control of Spice Cell in Calcutta. Bharti Enterprises went public in 2002, and the company was listed on Bombay Stock Exchange and National Stock Exchange of India. In 2003, the cellular phone operations were rebranded under the single Airtel brand. In 2004, Bharti acquired control of Hexacom and entered Rajasthan. In 2005, Bharti extended its network to Andaman and Nicobar.'2009, Airtel launched its first international mobile network in Sri Lanka. In 2010, Airtel began operating end Today, Airtel is the largest cellular service provider in India and fifth largest in the world.

ISTING DETAILS
Year Ending Month AGM Date (Month) Book Closure Date (Month) Face Value Of Equity Shares Market Lot Of Equity Shares BSE Code NSE Code BSE Group Sensex Nifty BSE-100 BSE-200 S&P CNX 500 CNX Midcap CNX FMCG Listed On The Stock Exchange, Mumbai, National Stock Exchange of India Ltd. Mar Sep Aug/Sep 5 1 532454 BHARTIARTL A Yes Yes Yes Yes Yes No No

10

Registered Address
Bharti Cresent, 1, Nelson Mandela Road,,Vasant Kunj, New Delhi Delhi 110070 Tel: 011-46666100 011-46666500 Fax: 011-46666137 011-41666149 Email: [email protected] Website: http://www.airtel.com Group: Bharti Group

Management - Bharti Airtel

Name Sunil Bharti Mittal Ajay Lal Chua Sock Koong Lord Evan Mervyn Davies N Kumar Pulak Prasad Rakesh Bharti Mittal Tan Yong Choo Name Manoj Kohli Akhil Gupta Craig Ehrlich Hui Weng Cheong Nikesh Arora Rajan Bharti Mittal Salim Ahmed Salim Tsun-yan Hsieh Designation Chairman and Managing director Non Executive Director Non Executive Director Non Executive Director Non Executive Director Non Executive Director Non Executive Director Non Executive Director Designation Joint Managing Director & CEO Non Executive Director Non Executive Director Non Executive Director Non Executive Director Non Executive Director Non Executive Director Non Executive Director

11

LOCATION DETAIL LOCATION TYPE

Registered & Corporate Office Qutab Ambience H-5/12 Mehrauli Road New Delhi - 110030 Delhi - India Phone : 41666000 Fax : 41666011/ 12 Email : [email protected] Internet : N.A. Qutab Ambience H-5/12 Mehrauli Road New Delhi - 110030 Delhi - India Phone : 41666000 Fax : 41666011/ 12 Email : [email protected] Internet : N.A. Aravali Crescent, 1, Nelson Mandela Road, Vasant Kunj, Phase 2, New Delhi - 110070 Delhi - India Phone : 41666111 Fax : 41666137, 41666146 Email : [email protected] Internet : N.A. Aravali Crescent, 1, Nelson Mandela Road, Vasant Kunj, Phase 2, New Delhi - 110070 Delhi - India Phone : 46666100 Fax : 46666137 Email : [email protected] Internet : N.A. Bharti Cresent, 1, Nelson Mandela Road, Vasant Kunj, Phase - II New Delhi - 110070 Delhi - India Phone : 46666100, 46666500, 46666255 Fax : 46666137, 41666149 Email : [email protected] Internet : N.A.

Registered Office

Registered Office

Registered & Corporate Office

Registered & Corporate Office

12

BRIEF INTRODUCTION TO IDEA CELLULAR

13

CEO of the Idea Cellular.

IDEA CELLULAR
Idea cellular was initially incorporated as Birla Communications Limited on March 14, 1995 & granted a certificate of commencement of business on August 11, 1995. Their registered office was in Mumbai, Maharashtra. The name was then changed to Birla AT&T Communications Ltd. On May 30, 1996. In 2000, Tata Cellular was a company providing mobile services in Andhra Pradesh. When Birla-AT&T brought Maharashtra and Gujarat to the table, the merger of these two entities was a reality. Thus BirlaTata-AT&T, popularly known as Batata, was born and was later branded as !dea. Idea is the 4th largest wireless carrier in Indian market with over 100 million customers and also provides broadband Internet to its customers.

About IDEA
IDEA Cellular is a publicly listed company, having listed on BSE & NSE in March 2007. It is the 3rd largest mobile services operator in India with wireless revenue market share at 13.9 % in Q1 FY2012. Idea has join the select global operators club servicing over 100 million subscribers, as of September 2011. Idea is a pan-India integrated GSM operator and has its own NLD and ILD operations, and ISP license. With traffic in excess of a billion minutes a day, Idea ranks
14

among the Top 10 country operators in the world. Idea operates across all 22 service areas with 2G services, and 3G services are being progressively rolled out to cover over 3,000 towns by FY 2012. Idea has a network of over 70,000 cell sites covering the entire length and breadth of the country. Idea has over 3,000 Service Centres servicing Idea subscribers across the country, including 450 special Experience Zones for 3G promotion. Ideas service delivery platform is ISO 9001:2008 certified, making it the only operator in the country to have this standard certification for all 22 service areas and the corporate office. Ideas strong growth in the Indian telephony market comes from its deep penetration in non-urban & rural markets. It has the highest share of rural subscribers as a percentage of total subscribers, amongst other GSM players. In fact, 2 out of every 3 new Idea subscribers come from rural/ semi-urban India. Idea is the winner of The Emerging Company of the Year Award at The Economic Times Corporate Excellence Awards 2009. IDEA Cellular also received the prestigious Avaya GlobalConnect Award for being the Most Customer Responsive Company in the Telecom sector in the year 2010. The company has received several other national and international recognitions for its path-breaking innovations in mobile telephony products & services. It won the GSM Association Award for Best Billing and Customer Care Solution for 2 consecutive years. It was awarded Mobile Operator of the Year Award India for 2007 and 2008 at the Annual Asian Mobile News Awards. IDEA Cellular is an Aditya Birla Group Company, Indias first truly multinational corporation. The group operates in 33 countries, and is anchored by more than 132,000 employees belonging to 42 nationalities.

15

LISTING DETAILS
Year Ending Month AGM Date (Month) Book Closure Date (Month) Mar Sep Sep

Face Value Of Equity Shares

10

16

Market Lot Of Equity Shares BSE Code NSE Code BSE Group

1 532822 IDEA A

Sensex Nifty BSE-100 BSE-200 S&P CNX 500 CNX Midcap CNX FMCG

No No Yes Yes Yes No No

Listed On

The Stock Exchange, Mumbai, National Stock Exchange of India Ltd.

