Annual Report 2005 2006

Directors’ Report
Dear Shareholders, The consolidated revenues and EBITDA for the year ended
The directors are pleased to present the Annual Report March 31, 2006 was Rs. 117,255 million and Rs. 42,250
together with audited statement of accounts for the year million respectively. The consolidated revenues and EBITDA
ended March 31, 2006. grew by 44% and 38% respectively for the year ended
March 31, 2006.
Overview
The net finance cost for the year was Rs. 2,244 million as
Bharti Airtel is one of India’s leading private sector providers compared to Rs. 2,439 million for the corresponding period
of telecommunication services, and was the first private player previous year. The finance cost declined with the net debt
to have an all India presence. The Company is the largest GSM going up from Rs. 41,171million to Rs. 41,738 million. This
mobile service provider in the country based on number of has been made possible due to replacement of certain old
customers. The Company had an aggregate of 20,925,948 borrowings by new borrowings at lower finance cost and
customers as of March 31, 2006, consisting of 19,579,208 funding through networking capital movement. The increase
Mobile and 1,346,740 Broadband & Telephone customers. in absolute EBITDA along-with reduced finance cost during
During the 2005-06 financial year, the Company crossed the year resulted in the cash profit from operations for the
certain key milestones, and maintained its position as one year ended March 31, 2006 of Rs. 40,006 million as compared
of the leading telecommunications services provider in India to Rs. 28,219 million for the year ended March 31, 2005.
by continuously innovating its strategy and augmenting its Profit before tax for the year ended March 31, 2006 was Rs.
operations. 23,455 million, and the net profit was at Rs. 20,279 million
Some of the key highlights include the following: leading to a net profit growth of 67% over the previous year
z The Company became India’s largest integrated private and an earnings per share (basic) of Rs. 10.776.
operator based on the total customer base; Net debt for the year ended March 31, 2006 was Rs. 41,738
z Highest ever net addition of 9,084,406 customers in a million resulting in the net debt to EBITDA of 0.99 times and
year; interest coverage ratio of 17.71 times.
z Full year consolidated gross revenues of Rs. 117.3 billion II. Financial highlights of Standalone Statement of
(~US$ 2.63 billion) and consolidated EBITDA of Rs. 42.2 Operations of the Company (legal entity):
billion (~US$ 947 million);
(In Rs. Million, except ratios)
z Full year consolidated net profit of Rs. 20.3 billion (~US$
455 million); Year ended
z Year-on-year growth of total customer base by 77% Particulars March 31, March 31, Y-o-Y
resulted in a 44% increase in revenues, 38% increase in 2006 2005 Growth
EBITDA and 67% growth in net profit. Gross Revenue 112,906 79,442 42%
Financial Results and Results of Operations EBITDA 40,786 29,940 36%
I. Financial highlights of Consolidated Statement of Cash Profit from 38,530 27,481 40%
Operations: Operations
(In Rs. Million, except ratios) Profit before 22,858 15,643 46%
Year ended Tax
Particulars March 31, March 31, Y-o-Y Net Profit 20,121 12,107 66%
2006 2005 Growth
Dividend
Gross Revenue 117,255 81,558 44% The directors believe that there are tremendous growth
EBITDA 42,250 30,658 38% opportunities available to the telecom sector and the
Cash Profit from 40,006 28,219 42% Company should leverage these by further expanding and
Operations strengthening its existing network. This will enhance
shareholder value in the long-term. Accordingly, the directors
Profit before 23,455 15,832 48% do not recommend any dividend for the year ended
Tax March 31, 2006, in view of the proposed investments in
Net Profit 20,279 12,116 67% network expansion and operations.
The strong operational performance of the Company during Subsidiary companies

the year culminated into an equally robust financial The Company has obtained an exemption from the
performance. Ministry of Company Affairs, Government of India vide
37
letter No. 47/164/2006-CL III dated April 26, 2006 in terms subscription of convertible debentures in Bharti
of Section 212(8) of the Companies Act from attaching the Enterprises Limited, representing an indirect economic
audited accounts of its subsidiaries for the financial year. In interest in Bharti Airtel Limited and acquisition of direct
pursuance thereof, the Company undertakes that annual interest in the Company from Warburg Pincus LLC.
accounts of the subsidiary companies and the related z South East Asia, Middle East and Western Europe
detailed information for the year ended March 31, 2006 will 4 (SEA-ME-WE-4) - A consortium of 16 international
be made available to its investors and subsidiary companies’ telecommunications companies including our Company
investors seeking such information at any point of time. The successfully commissioned the next generation
annual accounts of the subsidiary companies are also kept undersea cable system during the year.
for inspection by any investor at the registered office of the
z The Company announced its new integrated
Company and the concerned subsidiary companies. The
organization structure with the appointment of
statement required pursuant to the above referred approval
letter are disclosed after the Consolidated Accounts of the Manoj Kohli as the President of all business units to lead
the integrated management structure with effect from
Company forming part of this Annual Report.
March 1, 2006.
Highlights of the Year
z In order to reflect its brand essence, objective and the
z Major agreements and alliances: With the objective
nature of its business activities, the Company name was
of consolidation and achieving business synergies, Bharti
changed to Bharti Airtel Limited from Bharti Tele-
Cellular Limited and Bharti Infotel Limited have been
Ventures Limited, effective April 24, 2006.
merged with the Company. The same was sanctioned
by the Hon’ble High Court of Delhi on May 21, 2005. Capital market ratings:
The effective date of the merger was April 1, 2004. z ICRA assigned Issuer Rating of “Ir AAA” to the
z Bharti Airtel signed a managed capacity expansion Company during the year. This rating is the highest credit
contract with Ericsson to provide managed services quality rating assigned by ICRA.
and expand its GSM /GPRS network into rural India in z Standard & Poors upgraded its corporate credit
15 circles. rating on Bharti Airtel Limited to “BB+” from “BB”
z The Company and IBM launched Managed Services with stable outlook.
under their joint go-to-market program. The initial z CRISIL has assigned “AAA/Stable” to the long-term
offering portfolio includes managed hosting services debt programme of Bharti Airtel Limited indicating
and business resiliency and continuity services to highest safety.
enterprise customers in India.
z Fitch ratings, the international rating agency, upgraded
z The Company entered into an agreement with the Company’s long-term foreign currency rating
Nokia to expand its managed GSM/GPRS/EDGE to “BB+” from “BB” with a stable outlook on rating.
networks in eight circles. Nokia will provide managed
z CRISIL re-affirmed its Governance & Value Creation
services and expand the Company’s network in Mumbai,
(GVC) rating viz. ‘level 1’, which indicates that the
Maharashtra and Goa, Gujarat, Bihar and Jharkhand,
Company’s capability with respect to creating wealth
Orissa, Kolkata, West Bengal and Madhya Pradesh over
for all its stakeholders is the highest.
a three-year period.
New products/initiatives:
z The Company decided not to proceed with the
proposed sponsored ADR due to lack of sponsorship During the year, the Company introduced new and
interest by most of its principal shareholders. innovative products that were received well in the market
and enabled the Company to maintain its leadership position
z The Company entered into strategic partnership
despite competitive pressures.
outsourcing agreements for its customer care call
center operations to four international BPOs - z The Company introduced Rs. 200/- denomination
Hinduja TMT (HTMT), IBM Daksh, Mphasis and monthly recharge coupon in May 2005. It thus lowered
TeleTech Services, with the expectation of significantly the recharge denomination available in the market,
enhancing quality of customer service delivery to Bharti thereby making mobile services more affordable.
Airtel customers across the country. The Company also
z Launch of BlackBerry® 7100g™ business phone in
entered into an agreement with Nortel for technological
India in the month of June 2005 and BlackBerry®
expertise and availing best practices in customer care
8700g™ in March 2006. Bharti Airtel has made a wider
developed through Nortel’s worldwide customer base.
portfolio of BlackBerry® products available in India in
z Vodafone acquired 10% economic interest in the partnership with Research In motion (RIM). BlackBerry®
Company during the financial year 2005-06, by way of solutions provide instant emailing solutions.
38
z Launch of a suite of mobile services including Bridge contributed 71% to the consolidated revenues. The growth
Roaming, Bridge Prepaid, Bridge Enterprise and in revenues happened despite reductions in tariffs and intense
Bridge Concierge. These services will enable our competition. This robust growth was due to increases in
customers to enjoy a seamless mobile service experience subscriber base on account of the launch of Rs. 200 monthly
when roaming overseas on the Alliance Members recharge coupon and Rs. 999 lifetime prepaid, higher traffic
network. Bharti Airtel is the founder member of the on networks, and expansion of non-voice services. With
Bridge Alliance, which was established in November mobile tariffs in India being among the lowest in the world,
2004 and includes Globe Telecom (Philippines), Maxis the Company’s prime focus is on ensuring customer
(Malaysia), Singtel Mobile (Singapore), Singtel Optus satisfaction through superior network quality, customer
(Australia), Taiwan Mobile (Taiwan), Telkomsel service and continuous innovation in value-added services
(Indonesia) and CSL (Hong Kong). that would help expand its mobile customer base and drive
z The Company launched ‘Future Factory - Centres of up volumes.
Innovation’ to incubate pioneering mobile applications. The key financial results of the mobile segment for the year
The Future Factory has been conceptualized with the ended March 31, 2006 are presented below:
purpose of developing applications to cater to the needs
Financial highlights of Mobile Services:
of customer segments across the entire spectrum.
(In Rs. Million, except ratios)
z Bharti Airtel, ICICI Bank and VISA joined hands to launch
mChq – a credit card on the mobile phone. This is Year ended
the first mobile-to-mobile payment option, which Particulars March 31, March 31, Y-o-Y
enables Bharti Airtel customers and ICICI Bank Visa 2006 2005 Growth
cardholders to pay for their purchases with their Airtel
mobile phones. Gross Revenue 83,095 55,436 50%
z Bharti Airtel launched a suite of ‘One India plans’ for Earnings before 16,854 10,385 62%
Mobile and Broadband & Telephone Services Interest & Taxation
customers in March 2006. These plans give the option Broadband & Telephone Services
of making calls to any location in the country at a flat rate
of Re. 1 per minute. The Company provides Broadband & Telephone Services in
90 cities across India. As on March 31, 2006, the Company
z Bharti Airtel launched the world’s first Easy Music
had 1,346,740 customers, of which 23.4% (315,729) were
service for mobile phones. This service allows a mobile
also subscribing to broadband services.
phone user a choice of over 18,000 songs in over 20
languages for purchase from over 100,000 Bharti Airtel The customer base for the Broadband & Telephone Services
retail outlets in India for use as ring tones and call back grew by 57% in the year ended March 31, 2006. The
tones. revenues from the Broadband & Telephone Services were
Rs.15,075 million, a growth of 33% over the revenues in the
z Bharti Airtel introduced India’s first Rs. 999 Lifetime
previous financial year. The earnings before interest and
prepaid card with a life time validity with which a mobile
taxation was Rs. 606 million as compared to Rs. 1442 in the
user can continue to receive calls for lifetime without
previous financial year. The decline in EBIT was essentially
having to recharge or worry about the validity period of
due to the launch of services in 38 new cities during the
the card or coupon. The lifetime-prepaid card also offers
financial year.
the user full talk time on every future recharge of any
denomination. The key financial results of the Broadband & Telephone Services
for the year ended March 31, 2006 are presented below.
Business Review
Mobile Services Financial highlights of Broadband & Telephone Services:
During the financial year, the Company expanded its operations (In Rs. Million, except ratios)
to 3,778 census towns and over 80,687 non-census towns Year ended
and villages covering approximately 40% of the country’s
Particulars March 31, March 31, Y-o-Y
total population. The Company added 8,594,928 mobile
subscribers during the year, garnering 22.7% share of the all 2006 2005 Growth
India net additions in the wireless market and had a wireless Gross Revenue 15,075 11,311 33%
market share of 21.8% as on March 31, 2006. The Company’s Earnings before
strong performance helped consolidate its leadership in the
Interest & Taxation 606 1,442 -58%
market and has given it the might to take full advantage of
the rapidly growing telecom market. Enterprise Services
The revenues from mobile services for the financial year As a part of the new integrated structure, the Company has
were Rs.83,095 million, a growth of 50% over the revenues reclassified and created two sub units under this business
in the previous financial year. The mobile services business group, viz. Carriers (Long Distance Services) and Corporates.
39
Enterprise Services – Carriers Regulatory and Key Industry Developments
The Company complements its Mobile, Broadband and During the year, the following are the key regulatory
Telephone Services with national and international long developments:
distance services. The Company has over 32,900 route z Telecom Regulatory Authority of India (TRAI) introduced
kilometers of fibre on its national long distance network. a revised Interconnection Usage Charge (IUC) regime.
For international connectivity to the East, it has a submarine ‘Per-minute’ Access Deficit Charge (ADC) on domestic
cable landing station at Chennai which links the submarine calls has been replaced by a ‘revenue-share’ of 1.5% of
cable (owned by an associate company) connecting Chennai adjusted gross revenue as ADC, payable to BSNL. Revenue
and Singapore. For international connectivity to the West, it from Rural Fixed Wireline subscribers is exempt from
is a member of the South East Asia-Middle East-Western ADC. ‘Per minute’ ADC continues on ILD calls but at a
Europe – 4 (SEA-ME-WE-4) consortium jointly with 15 other reduced rate. Carriage charges, which were distance
global telecom operators, and has commissioned the fourth based earlier, are now left to negotiation between
generation cable system. operators subject to a ceiling of Rs.0.65/minute;
During the financial year, the Company saw significant z The IUC (Fifth Amendment) Regulation, 2005 that
growth in the long distance traffic carried on its network imposed ADC on calls originated by national and
due to the increased customer base and lower tariffs on international roamers has been set aside by TDSAT;
account of reduction in the regulatory costs (License fee
and Access Deficit Charge). z TRAI has issued a Regulation on Quality of Service
Parameters of Basic and Cellular Mobile Telephone
The key financial results of the long distance services division Services and a Regulation on Code of Practice for
for the year ended March 31,2006 are presented below. Metering and Billing Accuracy in India;
Financial highlights of Enterprise Services – Carriers: z The ceiling tariffs for IPLCs prescribed by TRAI, which
(In Rs. Million, except ratios) were contested by VSNL, have been upheld by TDSAT
Year ended and these are now in effect;
Particulars March 31, March 31, Y-o-Y z Pursuant to public consultations, TRAI has submitted
2006 2005 Growth recommendations to the Department of Telecom on
the following matters:
Gross Revenue 24,674 18,737 32%
a. Spectrum
Earnings before 7,794 4,716 65%
Interest & Taxation b. Convergence and Competition in Broadcasting and
Telecommunications
Enterprise Services – Corporates
c. Mobile Number Portability
This sub-unit of Enterprise Services provides secure, scalable,
d. Next Generation Networks
seamless, reliable and customized integrated solutions of
voice and data communications to corporate, small and e. Measures to promote growth of telecom services
medium scale enterprises, thus offering total telecom in rural areas
solution through a single window. The unit focuses on f. Measures to Promote Competition in IPLC in India
delivering telecommunications services as an integrated
g. Publications of Telephone Directory and Provision
offering including mobile, broadband, telephone, national
of Directory Enquiry Services.
and international long distance and data connectivity
services to key account corporate customers through The DoT has issued guidelines for allocation of GSM
business relationship management. spectrum beyond 10 MHz and upto 15 MHz, and
allotment of 5th and 6th CDMA carriers. The allocation
The key financial results of the enterprise services division
criterion continues to be linked to a minimum subscriber
for the year ended March 31,2006 are presented below.
base. The rest of the recommendations are under
Financial highlights of Enterprises Services – Corporates: consideration.
(In Rs. Million, except ratios) z The Government of India enhanced the FDI ceiling in
Year ended the telecom sector from 49% to 74% subject to certain
preconditions.
Particulars March 31, March 31, Y-o-Y
2006 2005 Growth z The Central Government revised terms and conditions
of several telecom service licenses which include:
Gross Revenue 6,933 5,406 28%
a. Entry Fee for NLD and ILD licenses reduced from
Earnings before 1,762 2,284 -23% Rs.1,000 million and Rs. 250 million respectively to
Interest & Taxation Rs. 25 million;
40
b. Annual License Fee for NLD and ILD licenses reduced research”. Over 200 students benefit from Bharti School
from15% to 6% of Adjusted Gross Revenue (AGR); annually. It also conducts programs for industry
c. NLD and ILD licensees permitted to access professionals. Bharti Merit Awards have been established to
subscribers directly for provision of Leased Circuits/ recognize excellence and merit.
Closed User Groups; In order to achieve its vision in the area of education, Bharti
d. Annual License Fee @ 6% of AGR imposed on Foundation will set up a large number of primary schools in
Internet Service Providers licensed with restricted rural areas across India to provide quality education to
internet telephony; underprivileged children, especially girls. To support Bharti
Foundation’s work, a corpus of Rs. 2 billion will be created
e. Infrastructure provider category II and VPN licenses over the next two years.
abolished. Existing licensees permitted to migrate
to NLD/ILD licenses; Employees Stock option plan
f. Annual License Fee for VSAT commercial license Human Resource is the key to the success of any
reduced from 10% to 6% of AGR. organization. The Company has always valued its human
resources and has tried to adopt the best HR practices.
Share Capital Accordingly an ESOP Scheme was introduced in 2002, which
The Company allotted 2,722,125 Equity Shares of Rs. 10/- benefited the employees. The second ESOP Scheme was
each upon merger of Bharti Cellular Limited (BCL) into the introduced in 2005, the approval for which was obtained
Company. by way of a Special Resolution passed by the shareholders in
the Tenth Annual General Meeting. The ESOPs also act as a
During the year the Company allotted 18,242,237 equity
retention tool for well-performing employees who are
shares upon conversion of Foreign Currency Convertible
contributing to the growth of the Company.
Bonds (FCCBs) by their holders. Due to these reasons, as on
the date of this report, the total issued, subscribed and paid The disclosures in compliance with clause 12 of the Securities
up equity share capital of the Company stands increased to and Exchange Board of India (Employee Stock Option Scheme
1,894,419,574 equity shares. and Employee Stock Purchase Scheme) Guidelines, 1999, as
amended are set out in Annexure A to this Report.
Corporate Governance
A certificate from M/s. Price Waterhouse, Chartered
The Company was ranked amongst the Top 25 Companies
Accountants, Statutory Auditors, with regards to the
by the Institute of Company Secretaries of India for good
implementation of the Company Employees’ Stock Option
corporate governance practices in the year 2005.
Schemes, would be placed before the shareholders in the
CRISIL has rated our corporate governance practices at the next Annual General Meeting, and a copy of the same shall
highest-level GVC I, indicating our capability to create wealth be available for inspection at the registered office of the
for our stakeholders while preserving the highest standards Company.
of ethics and governance.
Awards
Pursuant to the requirements of Clause 49 of the Listing
We are pleased to report that the Company received many
Agreement with the Stock Exchanges, a report of corporate
accolades and awards during the year in India and abroad
governance forms part of the Annual Report. A certificate by
on the quality of its management, leadership and customer
Price Waterhouse, Chartered Accountants, Auditors of the
service and has been ranked amongst leading companies
Company, confirming compliance of the conditions of
in renowned business publications. Your Chairman has also
corporate governance as stipulated under clause 49 of the
been conferred with many awards. Details of the awards
Listing Agreement, is annexed to corporate governance report.
are separately listed in another section of this report.
Corporate Social Responsibility
Directors
The Company believes in the power of education. Based on
the experience of last year, Bharti Foundation expanded its Chua Sock Koong, Bashir Currimjee and Donald Cameron
retire by rotation at forthcoming Annual General
operations this year by setting up 15 more Bharti Computer
Centres and 92 Bharti Libraries across 11 states. In the mid- Meeting and being eligible, offer themselves for
day meal program, the kitchen set up in Vrindavan is able to re-appointment.
feed 43,000 children every day. Bharti Foundation’s program Since the last Directors Report, Gavin John Darby,
on elementary education reaches out to over 70,000 Ajay Lal, Syeda Bilgrami Imam and Paul Donovan were
children. appointed as additional directors on the Board of the
On March 20, 2006 the Hon’ble Prime Minister of India, Company and hold office until the conclusion of the
Dr. Manmohan Singh inaugurated the Bharti School of forthcoming Annual General Meeting.
Telecommunication Technology and Management at IIT York Chye Chang and Arun Bharat Ram were appointed on
Delhi. Bharti School has been set up with a vision “To develop the Board of the Company on March 31, 2006 to fill up the
Telecom Leaders through excellence in education and casual vacancies caused by the resignations of Lim Toon
41
and Lung Chien Ping respectively and hold office until the Particulars of Employees
conclusion of ensuing Annual General Meeting. Paul Information as per the privisions of Section 217 (2A) of the
Donovan has been appointed as director effective April, 27 Companies Act, 1956 read with the Companeis (Particular
2006 in the vacancy caused by the resignation of William of Employees) Rule 1975 as amended, forms part of this
Thomas Morrow and he holds office until the conclusion of Report and are given in Annexure C of this Report.
the ensuing Annual General Meeting.
Directors’ Responsibility Statement
The Company has received notices from the members under
Pursuant to Section 217(2AA) of the Companies Act, 1956,
Section 257 of the Companies Act, 1956 proposing the
the directors to the best of their knowledge and belief
appointment of all of these directors, retiring at the ensuing
confirm that:
Annual General Meeting.
a) in the preparation of the annual accounts, the applicable
A brief resume, expertise, shareholding in the Company and accounting standards have been followed along with
details of other directorships of these directors as stipulated proper explanation relating to material departures;
under Clause 49 of the Listing Agreement with the Stock
b) they have selected such accounting policies and applied
Exchanges is appended as an annexure to the Notice of
them consistently and made judgements and estimates
ensuing Annual General Meeting.
that are reasonable and prudent so as to give a true and
Since the last Directors’ report, Lim Toon, Lung Chien Ping fair view of the state of affairs of the Company as at the
and William Thomas Morrow have ceased to be directors of end of the financial year and of the profit of the Company
the Company. The Board places on record its sincere for that period;
appreciation for the services rendered by Lim Toon, Lung c) they have taken proper and sufficient care for the
Chien Ping and William Thomas Morrow during their tenure maintenance of adequate accounting records in
on the board. The Board and the Company has benefited accordance with the provisions of the Companies Act,
immensely from their inputs. 1956 and for safeguarding the assets of the Company
Fixed Deposits and for preventing and detecting fraud and other
irregularities;
During the year, the Company has not accepted any fixed
d) they have prepared the annual accounts on a going
deposits from the public.
concern basis.
Auditors
Management Discussion and Analysis Report
The Statutory Auditors of the Company, M/s. Price
In accordance with the listing agreements, the Management
Waterhouse, Chartered Accountants, New Delhi, retire at the
Discussion and Analysis Report forms a part of the report.
conclusion of ensuing Annual General Meeting of the
Acknowledgements
Company and are eligible for re-appointment and have
confirmed that their re-appointment if made, shall be within The directors place on record their gratitude to the Central
the limits Section 224(1B) of the Companies Act, 1956. The Government, the State Governments, Department of
Audit Committee and the Board recommends the re- Telecommunications (DOT), other statutory bodies and the
appointment of Price Waterhouse, Chartered Accountants Company’s Bankers for the assistance, co-operation and
as Auditors of the Company. encouragement they extended to the Company. The
directors also place on record their sincere appreciation to
Auditor’s Report
the employees for their continuing support and unstinting
The Board has duly examined the statutory auditor’s report efforts in ensuring an excellent all round operational
to accounts and clarifications, wherever necessary, have been performance. Last but not the least the directors would like
included in the Notes to Accounts, section of the Annual to thank various partners viz. Bharti Telecom, SingTel Telecom
Report. International Ltd., Vodafone and other valuable shareholders
for their support and contribution. We look forward to their
Conservation of Energy, Technology Absorption and
continued support in the future.
Foreign Exchange
The Company, being a service provider organization, most

of the information as required under Section 217(1)(e) read For and on behalf of the Board
with the Companies (Disclosure of Particulars in the Report

of the Board of Directors) Rules 1988 as amended are not Sunil Bharti Mittal
applicable. However, the information as applicable has been New Delhi Chairman and Managing Director
given in Annexure B to the report. April 28, 2006
42
Annexure A
INFORMATION REGARDING THE EMPLOYEES STOCK OPTION SCHEME(S)
(as on March 31, 2006)
Sl. Particulars ESOP ESOP
No. Scheme 2005 Scheme 2001
1) Number of Stock Options granted 2,763,000 16,826,505*
2) Pricing Formula The exercise price for the purpose of grant 14,507,843 @ 22.5
of options will be higher of the following: 2,190,000 @ 70
(i) The average of the weekly high and 71,265 @ 0
low of the closing prices of the 20,000 @ 120
related shares quoted on the stock 37,397 @ 267.4
exchange during the six months
preceeding the relevant date;
(ii) The average of the weekly high and low
of the closing prices of the related shares
quoted on a stock exchange during the
two weeks preceeding the relevant date.
However, the exercise price in respect of
employees who met the eligibility criteria
as on June 1, 2005 was Rs. 221/-
3) Option Vested Nil 14,284,826
4) Number of options exercised Nil 10,808,282
5) Number of shares arising as a result of Nil 10,808,282

exercise of option
6) Number of option lapsed 164,500 3,253,147
7) Variation of terms of option NA NA
8) Money realized by exercise of options NA 219,420,557.5
9) Total number of options in force 2,598,500 2,765,076
10) Employee-wise details of options granted to

i) Senior Mangerial Personnel
a) Manoj Kohli 20,000 Nil
b) Sarvjit Singh Dhillon 20,000 Nil
c) Viresh Dayal 20,000 Nil
d) Ashok Juneja 20,000 Nil
e) Narender Gupta 20,000 Nil
f) Daljit Singh Nil 37,397
g) Anil Nayar 20,000 Nil
ii) Any other employee who receives a Nil Nil
grant in any one year of option
amounting to 5% or more of option
granted during that year;
iii) Identified employees who were granted Nil Nil
options, during any one year, equal to or
exceeding 1% of the issued capital
(excluding outstanding warrants and
conversions) of the Company at the
time of grant.
43
Sl. Particulars ESOP ESOP
No. Scheme 2005 Scheme 2001
11) Diluted Earning Per Share (EPS) pursuant to Nil N.A.

issue of shares on exercise of options
calculated in accordance with Accounting
Standard (AS) 20 ‘Earning Per Share’
12) In case, the employees compensation cost is N.A. Rs. 37,736,249

calculated on the basis of intrinsic value of
stock option, the difference between the
employees compensation of the stock
option cost based on intrinsic value of the
stock and the employees compensation of
the stock option cost based fair value, and
the impact of this difference on profits
and on EPS of the Company
13) For options whose exercise price either

equals or exceeds or is less than the
market price of the stock the following
are disclosed seperately:
a) Weighted average exercise price a) Rs. 238.03 a) Rs. 22.5; Rs. 70; Rs. 0
b) Weighted average fair value b) Rs. 191.86 b) NA; NA; Rs. 139.40
14) A description of the method and significant

assumptions used during the year to estimate
the fair values of options, including the
following weighted-average information:
i) risk-free interest rate; i) The Government Securities curve yields NA

are considered as on valuation date
Weighted average information - 6.65%
per annum to 7.33% per annum
ii) expected life; ii) SEBI guidelines on ESOP have been NA
strictly followed
Weighted average information -
48 to 66 months
iii) expected volatility; iii) Analysing the stock price behaviour NA
of Bharti Airtel Limited since February
2002, the historical volatality is 44.48%
annualized. Such volatality is annualized
using daily price data and assuming
250 trading days to annualize the same
Weighted average information -
44.48% to 45.87%
iv) expected dividends; and iv) The dividend rate is assumed to be zero NA
v) the price the underlying shares in the v) Weighted average stock price - Rs. 327.96 NA
market at the time of option grant.
* Grants of 2318662 number of shares were made out of the options lapsed over a period of time.
44
Annexure B
INFORMATION RELATING TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, RESEARCH AND DEVELOPMENT
AND FOREIGN EXCHANGE EARNING AND OUTGO FORMING PART OF DIRECTORS’ REPORT IN TERMS OF SECTION
217(1)(e) OF THE COMPANIES ACT, 1956 READ WITH THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT
OF THE BOARD OF DIRECTORS) RULES 1988.
Conservation of Energy
Bharti Airtel Limited being a telecom service provider requires minimal energy consumption and every endeavour has been
made to ensure the optimal use of energy, avoid wastage and conserve energy as far as possible.
Technology Absorption
The Company in its endeavour to obtain and deliver the best, has entered into a number of agreements and alliance with
major global telecom players to harness and tap the latest and the best technology available to the industry.
Foreign Exchange Earnings and Outgo
(i) Activities relating to exports; initiatives taken to increase exports; development of new export markets for products and
services; and export plans; Bharti Airtel, being a telecom service provider could due to its licences restrictions, not have
undertaken any activity relating to exports or development of export markets for services during the year.
(ii) Total foreign exchange used and earned for the year :
(a) Total Foreign Exchange Earning : Rs. 12,760 million
(b) Total Foreign Exchange Outgo : Rs. 24,440 million
45
Annexure - C
Statement of particulars under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 for the year
ended March 31,2006 and forming part of the Directors’ Report
Sl. Name Designation Nature of Nature of Qualification(s) Age Date of Total Gross Previous employment/
No. Employment, duties of (in years) Commencement experience Remuneration Designation
whether the of Employment (in years) (in Rs.)
contractual employee
or otherwise
(A) EMPLOYED THROUGHOUT THE FINANCIAL YEAR