17

Registered Address
Suman Tower, Plot No. 18,,Sector-11 Gandhinagar Gujarat 382011 Tel: 02712-66714000 Fax: 02712-23232251 Email: [email protected] Website: http://www.ideacellular.com Group: Birlas (Aditya Vikram) Group

Management - Idea Cellular

Name Kumar Mangalam Birla Rajashree Birla Biswajit A Subramanian Sanjeev Aga Gian Prakash Gupta Tarjani Vakil P Murari Madhabi Puri Buch Name Himanshu Kapania Rakesh Jain Juan Villalonga Navarro Arun Thiagarajan Mohan Gyani R C Bhargava Shridhir Sariputta Hansa Wijayasuriya Designation Chairman / Chair Person Non Executive Director Non Executive Director Non Executive Director Independent Director Independent Director Independent Director Independent Director Designation Managing Director Non Executive Director Non Executive Director Independent Director Independent Director Independent Director Alternate Director

18

LOCATION DETAIL LOCATION TYPES

Registered Office Suman Tower Plot No. 18 Gandhinagar - 382011 Gujarat - India Phone : 66714000 Fax : 23232251 Email : [email protected] Internet : N.A. 11/1, Sharada Center Off Karve Road Pune - 411004 Maharashtra - India Phone : M 9850003222 , Fax : 9850003999 Email : [email protected] Internet : N.A. Suman Tower, Plot No. 18, Sector-11 Gandhinagar - 382011 Gujarat - India Phone : 66714000 Fax : 23232251 Email : [email protected] Internet : N.A. Windsor, 5th Floor, Off CST Road, Near Vidya Nagari, Kalina, Santacruz (East) Mumbai - 400098 Maharashtra - India Phone : 66820000 Fax : 66820499 Email : [email protected] Internet : N.A. Windsor, 5th Floor, Off CST Road, Near Vidya Nagari, Kalina, Santacruz (East) Mumbai - 400098 Maharashtra - India Phone : 66820000 Fax : 66820499 Email : [email protected] Internet : N.A.

Corporate Office

Registered Office

Corporate Office

Corporate Office

19

FINANCIAL HIGHLIGHTS

20

FINANCIAL HIGHLIGHTS
1. TOTAL INCOME

ANALYSIS
In the above graph we can see that the total income of Bharti Airtel is more than Idea Cellular since 2005 and has grown steeply as compared to the total income of Idea Cellular. At present there s a difference of almost 22000 Rs. (in crores) between the total income of Idea Cellular and Bharti Airtel We can also say that by the time IDEA is also recovering its position in the market .

21

2. PROFIT BEFORE DEPRECIATION, INTEREST & TAX

ANALYSIS
The PBDIT ( Profit Before Interest, Depreciation & Tax) is more of Bharti Airtel than of Idea Cellular. There is a difference of almost 10000 (in Rs. Cr.) between the PBDIT of Bharti Airtel & Idea Cellular. In 2008 the IDEA tried to get through it but again in 2010 it went down .

22

3. PROFIT BEFORE DEPRECIATION & TAX

ANALYSIS
The difference between PBDIT & PBDT of Bharti Airtel is less than that of Idea Cellular which shows that the interest paid by BA is less than IC and hence the profit before depreciation and tax of BA is more than that of IC. The PBDT for AIRTEL is higher than the other that means Airtel can be highly getting profit before depereciation and tax.

23

4. PROFIT AFTER TAX

ANALYSIS
The PAT of Bharti Airtel is more than the PAT of Idea Cellular as there is a clear difference of almost 6000 (in Rs. Cr.) between their respective PAT. And this can be a huge amount for the beginner company like IDEA in oppose to AIRTEL.

24

5. EARNINGS PER SHARE

ANALYSIS
Earning per Share is more for the share holders of Bharti Airtel than that for the share holders of Idea Cellular. There is a clear difference of almost 15-17 Rs per share between the EPS of IC & BA. From this EPS we can see that the AIRTEL is the strongest in compare to any brand and it have such amount of EPS.

25

6. BOOK VALUE PER SHARE

ANALYSIS
The book value of BA has been more than IC in all the years but between 2009-10 there was a visible decrease in the book value of BA. But then to Idea cant make close to Airtel as since its a such experienced company in this market .

26

7. NET WORTH

ANALYSIS
THE Net Worth of BA is more than the Net Worth of IC. This thing only make Airtel a better company than the Idea . But also Idea can manage to do good in future .

27

8. TOTAL ASSETS

ANALYSIS
The total assets of Bharti Airtel is more than the total asstes of Idea Cellular that shows the total investment done by Bharti Airtel is more than the total investment done by Idea Cellular. As AIRTEL is older than the Idea its total assets are higher than idea but here idea did a good try to come over in a short period of time .

28

ACCOUNTING POLICIES FOR BHARTI AIRTEL

29

ACCOUNTING POLICIES
ACCOUNTING POLICIES OF AIRTEL
1. BASIS OF PREPARATION The financial statements have been prepared to comply in all material respects with the Notifi ed accounting standards issued by Companies (Accounting Standards) Rules, 2006, (''as amended'') and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis except in case of assets for which revaluation is carried out. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year. 2. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting year end. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates. 3. FIXED ASSETS Fixed Assets are stated at cost of acquisition and subsequent improvements thereto, including taxes and duties (net of cenvat credit), freight and other incidental expenses related to acquisition and installation. Capital work-in-progress is stated at cost. Site restoration cost obligations are capitalised when it is probable that an outfl ow of resources will be required to settle the obligation and a reliable estimate of the amount can be made. The intangible component of license fee payable by the Company for cellular and basic circles, upon migration to the National Telecom Policy (NTP 1999), i.e. Entry Fee, has been capitalised as an asset and the one time license fee paid by the Company for acquiring new licences (post NTP 1999) (basic, cellular, national long distance and international long distance services) has been capitalised as an 30

intangible asset. 4. DEPRECIATION/AMORTISATION Depreciation on fixed assets is provided on the straight line method based on useful lives of respective assets as estimated by the management or at the rates prescribed under Schedule XIV of the Companies Act, 1956, whichever is higher. Leasehold land is amortised over the period of lease. Depreciation rates adopted by the Company are as follows: Useful lives Leasehold Land Period of lease Building 20 years Building on Leased Land 20 years Leasehold Improvements Period of lease or 10 years whichever is less Plant and Machinery 3 years to 20 years Computer and Software 3 years Offi ce Equipment 2 years/5 years Furniture and Fixtures 5 years Vehicles 5 years Software up to Rs. 500 thousand is fully amortised within one year from the date it is placed in service. Bandwidth capacity is amortised on straight-line basis over the period of the agreement subject to a maximum of 18 years i.e. estimated useful life of bandwith. The Entry Fee capitalised is amortised over the period of the license and the one time licence fee is amortised over the balance period of licence from the date of commencement of commercial operations. 3G spectrum fees is being amortised over the period of license from the effective date of launch of 3G services. The site restoration cost obligation capitalised is depreciated over the period of the useful life of the related asset. 31