1. Arun Kr. Padhi Chief Human
Resource Officer Permanent Human Resource MA (Eco), MBA 51 20-Jan-03 27 2773285 Bharti Tele-Ventures Ltd./Vice President (HR)
2. K. Vijayaraghavan Chief Technical Officer Permanent Technical BE (E&E), PG Diploma 5 2 10-Oct-00 30 6524562 Spice Telecom/Vice President Technical
in Bus. Mgmt,
3. K. Srinivas Director (East) Permanent Operations B.Tech., PGDM 42 7-Nov-02 19 6825523 Hindustan Lever Ltd./Business Manager
New Ventures
4. Deepak Mehrotra Chief Executive Officer - Permanent Operations BE (Electrical), MMS 41 30-Oct-03 17 5480918 Hindustan Coca Cola Beverages/Region
Karnataka Vice President – Operations
5. Sharlin Thayil Chief Operating Permanent Operations B. Tech., MBA 44 28-Dec-00 20 3176663 BILT/Dy. General Manager – South
Officer - HP
6. Badri Agarwal Corporate Director Permanent Operations B.Com, CA 56 1-Sep-00 36 30296331 BML-AP & KK/Executive Director & CEO
7. Anil Nayar Corporate Director - Permanent General BE, PGDM 55 1-Apr-03 33 13989461 Bharti Cellular Ltd. (PO)/President
Chairman’s Office Management
8. Hemant Sachdev Director Marketing &
Communications Permanent Marketing B.Com 42 1-Apr-99 20 9511238 Bharti Telecom Ltd./Sr.VP (Mktg & Corp. Commn.)
9. K. L. Jain Corporate Director - Permanent Corp.Affairs B.Sc. (Hons.), MBA 56 1-Oct-98 34 11771656 Bharti Healthcare Ltd./Executive Director
Corporate Affairs
10. Narender Gupta Director - Legal and Permanent Secretarial & B.Com, PGDM, 47 1-Apr-01 27 5910482 Bharti Cellular Ltd./
Regulatory Regulatory FCS-ICSI, LLB Company Secretary
11. Viresh Dayal Corporate Director - Permanent Business B.Tech, PGDM 49 1-Aug-00 28 9479402 Bharti Telenet Ltd./
Business Development Development Director(Operations)
12. Jantina Catharina Alliance Director Contractual Alliance & Master of Dutch Law 4 6 16-Aug-01 29 19215618 British Telecom/Alliance Director
van de Vreede CSR
13. Manoj Kohli President Permanent General B.Com, LLB, MBA 47 26-Oct-02 27 16992235 Escotel Mobile Communications Ltd./
Management Executive Director & CEO
14. Sunil Bharti Mittal Chairman & Contractual General Graduate 48 1-Oct-01 20 98002936 Bharti Cellular Ltd./CMD
Managing Director Management
15. Rajan Bharti Mittal Joint Managing Contractual General Graduate 45 1-Oct-01 20 26472530 Bharti Infotel Ltd./MD
Director Management
16. Akhil Gupta Joint Managing Contractual General CA 50 1-Sep-03 24 36085829 Consultancy
Director Management
17. Vijaya Sampath Corporate Director - Permanent Legal B.A., LLB, FCS 52 1-Jan-04 22 8694547 Ranbaxy Laboratories/VP (Legal & Secretarial)
General Counsel &
Secretarial
18. Harish Dua Chief of Compliance & Permanent Internal Audit & CA, MBA 47 23-Feb-04 27 3759660 Pepsi Foods Pvt. Ltd./VP (Corp. Planning)
Internal Audit Chief Compliance
19. Ashok Juneja Chief Technical Officer Permanent Technical B. Tech., PGDM 49 29-Oct-03 27 10732486 Bharti Broadband Networks Ltd./Director
20. Sunil K. Goyal Chief Operating Permanent Operations ICWAI, MBE, CFA 37 2-Mar-01 15 4006170 Dabur India Ltd./Sr. Mgr. Corporate Planning
Officer - MP
21. Devendra Khanna Group Financial Permanent Fin & Accts CA 45 1-Sep-04 17 3601839 Triveni Engineering Industries Ltd./
Controller VP - Corp Finance & Planning
22. Sanjeev Kumar Chief Operating Permanent Operations B.Com (Hons), CA,CS 4 1 1-Jul-03 21 6043778 Bharti Mobile Ltd./CFO
Saxena Officer-Orissa
23. Vinit Taneja Sr.Vice President Permanent Human Resource B.Tech. (Mech.), 48 27-Sep-04 24 3410540 Institute of Quality Ltd/Sr. VP & Director
PGDM
24. Sarvjit Singh Dhillon Director Finance & Contractual Fin. & Accts. BA, (Hons) 39 1-Sep-04 18 13404192 Bharti Cellular Ltd./Group CFO &
Business Integration FCIMA, MBA Director Mobility
25. Rajesh Kharbanda Senior Vice President Permanent IT and Technology M.Sc.(Phy), MBA 51 16-Jan-03 25 2870389 New Holland/Chief Information Officer
26. Yudhister Bahl General Manager Permanent Financial B.A.(Hons) MA, 39 6-Apr-04 13 2487333 GAIAM, INC./Chief Financial Officer
Planning M.B.A
27. Ravi Kaushal Group Vice President Permanent Fin & Accts B.Com (Hons), CA, 50 17-Apr-95 23 3969230 TCIL BellSouth Ltd./General Manager (Fin.)
28. Harshvendra Soin Vice President Permanent Human Resource B.Com (Hons), 36 19-Aug-02 12 2508384 EIH Ltd./GM - HR
Bachelor of Law,
MPM & IR
29. Sanjay Nandrajog Executive Permanent Operations B.Tech (Chem), MBA 43 8-Jan-03 19 10033591 Pepsico/Market Unit Director
Director (North )
30. P. Swaminathan Chief Executive Officer Permanent Operations B.Tech, PGDM 50 1-Apr-03 27 8358535 Bharti Telenet Ltd./Chief Executive Officer,
& Director -TN MP
31. Vinod Sawhny Joint President - Airtel Permanent General BE (Mech), PGDBM 47 15-Jul-02 22 10807051 Spice Communications, Punjab,
Enterprises Services Management Managing Director
32. Rajiv Jaitly Chief Executive Permanent Operations BE, MBA 45 18-Mar-02 21 4988449 Data Access India Ltd./Executive Vice President
46
Officer - Punjab
47
or otherwise
33. Norman D. Price Director Networks Contractual Technical — 43 19-Apr-02 20 45954423 Nextel Partners, U.S./Director Engineering &
Operations
34. Atul Bindal Executive Director - Permanent Operations BE (Mech), MBA 45 26-Jun-03 21 14448165 DHL International/Communication Director
South Region Asia Pacific
35. Jayant Khosla Director - WR Permanent Operations BE (Hon), MBA 42 22-Mar-04 19 7824293 Coca Cola India/VP Operations, Mumbai
36. Shankar Prasad Chief Operating Permanent Operations BE, PGDM 43 28-Jan-04 19 3793538 Bharti Mobile Ltd./Vice President - CSD
Officer (UP - East)
37. Elango Thambiah Chief Executive Permanent Operations BE (Mech), PGDBM 40 8-Oct-01 19 4636573 Spice Communications/Vice President
Officer - AP
38. Christopher Tobit Chief Executive Permanent Operations BA 41 1-Feb-99 24 4635543 Collettes Group of Companies/
Officer - Delhi Group Business Development Manager
39. Sagarika Rai Vice President - HR Permanent Human Resource M.B.A (HR) 37 5-May-03 17 3643504 Rediffusion DY&R/General Manager - HR
40. Sandeep Gupte Head - Technical Permanent Technical M.B.A 38 25-Sep-01 13 3421285 Convergelabs/Telecom Consultant
41. Col. V. S. Rawat Sr.Vice President Permanent Technical BE (Telecom), ME 57 7-Aug-01 38 5161408 BPL Cellular Ltd./Chief Technical Officer
(Electronics & Telecom)
42. Amrita Gangotra Group Chief IT Permanent Network & IT B.Sc. (Maths), M.Sc. 4 1 25-Nov-02 17 4315701 HCF Comnet Ltd./Chief
Solutions (Ops. Research) Information Officer
Engagement
43. Bhaskar Chakraborty Chief Supply Permanent Finance & PGDBM, 48 19-May-97 26 4167597 Bharti Tele-Ventures Ltd./
Chain Officer Commercial Dip. in Materials Vice President - Matls
44. V. Venkatesh Chief Operating Permanent CSD PGDM, ACA 43 4-Jan-03 20 5666056 Bharti Tele-Ventures Ltd./Vice President
Officer-Marketing/
Sales & CSD
45. Sunil Colaso Vice President Permanent Marketing MBA, BBM 39 1-Oct-02 15 2891286 Max Healthcare/Dy.General Manager -
Marketing
46. S. K. Sharma Head - Quality Permanent Quality Assurance B. Tech 50 9-May-03 29 3861713 GE Capital/Vice President - Quality
47. P. S. Sandhu Sr. Vice President Permanent Network & IT BE, M. Tech 55 7-Aug-01 31 3603426 Bonsai Networks India Pvt. Ltd./Country
Head (Indian Operations)
48. Anurag Prashar Chief - CSD Permanent CSD BE, PGDBM 44 16-Jul-03 19 3727775 XEROX Modi Corp. Ltd./Executive Director
Customer Service Support
49. Sunil Tandon Head - Corp Solution Permanent Marketing B. Tech, MBA 44 4-Nov-03 19 5074797 Reliance Infocomm./Head Key National
Account
50. Vivek Bali Head - Brand & Permanent Marketing BA, MBA 45 4-Nov-03 24 5394181 Bristol Myers Squibb, USA/
Communication Consultant International Business
51. S. Sivaramakrishnan Head - IN/VAS Permanent Network & IT BE, M Sc. Engg, 53 1-Dec-03 27 3018925 Think Business Networks Pvt. Ltd./
PGDBA Vice President
52. Anjan Choudhury Vice President - IT Permanent Network & IT B.E. 44 1-Apr-04 20 3580070 Bharti Cellular Ltd./General Manager - IT
53. Amit Shankar Nandi Vice President - Permanent Marketing B.E., MBA 37 22-Feb-05 13 2638586 Marico Industries/Marketing Manager
Marketing
54. Mandeep Bhatia Chief Operating Permanent Operations BE, MBA 37 4-Dec-01 14 3451024 Spice Telecom - VP (Nepal)/
Officer - Maharashtra ESPL - Assistant Manger Sales
55. Amandeep Singh Vice President Permanent Technical BE (E&CE) 35 9-May-03 15 3393316 Spice Communications/VP (Tech. & IT), Punjab
Communications Ltd. - Manager
56. Gurinder Singh Chief Operating Permanent Operations MBA , B. Tech 39 19-Aug-02 17 4008045 Standard Charted Bank/Marketing Head
Sandhu Officer - Haryana
57. Randeep Singh Chief Technical Officer Permanent Technical B.E. 36 1-Aug-01 12 2765498 Spice Telecom, Asst. General Manager, Punjab
Sekhon
58. Raghunath Mandava Chief Operating Permanent Operations M. Tech, PGDBM 39 29-Sep-03 15 3924737 HLL/Operations & Mktg. Manager, Bangalore
Officer - Rajasthan
59. Sumathi Gurumurthi Vice President - CSD Permanent CSD BA, MA 45 1-Oct-96 20 2697029 Skycell Comm./General Manager - Customer
Service
60. Atul Chaturvedi Chief Operating Permanent Operations B.Tech , MBA 40 30-Jan-04 16 2563021 NIIT Limited/Head - Marketing
Officer - NESA (Career Education)
61. Rohit Malhotra Chief Operating Permanent Operations PG Diploma 38 15-Apr-04 12 3233060 Reliance Info Com/Business Manager
Officer - West Bengal
62. Sudipto Chowdhury Vice President - Permanent Distribution Sales Graduate 42 16-Jun-03 18 2666948 Bharti Cellular Ltd., UP (West)/
Sales Distribution General Manager - Sales
63. T.K. Balakumar Vice President - Permanent CSD BE 44 21-May-04 21 2482516 Daksh eServices Pvt. Ltd./Director -
Customer Services Operations & Quality
64. Deepak Soman Head CSD - East Permanent CSD B.Com., M.M.S. 45 18-Aug-03 21 2491899 HSBC/Manager - Delivery Channels
65. Michael Eric Lobo Head CSD - Kolkata Permanent CSD B.A. Diploma in 42 18-Oct-02 19 2579501 Koshika Telecom Ltd./Asstt. General Manager -
Computer Customer Care & Collections
66. Shruti Kant Pal Chief Human Resource Permanent Human Resource MA, PGDIR & W, 50 1-Mar-04 23 2527399 The Williamson Magor Group/Vice President
Officer - East XLRI
67. Jayesh Nadkar Head - Site Acquisition Permanent Facility Mgmt. PG Diploma 41 1-Sep-01 20 2667512 Reliance Infocom Limited - Program Manager
68. Jitendra Rahi Vice President Permanent Sales Masters in Marketing 43 1-Sep-04 15 2937462 Jumbo Electronics Pvt. Ltd./
Mgmt. - Mumbai Head - Retail Operations
University
69. Manoj Dawane Vice President Permanent Marketing BE, MBA 37 30-Apr-04 18 2658929 Netdecisions Pvt. India Ltd. - Director
or otherwise
70. Sonjoy Mohanty Chief of Acquisition and Permanent Marketing BA (Eco. Hons) 42 19-Apr-04 21 5397238 Escotel Mobile Communications/Chief Officer -
Relationship Centers MA (Eco Hons), Customer Acquistion and Retention
PG Dip. in Mgmt.
71. Sam Elangalloor Chief Operating Permanent Operations MBA (Mktg.) 42 2-Feb-04 16 2586048 ZEE Telefilms/Vice President - Sales &
Officer - Sales/ Marketing
Marketing & CSD
72. Kuljit Singh General Manager Permanent Marketing PGDIM, BA 43 1-Sep-03 19 2527316 Sprint RPG/National Channel Manager
73. Sugumaran J. Chief Technical Officer Permanent Technical BE (Electronics) 50 24-Jul-00 26 3265734 BPL Mobile Communications/Head N/W
Performance
74. Anil K. Malhotra General Manager Permanent Technical Diploma in 56 11-May-95 31 2444324 Gateway Digital Switch - VSNL/Deputy
Telecommunication Engineer
Engineering
75. Jagdish Randhawa Vice President - CSD Permanent CSD M.Sc. 55 26-Feb-04 33 2591803 Spice Communications/Vice President
76. N. F. Aibara Head - Mkt. Sales & Permanent Marketing BA, PGDMM, MBA 50 8-Apr-04 29 3733327 Escotel Mobile Communication Ltd./
Channel Development Dy. General Manager
77. Ashok Sharma Vice President Permanent Technical BE, PGDIP & IM, M.Sc. 5 8 1-Sep-04 34 2710349 Spice Communications/Vice President
78. Anup Vikal Vice President Permanent Finance MBA, BE (Mechanical) 3 7 11-Oct-01 13 2401446 Tata Home Finance/General Manager
79. Mrinal Roy Chief Executive Permanent Operations BE., PGDBM 42 14-Oct-02 18 2758286 ABC Consultant Pvt. Ltd./Head - North
Officer (West Bengal)
80. Rajiv K. Sharma Chief Executive Permanent Operations MA, LLB, MBA 48 29-Dec-00 25 5775602 GMS Technologies/Chief Executive Officer
Officer - NCR
81. K. Krishnan Joint President-Broad Permanent General Mgmt. B.Com., ICWA, CA 51 26-Jan-01 27 9791977 Saregama (I) Ltd./Managing Director
and Telecome
services
82. Prem Pradeep Chief Operating Officer - Permanent Operations B.Tech, MBA 50 15-Oct-01 25 6109323 Saregama (I) Ltd./Head E-Business
South Central
83. Rohtash Mal Chief Executive Permanent Operations B.Tech, PGDM 51 13-Nov-00 30 8412434 Maruti Udyog Ltd./Chief General
Officer - North Manager - Mktg. & Sales
84. N. Arjun Executive Director - Permanent Operations B. Com, MBA 48 1-Oct-00 26 10399561 Bharti Tele-Ventures Ltd./Chief Operating Officer
Enterprices Services
(Carriers)
85. Jagbir Singh Chief Technical Permanent Technical M. Phil, M.Tech, 41 9-Nov-01 19 7572557 Nortel Networks, Singapore/
Officer - Mobility M.Sc., MBA Director - Network Systems & Solutions
86. Shantanu Banerjee Head HR Engagement Permanent Human Resource ICWAI, MBA 48 30-Mar-04 24 5694323 Indo Rama Synthetics (I) Ltd./
Sr. Vice President - Corp. HR
87. Amit Shukla Vice President Permanent Marketing B.Tech, PGDM 41 23-Jun-01 17 3394611 G.M.PENS/Vice President - Sales & Marketing
88. Shamik Das Chief Operating Permanent Operations B.Com. (Hons), FCA 43 1-Jun-01 22 5662026 Bharti Mobile Ltd./Chief Financial Officer
Officer - South
89. Alok Kumar Vice President Permanent CRM B. Tech 48 6-Jul-01 27 3921347 Escotel Ltd./Chief General Manager
90. Mrinalini Gupta Vice President Permanent Marketing BA (Eco), 43 12-Nov-03 21 4061749 The Hindustan Times/Vice President -
MBA (Mktg.) Marketing
91. T.K. Anand Kumar Chief - Technical Permanent Technical B.Tech 51 15-Nov-02 26 3269005 Interwave Communications/Project Director
92. Rahul Mehta Chief Operating Permanent Operations BA 45 1-Jun-98 23 4317757 RPG Richo Ltd./Controller Business
Officer - B & TS North Operations - South
93. Prasanta Das Chief - Customer Permanent Customer Service BE Elec. & 42 19-Aug-02 21 3220640 HFCL/Associate Vice President
Sharma Service & Network & Network Telecom
Operations - North Operations
94. Ramamurthy Kolluri Chief Technical Permanent Technical B. Tech, M.Tech 51 3-Nov-00 26 4264483 Siemens Public Communication Networks Ltd./
Officer - LDS Vice President - Information & Broadband
95. N. Gambhir Head - Network Permanent Operations BE Elec. & Telecom 57 30-Apr-01 37 3030162 VSNL/General Mananger
Operations
96. Chandan Ghosh Vice President - Permanent Commercial Diploma in 47 1-Mar-02 25 4925481 British Telecom./Director ICS South Asia
Commercial (ILD) Electrical Engg
97. Sukanto Aich Vice President - AES Permanent Sales BE, MBA 37 9-Jul-01 13 2854525 Ecosoft Technologies Ltd./Head Sales
98. Arun Bhardwaj Sr. Vice President Permanent Sales BE, MBA 42 1-Feb-02 21 3866360 Ericsson inc./Director
99. Milan Rao Vice President - AES Permanent Sales BE, MBA 35 1-Apr-03 12 3208637 JM Morgan Stanley/Head Sales
100. Vipin Agarwal Vice President - AES Permanent Spl. Pro. - Finance C.A. 41 13-Jul-03 18 2581674 Eicher Motors Ltd./Head Sales
101. M. S. Ravichandran Vice President - BB & Permanent Technical BE (Hons), 56 9-Apr-01 32 4905830 RPG Cellular/Vice President - Tech. & Ops.
TS (South) M.Tech - Comm
102. Sanjay Bahl Chief CSD - B & TS North Permanent Knowledge BE. (Elect.), 42 1-Apr-96 23 3676739 Casio Bharti/General Manager - Marketing
Mgmt & Quality MBA (Mktg.)
103. Anuj Khungar Chief - B & TS (NCR) Permanent Technical BE, M.Tech 41 28-Feb-05 18 2784684 Reliance Infocom/Chief Technical Officer
104. P. V. V. Srinivasa Rao Chief Sales & Permanent Sales & B.Tech., PGDBM 36 17-Jan-05 11 2651012 Hero Motors/Chief Operating Officer
Marketing Marketing
105. A.M. Rai Vice President - Permanent Network Engineering, 40 28-Dec-00 23 2854086 Fibcom
Network Planning Planning REC Warangal
106. Rajiv Mehrotra Vice President Permanent Operations B.Sc., MBA 39 12-Jan-00 17 2748382 Koshika Telecom Ltd./Dy. General Manager
48
49
or otherwise
107. Navaidul Islam Khan Chief Executive Permanent Operations BE 56 27-Mar-00 31 5296337 Bharti Hexacom Limited/CEO
Officer - UP West
108. Shankar Halder Chief Technical Officer Permanent Technical BE 48 19-Apr-04 22 5450381 Escotel Ltd./Chief Technical Officer
109. Ramgopal Vallath Chief Operating Permanent Operations B.Tech (Elect. & 38 19-Nov-01 13 2861276 3Com India Pvt. Ltd./Country Sales Manager
Officer - Kerala Telecomm.), PG Dip.
in Business Mgmt.
110. Randeep Narang Chief Operating Permanent Operations B. Com, PGDBM 44 3-Jan-05 20 2803585 Iquara/Chief Operating Officer
Officer - West
111. Vivek Y. Vyavaharkar Chief Technical Permanent Technical BE 54 1-Oct-01 33 4063661 BPL Mobile Cellular Limited/Head Technical
Officer - Maharashtra &
Mumbai
112. Deepak Srivastava Chief Operating Permanent Operations Bachelor of 46 13-Sep-04 22 4483087 BOC Edwards/GM - South Asia &
Officer - Bihar Technology Country Manager, India
(Chemical Engg.)
113. Ajai Puri Chief Operating Permanent Operations Master of Commerce, 45 15-May-04 24 3641134 Cargill Foods India/Business Head - India Foods
Officer - Kolkata Fulbright Fellowship
for Leadership in
Mgmt.
114. Rupak Agarwal Chief Sales Officer Permanent Sales BE (Elec.), PGDBM 39.3 1-Sep-04 18 2945611 HT Media Ltd./GM - Strategic Marketing
(Mark. & Fin.)
115. Harish K. Gandhi Sr. Vice President - Permanent Human Resource MBA, LLB 49 1-Nov-02 26 4671610 Bharti Tele-Ventures Ltd./
Human Resource BTNL (Corporate Office), Vice President - HR
116. Rajan Dutta Chief Human Permanent Human Resource Master in PM & IR, 43 4-Jan-05 22 5032802 IDEA Cellular Ltd./Chief of HR & TQM
Resources Officer Dip. in Training
117. Rajan Swaroop Director - East Permanent Operations PGDM (MBA), 49 15-Nov-04 24 6865241 Escotel Mobile Comunications Ltd./
Regional Hub Mech. Engineer CEO and Executive Director
118. Dr. Jai Menon Corp Director - IT and Contractual IT & Technology Doctorate & 42 22-Aug-02 19 10136282 Bell South Corp. Atlanta/
Innovation Masters, B.Tech. Corporate Officer and Executive Vice President
119. N. V. Subba Rao Chief Operating Permanent Operations M.Tech./PGPIM 46 16-Jun-03 29 3009644 Tata Teleservices Ltd./General Manager
Office - Mktg./Sales
& CSD
(B) EMPLOYED FOR PART OF THE FINANCIAL YEAR