Fixed Assets costing up to Rs. 5 thousand (other than identifi ed CPE) are being fully depreciated within one year from the date of acquisition. 5. REVENUE RECOGNITION AND RECEIVABLES Mobile Services Service revenue is recognised on completion of provision of services. Service revenue includes income on roaming commission and an access charge recovered from other operators, and is net of discounts and waivers. Revenue, net of discount, is recognised on transfer of all signifi cant risks and rewards to the customer and when no signifi cant uncertainty exists regarding realisation of consideration. Processing fees on recharge is being recognised over the estimated customer relationship period or voucher validity period, as applicable. Revenue from prepaid calling cards packs is recognised on the actual usage basis. Telemedia Services Service revenue is recognised on completion of provision of services. Revenue is recognised when no signifi cant uncertainty exists regarding realisation of consideration. Service Revenue includes access charges recovered from other operators, and is net of discounts and waivers. Enterprise Services Revenue, net of discount, from sale of goods is recognised on transfer of all signifi cant risks and rewards to the customer and when no signifi cant uncertainty exists regarding realisation of consideration. Revenue on account of bandwidth service is recognised on time proportion basis in accordance with the related contracts. Service Revenue includes access charges recovered from other operators, revenues from registration, installation and provision of Internet and Satellite services. Registration fees is recognised at the time of dispatch and invoicing of Start up Kits. Installation charges are recognised as revenue on satisfactory completion of installation of hardware and service revenue is recognised from the date of satisfactory installation of equipment and software at the customer site and provisioning of Internet and Satellite services. Activation Income Activation revenue and related direct activation costs, not exceeding 32

the activation revenue, are deferred and amortised over the related estimated customer relationship period, as derived from the estimated customer churn period. Investing and other Activities Income on account of interest and other activities are recognised on an accrual basis. Dividends are accounted for when the right to receive the payment is established. Provision for doubtful debts The Company provides for amounts outstanding for more than 90 days in case of active subscribers, roaming receivables, receivables for data services and for entire outstanding from deactivated customers net off security deposits or in specifi c cases where management is of the view that the amounts from certain customers are not recoverable. For receivables due from the other operators on account of their National Long Distance (NLD) and International Long Distance (ILD) traffi c for voice and Interconnect Usage charges (IUC), the Company provides for amounts outstanding for more than 120 days from the date of billing, net of any amounts payable to the operators or in specifi c cases where management is of the view that the amounts from these operators are not recoverable. Accrued Billing revenue Accrued billing revenue represent revenue recognized in respect of Mobile, Broadband and Telephone, and Long Distance services provided from the bill cycle date to the end of each month. These are billed in subsequent periods as per the terms of the billing plans. 6. INVENTORY Inventory is valued at the lower of cost and net realisable value. Cost is determined on First-in-First-out basis. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale. The Company provides for obsolete and slow-moving inventory based on management estimates of the usability of inventory. 7. INVESTMENT Current Investments are valued at lower of cost and fair market value determined on individual basis.

33

Long-term Investments are valued at cost. Provision is made for diminution in value to recognise a decline, if any, other than that of temporary nature. 8. LICENSE FEES REVENUE SHARE With effect from August 1, 1999, the variable Licence fee computed at prescribed rates of revenue share is charged to the Profit and Loss Account in the year in which the related revenues are recognised. Revenue for this purpose identifi ed as adjusted gross revenue as per the respective license agreements. 9. FOREIGN CURRENCY TRANSLATION, ACCOUNTING FOR FORWARD CONTRACTS AND DERIVATIVES Initial Recognition Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction. Conversion Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined. Exchange Differences Exchange differences arising on the settlement of monetary items or on restatement of the Company''s monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as income or as expenses in the year in which they arise as mentioned below. Forward Exchange Contracts covered under AS 11, ''The Effects of Changes in Foreign Exchange Rates'' Exchange differences on forward exchange contracts and plain vanilla currency options for establishing the amount of reporting currency and not intended for trading and speculation purposes, are recognised in the Profit and Loss account in the year in the which the exchange rate changes. The premium or discount arising at the inception of forward 34

exchange contracts is amortised as expense or income over the life of the contract. Any Profit or loss arising on cancellation or renewal of such forward exchange contract is recognised as income or expense for the year. Exchange difference on forward contracts which are taken to establish the amount other than the reporting currency arising due to the difference between forward rate available at the reporting date for the remaining maturity period and the contracted forward rate (or the forward rate last used to measure a gain or loss on the contract for an earlier period) are recognised in the Profit and loss account for the year. Other Derivative Instruments, not in the nature of AS 11, ''The Effects of Changes in Foreign Exchange Rates'' The Company enters into various foreign currency option contracts and interest rate swap contracts that are not in the nature of forward contracts designated under AS 11 as such and contracts that are not entered to establish the amount of the reporting currency required or available at the settlement date of a transaction; to hedge its risks with respect to foreign currency fl uctuations and interest rate exposure arising out of import of capital goods using foreign currency loan. At every year end all outstanding derivative contracts are fair valued on a mark-to-market basis and any loss on valuation is recognised in the Profit and loss account, on each contract basis. Any gain on mark-to-market valuation on respective contracts is not recognised by the Company, keeping in view the principle of prudence as enunciated in AS 1, ''Disclosure of Accounting Policies''. Any reducti on to fair values and any reversals of such reductions are included in Profit and loss statement of the year. Embedded Derivative Instruments The Company occasionally enters into contracts that do not in their entirety meet the defi nition of a derivative instrument that may contain embedded derivative instruments implicit or explicit terms that affect some or all of the cash fl ow or the value of other exchanges required by the contract in a manner similar to a derivative instrument. The Company assesses whether the economic characteristics and risks of the embedded derivative are clearly and closely related to the economic characteristics and risks of the remaining component of the host contract and whether a separate, non-embedded instrument with the same terms as the embedded instrument would meet the defi nition of a derivative instrument. When it is determined that (1) the embedded derivative possesses economic characteristics and risks that are not clearly and closely related to the economic characteristics and risks of the host contract and (2) a separate, standalone instrument with the same terms would qualify as a derivative instrument, the embedded 35

derivative is separated from the host contract, carried at fair value as a trading or non-hedging derivative instrument. At every year end, all outstanding embedded derivative instruments are fair valued on mark-to-market basis and any loss on valuation is recognised in the Profit and loss account for the year. Any reduction in mark to market valuations and reversals of such reductions are included in Profit and loss statement of the year. Translation of Integral and Non-Integral Foreign Operation The financial statements of an integral foreign operation are translated as if the transactions of the foreign operation have been those of the Company itself. In translating the financial statements of a non-integral foreign operation for incorporation in financial statements, the assets and liabilities, both monetary and non-monetary are translated at the closing rate; income and expense items are translated at exchange rate at the date of transaction for the year; and all resulting exchange differences are accumulated in a foreign currency translation reserve until the disposal of the net investment. Foreign exchange contracts for trading and speculation purpose Foreign exchange contracts intended for trading and/or speculation are fair valued on a mark-to-market basis and any gain or loss on such valuation is recognised in the Profit and Loss Account for the year. 10. EMPLOYEE BENEFITS (a) Short-term employee benefi ts are recognised in the year during which the services have been rendered. (b) All employees of the Company are entitled to receive benefi ts under the Provident Fund, which is a defi ned contribution plan. Both the employee and the employer make monthly contributions to the plan at a predetermined rate (presently 12%) of the employees'' basic salary. These contributions are made to the fund administered and managed by the Government of India. In addition, some employees of the Company are covered under the employees'' state insurance schemes, which are also defi ned contribution schemes recognised and administered by the Government of India. The Company''s contributions to both these schemes are expensed in the Profit and Loss Account. The Company has no further obligations under these plans beyond its monthly contributions. (c) Some employees of the Company are entitled to superannuation, a defi ned contribution plan which is administered through Life Insurance 36