1. Jagdish Kini Chief Executive Permanent Operations B.Sc., MBA 50 15-Sep-00 26 12806206 Gillette India/Managing Director
Officer & Director
Mobility - South
Central Region &
West (Mah.)
2. Jagdeep Khandpur Corporate Director - Permanent Human Resource MBA (HR) 46 16-Aug-00 26 17991586 Ballarpur Industries Ltd./Group VP (HR)
Human Resources
3. Arvind Mehra Chief Operating Permanent Operations B.Com, FCA, FCS 42 17-Dec-01 23 3686482 Caltex Lubricants India Ltd./CFO & Co. Secretary
Officer (UP - West)
4. Madhur Taneja Chief Operating Permanent Operations B.Sc., MBA 36 3-Jan-03 14 2012326 Pepsico Inc./Mktg Development Mgr - FRITOLAY
Officer - MP &
Chattisgarh
5. Atul Joshi Chief Operating Permanent Operations MA, MBA 42 26-Jun-03 19 3947723 Max New York Life Insurance Company/
Officer - Gujarat Director Supplementary Distribution
6. Sudhir Agarwal Chief Operating Officer Permanent Operations MBA 41 18-Feb-05 15 1330253 Modi Corp.Ltd/Director
7. Deepak Gulati Chief Executive Permanent Operations B.Sc, MBA 45 15-Jun-98 24 6854438 Bharti Cellular Ltd./Chief Executive,
Officer (Eastern Region) Special Project
8. Neeran Chhiber Chief Business Permanent Business MMS 46 15-Jul-05 20 2608374 Telecom Seychelles Ltd./Chief Executive Officer
Development Development
9. Daljit Singh Corporate Director - Contractual Human Resource M.Sc., LLB, MBA 55 25-Jul-05 31 7180970 American Express/Vice President - HR
Human Resources
10. Vivek Mahendru Vice President - Group Permanent IT & Technology B.Sc., MBA, Dip. 40 2-Nov-05 20 1564128 IDEA Cellular Ltd./Head - IT
IT Transformation in Statistics, Advance
System Dip. in Computer
Application
11. Mohit Bhatnagar Head - NPD & Innovation Permanent Marketing MBA, MS 36 18-Jan-02 15 3196741 Brightpond Inc/Co-founder & Chief
Operating officer
12. Pratik Pota Head - Acqisition Permanent Marketing BE, PGDM 37.48 1-Dec-01 14 3615050 HLL/Manager - Marketing
13. S. C. Agrawal Vice President Permanent Finance & Diploma in Mech. 53.69 12-Apr-88 33 2809807 Bharti Telecom Ltd./General Manager -
Commercial Engg., Graduate Dip. Corporate Matrials
Course in Materials
Management
14. Bhuvanesh Chief Operating Permanent Operations Bachelor of 45 15-Jul-05 24 2974828 BPL Mobile Cellular Ltd./COO - West
Pratap Singh Office - Gujarat Commerce
15. Anshul Gauba Head - Retail Sales Permanent Sales BE, MBA 33 6-Mar-06 12 137022 BPL Mobile Cellular Ltd./Head Prepaid
Business - Maharastra & Goa
or otherwise
16. Shashi Arora Sr. Vice President - Permanent Sales & BE, MBA 41 1-Feb-06 15 1691450 Kotak Mahindra/Group Head - Marketing
Sales & Marketing Marketing
17. Anant Arora Vice President - Permanent Sales MBA 39 9-Apr-03 16 2610311 Reliance Infocom/Head - Sales Operations
Sales - Kolkata
18. Umesh A Durve Head - Post Paid Sales Permanent Sales and PG Diploma 40 5-Jan-06 16 719190 BPL Cellular Ltd./Regional Business Head
Marketing
19. Shanker Narayan Chief Financial Officer Permanent Finance CA 39 16-Apr-04 16 3246821 Hutchinson Essar Ltd./Vice President
20. Vishal Sehgal Vice President Permanent Mangerial/ MBA (Mkt. & Finance), 38 15-Jul-05 14 2674643 Reliance Infocom/Head - Cluster Sales &
Supervisory B.Tech (Mech) Operations & Business Head Post Paid Business
21. Aniruddha Basu General Manager Permanent Technical B.Tech (Radio 39 23-Nov-05 11 1102395 Idea Cellular Ltd./General Manager
Physics & Electronics)
22. Faisal Siddqui General Manager Permanent Mangerial/ MBA, MS, BS 38 5-Dec-05 13 846441 Nextel Communications/Sr. Manager -
Supervisory Product Strategy
23. Nilanjan Mukherjee Senior Vice President Permanent Sales & Marketing Graduation 41 30-Jan-06 17 1577902 Idea Cellular Ltd./Vice President
24. K. B. Rajendran Vice President Permanent Sales BE, MBA 40.6 8-Oct-01 17 2421176 Broadband Solutions Pvt. Ltd.
Senior Manager - Business Development
25. Rajiv Kohli Chief Executive Permanent Operations B.Tech, PGDM 45 1-Jun-00 19 5535125 Koshika Telecom Ltd./GM Marketing
Officer - Access
Business North
26. Mohan Gopinath Chief Executive Permanent Operations B.Com. (Hons.), 52 1-Sep-05 24 4485664 NET-iTech Asia Pacific Pte Ltd./
Menon Officer & Director - Dip. in Marketing, Chief Executive Officer
Enterprise Services LLB
(Corporates)
27. Akshay Kumar Chief Marketing Permanent Marketing B.Tech (Hons), 45 26-Dec-05 22 3116124 DBS Bank Ltd./Vice President
Officer - B & TS PGDM
28. Nilanjan Roy Chief Controller Permanent Finance & B.Com (Hons), 38 1-Mar-06 16 448576 Unilever - USA/Finance Director
Accounts A.C.A
29. Sanjay Kapoor Joint President- Permanent General B.Com (Hons), 44 1-Mar-06 23 784000 Tele Tech Services India Ltd./President & CEO
Mobility Business Management MBA
30. Arvind Mathur Vice President Permanent Technical B.Sc, M.Sc 42 7-Nov-05 16 2021082 Sify Ltd./General Manager
(Electrical
Communication
Engineering)
31. N. Shekhar Vice President Permanent Finance CA, MBA 40 20-Jan-06 17 1000571 Coca-Cola India Inc./General Manager -
Finance
32. Sunil Dwivedi Vice President Permanent Marketing BE, MBA 38 1-Mar-06 17 256148 Reliance Infocomm./International Calling Cards
33. Soumitra K. Ghatak Vice President Permanent Sales and BA (ECO), PGDM 50 16-Mar-06 25 152060 LML Ltd./Sr. Vice President
Marketing
34. Sudhir Chopra Vice President Permanent Technical BE (Hons) 42 27-Jan-06 20 1010026 Alcatel/Head - Projects
35. Kantak Shailesh Vice President Permanent Marketing BE, MMS 39 12-Jan-06 15 1061133 BPL MOBILE/Chief Operating Officer
Anant
36. S. Ramaswamy Sr.Vice President Permanent CSD BA 41 5-Jan-06 20 1425414 IDEA Cellular/Viice President
37. Shankho Chowdhury Vice President Permanent Operations BA (English 45 11-Jan-06 20 585660 Owned Media Solution & Marketing Company
Literature)
Notes: 1. Gross remuneration comprises of Salary, Allowances, Company’s contribution to Provident Fund and taxable value of perquisites.
2. The employee would qualify for being included in Category (A) or (B) on the following basis:
For (A) if the aggregate remuneration drawn by him during the year was not less than Rs. 24,00,000 p.a.
For (B) if the aggregate remuneration drawn by him during the part of the year was not less than Rs. 2,00,000 p.m.
3. None of the employees mentioned above is a relative of any Director of the Company except Mr. Sunil Bharti Mittal, Mr. Rakesh Bharti Mittal and Mr. Rajan Bharti Mittal, who are brothers and Directors on the Board
of the Company.
4. None of the employees mentioned above holds 2% or more share capital of the Company.
5. The designation - ‘Director’ wherever prefixed describe the area of responsibility occurring in the above statement and is not a Board position except that of Mr. Akhil Gupta, Mr. Sunil Bharti Mittal and Mr. Rajan Bharti
Mittal.
50
Management Discussion & Analysis
1. INDUSTRY STRUCTURE AND DEVELOPMENTS private integrated telecom player in India. It has invested
approximately Rs. 215 billion in the telecom sector and had
1.1. Indian telecom Industry
annual revenue of Rs. 117 billion in the year under review.
Driven by rising income levels and favourable demographics, The Company has a market capitalisation of over Rs. 760
India is poised to at least double its GDP in nominal terms billion and is among the top 10 listed entities in India.
from current levels by FY 2010, as stated in one of the recent
reports released by Merrill Lynch. This era of rapid economic 1.2. Recent developments
growth has been accompanied by exponential growth in
The telecom industry is one of the most dynamic
the telecom sector, particularly on the wireless side. India
industries in the country today and is characterised by a
has reached a wireless penetration of 8.3% in FY 2006, and
constantly evolving regulatory environment. The relative
its mobile base has increased at a compounded annual
importance of regulatory changes should be viewed in
growth rate of 85% over the last seven years. With increasing
light of the big challenges and opportunities that the
network coverage and affordability this growth is expected
industry is facing today (as detailed in Section 2 of this
to continue in the medium term.
report). On balance, the direction and pace of regulatory
With about 20.93 million mobile and broadband & telephone changes is positive for the industry and augurs well for
customers on March 31, 2006, the Company is the largest the Company.
The following table captures few of the key regulatory changes that were implemented by the DoT/ TRAI in 2005-06.
Regulatory Brief Comment
Development
Alteration of Interconnection z Changes effective from March 1, 2006
Usage Charge (IUC) Regime z On domestic calls, per minute ADC is replaced by a “revenue share ADC” wherein
operators will pay 1.5% of their non-rural AGR to BSNL
z ADC on International call has been reduced
z Downward revision of tariffs.
Increase in Foreign Direct z On November 3, 2005, the Government of India announced enhancement of
Investment (FDI) limit from FDI ceiling from 49% to 74% in the telecom sector, subject to certain preconditions.
49% to 74%
Revised Terms and z On November 11, 2005, the central government announced revised terms for
Conditions of Licenses NLD, ILD, ISPs, IPVPN and VSATs with a decrease in license fee for NLD/ILD licenses
from 15% of AGR to 6% of AGR
z Revised norms provide considerable ease of entry to new operators with the lowering
of entry barriers through reduced license fee and roll out obligations. The one time
entry fee has been reduced to Rs. 250 million from Rs. 1,000 million.
Regulation on Code of z Effective March 21, 2006

Practice for Metering and z The regulation prescribes various measures to ensure that the customer gets complete
Billing Accuracy information relating to his tariff plan and charges for value-added services.
Regulation on Quality of z Effective July 01, 2005.

Service (QoS) parameters
of basic and cellular services
Amendment to Reporting z Effective March 27, 2006
System on Accounting z Restriction of applicability to only those service providers whose minimum turnover
Separation Regulation in the preceding financial year is Rs. 250 million.
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Development
Amendments to Telecom z Corporate plans (for data) need not be disclosed to TRAI
Tariff Order 1999 z All operators need to issue a periodic certificate of compliance with principles of
non-discrimination and non-predation
z Lifetime plans applicable only for the remaining life of the license. Operators need to
disclose the date of expiry of existing license to subscribers of the lifetime plan(s).
No change in tariff would be permitted during the life of the plan.
The following table captures the salient draft regulations, directives and recommendations relating to various regulatory
matters.

Development
Draft Regulation on z Covers the commercial and technical arrangements on how operators should connect
Intelligent Network (IN) their equipment, networks and services to enable customers to have access to the IN
Services services of all operators.
TRAI’s Recommendations z The existing ceiling on spectrum charges should be reduced from 6% to 4% of AGR
on Spectrum to DoT z The existing spectrum allocation criteria should be made technology-neutral
z The unallocated carriers in 800 MHz should be given to existing CDMA operators
z When the Ministry of Defence vacates spectrum in the 900 MHz band, a part of it
should be allocated to GSM operators who have been allocated spectrum only in
1800 MHz band.
TRAI’s Recommendations z There should be a converged regulatory regime based on a slightly modified
on Convergence and Communications Convergence Bill 2001
Competition in Broadcasting z Entry fee for unified license should be reduced to Rs.50 million as against Rs.1,070 million
and Telecommunications recommended earlier to reflect the recent change in NLD/ILD license. Further, entry fee
should reduce to Rs.3 million after 5 years as recommended earlier.
TRAI’s Recommendations z MNP will allow mobile phone customers to switch service providers without having to
on Mobile Number sacrifice their existing number, often the biggest deterrent for a dissatisfied customer
Portability (MNP) to switch service providers. DOT has decided to defer implementation of MNP as of now.
TRAI’s Recommendations z Recommendations on industry-wide issues in the event that operators decide to migrate
on Next Generation to Next Generation Networks.
Networks (NGN)
TRAI recommends steps for z Recommendations for utilization of National Internet Exchange of India (NIXI) which
improvement in the was set up for peering of ISPs among themselves, for the purpose of routing domestic
effectiveness of NIXI traffic within the country, instead of taking it all the way to US/ abroad.
DOT and TRAI Directives During the course of the year, TRAI and the DoT issued a number of directives to all
telecom service providers. The salient ones amongst these are:
z Inter-Service-Area connectivity
z Information to customers about complete details of the tariff plan
z Provision of Interconnection
z Charges for Value Added Services (VAS) and Premium Rate Services
z Formats for Publication/ Advertisement of subscriber tariff
z Tariff plans with misleading titles
z Implementation of Carrier Selection.
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2. OPPORTUNITIES AND THREATS our competitive position and focus on customer delight,
we believe we are well positioned to attract subscribers
2.1. Opportunities
presently on other networks, as and when number portability
A strong economy and a growing market
gets introduced in the market.
The Indian telecommunication industry is amongst the fastest
2.2. Threats
growing telecom markets in the world and is poised to deliver
Regulatory decisions and changes
solid growth as a result of several economic reforms that
have lead to strong GDP growth pegged at approximately On the regulatory front, reduction in the entry fee and the
8.1% for FY 2006. Increasing per capita income supported by annual license fee for National Long Distance and
increased consumption is resulting in a greater-than- International Long Distance (ILD), combined with the
proportionate impetus for telecom growth. As India still impending implementation of Carrier Access Code (CAC)
remains one of the lowest penetrated markets, it is one of the would lead to greater competition in the Long Distance
most attractive telecom markets in the world today. segment. The implementation of Carrier Access Code would
make it easier for customers to choose their long distance
New technologies and paradigms
carrier, regardless of the access provider.
The trend towards adoption of Next Generation Networks
We, however, believe that given our focus on offering value-
(NGN) is global and the discussions in India are still at a
for-money services to consumers, we would stand to gain
preliminary stage. Bharti will partake in the discussions
from the introduction of CAC.
regarding the feasibility, and the model for adopting 3G and
other NGN related technologies in the Indian context. Introduction of number portability may impact our
business
Technologies like Triple Play, wherein a single cable can deliver
voice, data, video on demand and IPTV provide us with a Number portability can lead to high customer attrition rate,
unique opportunity as we are an integrated player and are as the inability to retain a telephone number is currently a
well positioned to deliver this service. significant exit barrier for a customer in the intensely
competitive Indian market. We may experience increased
Strong strategic partnerships
price competition as operators seek to retain or attract
We have strong strategic alliances with SingTel, and
subscribers as well as incur an increased acquisition cost per
Vodafone, both of whom have invested in the equity capital
subscriber.
of our Company. Our alliances provide us access to
In addition, if we are required to offer number portability,
technological know-how as well as best practices to enhance
we will need to invest in implementation and maintenance
customer experience. We will continue to leverage the
of complex back-end support systems, which will increase
strengths of our partners and benefit from their experience
our capital expenditure and expenses. However, given our
and know-how.
focus on customer delight, our presence in all circles as an
Introduction of number portability
integrated telecom operator and our emphasis on network
Number portability would allow customers to retain their
enhancement and expansion, we believe that we would
telephone numbers even after switching service providers
benefit from introduction on number portability.
or networks. We believe that companies with better service
Increased competition may reduce market share
delivery and customer care platforms stand to gain over
and/or revenue
their competitors. Extensive network coverage, coupled with
aggressive pricing and innovative products and services Bharti Airtel is the only private GSM operator having an all-
would help in gaining a larger share of the market. Given India footprint. The Company is the market leader in the
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wireless space based on the number of customers. With the were subscribing to broadband (DSL) services. During the
new foreign entities entering the Indian market through their financial year FY 2005-06, we added 489,478 customers
investments in the current operators, the financial strength registering a growth of 57% over the previous year.
of these players is likely to increase. Also, few of our
Broadband & Telephone Services recorded gross revenues
competitors are likely to raise funds either through private
of Rs. 15,075 million for the year ended March 31, 2006,
equity, borrowing or from public listings. They are likely to
showing a growth of 33% year on year. The earnings before
plough back funds to expand network and provide greater
interest and tax was Rs. 606 million for the financial year
quality of service. This may lead to a downward pressure on
2005-06 as compared with Rs. 1,442 million in the previous
both customer and revenue market share.
year. This reduction was attributable to the rollout of services
3. SEGMENT WISE PERFORMANCE in 38 new cities during the financial year 2005-06.
3.1. Mobile Services 3.2.2 Enterprise Services
During the financial year, we added 8,594,928 mobile 3.2.2.1 Enterprise Services (Carriers)
customers on our networks, to end the year with a mobile 1. The Company complements its Mobile and Broadband
customer base of 19,579,208. We have maintained our & Telephone Services with national and international long
leadership in terms of wireless subscribers and have distance services. It has approximately 32,900 route
improved our wireless subscriber market share from 21.2% kilometres of optic fibre on its national long distance network
as at March 31, 2005 to 21.8% as at March 31, 2006. as at March 31, 2006. For international connectivity to the
East, it has a submarine cable landing station at Chennai,
Of our 19,579,208 mobile customers as at March 31, 2006,
which connects the submarine cable (owned by an associate
post-paid customers contributed 17.3% to the overall
company) between Chennai and Singapore. For international
customer base, while the prepaid customers contributed
connectivity to the West, it is a member of the South East
the balance 82.7%. During the financial year ended March
Asia-Middle East-Western Europe – 4 (SEA-ME-WE-4)
31, 2006, our share of 8,594,928 net additions was 22.7%
consortium jointly with 15 other global telecom operators,
of the all-India wireless subscribers net additions.
and have commissioned the fourth generation cable system.
The Mobile Services business recorded gross revenues of
SEA-ME-WE-4 supports telephone, internet, multimedia and
Rs. 83,095 million for the year ended March 31, 2006,
various other broadband and data applications.
showing a growth of 50% year on year. The earnings before
The division recorded gross revenues of Rs. 24,674 million
interest and tax was Rs. 16,854 million for the financial year
for the year ended March 31, 2006, demonstrating a growth
2005-06 as compared with Rs. 10,385 million in the previous
of 32% year on year. The earnings before interest and tax
year, representing a year on year growth of 62%.
was Rs. 7,794 million for the financial year 2005-06 as
3.2. Non-Mobile Services
compared with Rs. 4,716 million in the previous year.
Non-Mobile Services comprises of Broadband & Telephone
3.2.2.2 Enterprise Services (Corporates)
Services and Enterprise Services. Enterprise Services is further
The Enterprise Services business unit provides secure,
divided into two sub-business units, i.e. Enterprise Services–
scalable, seamless, reliable and customized integrated
Carriers (Long Distance) and Enterprise Services–Corporates.
solutions of voice and data communications for corporate,
3.2.1 Broadband & Telephone Services small and medium scale enterprises.
Broadband (DSL) and telephone (fixed line) services are The unit recorded gross revenues of Rs. 6,933 million for the
provided in 90 cities across India. We had 1,346,740 year ended March 31, 2006, demonstrating a growth of
customers as on March 31, 2006 of which 23.4% (315,729) 28% year on year. The earnings before interest and tax was
54
Rs. 1,762 million for the financial year 2005-06 as compared Technical failures and natural disasters could damage
with Rs. 2,284 million in the previous year. our telecommunication networks.
4. OUTLOOK We maintain insurance for our assets equal to the

replacement value of our existing telecommunications
We believe that Bharti Airtel Ltd. will benefit from the overall
networks, which provides cover for damage caused by fire,
economic growth and the potential for further growth of
special perils, and terrorist attacks. However, there can be no
telecom services in the Indian market. We are the first and
assurance that any claim under the insurance policies
only private GSM mobile operator to have an all-India
maintained by us will be honored. Further, technical failures
footprint. We believe that we are in a strong position to
and natural disasters, even when covered by insurance, may
enhance our leadership, based on: -
cause disruption in our operations.
z our rich human resource talent pool;
As a normal course of business, we have implemented back-up
z the growth potential of new services in the data market
solutions in the event such issues arise, which we believe will
and our track record in innovation;
enable us to continue with normal operations under most
z the expansion of our networks to rural markets;
circumstances.
z our ability to maximize returns on investment;
Changes in available technology could increase
z the ability to leverage the strengths of our business
competition and our capital costs.
partners and our integrated player status;
In order to remain competitive, we consistently introduce
z our focus on building a strong brand, and enhancing sophisticated new technologies.In the event that the new
customer experience. technologies that we have adopted or intended to adopt,
We have consistently been the first to market with many fail to be cost effective or are not accepted by customers,
successful and innovative products that add to superior our ability to remain competitive could be affected.
customer experience and satisfaction. For instance, we We have prudently deployed new technologies after
introduced a validity free world in India. assessing the experience of our international partners in the
We firmly believe that we will continue to provide unique deployment process before choosing to do so ourselves.
and innovative products and services to our customers that Skilled manpower and talent.
will help us further consolidate our market leadership.
The growth of the Indian economy has led to an increased
5. RISKS AND CONCERNS requirement for talented managerial personnel. We believe
Our business is subject to extensive regulation by the that talented manpower is a key strength. Given the track
Government, which could have an adverse effect on record and success of our employees, other companies often
our business. look to Bharti Airtel as a hunting ground for talent.
Our business units compete with government-owned or As a retention strategy, the company has issued ESOPs.
government controlled companies. The regulatory Further, in order to mitigate the risk we place considerable
environment may tend to benefit them over the private emphasis on development of leadership skills and on building
operators. employee motivation.
We, however, do not perceive adverse changes in the 6. INTERNAL CONTROL SYSTEMS
regulatory environment. We are confident that the The Company has in place adequate systems of internal
government will continue to ensure a level playing field for controls commensurate with its size and nature of its
all operators keeping the customers’ best interest in mind. operations. These have been designed to provide reasonable
55
assurance with regard to recording and providing reliable was at Rs. 40,006 million, up by 42% while Profit before tax
financial and operational information, complying with was Rs. 23,455 million up by 48% from the previous year.
applicable statutes, safeguarding assets from unauthorized
Net profit for the year was Rs. 20,279 million, a growth of
use or losses, executing transactions with proper
67% over the previous year.
authorizations and ensuring compliance with corporate
policies. 8. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES
The Company has a well-defined delegation of power with With the ongoing economic growth in India and increasing
authority limits for approving all expenses and transactions. competitiveness in the services sector, it was imperative to
There are formalized processes laid down for review of the align our structures, systems and processes with our vision.
actuals vs the budgets and annual and long-term business To capitalize on diverse opportunities in the telecom sector,
plans. The Company has implemented an Enterprise Resource all our business lines have been structurally synergized to
Planning (ERP) system to connect financial information of provide the ‘One Airtel’ experience. This not only ensures
different locations for efficient exchange of information and enhanced sustainability and scalability for future business
is continuing to align its processes and controls. opportunities but also leverages our diverse strengths to
address prospective competitive challenges. To align people
The Corporate Audit Group is responsible for performing
capabilities with the revamped organizational design, the
regular internal audit reviews to ensure adequacy of the
Company has developed a comprehensive leadership
internal control systems and adherence to management
competency framework. Further, in order to ensure seamless
policies and statutory requirements. These audits are
executed as per an Internal Audit Plan, which is based on structural transition and account for enhanced job
assessment of major risks faced by the Company and is responsibilities in the current context the Company is
approved by the Audit Committee. In line with best practices, conducting a detailed job evaluation exercise. This will
the planning and execution of the internal audit is oriented enable validated assessment of various existing/new roles
towards review of controls in various operational and within the Company, provide more clarity to the job
financial areas critical to business – IT, Revenue Assurance, incumbents and in turn support organizational optimization.
Collection Credit and Risk, Network Security, Financial The Company’s continuing growth, coupled with quantum
Reporting, Procurement etc. developments in the services segments, and transferability
The Corporate Audit Group functionally reports to the Board of skills has resulted in significant risks attributable to talent
Audit Committee and administratively to the Chairman and retention across senior/critical positions. In order to address
Group Managing Director. The Board Audit Committee these risks the Company envisages introducing a talent
periodically reviews the audit plans, as well as observations assessment process to develop and recognize exemplary
of both internal and statutory auditors. leaders. The Company also plans to introduce a targeted
retention plan for senior/critical employees by providing
7. DISCUSSION ON FINANCIAL PERFORMANCE
stock options based on performance of these employees.
For the year ended March 31, 2006, the Company had
consolidated gross revenues of Rs. 117,255 million, a growth A combination of these structural and systematic human
of 44% year on year. Earnings before Interest, Tax, Depreciation resource measures would ensure that the Company realizes
& Amortisation or EBITDA were Rs. 42,250 million, a growth its vision of ‘being targeted by top talent’ and
of 38% over the previous year. Cash profit from operations simultaneously fulfill its growth agenda.
56
Report on corporate governance
THE COMPANY’S GOVERNANCE PHILOSOPHY
Corporate governance refers to a blend of law, regulation and voluntary practices that is able to attract capital and talent,
enable the organization to perform efficiently and ethically, generate long-term wealth and value for all its stakeholders and
respect the interests of society as a whole.
At Bharti Airtel Limited we believe in, and abide by, the following principles of effective corporate governance:
z Transparency in disclosure and communication of relevant financial and operational information;
z Accountability, supported by robust internal processes of management oversight and control for monitoring of performance
and risk;
z Integrity and ethics in all our dealings;
z Balancing the enforcement and protection of the rights of all stakeholders, thus creating wealth and value in the long-
term;
z Independence of directors in reviewing and approving corporate strategy, major business plans and activities as well as
senior management appointments;
z Well defined corporate structure that establishes checks and balances and delegates decision making to appropriate
levels in the organization.
The implementation of Clause 49 of the Listing Agreement with the stock exchange will undoubtedly raise the standards of
corporate governance in India. However, regulatory directives and enforcement will not be sufficient to create a best in class
transparent organization. We believe that establishing trust with our customers, investors, employees, business partners,
shareholders and the public at large requires that we go beyond regulatory compliance and adopt a culture and process for
credible self-regulation that transcends mere form.
Corporate governance rating
The earlier awarded highest Governance and Value Creation (GVC) rating viz. ‘CRISIL GVC Level 1’ by CRISIL, has been
reaffirmed once again this year. This clearly indicates our capability to create wealth for all our stakeholders, while preserving
the highest standards of ethics and governance. We acknowledge that corporate governance is a continuing process of
increasing the levels of governance and we endeavor to establish and benchmark ourselves with industry’s best practices to
ensure that our commitment to stay at the highest level is maintained.
Governance structure
The Chairman and Managing Director of Bharti Airtel is supported by two Joint Managing Directors, by the President of Bharti
Airtel and by a number of Corporate Directors to ensure the highest corporate governance standards, and to aid in designing
future strategy for the Company.
The Bharti Airtel organization is structured in three Strategic Business Units, i.e. Mobile Services, Broadband & Telephone
Services (B&TS), and Enterprise Services headed by three Joint Presidents who report directly to the President.
The President’s Office is provided the highest level of functional expertise and delivery, by functions such as Finance & Business
Integration, IT & Innovation, Marketing & Communication, Networks, Human Resources, Customer Service Delivery, Legal &
Regulatory, Supply Chain and Content Factory.
The principles of corporate governance in Bharti Airtel are practiced at multiple levels, which are interlinked with each other:
a) Strategic supervision and direction – by the Board of directors;
57
b) Strategic design – by the senior management;
c) Strategic control and implementation – by the Airtel Management Board;
d) Operations management – by the management boards of the three Strategic Business Units, assisted by their respective
circle Executive Committees. There are twenty three circles in the Company, each with its own Executive Committee,
comprising of functional heads of divisions for day-to-day management and decision making;
e) Technology management – by the Airtel Technology Council.
This multi-tier structure for Corporate Governance ensures that:
i. Strategic supervision can be conducted by the Board based on independent judgment, thereby increasing accountability;
ii. Strategic design outlines the Company’s strategy for future growth;
iii. Strategic control and implementation activities have a clear focus on specific business areas, and on achieving synergies
with cross-business linkages, while maintaining a culture of customer centricity and meritocracy in the Company;
iv. Operations management of the strategic business units remains focused on enhancing the efficiency and effectiveness
of the respective businesses; and
v. Technology management concentrates on assessing emerging trends of technology, and achieves consensus on future
technology initiatives and action plans.
Our governance structure and process helps in clearly determining the responsibilities and entrusted powers of each of the
business entities, thus enabling them to perform those responsibilities in the most effective manner. It also allows us to
maintain our focus on the vision, mission and values we have defined, besides enabling effective delegation of authority and
empowerment at all levels.
BOARD OF DIRECTORS
Composition of the Board
The business of the Company is conducted by the management, under the direction of the Board, which oversees its
performance. The Board currently comprises of eighteen members, fifteen of whom are non-executive. A resume of each of
our directors is available on the website of the Company at www.bhartiairtel.in.
Sunil Bharti Mittal is the Executive Chairman, CEO and Managing Director. In accordance with the stipulations of the revised
Clause 49 of the Listing Agreement half of the Board members are independent directors, as is illustrated by the below graph.
The table sets out the names of directors, status and number of directorships held in other companies.
Promoter Independent Executive

Non-Promoter Non-Independent Non-Executive
83%
83% 50%
50%
17%
17%
58
Name of the Director Category Number of Directorships1 and Committee2
Memberships & Chairmanships
Directorships Memberships Chairmanships
Sunil Bharti Mittal Executive director – Promoter 8 — —

Rajan Bharti Mittal Executive director – Promoter 5 2 —
Akhil Gupta Executive director 9 3 3
Rakesh Bharti Mittal Non-executive director – Promoter 4 1 1
Chua Sock Koong Non-executive director 2 2 —
Paul O’ Sullivan Non-executive director 2 — —
York Chye Chang4 Non-executive director 1 — —
Gavin John Darby 3
Non-executive director 2 2 —
William Thomas Morrow3 Non-executive director 1 — —
Paul Donovan6 Non-executive director 1 — —
Lim Toon 5
Non-executive director 2 — —
Bashir Currimjee Independent director 1 1 —
Donald Cameron Independent director 1 — —
Kurt Hellstrom Independent director 1 — —
N. Kumar Independent director 7 1 2
Pulak Chandan Prasad Independent director 3 1 —
V. S. Raju Independent director 3 2 —
Ajay Lal3 Independent director 3 2 —
Syeda Bilgrami Imam 3
Independent director 1 1 0
Arun Bharat Ram4 Independent director 10 3 1
Lung Chien Ping5 Independent director 1 1 —
1. The directorships held by the directors, as mentioned above, do not include the directorships held in foreign companies,
private limited companies and companies under Section 25 of the Companies Act.
2. The committees considered for the purpose are those prescribed under Clause 49(I)(C)(ii) of the Listing Agreement(s) viz.
Audit Committee and Shareholders/Investors Grievance Committee of Indian Public Limited Companies.
3. William Thomas Morrow, Gavin John Darby, Ajay Lal and Syeda Bilgrami Imam were appointed as additional directors on
the Board w. e. f. January 23, 2006. William Thomas Morrow has resigned from the Board effective
April 27, 2006.
4. York Chye Chang and Arun Bharat Ram were appointed as directors on the Board w.e.f. March 31, 2006 to fill the casual
vacancies caused due to resignation of Lim Toon and Lung Chien Ping respectively.
5. Lim Toon, non-executive director and Lung Chien Ping, independent director resigned from the Board effective February
24, 2006.
6. Paul Donovan was appointed as an additional director on the Board w. e. f. April 27, 2006.
All our directors have professional skills and experience in different and complementary fields. They have proven judgment
and competence in understanding and guiding the company’s performance and strategy. The present strength and composition
of the Board reflects the diverse nature of the business environment in which we operate. The Board reviews its strength and
composition from time to time to ensure it remains aligned with the requirements of the business.
None of the non-executive directors hold any equity shares in the Company, save for Bashir Currimjee, who – through a relative
– holds 700 shares.
59
Independent directors
The independence of a director is determined by the criteria stipulated under the revised Clause 49 of the Listing Agreement
as set out below.
None of the independent directors
a) apart from receiving his/her remuneration, has any material pecuniary relationships or transactions with the Company, its
promoters, its directors, its senior management or its holding company, its subsidiaries and associates that may affect
independence of the director;
b) is related to promoters or persons occupying management positions at the Board level or at one level below the Board;
c) has been an executive of the Company in the immediately preceding three financial years;
d) is a partner or an executive or was a partner or an executive during the preceding three years, of any of the following:
i. the statutory audit firm or the internal audit firm that is associated with the Company, and
ii. the legal firm(s) and consulting firm(s) that have a material association with the Company.
e) is a material supplier, service provider or customer or a lessor or lessee of the Company, which may affect independence
of the Director; and
f) is a substantial shareholder of the Company i.e. owning two percent or more of the block of voting shares.
We follow a process of self-certification by directors for ensuring that the criteria are fully met and the certificates are tabled
before the Board.
Meeting of independent directors and Lead independent director
All independent directors meet separately prior to the commencement of all Board meetings, without the presence of any
executive directors or representative of management to discuss and form an independent opinion on the agenda items and
other Board related matters. Mr. Bashir Currimjee has been designated as the Lead independent director. The role of the Lead
independent director is to:
z preside over all executive sessions of the independent directors;
z provide objective feedback of the independent directors as a group to the Board on various matters including agenda
and other items;
z undertake such other assignments as may be requested by the Board from time to time.
Number of Board Meetings
During the year 2005-06, the Board met four times, on
z April 28 and 29, 2005
z July 26 and 27, 2005
z October 27, 2005 and
z January 23 and 24, 2006
The time gap between two meetings was not more than 4 months. The calendar for Board and Committee meetings is fixed
in advance for the whole year. Meetings are generally held at the registered office of the Company in New Delhi, though a few
meetings are held in other cities and/or locations for logistical reasons.
Information available to the Board
The Board has complete access to all the relevant information within the Company, and to all our employees. The information
regularly supplied to the Board specifically includes:
z Annual operating plans, budgets and any updates therein;
z Capital budgets and any updates therein;
z Quarterly results for the Company and its operating divisions or business segments;
z Minutes of meetings of Audit Committee and other Committees of the Board;
z Information on recruitment/remuneration of senior officers just below Board level;
z Material show cause, demand, prosecution notices and penalty notices, if any;
z Fatal or serious accidents, dangerous occurrences, any material effluent or pollution problems, if any;
z Any material default in financial obligations to and by the Company or substantial non-payment for services provided by
the Company;
z Any issue, which involves possible public or product liability claims of substantial nature, if any;
60
z Details of any joint venture or collaboration agreement;
z Transactions involving substantial payment towards goodwill, brand equity or intellectual property;
z Significant labour problems and their proposed solutions, if any. Any significant development in human resources/
industrial relations front like signing of wage agreement, implementation of voluntary retirement scheme etc. if any;
z Sale of material nature, of investments, subsidiaries, assets, which is not in the normal course of business;
z Quarterly details of foreign exchange exposures and the steps taken by management to limit the risks of adverse
exchange rate movement, if material;
z Non-compliance of any regulatory, statutory nature or listing requirements and shareholders service;
z Various dislosures;
z All proposals requiring strategic decisions;
z Regular business updates.
The above information is generally provided as part of the agenda papers of the Board meeting and/or is placed at the table
during the course of the meeting. The President and other senior management staff are also invited to the Board meetings to
present reports on the Company’s operations and internal control systems.
The Company Secretary, in consultation with the Chairman, prepares the agenda. All Board members are at liberty to suggest
agenda items for inclusion. The detailed agenda is sent to the members a week before the Board meeting date. Board meetings
are held quarterly to coincide with the announcement of quarterly results and Committee meetings are held on the same dates
as Board meetings.
Attendance of directors in the Board meetings and AGM
No. of Board
meetings Attendance at last AGM
Name of director Held Attended held on September 6, 2005
Sunil Bharti Mittal 4 4 Yes

Rajan Bharti Mittal 4 4 Yes
Akhil Gupta 4 4 Yes
Rakesh Bharti Mittal 4 4 Yes
Chua Sock Koong 4 4 No
Paul O’ Sullivan 1
4 4 No
York Chye Chang 2
N.A. N.A. N.A.
Gavin John Darby3 1 1 N.A.
William Thomas Morrow 3
1 — N.A.
Lim Toon 4
4 4 No
Bashir Currimjee 4 4 No
Donald Cameron 4 4 No
Kurt Hellstrom 4 3 No
N. Kumar 4 3 No
Pulak Chandan Prasad 4 4 No
V. S. Raju 4 4 No
Ajay Lal3
1 — N.A.
Syeda Bilgrami Imam 3
1 1 N.A.
Arun Bharat Ram2 N.A. N.A. N.A.
Lung Chien Ping4 4 4 No
1. One meeting attended through alternate director.