Corporation of India (LIC). Superannuation benefi ts are recorded as an expense as incurred. (d) Short-term compensated absences are provided for, based on estimates. Long-term compensated absences are provided for based on actuarial valuation. The actuarial valuation is done as per projected unit credit method at the end of each period/year. (e) The Company provides for gratuity obligations through a defi ned benefi t retirement plan (the ''Gratuity Plan'') covering all employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement or termination of employment based on the respective employee salary and years of employment with the Company. The Company provides for the Gratuity Plan based on actuarial valuations as per the Projected Unit Credit Method at the end of each period/year in accordance with Accounting Standard 15, Employee Benefi ts. The Company makes annual contributions to the LIC for the Gratuity Plan in respect of employees at certain circles. (f) Other Long-term employee benefi ts are provided based on actuarial valuation made at the end of each period/ year. The actuarial valuation is done as per projected unit credit method. (g) Actuarial gains and losses are recognised as and when incurred. 11. PRE-OPERATIVE EXPENDITURE Expenditure incurred by the Company from the date of acquisition of license for a new circle or from the date of start-up of new venture or business, up to the date of commencement of commercial operations of the circle or the new venture or business, not directly attributable to fixed assets are charged to the Profit and Loss account in the year in which such expenditure is incurred. 12. LEASES a) Where the Company is the lessee Leases where the lessor effectively retains substantially all the risks and benefi ts of ownership of the leased term, are classifi ed as operating leases. Lease Rentals with respect to assets taken on ''Operating Lease'' are charged to the Profit and Loss Account on a straight-line basis over the lease term. Leases which effectively transfer to the Company substantially all the risks and benefi ts incidental to ownership of the leased item are classifi ed as fi nance lease. Assets acquired on ''Finance Lease'' which transfer risk and rewards of ownership to the Company are capitalised as assets by the Company at the lower of fair value of the 37

leased property or the present value of the minimum lease payments. Amortisation of capitalised leased assets is computed on the Straight Line method over the useful life of the assets. Lease rental payable is apportioned between principal and fi nance charge using the internal rate of return method. The fi nance charge is allocated over the lease term so as to produce a constant periodic rate of interest on the remaining balance of liability. b) Where the Company is the lessor Lease income in respect of ''Operating Lease'' is recognised in the Profi t and Loss Account on a straight-line basis over the lease term. Finance leases as a dealer lessor are recognized as a sale transaction in the Profit and Loss Account and are treated as other outright sales. Finance Income is recognised based on a pattern refl ecting a constant periodic rate of return on the net investment of the lessor outstanding in respect of the lease. c) Initial direct costs are expensed in the Profit and Loss Account at the inception of the lease. 13. TAXATION Current Income tax is measured at the amount expected to be paid to the tax authorities in accordance with Indian Income Tax Act, 1961. Deferred income taxes refl ects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised and reviewed at each balance sheet date, only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable Profits. At each balance sheet date, unrecognised deferred tax assets of earlier years are re-assessed and recognised to the extent that it has become reasonably or virtually certain, as the case may be, that future taxable income will be available against which such deferred tax assets can be realised. Minimum Alternative Tax (MAT) credit is recognised as an asset only 38

when and to the extent there is convincing evidence that the Company will pay normal income tax during the specifi ed period. In the year in which the MAT credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in Guidance Note issued by the ICAI, the said asset is created by way of a credit to the Profi t and Loss account and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specifi ed period. 14. BORROWING COST Borrowing cost attributable to the acquisition or construction of fi xed assets which takes substantial period of time to get ready for its intended use is capitalised as part of the cost of that asset. Other borrowing costs are recognised as an expense in the year in which they are incurred. The interest cost incurred for funding a qualifying asset during the acquisition/construction period is capitalised based on actual investment in the asset at the average interest rate. 15. IMPAIRMENT OF ASSETS The carrying amounts of assets are reviewed at each balance sheet date for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the assets'' carrying amount exceeds its recoverable amount. The recoverable amount is the higher of the assets'' fair value less costs to sell and value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifi able cash flows (cash generating units). 16. SEGMENTAL REPORTING a) Primary Segment The Company operates in three primary business segments viz. Mobile Services, Telemedia Services and Enterprise Services. b) Secondary Segment The Company has operations within India as well as in other countries through entities located outside India. The operations in India constitute the major part, which is the only reportable segment, the remaining portion being attributable to others. 17. EARNINGS PER SHARE 39

The earnings considered in ascertaining the Company''s Earnings Per Share (''EPS'') comprise the net Profit after tax. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the period. The weighted average number of equity shares outstanding during the year is adjusted for events of share splits/bonus issue post year end and accordingly, the EPS is restated for all periods presented in these financial statements. The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity shares unless impact is anti dilutive. The weighted average number of equity shares outstanding during the year are adjusted for events of bonus issue; bonus element in a rights issue to existing shareholders; share split; and reverse share split (consolidation of shares). 18. ASSET RETIREMENT OBLIGATIONS (ARO) Provision for ARO is based on past experience and technical estimates. 19. PROVISIONS Provisions are recognised when the Company has a present obligation as a result of past event; it is more likely than not that an outfl ow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to refl ect the current best estimates. 20. EMPLOYEE STOCK OPTIONS OUTSTANDING Employee Stock options outstanding are valued using Black Scholes/ Monte Carlo/ Lattice valuation option pricing model and the fair value is recognised as an expense over the period in which the options vest. The difference between the actual purchase cost of shares issued upon exercise of options and the sum of fair value of the option and exercise price is adjusted against General Reserve. 21. CASH AND CASH EQUIVALENTS Cash and Cash equivalents in the Balance Sheet comprise cash in hand and at bank and short-term investments.

40

ACCOUNTING POLICIES FOR IDEA CELLULER

41

 ACCOUNTING POLICIES OF IDEA CELLULAR

1. Basis of Preparation of Financial Statements: The Financial Statements have been prepared under the historical cost convention on accrual basis. The mandatory applicable accounting standards in India and the provisions of the Companies Act, 1956 have been followed in preparation of these financial statements. 2. Fixed Assets: Fixed assets are stated at cost of acquisition and installation less accumulated depreciation. Cost is inclusive of freight, duties, levies and any directly attributable cost of bringing the assets to their working condition for intended use. Asset retirement obligations are capitalized based on a constructive obligation as a result of past events, when it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made. Such costs are depreciated over the remaining useful life of the asset. 3. Expenditure during pre-operative period of license: Expenses incurred on project and other charges during construction period are included under pre-operative expenditure (grouped under Capital Work in Progress) and are allocated to the cost of Fixed Assets on the commencement of commercial operations. 4. Depreciation and Amortisation: Depreciation on fixed assets is provided on straight-line method (except stated otherwise) on the basis of estimated useful economic lives as given below: i) Cost of Rights, Licences including the fees paid on fixed basis prior to revenue share regime and Spectrum fee is amortised on straight-line method on commencement of operations over the validity period. ii) Software, which is not an integral part of Hardware, is treated as Intangible asset and is amortized over their useful economic lives as estimated by the management between 3 to 5 years. iii) Bandwidth / Fibre taken on Indefeasible Right of Use (IRU) is amortised over the agreement period. 42

Assets costing upto Rs. 5,000/- are depreciated fully in the month of purchase. 5. Inventories: Inventories are valued at cost or net realisable value, whichever is lower. Cost is determined on weighted average basis. 6. Foreign currency transactions: Transactions in foreign currency are recorded at the exchange rates prevailing at the dates of the transactions. As per the transitional provisions given in the notification issued by Ministry of Corporate Affairs dated 31st March, 2009, the company has opted for the option of adjusting the exchange difference on long term foreign currency monetary items to the cost of the assets acquired out of these foreign currency monetary items. The company has aligned its accounting policy based on this notification. Exchange difference arising out of fluctuation in exchange rates on settlement / period end is accounted based on the nature of transaction as under: 1) Short term foreign currency monetary assets and liabilities: recognised in the Profit and Loss account. 2) Long term foreign currency monetary liabilities used for acquisition of fixed assets: adjusted to the cost of the fixed assets and amortised over the remaining useful life of the asset. 3) Other long term foreign currency monetary liabilities: recognised in Foreign Currency Monetary Item Translation Difference Account and amortised over the period of liability not exceeding 31st March, 2012. 7. Taxation: a) Current Tax: Provision for current income tax is made on the taxable income using the applicable tax rates and tax laws. b) Deferred Tax: Deferred tax arising on account of timing differences and which are capable of reversal in one or more subsequent periods is recognised using the tax rates and tax laws that have been enacted or substantively enacted. Deferred tax assets are not recognised unless there is virtual certainty with respect to the reversal of the same in future years. c) Minimum Alternative Tax (MAT) credit: MAT credit is recognised as an asset only when and to the extent there is convincing evidence that the 43

Company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in Guidance Note issued by the ICAI, the said asset is created by way of a credit to the Profit and Loss account and shown as MAT credit entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT credit entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal income tax during the specified period. 8. Retirement Benefits: Contributions to Provident and Pension funds are funded with the appropriate authorities and charged to the Profit and Loss Account. Contributions to superannuation are funded with the Life Insurance Corporation of India and charged to the profit and loss account. Liability for gratuity as at the year end is provided on the basis of actuarial valuation and funded with Life Insurance Corporation of India. Provision in accounts for leave benefits to employees is based on actuarial valuation done by projected accrued benefit method at the period end. 9. Revenue Recognition and Receivables: Revenue on account of telephony services (mobile & long distance) and sale of handsets and related accessories is recognized net of rebates, discount, service tax etc. on rendering of services and supply of goods respectively. Recharge fees on recharge vouchers is recognized as revenue as and when the recharge voucher is activated by the subscriber. Service income from passive infrastructure is recognized on accrual basis (net of reimbursements) as per the contractual terms on straight line method over the contract period. Unbilled receivables represent revenues recognized from the bill cycle date to the end of each month. These are billed in subsequent periods as per the terms of the billing plans. Debts (net of security deposits outstanding there against) due from subscribers, which remain unpaid for more than 90 days from the date of bill and/or other debts which are otherwise considered doubtful, are provided for. Provision for doubtful debts on account of interconnect usage charges 44

(IUC), roaming charges and passive infrastructure sharing from other telecom operators is made for dues outstanding more than 180 days from the date of billing other than cases when an amount is payable to that operator or in specific case when management is of the view that the amount is recoverable. 10. Investments: Current investments are stated at lower of cost or fair value in respect of each separate investment. Long-term investments are stated at cost less provision for diminution in value other than temporary, if any. 11. Borrowing Cost: Interest and other costs incurred in connection with the borrowing of the funds are charged to revenue on accrual basis except those borrowing costs which are directly attributable to the acquisition or construction of those fixed assets, which necessarily take a substantial period of time to get ready for their intended use. Such costs are capitalized with the fixed assets. 12. Licence Fees Revenue Share: With effect from 1st August, 1999 the variable licence fee computed at prescribed rates of revenue share is being charged to the profit and loss account in the period in which the related revenue arises. Revenue for this purpose comprises adjusted gross revenue as per the licence agreement of the licence area to which the licence pertains. 13. Use of Estimate: The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting year. Differences between actual results and estimates are recognised in the periods in which the results are known / materialise. 14. Leases: a) Operating: Lease of assets under which significant risks and rewards of ownership are effectively retained by the lessor are classified as operating leases. Lease payments under an operating lease are recognised as expense in the profit and loss account, on a straight-line or other systematic basis over the lease term.

45

b) Finance: Leased assets acquired on which significant risk and reward of ownership effectively transferred to the Company are capitalised at lower of fair value or the amounts paid under such lease arrangements. Such assets are amortised over the period of lease or estimated life of such assets whichever is less. 15. Earnings Per Share: The earnings considered in ascertaining the Company''s EPS comprises the net profit after tax, after reducing dividend on Cumulative Preference Shares for the period (irrespective of whether declared, paid or not), as per Accounting Standard 20 on Earnings Per Share, issued by the Institute of Chartered Accountants of India. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the period. The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity shares unless the effect of the potential dilutive equity shares is anti-dilutive. 16. Impairment of Assets: Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized in accordance for AS-28 Impairment of Assets, for the amount by which the asset''s carrying amount exceeds its recoverable amount as on the carrying date. The recoverable amount is higher of the asset''s fair value less costs to sell vis--vis value in use. For the purpose of impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows. 17. Provisions & Contingent Liability: Provisions are recognized when the Company has a present obligation as a result of past events; it is more likely than not that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. A contingent liability is disclosed where there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. 18. Issue Expenditure: Expenses incurred in connection with issue of equity shares are adjusted against share premium. 19. Employee Stock Option: In respect of stock options granted pursuant to the company''s Employee Stock Option Scheme, the intrinsic value of the option is treated as discount and accounted as employee compensation cost over the vesting 46

period. In respect of re-pricing of existing stock option, the incremental intrinsic value of the option is accounted as employee cost over the remaining vesting period.