2. Appointed as directors with effect from March 31, 2006 to fill the casual vacancies caused due to resignation of
Lim Toon and Lung Chien Ping respectively.
3. Appointed as additional director w.e.f. January 23, 2006.
4. Resigned from the Board on February 24, 2006.
61
Code of Conduct
The Board has laid down a Code of Conduct for all directors and senior management staff of the Company, which is also
available on the website of the Company www.bhartiairtel.in. All directors and members of the senior management, that
includes company executives who report directly to the Chairman and executive directors, have affirmed their compliance
with the said Code. A declaration signed by the Chief Executive Officer to this effect is appended as Annexure B at the end of
this report. Employees of the Company also confirm compliance with the Code of Conduct that is applicable for all employees.
COMMITTEES OF THE BOARD
In compliance with the Listing Agreements (both mandatory and non-mandatory) and the SEBI Regulations, the Board has
constituted the following statutory committees, viz.:
1. Audit Committee
2. HR/ Remuneration Committee
3. ESOP Compensation Committee and
4. Investors’ Grievance Committee.
AUDIT COMMITTEE
As on March 31, 2006, the Audit Committee comprises of nine members, two-thirds (6 members) of which are independent
directors. The Chairman of the Audit Committee is an independent director. The majority of the Audit Committee members,
including the Chairman, N. Kumar, have accounting and financial management expertise.
The Chief Internal Auditor, Group CFO and the representative of the Statutory Auditors are permanent invitees to the Audit
Committee. The Company Secretary acts as the secretary of the Committee.
The key responsibilities of the Audit Committee include the following:
z Oversight of the Company’s financial reporting process and the disclosure of its financial information, to ensure that the
financial statements are true and accurate and provide sufficient information;
z Recommending to the Board the appointment, re-appointment and, if required, the replacement or removal of the
statutory auditor and the fixation of their audit fees;
z Approval of payment to statutory auditors for any other services rendered by the statutory auditors;
z Reviewing, with the management, the annual financial statements before submission to the Board for approval, with
particular reference to:
a) Matters required to be included in the Director’s Responsibility Statement, which form part of the Board’s report in
terms of Clause (2AA) of Section 217 of the Companies Act, 1956;
b) Changes, if any, in accounting policies and practices and reasons for the same;
c) Major accounting entries involving estimates based on the exercise of judgment by management;
d) Significant adjustments made in the financial statements arising out of audit findings;
e) Compliance with listing and other legal requirements relating to financial statements;
f) Disclosure of any related party transactions; and
g) Qualifications in the draft audit report.
z Reviewing, with the management, the quarterly financial statements before submission to the board for approval;
z Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control
systems;
z Reviewing the adequacy of the internal audit function, including the structure of the internal audit department, staffing
and seniority of the official heading the department, availability and deployment of resources to complete their
responsibilities and the performance of the outsourced audit activity;
62
z Discussion with internal auditors with respect to the coverage and frequency of internal audits as per the annual audit
plan, nature of significant findings and follow up thereof;
z Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud
or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board;
z Obtaining an update on the risks management framework and the manner in which risks are being addressed;
z Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit
discussion to ascertain any area of concern;
z Reviewing the reasons for substantial defaults in payment to the depositors, debenture holders, shareholders (in case of
non-payment of declared dividends) and creditors, if any;
z Reviewing the functioning of the whistle blower mechanism and the nature of complaints received by the Ombudsman;
z Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.
The Audit Committee also specifically reviews the un-audited/audited quarterly financial results of the Company before these
are submitted to the Board for approval. Minutes of each Audit Committee meeting are placed before the Board for noting.
The Audit Committee is empowered, pursuant to its terms of reference, to:
z Investigate any activity within its terms of reference and to seek any information it requires from any employee;
z Obtain legal or other independent professional advice and to secure the attendance of outsiders with relevant experience
and expertise, when considered necessary.
We have instituted internal processes and systems to ensure that the Audit Committee has access to all the material information,
and reviews on a regular basis the following:
z Management discussion and analysis of financial condition and results of operations;
z Statement of significant related party transactions (as defined by the Audit Committee), submitted by management;
z Management certificates on internal controls and compliance with laws and regulations, including any exceptions to
these;
z Management letters/letters of internal control weaknesses issued by the statutory auditors;
z Internal audit reports relating to internal control weaknesses;
z The appointment, removal and terms of remuneration of the Chief Internal Auditor;
z The financial statements, in particular the investments, if any, made by the unlisted subsidiary companies.
The Audit Committee is also presented with the following information on related party transactions (whenever applicable):
z A statement in summary form of transactions with related parties in the ordinary course of business;
z Details of material transactions with related parties, which are not in the normal course of business;
z Details of material transactions with related parties or others, which are not on an arm’s length basis accompanied by
management’s justification for the same.
The Audit Committee held four meetings during 2005-06, on
z April 28, 2005
z July 26, 2005
z October 27 and 28, 2005 and
z January 23 and 24, 2006
63
The time gap between any two meetings was less than four months. The composition of the Audit Committee as at March 31,
2006 and the attendance of members at the meetings is given below:
Member Director Category No. of Audit Committee Meetings

Held Attended
N. Kumar, Chairman Independent director 4 3
Akhil Gupta Executive director 4 4
Chua Sock Koong Non-executive director 4 4
Gavin John Darby 1
Non-executive director 1 1
Bashir Currimjee Independent director 4 4
Arun Bharat Ram2 Independent director N.A. N.A.
Pulak Chandan Prasad4 Independent director 4 4
Syeda Bilgrami Imam1 Independent director 1 —
Ajay Lal1
Independent director 1 —
Lung Chien Ping 3
Independent director 1 1
1. Appointed as members of the Audit Committee w.e.f. January 23, 2006

2. Appointed as member of the Audit Committee w.e.f. March 31, 2006
3. Lung Chien Ping, who was appointed as member of the Audit Committee w.e.f. January 1, 2006 ceased to be a member
of the Board and Audit Committee w.e.f. February 24, 2006.
4. Pulak Chandan Prasad, member was elected as Chairman of the meeting held on April 28, 2005.
Audit Committee Report for the year ended March 31, 2006
To the shareholders of Bharti Airtel Limited:
Two-third of the Audit Committee members are independent directors, according to the definition laid down in the Clause 49
of the Listing Agreement with the relevant stock exchanges.
The management is responsible for the Company’s internal controls and financial reporting process. The statutory auditors are
responsible for performing an independent audit of the Company’s financial statements in accordance with the Indian GAAP
(Generally Accepted Accounting Principles) and for issuing a report thereon. The Company also has in place an internal audit
group responsible for reviewing all the operations of the Company to evaluate the risks, internal controls and governance
processes.
The Audit Committee is responsible for ensuring the proper discharge of the above noted responsibilities of management and
auditors. It is also responsible for overseeing the processes related to the financial reporting and information dissemination.
In this regard the Committee discussed with the Company’s internal auditors and statutory auditors the overall scope and plan for
their respective audits. The Committee also discussed the results of their examinations, their evaluation of the Company’s internal
controls and the overall quality of financial reporting. The management presented to the Committee, the Company’s financial
statements and also affirmed that the Company’s financial statements had been drawn up in accordance with the Indian GAAP.
The Committee has also reviewed the internal controls put in place to ensure that the accounts of the Company are properly
maintained and that the accounting transactions are in accordance with prevailing laws and regulations. Based on its review
and discussions conducted with the management and the statutory auditors, the Audit Committee believes that the Company’s
financial statements are in conformity with Indian GAAP.
The Committee has recommended to the Board, the re-appointment of M/s. Price Waterhouse, Chartered Accountants as
statutory auditors of the Company.
In conclusion, the Committee is sufficiently satisfied that it has complied with the responsibilities as outlined in the Audit
Committee’s Charter.
N. Kumar
Chairman, Board Audit Committee
64
HUMAN RESOURCE (HR) COMMITTEE
In compliance with the non-mandatory requirements of Clause 49 of the Listing Agreement, we have constituted a
Remuneration Committee (which is known as HR Committee).
The Committee comprises of six non-executive directors, out of which three members including the Chairman of the committee
Donald Cameron, are independent directors. The Company Secretary acts as the secretary of the Committee.
The key responsibilities of the HR Committee include the following:
z Attraction and retention strategies for employees;
z Employees development strategies;
z Compensation (including salaries and salary adjustments, incentives/benefits bonuses, stock options) and performance
targets for the Chairman and Managing Director (CMD) and Joint Managing Director (JMDs);
z All human resource related issues;
z Other key issues/matters as may be referred by the Board or as may be necessary in view of Clause 49 of the Listing
Agreement or any statutory provisions.
During the year, the Committee met four times, on
z April 28, 2005
z July 26, 2005
z October 28, 2005 and
z January 23, 2006
The composition and members’ attendance at the Committee meetings is presented below:
Member Director Category No. of Meetings

Held Attended
Donald Cameron Independent non-executive director 4 4
(Chairman)
Kurt Hellstrom Independent non-executive director 4 3
V. S. Raju Independent non-executive director 4 4
Paul O’ Sullivan 1
Non-executive director 4 4
Rakesh Bharti Mittal Non-executive director 4 4
2
William Thomas Morrow Non-executive director 1 —
Rajan Bharti Mittal3 Executive director 2 2
1. One (1) meeting attended through alternate director.
2. Appointed as member of the HR Committee w.e.f. January 23, 2006. He has subsequently resigned from the Board
effective April 27, 2006.
3. Ceased to be member of the Committee w.e.f. January 23, 2006.
Remuneration Policy for directors
The remuneration paid to executive directors viz. Sunil Bharti Mittal - Chairman and Managing Director, Rajan Bharti Mittal and
Akhil Gupta – Joint Managing Directors is reviewed by the HR Committee and approved by the Board of directors and the
shareholders of the Company. The performance linked incentives paid to the executive directors are based on the performance
of the Company as well as that of the directors as reviewed by the Remuneration/HR Committee and approved by the Board.
The non-executive directors representing the key shareholders, namely Bharti Telecom Ltd., SingTel and Vodafone are not
entitled to any remuneration or reimbursement of any expenses in terms of the shareholders’ agreements executed amongst
themselves. The independent non-executive directors are paid sitting fees within the prescribed limits for the Board/Committee
65
meetings attended by them. Further a commission, duly approved by the shareholders, not exceeding 1% of the net profit of
the Company for the year calculated as per the Companies Act, 1956 is also payable to the non-executive independent
directors. As a matter of better corporate governance, the Board of directors in its meeting held on January 23-24, 2006 has
approved and adopted a policy on all payments including sitting fees, commissions, reimbursement of expenses etc. to
independent directors. Compensation of the non-executive independent directors is linked with the number of meetings
attended by the respective director during the year.
ESOP Compensation Committee

The ESOP Compensation Committee of the Board is constituted in accordance with SEBI (Employee Stock Option Scheme and
Employee Stock Purchase Scheme) Guidelines, 1999. The Committee comprises of 4 members of whom three are independent
and all are non-executive.
The key responsibilities of the ESOP Compensation Committee includes the following:
1. ESOP plan and future grants.

2. Other key issues as may be referred by the Board.
During the year, the committee met three times viz. on
z April 28, 2005,

z July 26, 2005 and
z January 23, 2006.
The composition and members’ attendance at the Committee meetings is presented below:

Held Attended
Rakesh Bharti Mittal

(Chairman) Non-executive director 3 3
Donald Cameron Independent non-executive director 3 3
Kurt Hellstrom Independent non-executive director 3 2
V. S. Raju Independent non-executive director 3 3
INVESTORS’ GRIEVANCE COMMITTEE
The Shareholders/Investors Grievance Committee of the Board oversees redressal of shareholders’/investors’ complaints on
various matters like transfer of shares, non-receipt of annual reports and other such issues.
The meetings of the Committee are generally held on monthly basis, to review and ensure that all investor grievances are
redressed within a period of 7-10 days from the date of receipt of complaint. These, however, do not include complaints/
requests, which are constrained by legal impediments/procedural issues.
The Committee comprises of three members. Rakesh Bharti Mittal, the non-executive director is the Chairman of the Committee.
The attendance of members at the meetings of Investors’ Grievance Committee held during the past financial year is as under:
During the year, the committee met ten times viz. on
z April 29, 2005

z May 27, 2005
z June 16, 2005
z July 27, 2005
z August 31, 2005
z September 20, 2005
z October 27, 2005
z November 30, 2005
z December 26, 2005
z March 9, 2006
66
Held Attended
Rakesh Bharti Mittal (Chairman) Non-executive director 10 10

Rajan Bharti Mittal Executive director 10 9
Akhil Gupta Executive director 10 10
Nature of complaints and redressal status
During the past financial year, the complaints received by us were general in nature, which include issues relating to the
change of address, non-receipt of shares, refund orders etc. All these complaints/queries were resolved to the satisfaction of
investors. Details of the same are as follows:
Type of complaint No. of Redressed Pending

complaints
Non-receipt of any shares (Remat/ Transfer/Electronic Credit) 5 5 0

Non-receipt of annual report 18 18 0
Correction/change of bank mandate of refund orders — — —
Miscellaneous — — —
TOTAL 23 23 0
The above table does not include the responses furnished by us on clarifications sought by stock exchanges from time to time
on various market related information.
We have processed and completed all requests for share transfers and other related matters except those which are disputed
and sub-judice.
Subsidiary companies
The revised Clause 49 defines a ‘material non-listed Indian subsidiary’ as an unlisted subsidiary, incorporated in India, whose
turnover or net worth (i.e. paid up capital and free reserves) exceeds 20% of the consolidated turnover or net worth respectively,
of the listed holding company and its subsidiaries in the immediately preceding accounting year:
We do not have any material non-listed Indian subsidiary.
General Body Meetings

The last three Annual General Meetings (AGMs) were held as under:
Financial Year Location Date Time
2004-2005 Air Force Auditorium, September 6, 2005 03.30 p.m.

Subroto Park,
New Delhi – 110 020
2003-2004 Air Force Auditorium, August 20, 2004 03.30 p.m.

Subroto Park,
2002-2003 Air Force Auditorium October 21, 2003 03.30 p.m.

Subroto Park
Special resolutions passed at the last 3 AGMs
1. 2004-05 – Annual General Meeting held on September 6, 2005

a) Approval of the ESOP Scheme 2005;
b) Applicability of ESOP Scheme 2005 to the employees of holding and subsidiary companies;
c) Amendments in the Articles of Association of the Company consequent upon reduction in shareholding of one of
the strategic shareholders viz. Brentwood Investment Holdings Limited.
67
2. 2003-04 – Annual General Meeting held on August 20, 2004:
a) Authorising the payment of commission to non-executive directors of the Company not exceeding 1% of the net
profits of the Company in each financial year;
b) Authorising amendments to the Company’s existing ESOP scheme; and
c) Authorising Sponsored ADR issue of the Company.
3. 2002-03 – Annual General Meeting held on October 21, 2003:
a) Authorising the Board for voluntary de-listing of the existing equity shares of Rs. 10/- each, from The Delhi Stock
Exchange Association Limited (DSE);
b) Authorising the Board to make loans to, or furnish guarantees or provide securities on behalf of Bharti Cellular
Limited (BCL), an erstwhile subsidiary of the Company upto an aggregate amount of Rs. 67,000 mn; and
c) Authorising the Board to make loans to, or furnish guarantees or provide securities on behalf of Bharti Infotel
Limited (BIL), an erstwhile subsidiary of the Company upto an aggregate amount of Rs. 40,000 mn.
Postal Ballot
During the year under review, in pursuance of Section 192A of the Companies Act, 1956 and Companies (Passing of the
Resolution by Postal Ballot) Rules, 2001, we have conducted three postal ballots for seeking approval of the shareholders by
way of special resolution. M/s. S. K. Jain, Chartered Accountants, New Delhi were appointed as scrutiniser. The results of the
postal ballot were published in Business Standard (English Daily) and Jansatta (Hindi newspaper). The summary of the results
was as follows:
Date of
S. declaration Particulars of the Total valid In favour Against
No. of results resolution passed Votes (%) (%)
1. 29.11.05 For increase in the limits of investments 1173100745 1173099657 1088

by FIIs to sectorial cap as may be (100.00%) (99.999%) (0.0001%)
applicable from time to time.
2. 02.03.06 a. For amendment in the Memorandum 1447322242 1447321399 843

of Association (100.00%) (99.999%) (0.0001%)
b. For amendment in Articles of Association 1447322242 1447320371 1871

(100.00%) (99.999%) (0.0001%)
3. 22.03.06 For change in the name of the Company 1386490710 1386488680 2030
from Bharti Tele-Ventures Limited to (100.00%) (99.999%) (0.0001%)
Bharti Airtel Limited
We believe that the postal ballot system allows for more participation of shareholders located in various parts of the country,
who would normally not attend and vote at general meetings held in New Delhi.
Disclosures
i. Disclosure on materially significant related party transactions
The required statements/disclosures with respect to the related party transactions, if any are duly made to the Audit
Committee on a quarterly basis in terms of Clause 49(IV)(A) and other applicable laws. For the financial year ended
March 31, 2006, there were no transactions of material nature with the related party which are not in the normal course
of business.
Further for the financial year ended March 31, 2006 there no material individual transactions with related parties or
others, which were not on an arm’s length basis.
The related party transactions have been disclosed under Note 28 of Schedule 23 forming part of the Annual Accounts.
68
ii Details of non-compliance with regard to capital market
There have been no instances of non-compliances by us and no penalties and/or strictures have been imposed on us by
stock exchanges or SEBI or any statutory authority on any matter related to the capital markets during the last three years.
iii. Ombudsman Policy
We have implemented an Ombudsman Policy (includes Whistle Blower Policy), which outlines the method and process
for stakeholders to voice genuine concerns about unprofessional conduct that may be in breach of our Code of Conduct
for employees. The policy aims to ensure that genuine complainants can raise their concerns in full confidence, without
any fear of retaliation or victimizations. The Corporate Ombudsman administers a formal process to review and investigate
any concerns raised, and undertakes all appropriate actions required to resolve the reported matter. Depending on the
gravity of the concern, the Ombudsman constitutes a meeting of the Code Compliance Committee to undertake a full
investigation, which may involve both internal and external investigative bodies. Instances of serious misconduct dealt
with by the Ombudsman and the Code Compliance Committee are reported to the Audit Committee. Members of this
Committee comprise the Ombudsman as Convenor, the Chief Internal Auditor, Corporate Director HR and the General
Counsel and Company Secretary. No employee of the Company has been denied access to this policy.
iv. Disclosure of accounting treatment
There is no deviation in following the treatments prescribed in any Accounting Standard (AS) in the preparation of
financial statements of the Company.
v. Disclosure – Risk Management
We have created a Risk Management Framework, key elements of which are as follows:
z A detailed and comprehensive Risk Management Policy;
z A risk register, which lists key risks faced by the organization, and their mitigating controls;
z A methodology for rating these risks for their implications and probability of occurrence;
z A methodology for evaluating the mitigating controls through an evaluation mechanism built in the Company’s
internal audit programme;
z A process of communicating the risks through a risk matrix to the senior management and the Board Audit
Committee;
z A designated Risk Manager as the owner of this process.
The key elements of this framework are in place at the corporate level and the Company is currently in the process of
extending this further down the organization so as to eventually achieve a comprehensive enterprise wide risk management
framework.
vi. Details of public funding obtained in last three years
We have not obtained any public funding in last three years.
vii. Remuneration of directors
For the financial year ended March 31, 2006, a total of Rs. 7,10,000/- were paid as sitting fee and a provision of
Rs. 98,98,350/- has been made for payment of commission to all non-executive independent directors.
69
The details of the remuneration paid to all directors during the last financial year is as under:
Name of Sitting Salary and Performance Commission Stock Total