CAPITAL STRUCTURE ANALYSIS OF BHARTI AIRTEL

47

48

49

CAPITAL STRUCTURE ANALYSIS OF IDEA CELLULER

50

51

SHARE HOLDING PATTERN OF BHARTI AIRTEL

52

53

SHARE HOLDING PATTERN OF IDEA CELLULER

54

55

CASH FLOW STATEMENT OF BHARTI AIRTEL

56

CASH FLOW STATEMENT ANALYSIS FOR BHARTI AIRTEL Types of Cash Flows 2008-09 2009-10 2010-11 Operating 11853.1 12692.6 activities 5 3 13215.4 Investing activities -10894.3 -10601.6 -19075 Financing activities -672 -2539.3 5646.5 TOTAL 286.77 -448.35 -213.1

57

58

CASH FLOW STATEMENT OF BHARTI AIRTEL

59

CASH FLOW STATEMENT ANALYSIS FOR IDEA CELLULER Types of Cash Flows 2008-09 2009-10 2010-11 Operating activities 1863.74 1985.14 4500.7 Investing activities -7655.3 -2095.9 -7644.4 Financing activities 7639 -2530.5 3314.83 TOTAL 1847.37 -2641.3 171.09

60

COMMON SIZE STATEMENT ANALYSIS OF BHARTI AIRTEL

61

COMMON SIZE STATEMENTS

P&L A/C of AIRTEL
March '09 Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised 286.94 0 1,397.54 8,627.13 9,385.68 1,409.89 -269.25 4.26 26.31 28.62 4.3 -0.82 0.88 278.72 0 1,401.66 11,882.41 6,856.42 1,482.39 -293.31 34,048.32 0 34,048.32 -1,261.75 5.29 32,791.86 100.00 35,609.54 0 35,609.54 1,118.46 -34.91 36,693.09 38,015.80 0 38,015.80 218.2 7.2 % March'10

March'11

100 0.76 3.82 32.38 18.69 4.04 -0.8

38,241.20 251.3 0 1,304.50 14,204.20 8,137.70 699.6 0

Total Expenses

20,837.93

63.55

21,608.29

24,597.30

58.89

62

 BALANCE SHEET OF AIRTEL

Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities March '09 1,898.24 1,898.24 116.22 0 25,627.3 8 2.13 27,643.9 7 51.73 7,661.92 7,713.65 35,357.6 2 %

5.37

March '10 1,898.77 1,898.77 186.09 0 34,650.1 9 2.13 36,737.1 8 39.43 4,999.49 5,038.92 41,776.1 0

% 4.55

March '11 1,898.80 1,898.80 278.6 0 41,932.1 0 2.1 44,111.6 0 17.1 11,880.4 0 11,897.5 0 56,009.1 0

% 3.39

72.48 0.006 0.15 21.67 21.82

74.87 0.004 0.03 21.21 21.24

0.094 11.97 12.06

Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets Contingent Liabilities 37,266.7 0 12,253.3 4 25,013.3 6 2,566.67 11,777.7 6 62.15 2,550.05 153.44 2,765.64 5,602.83 2,098.16 10,466.6 3 0 13,832.4 9 634.4 14,466.8 9 -4,000.26 0.09 35,357.6 2 4,104.25 44,212.5 3 16,187.5 6 28,024.9 7 1,594.74 15,773.3 2 27.24 2,104.98 54.89 2,187.11 7,072.42 761.86 10,021.3 9 0 12,979.5 5 658.75 13,638.3 0 -3,616.91 0 41,776.1 2 3,921.50 61,437.5 0 20,736.7 0 40,700.8 0 6,497.60 11,813.0 0 34.4 2,375.80 126.6 2,536.80 11,186.1 0 7.2 13,730.1 0 0 16,104.8 0 627.6 16,732.4 0 -3,002.30 0 56,009.1 0 49,771.4 0

7.26 33.31 0.18 7.21 0.43 7.82 15.85 5.93 29.6 39.12 1.79 40.92 -11.31 0.0003

3.82 37.76 0.065 5.04 0.13 5.23 16.93 1.82 23.99

11.6 21.09 0.06 4.24 0.23 4.53 19.97 0.14 24.51 28.75 1.12 29.87 -5.36

31.07 1.58 32.65 -8.66

63

Book Value (Rs)

145.01

96.24

115.42

64

COMMON SIZE STATEMENT ANALYSIS OF IDEA CELLULER

65

 P&L A/C of AIRTEL

March '09 Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised 286.94 0 1,397.54 8,627.13 9,385.68 1,409.89 -269.25 4.26 26.31 28.62 4.3 -0.82 0.88 278.72 0 1,401.66 11,882.41 6,856.42 1,482.39 -293.31 34,048.32 0 34,048.32 -1,261.75 5.29 32,791.86 100.00 35,609.54 0 35,609.54 1,118.46 -34.91 36,693.09 38,015.80 0 38,015.80 218.2 7.2 % March'10

March'11

100 0.76 3.82 32.38 18.69 4.04 -0.8

38,241.20 251.3 0 1,304.50 14,204.20 8,137.70 699.6 0

Total Expenses

20,837.93

63.55

21,608.29

24,597.30

58.89

BALANCE SHEET OF AIRTEL

66

Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities

March '09 1,898.24 1,898.24 116.22 0 25,627.3 8 2.13 27,643.9 7 51.73 7,661.92 7,713.65 35,357.6 2

5.37

March '10 1,898.77 1,898.77 186.09 0 34,650.1 9 2.13 36,737.1 8 39.43 4,999.49 5,038.92 41,776.1 0

% 4.55

March '11 1,898.80 1,898.80 278.6 0 41,932.1 0 2.1 44,111.6 0 17.1 11,880.4 0 11,897.5 0 56,009.1 0

% 3.39

72.48 0.006 0.15 21.67 21.82

74.87 0.004 0.03 21.21 21.24

0.094 11.97 12.06

Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets Contingent Liabilities Book Value (Rs) 37,266.7 0 12,253.3 4 25,013.3 6 2,566.67 11,777.7 6 62.15 2,550.05 153.44 2,765.64 5,602.83 2,098.16 10,466.6 3 0 13,832.4 9 634.4 14,466.8 9 -4,000.26 0.09 35,357.6 2 4,104.25 145.01 44,212.5 3 16,187.5 6 28,024.9 7 1,594.74 15,773.3 2 27.24 2,104.98 54.89 2,187.11 7,072.42 761.86 10,021.3 9 0 12,979.5 5 658.75 13,638.3 0 -3,616.91 0 41,776.1 2 3,921.50 96.24 61,437.5 0 20,736.7 0 40,700.8 0 6,497.60 11,813.0 0 34.4 2,375.80 126.6 2,536.80 11,186.1 0 7.2 13,730.1 0 0 16,104.8 0 627.6 16,732.4 0 -3,002.30 0 56,009.1 0 49,771.4 0 115.42

7.26 33.31 0.18 7.21 0.43 7.82 15.85 5.93 29.6 39.12 1.79 40.92 -11.31 0.0003

3.82 37.76 0.065 5.04 0.13 5.23 16.93 1.82 23.99

11.6 21.09 0.06 4.24 0.23 4.53 19.97 0.14 24.51 28.75 1.12 29.87 -5.36

31.07 1.58 32.65 -8.66

67

68

CSR ACTIVITIES OF BHARTI AIRTEL

69

CSR ACTIVITIES OF AIRTEL.

Trust / Foundation for CSR Bharti Foundation

CSR Areas

1. Children 2. Community Welfare 3. Disaster Relief 4. Education 5. Energy 6. Environment 7. Girl Child 8. Healthcare 9. Poverty Eradication 10. Rural Development 11. Vocational Training

Three main 1. Education CSR activities 2. Community Welfare 3. Environment

70

AWARDS & ACHIEVEMENTS OF BHARTI AIRTEL

71

AWARDS OF AIRTEL
Bharti Airtel awarded the prestigious QCI-DL Shah Award on Economics of Quality Award is recognition of the initiatives taken by the organization to enhance customer delight using Six Sigma methodology Honble President of India Dr. A.P.J. Abdul Kalam presented the award. Bangalore, Dec 11, DHNS: Bharti Airtel has been awarded the Telecom Centre of Excellence (TCOE) Award for service provider with customer focus for best delivery of Network Services for the year 2011. Telecom Centres of Excellence (TCOE), in association with the Department of Telecommunications (DOT), etc has instituted this national award. NEW DELHI: Bharti Airtel, the country's top telecom company, has bagged the "Best Global Wholesale Carrier for 2009" award at the Telecoms World Awards Middle East held in Dubai. Telecoms World is an annual award function of Terrapinn, a business media organisation for global telecom carriers and services provider. Bharti Airtel ranked Best Telecom Company in Gujarat at GESIA Annual Awards Bharti Airtel one of the Asia's leading integrated telecom service provider was recognised as the Best telecom company in Gujarat at the 3rd edition of GESIA Annual awards, given away in Ahmedabad recently.

72

CSR ACTIVITIES OF IDEA CELLULAR

73

CSR ACTIVITIES OF IDEA

Trust / Foundation for CSR CSR Areas Aditya Birla Centre for Community Initiatives and Rural Development 1. Community Welfare 2. Education 3. Environment 1. Environment 2. Community Welfare 3. Education

Three main CSR activities

74

AWARDS & ACHIEVEMENTS OF IDEA CELLULAR

75

AWARDS OF IDEA
1) New Delhi, 3rd January 2012: Idea Cellular, Indias 3rd largest mobile operator and one of the top brands in the country recently won awards for its brand campaign at the Effies. Idea bagged the Effies Gold and Silver 2011 for the No Idea-Get Idea and Break the language Barrier brand campaigns respectively. . 2) Both these campaigns also won the industry revered Best Brand Campaign of the year at the World Communication Awards 2011, held in London last month. Idea is the only Indian company to have won at the Annual Awards ceremony, which witnessed participation from the worlds biggest communications providers. 3) Idea Cellular also won the Advertiser of the Year title at the grand exchange4medias Golden Mikes Radio Advertising Awards 2011.

76

HUMAN RESOURCE ANALYSIS FOR BHARTI AIRTEL

77

 AIRTEL
Talent Acquistion

HUMAN RESOURCE ANALYSIS

Building supply chain of talented workforce In-sourcing large number of employees with Airtels channel partners and associates Establishing and implementing objective recruitment tools such as conducting online tests based on psychometric profile, aptitude and skills assessment Conducting competency mapping of every role holder

Employee Engagement and Development Offering Study while Work programmes Setting benchmarks in employee reward and recognition Implementing employee friendly HR policies Interacting with employees through open houses, employee forums and helplines etc. Developing role competency matrix Developing robust communication vehicles Managing employees lifecycle

Attrition Management Following a multi pronged approach to address high attrition rates Developing a strong Bharti Airtel Services community Defining a clear growth path for all employees Creating a uniform frontline Sales/ Service Management structure Creating and implementing effective processes to enhance productivity

78

Employee Service Assurance Educating employees on organisations HR policies and processes Complying with statutory regulations and company policies Standardising hygiene factors across various role holders Conducting employee satisfaction surveys periodically for taking corrective action

BIBLIOGRAPHY

79

BIBLIOGRAPHY WWW.MONEYCONTROL.COM WWW.GOOGLE.COM WWW.KARMAYOG.COM WWW.BHARTIAIRTE.COM WWW.IDEACELLULAR.COM

80

(P & L A/C & BALANCE SHEET FOR THE LAST 5 YRS IN A SINGLE SPREAD SHEET)

ANNEXURE

81

 P & L A/C OF AIRTE

Balance Sheet of Bharti Airtel ------------------- in Rs. Cr. -------------------

82

Mar '11 12 mths Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities 1,898.80 1,898.80 278.60 0.00 41,932.1 0 2.10 44,111.6 0 17.10 11,880.4 0 11,897.5 0 56,009.1 0 Mar '11 12 mths Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets 61,437.5 0 20,736.7 0 40,700.8 0 6,497.60 11,813.0 0 34.40 2,375.80 126.60 2,536.80 11,186.1 0 7.20 13,730.1 0 0.00 16,104.8 0 627.60 16,732.4 0 -3,002.30 0.00 56,009.1

Mar '10 12 mths

Mar '09 12 mths

Mar '08 12 mths

Mar '07 12 mths

1,898.77 1,898.77 186.09 0.00 34,650.19 2.13 36,737.18 39.43 4,999.49 5,038.92 41,776.10 Mar '10 12 mths

1,898.24 1,898.24 116.22 0.00 25,627.38 2.13 27,643.97 51.73 7,661.92 7,713.65 35,357.62 Mar '09 12 mths

1,897.91 1,897.91 57.63 0.00 18,283.82 2.13 20,241.49 52.42 6,517.92 6,570.34 26,811.83 Mar '08 12 mths

1,895.93 1,895.93 30.00 0.00 9,515.21 2.13 11,443.27 266.45 5,044.36 5,310.81 16,754.08 Mar '07 12 mths

44,212.53 16,187.56 28,024.97 1,594.74 15,773.32 27.24 2,104.98 54.89 2,187.11 7,072.42 761.86 10,021.39 0.00 12,979.55 658.75 13,638.30 -3,616.91 0.00 41,776.12

37,266.70 12,253.34 25,013.36 2,566.67 11,777.76 62.15 2,550.05 153.44 2,765.64 5,602.83 2,098.16 10,466.63 0.00 13,832.49 634.40 14,466.89 -4,000.26 0.09 35,357.62

28,115.65 9,085.00 19,030.65 2,751.08 10,952.85 56.86 2,776.46 200.86 3,034.18 5,103.13 302.08 8,439.39 0.00 12,400.38 1,961.95 14,362.33 -5,922.94 0.20 26,811.84

26,509.93 7,204.30 19,305.63 2,375.82 705.82 47.81 1,418.52 239.11 1,705.44 3,160.02 541.35 5,406.81 0.00 9,809.83 1,232.84 11,042.67 -5,635.86 2.66 16,754.07

83

 BALANCE SHEET OF AIRTEL

Balance Sheet of Bharti Airtel ------------------- in Rs. Cr. -------------------

84

Mar '11 12 mths Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities 1,898.80 1,898.80 278.60 0.00 41,932.1 0 2.10 44,111.6 0 17.10 11,880.4 0 11,897.5 0 56,009.1 0 Mar '11 12 mths Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets 61,437.5 0 20,736.7 0 40,700.8 0 6,497.60 11,813.0 0 34.40 2,375.80 126.60 2,536.80 11,186.1 0 7.20 13,730.1 0 0.00 16,104.8 0 627.60 16,732.4 0 -3,002.30 0.00 56,009.1