Director Fees Allowances Linked Options
Incentive
Executive Directors
Sunil Bharti Mittal 0 51,711,081 75,048,000 0 0 126,759,081
Rajan Bharti Mittal 0 13,175,316 11,644,781 0 0 24,820,097
Akhil Gupta 0 16,693,776 15,432,813 0 0 32,126,589
Non-Executive Directors
Ajay Lal 0 0 0 0 0 0
Arun Bharat Ram 0 0 0 0 0 0
Bashir Currimjee 140,000 0 0 892,200 0 1,032,200
Chua Sock Koong 0 0 0 0 0 0
Donald Cameron 140,000 0 0 3,876,000 0 4,016,000
Gavin John Darby 0 0 0 0 0 0
Kurt Hellstrom 100,000 0 0 2,230,500 0 2,330,500
Lim Toon 0 0 0 0 0 0
Lung Chien Ping 80,000 0 0 892,200 0 972,200
N. Kumar 100,000 0 0 892,200 0 992,200
Paul O’ Sullivan 0 0 0 0 0 0
Pulak Chandan Prasad 0 0 0 0 0 0
Rakesh Bharti Mittal 0 0 0 0 0 0
Syeda Bilgrami Imam 10,000 0 0 223,050 0 233,050
V. S. Raju 140,000 0 0 892,200 0 1,032,200
William Thomas Morrow 0 0 0 0 0 0
York Chye Chang 0 0 0 0 0 0
710,000 81,580,173 102,125,594 9,898,350 0 194,314,117
Actual payment shall be subject to applicable laws and deduction of tax at source, wherever applicable.
The Company has entered into contracts with the three executive directors each dated October 1, 2001. These are based
on the approval of shareholders granted in their meeting held on September 25, 2001. There are no other contracts with
any other director. No notice period or severance fee is payable to any director.
viii. Management
Detailed report on Management Discussion and Analysis (MDA) forms part of the Directors’ Report. We have a system in
place whereby senior management makes disclosures on quarterly basis to the Board relating to all material financial and
commercial transactions, where they have personal interest that may pose a potential conflict with the interest of the
Company at large.
ix. CEO/CFO Certificate
The certificate required under Clause 49(V) of the listing agreement duly signed by the CEO and CFO has been given to
the Board and the same is annexed as Annexure A.
70
x. Details of compliance with mandatory requirements and adoption of non-mandatory requirements of Clause
49 of the Listing Agreement
Compliance
Clause of Listing Status
Particulars agreement Yes/No
I. Board of directors 49 I
(A) Composition of Board 49(IA) Yes
(B) Non-executive directors’ compensation and disclosures 49 (IB) Yes
(C) Other provisions relating to Board and Committees 49 (IC) Yes
(D) Code of Conduct 49 (ID) Yes
II. Audit Committee 49 (II)
(A) Qualified and Independent Audit Committee 49 (IIA) Yes
(B) Meeting of Audit Committee 49 (IIB) Yes
(C) Powers of Audit Committee 49 (IIC) Yes
(D) Role of Audit Committee 49 II(D) Yes
(E) Review of Information by Audit Committee 49 (IIE) Yes
III. Subsidiary Companies 49 (III) Yes
IV. Disclosures 49 (IV)
(A) Basis of related party transactions 49 (IV A) Yes
(B) Board disclosures 49 (IV B) Yes
(C) Proceeds from public issues, rights issues, preferential issues etc. 49 (IV C) N/A
(D) Remuneration of Directors 49 (IV D) Yes
(E) Management 49 (IV E) Yes
(F) Shareholders 49 (IV F) Yes
V. CEO/CFO Certification 49 (V) Yes
VI. Report on corporate governance 49 (VI) Yes
VII. Compliance 49 (VII) Yes
N. Kumar, the Chairman of the Audit Committee could not attend the Annual General Meeting (AGM) held on September
6, 2005 due to an imminent surgery he had to undergo. However, Akhil Gupta, Joint Managing Director and Audit
Committee member was present at the AGM to answer shareholder queries.
Besides complying with all the mandatory requirements of Clause 49, we have a Remuneration Committee of the Board
(known as HR Committee), which comprises of non-executive directors. The scope of the Committee among other
things includes consideration and recommendation of remuneration of executive directors. We have also established an
Ombudsman Policy for employees to report to the management about unethical behavior, actual or suspected fraud or
violation of the Company’s Code of Conduct. Our objective is to comply with other applicable non-mandatory requirements
of Clause 49 as well.
Means of communication
z The quarterly audited/un-audited results are published in prominent daily newspapers, viz. Business Standard and Jansatta
(vernacular newspaper) and are also posted on the our website. At the end of each quarter we organize an earnings call
with analysts and investors, which is also broadcast live on our website, and the transcript is posted on the website soon
after;
z Our financial results are also posted on SEBI’s EDIFAR System and can be viewed on SEBI website www.sebiedifar.nic.in;
z Our website address is www.bhartiairtel.in and up-to-date financial results, official news releases, financial analysis
reports, presentations made to the institutional investors and other general information about the Company are available
on the website;
z Latest presentations made to the institutional investors are also made available on our website.
71
General Shareholders’ Information
i) The 11th Annual General Meeting will be held on August 21, 2006 at 3.30 p.m. at Air Force Auditorium, Subroto Park,
New Delhi – 110 010.
ii) Financial Calendar for the year 2006-2007
Tentative Schedule:
Accounting year April 1, 2006 to March 31, 2007
First Quarter Results July 2006
Second Quarter and Half Yearly Results October 2006
Third Quarter Results January 2007
Fourth Quarter Results/ Annual Results April 2007
Annual General Meeting August/September 2007
iii) Book Closure Date: August 12, 2006 to August 21, 2006 (both days inclusive)
iv) We have not recommended any dividend for the financial year 2005-06.
v) Listing on stock exchanges and stock code
Our equity shares are listed on:
z The National Stock Exchange of India Limited, Symbol -‘BHARTI’; and
z The Bombay Stock Exchange Limited, Mumbai, Scrip code - 532454
We have paid listing fees for the year 2006-2007 to both the stock exchanges viz. the Bombay Stock Exchange Limited
and the National Stock Exchange of India Limited, where our securities are listed.
vi) Stock Market Data for the period April 1, 2005 to March 31, 2006
(Share price performance in comparison with NSE Nifty)
Bharti S & P CNX Nifty Index
Monthly Volume Monthly

Month High Low Average Traded High Low Average
(Rs.) (Rs.) (Rs.) (Rs.)
April ‘05 225.00 192.50 208.55 4,378,302,248.55 2,084.90 1,896.30 1,987.10

May ‘05 232.00 205.25 218.93 4,276,305,665.75 2,099.35 1,898.15 2,002.28
June ‘05 246.90 217.55 230.32 6,412,689,002.55 2,226.15 2,061.35 2,134.29
July ‘05 287.00 229.80 257.32 8,887,627,078.70 2,332.55 2,171.25 2,236.70
August ‘05 324.50 279.55 304.37 10,057,797,254.30 2,426.65 2,294.25 2,357.56
September ‘05 367.25 302.15 340.62 8,323,194,812.05 2,633.90 2,382.90 2,511.70
October ‘05 352.90 305.15 332.25 10,865,693,743.65 2,669.20 2,307.45 2,486.78
November ‘05 381.00 320.45 354.57 6,812,757,769.30 2,727.05 2,366.80 2,574.66
December ‘05 370.00 326.60 352.05 8,323,194,812.05 2,857.00 2,641.95 2,772.61
January ‘06 394.90 322.75 346.69 5,015,633,521.15 3,005.10 2,783.85 2,892.68
February ‘06 395.00 350.00 368.36 4,496,869,775.80 3,090.30 2,928.10 3,019.32
March ‘06 428.90 358.00 392.48 8,546,751,861.30 3,433.85 3,064.00 3,236.37
72
Share Price vs S & P CNX Nifty
3300 420
Bharti (Monthly Average)

3000 380
Nifty (Monthly Average)
2700 340
2400 300
2100 260
1800 220
1500 180
1 2 3 4 5 6 7 8 9 10 11 12
Month
Nifty Bharti
Share price performance in comparison with BSE Sensex

Bharti BSE Sensex
Monthly Volume Monthly
Month High Low Average Traded High Low Average
(Rs.) (Rs.) (Rs.) (Rs.)
April ‘05 219.40 192.45 207.15 1,035,439,994.00 6,606.41 6,134.86 6,379.29

May ‘05 229.95 205.60 224.05 993,213,759.00 6,715.11 6,195.15 6,482.66
June ‘05 247.00 218.00 242.85 2,878,859,631.00 7,193.85 6,655.56 6,925.86
July ‘05 287.20 237.05 283.10 2,930,422,033.00 7,638.42 7,145.13 7,336.70
August ‘05 324.50 279.90 315.45 3,743,981,491.00 7,859.53 7,595.57 7,726.03
September ’05 366.70 314.50 348.50 2,720,907,760.00 8,650.17 7,876.15 8,272.32
October ‘05 352.00 305.25 322.65 3,422,109,181.00 8,799.96 7,685.64 8,220.45
November ‘05 377.00 320.15 357.55 2,047,811,186.00 8,994.94 7,944.10 8,552.09
December ‘05 368.00 327.00 345.70 2,999,826,379.00 9,397.93 8,815.53 9,162.07
January ‘06 363.75 323.00 355.60 1,748,328,707.00 9,919.89 9,237.53 9,539.67
February ‘06 378.00 349.00 361.30 1,330,054,610.00 10,370.24 9,742.58 10,090.08
March ‘06 429.00 357.00 412.85 2,240,705,140.00 10,370.24 9,742.58 10,090.08
73
Bharti Share Price vs BSE Sensex
12000 450
BSE Sensex (Monthly Average in Rs.)
Bharti (Monthly Average in Rs.)

420
11000
390
10000 360
330
9000
300
8000 270
240
7000
210
6000 180
1- 2- 3- 4- 5- 6- 7- 8- 9- 10- 11- 12-
Month
Sensex Bharti
vii) Registrar and Transfer Agent
Our share transfer work is handled by M/s. Karvy Computershare Private Limited (previously Karvy Consultants Limited),
the Registrar and Share Transfer Agent (RTA). Their complete address is as under:
Karvy Computershare Private Limited

‘Karvy House’, 46 Avenue 4,
Street No. 1, Banjara Hills
Hyderabad - 500 034
Tel: (91-40) 23420815-20
Fax: (91-40) 23420814
Email: [email protected]
viii) Share Transfer System
Our shares are traded on the stock exchanges through the depository system. The ISIN of our Scrip is: INE 397D01016.
All requests received by us/RTA for dematerialisation/re-materialisation/transfer are dealt with expeditiously. Share
certificates duly endorsed are issued/transferred to all those shareholders who opt for shares in the physical form.
ix) Distribution of shareholding by number of shares held as on March 31, 2006
S. No. of equity No. of % to total Number of % to total

No. shares held shareholders no. of equity shares no. of
shareholders of Rs. 10/- equity shares
1. 1-5,000 48,448 97.86 10,835,938 0.57
2. 5,001-10,000 311 0.63 2,202,979 0.12
3. 10,001-20,000 154 0.31 2,254,256 0.12
4. 20,001- 30,000 69 0.14 1,757,345 0.09
5. 30,001-40,000 31 0.06 1,115,854 0.06
6. 40,001-50,000 33 0.07 1,511,429 0.08
7. 50,001-100,000 87 0.18 6,129,664 0.32
8. 10,0001 & above 373 0.75 1,868,071,839 98.64
Total 49,506 100.00 1,893,879,304 100.00
74
x) Categories of shareholding as on March 31, 2006
S. No. Category No. of Shares Held % of Share Holding
A. PROMOTERS’ HOLDING
1. Promoters
– Indian promoters 859,986,028 45.41%
– Foreign promoters 0 0.00%
2. Persons acting in concert 1,300,700 0.07%
Sub-Total A 861,286,728 45.48%
B. NON-PROMOTER HOLDINGS
3. Institutional Investors
a) Mutual Funds and UTI 40,674,230 2.15%
b) Banks, Financial Institution, Insurance Companies, 32,300,424 1.71%
Central/State Government Institutions/
Non-Government Institutions
c) FII 485,119,934 25.62%
Sub-Total B 558,094,588 29.47%
4. Others
a) Private corporate bodies 24,137,879 1.27%
b) Indian public 19,136,493 1.01%
c) NRIs/OCBs 15,550,929 0.82%
d) Foreign Companies 409,254,605 21.62%
e) Any other :
i) Trusts 4,207,230 0.22%
ii) HUF 247,870 0.01%
iii) Clearing Members (NSDL & CDSL) 1,962,982 0.10%
Sub-Total C 474,497,988 25.05%
GRAND TOTAL (A+B+C) 1,893,879,304 100.00%
xi) Dematerlisation of shares and liquidity

Trading in equity shares in dematerialized form became mandatory from May 31, 1999. Ours equity shares are tradable
in compulsory dematerialized form since listing i.e. February 15, 2002. To facilitate trading in dematerialized form in
India, there are two depositories i.e. National Securities Depository Limited (NSDL) and Central Depository Services
(India) Limited (CDSL).
We have entered into agreement with both these depositories. Shareholders can open their accounts with any of the
Depository Participant registered with these depositories.
z As on March 31, 2006, our more than 84% shares were held in dematerialized form;
z Our equity shares are frequently traded at Bombay Stock Exchange Limited and National Stock Exchange of India
Limited.
xii) Outstanding GDRs/ ADRs/ Warrants/ Options

During the year 2004-05, we issued USD 115,000,000 Zero Coupon Convertible Bonds (“Bonds”) due in 2009. The
Bonds are convertible at any time after June 12, 2004 upto April 12, 2009 by the holders, into fully paid equity shares
of Rs. 10/- per share, at an initial conversion price of Rs. 233.17 per share. During the year, we received 33 notices from
different bondholders aggregating to USD 94.756 million convertible into 17,701,967 equity shares of the Company.
After the aforesaid allotment of 17,701,967 equity shares, the issued, subscribed and paid-up capital of the Company is
Rs. 18,938,793,040/-. Outstanding FCCBs as at 31.03.2006 are USD 20.244 million the details have been provided under
Schedule 23 forming part of the annual accounts.
xiii) Investors’ correspondence may be addressed to:

Vijaya Sampath
General Counsel and Company Secretary
Bharti Airtel Limited
Qutab Ambience, H-5/12, Mehrauli Road, New Delhi - 110 030
Tel: 91-11-41666000-07 Email: [email protected],
Fax: 91-11-41666011-12 Website: www.bhartiairtel.in
75
Annexure A
Chief Executive Officer (CEO)/Chief Financial Officer (CFO) Certification
We, Sunil Bharti Mittal, Chairman and Managing Director and Akhil Gupta, Chief Financial Officer of Bharti Airtel Limited, to
the best of our knowledge and belief hereby certify that:
(a) We have reviewed financial statements and the cash flow statement for the year and that to the best of our knowledge
and belief:
(i) these statements do not contain any materially untrue statement or omit any material fact or contain statements
that might be misleading;
(ii) these statements together present a true and fair view of the Company’s affairs and are in compliance with existing
accounting standards, applicable laws and regulations.
(b) There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year which
are fraudulent, illegal or violative of the Company’s code of conduct.
(c) We accept responsibility for establishing and maintaining internal controls for financial reporting and that we have
evaluated the effectiveness of internal control systems of the Company pertaining to financial reporting and we have
disclosed to the auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if
any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies.
(d) We have indicated to the auditors and the Audit committee:
(i) Significant changes in internal control over financial reporting during the year;
(ii) Significant changes in accounting policies during the year and that the same have been disclosed in the notes to the
financial statements; and
(iii) Instances of significant fraud of which we have become aware and the involvement therein, if any, of the management
or an employee having a significant role in the Company’s internal control system over financial reporting.
Name : Sunil Bharti Mittal Name : Akhil Gupta

Designation : Chairman & CEO Designation : Joint Managing Director & CFO
Date : April 28, 2006
Annexure B
Declaration
This is to confirm that the Company has adopted a Code of Conduct for its Board members and the senior management and
the same is available on the Company’s website.
I confirm that the Company has in respect of financial year ended March 31, 2006, received from the senior management
team of the Company and the members of the Board a declaration of compliance with the Code of Conduct as applicable to
them.
For the purpose of this declaration, the term ‘senior management’ means the direct reportees of the Chairman and Managing
Director, and the Joint Managing Directors.
Sunil Bharti Mittal

Chairman & Managing Director
New Delhi
April 28, 2006
76
Auditors’ Certificate
regarding compliance of conditions of Corporate Governance
To the Members of Bharti Airtel Limited,
We have examined the compliance of conditions of Corporate Governance by Bharti Airtel Limited (‘the Company’), for the
year ended March 31, 2006, as stipulated in Clause 49 of the Listing Agreements of the said Company with stock exchanges
in India.
The compliance of conditions of Corporate Governance is the responsibility of the Company’s management. Our examination
was carried out in accordance with the Guidance Note on Certification of Corporate Governance (as stipulated in Clause 49 of
the Listing Agreements), issued by the Institute of Chartered Accountants of India and was limited to procedures and
implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance.
It is neither an audit nor an expression of opinion on the financial statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company
has in all material respects complied with the conditions of Corporate Governance as stipulated in the above mentioned
Listing Agreement.
We state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or
effectiveness with which the management has conducted the affairs of the Company.
For and on behalf of
PRICE WATERHOUSE
Chartered Accountants
U. RAJEEV
Partner
Membership No.: F87191
Place : New Delhi