Mar '10 12 mths

Mar '09 12 mths

Mar '08 12 mths

Mar '07 12 mths

1,898.77 1,898.77 186.09 0.00 34,650.19 2.13 36,737.18 39.43 4,999.49 5,038.92 41,776.10 Mar '10 12 mths

1,898.24 1,898.24 116.22 0.00 25,627.38 2.13 27,643.97 51.73 7,661.92 7,713.65 35,357.62 Mar '09 12 mths

1,897.91 1,897.91 57.63 0.00 18,283.82 2.13 20,241.49 52.42 6,517.92 6,570.34 26,811.83 Mar '08 12 mths

1,895.93 1,895.93 30.00 0.00 9,515.21 2.13 11,443.27 266.45 5,044.36 5,310.81 16,754.08 Mar '07 12 mths

44,212.53 16,187.56 28,024.97 1,594.74 15,773.32 27.24 2,104.98 54.89 2,187.11 7,072.42 761.86 10,021.39 0.00 12,979.55 658.75 13,638.30 -3,616.91 0.00 41,776.12

37,266.70 12,253.34 25,013.36 2,566.67 11,777.76 62.15 2,550.05 153.44 2,765.64 5,602.83 2,098.16 10,466.63 0.00 13,832.49 634.40 14,466.89 -4,000.26 0.09 35,357.62

28,115.65 9,085.00 19,030.65 2,751.08 10,952.85 56.86 2,776.46 200.86 3,034.18 5,103.13 302.08 8,439.39 0.00 12,400.38 1,961.95 14,362.33 -5,922.94 0.20 26,811.84

26,509.93 7,204.30 19,305.63 2,375.82 705.82 47.81 1,418.52 239.11 1,705.44 3,160.02 541.35 5,406.81 0.00 9,809.83 1,232.84 11,042.67 -5,635.86 2.66 16,754.07

85

 P&L A/C of IDEA

Profit & Loss account of Idea Cellular Mar '11 12 mths Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses 0.02 1,392.66 719.38 7,412.44 2,082.93 107.92 0.00 11,715.3 5 Mar '11 12 mths Operating Profit PBDIT Interest PBDT Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax Reported Net Profit Total Value Addition Preference Dividend Equity Dividend Corporate Dividend Tax 3,617.45 3,726.68 894.82 2,831.86 1,723.00 250.02 858.84 47.46 906.30 61.72 844.60 11,715.3 2 0.00 0.00 0.00 0.02 942.27 561.17 5,187.63 1,823.48 91.58 0.00 8,606.15 Mar '10 12 mths 3,244.09 3,627.92 982.44 2,645.48 1,366.61 184.59 1,094.28 91.61 1,185.89 115.08 1,053.66 8,606.12 0.00 0.00 0.00 18.92 533.54 458.46 4,022.86 1,621.90 82.76 0.00 6,738.44 Mar '09 12 mths 3,118.59 3,520.39 1,206.35 2,314.04 1,096.72 146.13 1,071.19 15.68 1,086.87 85.65 1,001.21 6,719.52 0.00 0.00 0.00 0.01 224.40 332.88 2,643.43 974.08 53.87 0.00 4,228.67 Mar '08 12 mths 2,491.32 2,675.49 695.85 1,979.64 756.85 119.91 1,102.88 13.97 1,116.85 72.50 1,044.36 4,228.66 0.00 0.00 0.00 4.06 109.46 251.43 1,388.33 959.34 38.69 -0.08 2,751.23 Mar '07 12 mths 1,613.97 1,641.61 478.26 1,163.35 563.67 108.14 491.54 5.23 496.77 6.99 502.06 2,747.16 0.00 0.00 0.00 15,332.8 0 0.00 15,332.8 0 109.23 0.00 15,442.0 3 11,850.24 0.00 11,850.24 383.83 0.00 12,234.07 9,857.08 0.00 9,857.08 401.80 -0.05 10,258.83 6,719.99 0.00 6,719.99 184.17 0.00 6,904.16 4,366.40 0.00 4,366.40 27.64 -1.20 4,392.84 ------------------- in Rs. Cr. ------------------Mar '10 12 mths Mar '09 12 mths Mar '08 12 mths Mar '07 12 mths

86

Per share data (annualised) Shares in issue (lakhs) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs) 33,032.7 2 2.56 0.00 37.18 32,998.38 3.19 0.00 34.59 31,000.95 3.23 0.00 36.37 26,353.61 3.96 0.00 13.44 25,928.61 1.94 0.00 8.4

BALANCE SHEET of IDEA

Balance Sheet of Idea Cellular Mar '11 12 mths Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities 3,303.27 3,303.27 47.81 0.00 8,979.62 0.00 12,330.7 0 7,760.04 2,797.42 10,557.4 6 22,888.1 6 Mar '11 12 mths Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance 28,938.7 5 9,807.13 19,131.6 2 3,594.05 2,572.81 52.22 461.45 47.47 22,834.40 7,907.34 14,927.06 462.58 2,755.13 46.70 430.12 129.13 15,562.75 4,739.86 10,822.89 1,721.82 4,928.81 42.73 329.59 140.86 12,791.22 3,123.83 9,667.39 941.13 569.93 27.62 198.59 147.67 8,229.61 2,637.18 5,592.43 506.52 13.83 17.91 152.48 122.76 3,299.84 3,299.84 44.45 0.00 8,112.95 0.00 11,457.24 5,988.61 537.81 6,526.42 17,983.66 Mar '10 12 mths 3,100.10 3,100.10 18.23 0.00 8,176.09 0.00 11,294.42 5,564.93 2,014.43 7,579.36 18,873.78 Mar '09 12 mths 2,635.36 2,635.36 3.76 0.00 906.91 0.00 3,546.03 5,454.43 1,060.33 6,514.76 10,060.79 Mar '08 12 mths 2,592.86 2,592.86 0.00 0.00 -413.71 0.00 2,179.15 3,539.77 710.74 4,250.51 6,429.66 Mar '07 12 mths ------------------- in Rs. Cr. ------------------Mar '10 12 mths Mar '09 12 mths Mar '08 12 mths Mar '07 12 mths

87

Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets Contingent Liabilities Book Value (Rs)

561.14 2,941.45 404.07 3,906.66 0.00 6,187.79 129.17 6,316.96 -2,410.30 0.00 22,888.1 8 3,409.89 37.18

605.95 3,533.15 151.31 4,290.41 0.00 4,313.76 137.76 4,451.52 -161.11 0.00 17,983.66 1,960.75 34.59

513.18 2,278.21 2,203.57 4,994.96 0.00 3,496.04 98.65 3,594.69 1,400.27 0.00 18,873.79 2,279.41 36.37

373.88 950.88 349.38 1,674.14 0.00 2,709.98 81.82 2,791.80 -1,117.66 0.00 10,060.79 2,308.87 13.44

293.15 560.82 1,696.97 2,550.94 0.00 2,180.21 53.84 2,234.05 316.89 0.00 6,429.67 1,236.57 8.40

88