77
Standalone Financial Statements with Auditors’ Report
Auditors’ Report to the Members of Bharti Airtel Limited (Formerly Bharti Tele-Ventures Limited)
1. We have audited the attached Balance Sheet of Bharti during the year and no material discrepancies
Airtel Limited, as at March 31, 2006, and the related between the book records and the physical
Profit and Loss Account and Cash Flow Statement for inventory have been noticed.
the year ended on that date annexed thereto, which
(c) In our opinion and according to the
we have signed under reference to this report. These
information and explanations given to us,
financial statements are the responsibility of the
a substantial part of fixed assets has not
company’s management. Our responsibility is to
been disposed of by the company during
express an opinion on these financial statements based
the year.
on our audit.
(ii) (a) The inventory (excluding stocks with third
2. We conducted our audit in accordance with the
parties) has been physically verified by the
auditing standards generally accepted in India. Those
Standards require that we plan and perform the audit management during the year. In respect of
to obtain reasonable assurance about whether the inventory lying with third parties, these
financial statements are free of material misstatement. have substantially been confirmed by them.
An audit includes examining, on a test basis, evidence In our opinion, the frequency of verification
supporting the amounts and disclosures in the financial is reasonable.
statements. An audit also includes assessing the (b) In our opinion, the procedures of physical
accounting principles used and significant estimates verification of inventory followed by the
made by management, as well as evaluating the overall management are reasonable and adequate
financial statement presentation. We believe that our in relation to the size of the company and
audit provides a reasonable basis for our opinion. the nature of its business.
3. As required by the Companies (Auditor’s Report) Order, (c) On the basis of our examination of the
2003, as amended by the Companies (Auditor’s Report) inventory records, in our opinion, the
(Amendment) Order, 2004, issued by the Central
company is maintaining proper records of
Government of India in terms of sub-section (4A) of
inventory. The discrepancies noticed on
Section 227 of ‘The Companies Act, 1956’ of India (the
physical verification of inventory as
‘Act’) and on the basis of such checks of the books and
compared to book records were not
records of the company as we considered appropriate
material.
and according to the information and explanations
given to us, we further report that: (iii) The company has neither granted nor taken any
loans, secured or unsecured, that need to be entered
(i) (a) The Company is maintaining proper records
into the register maintained under section 301 of
showing full particulars including
the Act. Accordingly, clauses (iii) (b), (c), (d), (f) and
quantitative details and situation of fixed
(g) of the Companies (Auditor’s Report) Order, 2003,
assets.
as amended by the Companies (Auditor’s Report)
(b) The fixed assets are physically verified by (Amendment) Order, 2004 are not applicable to
the management according to a phased the company for the current year.
programme designed to cover all the items
(iv) In our opinion and according to the information
over a period of three years, which in our
and explanations given to us, having regard to
opinion, is reasonable having regard to the
size of the company and the nature of its the explanation that certain items purchased are
assets. Pursuant to the programme, a of special nature for which suitable alternative
portion of the fixed assets has been sources do not exist for obtaining comparative
physically verified by the management quotations, there is an adequate internal control
78
system commensurate with the size of the where, pursuant to the Rules made by the Central
company and the nature of its business for the Government of India, the maintenance of cost
purchase of inventory, fixed assets and for the records has been prescribed under clause (d) of
sale of goods and services, except for certain sub-section (1) of Section 209 of the Act and are
general information system controls, which are of the opinion that prima facie, the prescribed
being further strengthened by the management. accounts and records have been made and
Further, on the basis of our examination of the maintained. We have not, however, made a
books and records of the company, and according detailed examination of the records with a view
to the information and explanations given to us, to determine whether they are accurate or
we have neither come across nor have been complete.
informed of any continuing failure to correct
(ix) (a) According to the information and
major weaknesses in the aforesaid internal control
explanations given to us and the records of
system.
the company examined by us, in our
(v) According to the information and explanations opinion, the company is generally regular
given to us, there have been no contracts or in depositing undisputed statutory dues
arrangements referred to in Section 301 of the including investor education and
Act during the year to be entered in the register protection fund, employees’ state
required to be maintained under that section. insurance, income-tax, wealth tax, service
Accordingly commenting on transactions made tax, customs duty, excise duty and other
in pursuance of such contracts or arrangements material statutory dues as applicable, with
does not arise. the appropriate authorities though there
has been a slight delay in a few cases.
(vi) The company has not accepted any deposits from
the public within the meaning of Sections 58A and (b) According to the information and
58AA of the Act and the rules framed there under. explanations given to us and the records of
the company examined by us, the
(vii) In our opinion, the company has an internal audit
particulars of dues of income-tax, sales-tax,
system commensurate with its size and nature of
wealth tax, service tax, customs duty, excise
its business.
duty and cess as at March 31, 2006 which
(viii) We have broadly reviewed the books of account have not been deposited on account of a
maintained by the company in respect of products dispute, are as follows: -
Name of the Statute Nature of Amount Amount Period to Forum where the dispute
the Dues Disputed Deposited which it is pending
(in Rs. ‘000) (in Rs. ‘000) Relates
Kerala General Sales Tax 548 548 2003-04 Supreme Court

Sales Tax Act,1963
CST / UP Trade Sales Tax 53 53 2003-04 Asst Commissioner Trade

Tax Act, 1948 Tax-Noida
CST / UP Trade Sales Tax 172 – 2005-06 Deputy Commissioner –

Tax Act, 1948 Trade Tax, Meerut
CST / UP Trade Sales Tax 140 – 2001-02 Tribunal, Ghaziabad

Tax Act, 1948
CST / UP Trade Sales Tax 4,837 4,837 2004-05 Joint Commissioner (Appeal)
Tax Act, 1948
79
CST / UP Trade Sales Tax 298 298 2003-04 Joint Commissioner (Appeal)
Tax Act, 1948
CST / UP Trade Sales Tax 251 151 2003-04 Assessing Officer

Tax Act, 1948
CST / UP Trade Sales Tax 34 - 2004-05 Assessing Officer

Tax Act, 1948
CST / UP Trade Sales Tax 129 129 2004-05 Assessing Officer

Tax Act, 1948
Madhya Pradesh Sales Tax 144 – 1998-99 MP Commercial Tax Tribunal

Commercial Tax Act, 1991
Punjab General Sales Sales Tax 611 611 2002-03 Sales Tax Tribunal Punjab
Tax Act
Punjab General Sales Sales Tax 80 – 2001-02 Dy. Commissioner of Excise &
Tax Act Taxation
West Bengal Sales 6,325 – 2002-03 Asst. Commissioner,

Tax Act, 1994 Commercial Tax Officer,
West Bengal
Andhra Pradesh General Sales Tax 2,861 – 2001-02 Appellate Deputy

Sales Tax Act, 1957 Commissioner
Bihar Value Added Sales Tax 28,147 – 2005-06 High Court

Tax Act, 2005
Tamil Nadu General Sales Tax 4,178 1,325 2002-03 CTO

Sales Tax Act, 1959
CST / UP Trade Sales Tax 397 – 2005-06 High Court

Tax Act,1948
Delhi Sales Tax Act, 1975 Sales Tax 18,698 3,000 1999-2001 Supreme court
Tamil Nadu General Sales Tax 10,928 3,773 1999-2001 Appellate commissioner
Sales Tax Act, 1959
Sub Total (A) 78,831 14,725
80
Finance Act, 1994 Service Tax 4 – 1998-99 Additional Commissioner

(Service Tax Provisions)
Finance Act, 1994 Service Tax 56 – 1995-96 Commissioner Appeals




Finance Act, 1994 Service Tax 233 – 1998-99 Additional Commissioner

Finance Act, 1994 Service Tax 9,313 – 1998-00 Additional Commissioner

Finance Act, 1994 Service Tax 18,925 – 1997-99 Additional Commissioner

Finance Act, 1994 Service Tax 19,120 – 2001-03 Deputy Commissioner




Finance Act, 1994 Service Tax 2,588 – 2003-04 Commissioner of Central Excise
Finance Act, 1994 Service Tax 15,502 – 2003-04 Dy. Commissioner of Service
(Service Tax Provisions) Tax Mumbai
Finance Act, 1994 Service Tax 547 – 2003-04 Commissioner of Central Excise
81
Finance Act, 1994 Service Tax 61 – 2004-05 Assistant Commissioner

Finance Act, 1994 Service Tax 2,556 – 1997-99 Commissioner Appeals

Finance Act, 1994 Service Tax 1,613 – 2003-05 Asstt. Commissioner of

(Service Tax Provisions) Service Tax
Finance Act, 1994 Service Tax 13,040 140 2003-04 Dy. Commissioner, Service Tax
Finance Act, 1994 Service Tax 2,054 – 2003-04 Commissioner Appeals

Sub Total (B) 123,414 140
Income Tax Act,1961 Income Tax 56,400 22,862 2001-04 Income Tax Appellate Tribunal
Income Tax Act,1961 Income Tax 5,270 – 2002-04 Income Tax Appellate Tribunal
Income Tax Act,1961 Income Tax 4,924 – 2001-05 Commissioner of Income Tax
(Appeals)
Income Tax Act,1961 Income Tax 11,200 11,200 2005-06 Commissioner of Income Tax
(Appeals)
(Appeals)
(Appeals)
Income Tax Act,1961 Income Tax 11,153 642 2001-02 Commissioner of Income Tax
(Appeals)
Income Tax Act,1961 Income Tax 573 573 1995-96 Income Tax Appellate Tribunal
Sub Total (C) 584,112 381,147
82
The above does not include amounts which have not (xvii) On the basis of an overall examination of the balance
been deposited (as explained in Note 4(b) on Schedule sheet of the company, in our opinion and according
23 in respect of Sales Tax/ Service Tax, wherein the to the information and explanations given to us, funds
Supreme Court has decided in favour of the telecom amounting to Rs. 55,874,815 thousand raised on a
operators, consequent to which the respective short term basis (primarily representing capital
authorities have/are in the process of issuing necessary creditors) have been used for long-term investment
orders. (representing Fixed Assets).
(x) The company has no accumulated losses as at March (xviii) The company has not made any preferential allotment
31, 2006 and it has not incurred any cash losses in of shares to parties and companies covered in the
the financial year ended on that date or in the register maintained under Section 301 of the Act
immediately preceding financial year. during the year.
(xi) According to the records of the company examined (xix) The company has created security or charge in respect
by us and the information and explanation given to of debentures issued and outstanding at the year-
us, the company has not defaulted in repayment of end.
dues to any financial institution or bank or debenture
(xx) The company has not raised any money by public
holders as at the balance sheet date.
issues during the year.
(xii) The company has not granted any loans and advances
(xxi) During the course of our examination of the books
on the basis of security by way of pledge of shares,
and records of the company, carried out in accordance
debentures and other securities.
with the generally accepted auditing practices in India,
(xiii) The provisions of any special statute applicable to and according to the information and explanations
chit fund / nidhi / mutual benefit fund / societies are given to us, we have neither come across any instance
not applicable to the company. of fraud on or by the company, noticed or reported
during the year, nor have we been informed of such
(xiv) In our opinion, the company has maintained proper
case by the management other than 7 cases of
records of transactions and contracts relating to
employee frauds which in the opinion of the
dealing or trading in shares, securities, debentures
management is not expected to be significant, and
and other investments during the year and timely
an instance of misstatement of financial statements
entries have been made therein. Further, such
to the extent of Rs. 1,25,720.61 thousands, which
securities have been held by the company in its own
has been adjusted in the financial statements by
name or are in the process of transfer in its name,
charging it to the Profit and Loss Account as explained
except to the extent of the exemption granted under
in Note 33 of Schedule 23.
Section 49 of the Act.
4. Further to our comments in the Annexure referred to
(xv) In our opinion and according to the information and
in paragraph 3 above, we report that:
explanations given to us, the company has not given
any guarantee for loans taken by others from banks (a) We have obtained all the information and
or financial institutions during the year. explanations, which to the best of our
knowledge and belief were necessary for the
(xvi) In our opinion, and according to the information and
purposes of our audit;
explanations given to us, on an overall basis, the term
loans have been applied for the purposes for which (b) In our opinion, proper books of account as
they were obtained. required by law have been kept by the company
83
so far as appears from our examination of those prescribed manner the information required by
books; the Act and give a true and fair view in
conformity with the accounting principles
(c) The Balance Sheet, Profit and Loss Account and
generally accepted in India:
Cash Flow Statement dealt with by this report
are in agreement with the books of account; (i) in the case of the Balance Sheet, of the
state of affairs of the company as at
(d) In our opinion, the Balance Sheet, Profit and
March 31, 2006;
Loss Account and Cash Flow Statement dealt
with by this report comply with the accounting (ii) in the case of the Profit and Loss Ac-
standards referred to in sub-section (3C) of count, of the profit for the year ended
Section 211 of the Act; on that date; and
(e) On the basis of written representations received (iii) in the case of the Cash Flow Statement,
from the directors, and taken on record by the of the cash flows for the year ended on
Board of Directors, none of the directors is that date.
disqualified as on March 31, 2006 from being
appointed as a director in terms of clause (g) of
U. RAJEEV
sub-section (1) of Section 274 of the Act;
Partner
Membership Number F-87191
(f) In our opinion and to the best of our information
and according to the explanations given to us, For and on behalf of
the said financial statements together with the Place : New Delhi PRICE WATERHOUSE
notes thereon and attached thereto give in the Date : April 28, 2006 Chartered Accountants
84
Balance Sheet as at March 31, 2006
Schedule As at As at
Particulars No. March 31, 2006 March 31, 2005
(Rs. ‘000) (Rs. ‘000)
SOURCES OF FUNDS
Shareholders’ Funds
Share Capital 1 18,938,793 18,560,889
Employee Stock Option Outstanding 505,961 –
Less: Deferred Stock Compensation 384,701 121,260 –
(Refer Note 32 on Schedule 23)
Reserves and Surplus 2 54,395,531 34,639,403
Loan Funds
Secured Loans 3 28,633,707 39,598,760
Unsecured Loans 4 19,329,201 10,344,149
Deferred Tax Liability 1,890,459 1,009,011
(Refer Note 12 on Schedule 22 and 31 on Schedule 23)
Total 123,308,951 104,152,212
APPLICATION OF FUNDS
Fixed Assets 5
Gross Block 179,517,371 132,406,305
Less: Depreciation 49,448,600 34,756,448
Net Block 130,068,771 97,649,857
Capital Work in Progress 23,412,498 9,944,602
153,481,269 107,594,459
Preoperative Expenditure pending allocation 6 – –
153,481,269 107,594,459
Investments 7 7,196,981 9,318,953
Current Assets, Loans and Advances
Inventories 8 177,444 315,838
Sundry Debtors 9 10,761,709 7,157,443
Cash and Bank Balances 10 3,074,285 3,841,352
Other Current Assets, Loans and Advances 11 15,529,497 10,676,095
29,542,935 21,990,728
Less: Current Liabilities and Provisions 12
Current Liabilities 64,655,783 42,079,834
Provisions 2,335,851 1,119,910
66,991,634 43,199,744
Net Current Assets (37,448,699) (21,209,016)
Miscellaneous Expenditure
(to the extent not written off or adjusted) 13 79,400 583,483
Profit and Loss Account – 7,864,333
Total 123,308,951 104,152,212
Statement of Significant Accounting Policies 22
Notes to Accounts 23
This is the Balance Sheet referred to The Schedules referred to above form an integral part of the Balance Sheet.
in our report of even date.
For and on behalf of the Board
U. RAJEEV SUNIL BHARTI MITTAL AKHIL GUPTA
Partner Chairman & Managing Director Joint Managing Director
Membership No. F-87191
PRICE WATERHOUSE
DEVEN KHANNA VIJAYA SAMPATH SARVJIT SINGH DHILLON
Group Financial Controller Company Secretary Director (Finance & Business
Place : New Delhi Integration)
85
Profit and Loss Account for the year ended March 31, 2006
Schedule For the year ended For the year ended

(Rs. ‘000) (Rs. ‘000)
INCOME
Service Revenue 111,572,637 78,301,809
Sale of Goods 714,176 728,480
Other Income 14 618,980 411,651
112,905,793 79,441,940
EXPENDITURE
Access Charges 21,519,176 16,831,728
Network Operating 15 11,408,836 6,800,472
Cost of Sales of Goods 16 674,043 721,037
Personnel 17 7,754,523 5,017,651
Sales and Marketing 18 8,013,612 6,258,076
Administrative and Others 19 11,953,078 6,241,379
Total Expenditure 61,323,268 41,870,343
Profit including other income and before Licence Fee,
Finance Expenses/(Income) (Net), Depreciation, Amortisation,
Pre-operative Expenditure, Charity and Donation and Taxation 51,582,525 37,571,597
Licence fee & Spectrum charges (revenue share) 10,796,745 7,631,456
Profit including other income and before
Finance Expense/(income) (net) 20 2,256,011 2,459,184
Depreciation 14,323,385 10,193,626
Amortisation 21 1,273,894 1,157,480
Pre-operative Expenditure written off 6 – 455,952
Charity and Donation 74,535 31,137
Profit Before Tax 22,857,955 15,642,762
Tax Expenses
Current Tax 1,665,243 86,072
(Net of write back for earlier years’ Rs. 351 thousand;
Previous Year Rs. 914,501 thousand)
(Inclusive of Provision for earlier years Rs. 72,820 Thousand;
Previous year Rs. (914,501) Thousand)
Deferred Tax expense (Refer Note 12 on Schedule 22 and 31 881,447 3,449,951
on Schedule 23)
Fringe Benefit Tax 190,471 –
Profit After Tax 20,120,794 12,106,739
Transferred to/(from) Debenture Redemption Reserve (2,307,348) 2,478,854
22,428,142 9,627,885
Profit/(Loss) brought forward (7,864,333) 8,031
Losses acquired under the scheme of amalgamation – (7,010,894)
Difference of consideration and value of net
assets acquired under the scheme of amalgamation – (10,489,355)
Profit/(Loss) carried forward to the Balance Sheet 14,563,809 (7,864,333)
Earnings per share (in Rs.) - Basic 10.6921 6.5323

Earnings per share (in Rs.) - Diluted 10.6051 6.4444
(Refer Note 17 on Schedule 22 and Note 30 on Schedule 23)
This is the Profit and Loss Account referred to The Schedules referred to above form an integral part of the
in our report of even date. Profit and Loss Account.
PRICE WATERHOUSE
86
Cash Flow Statement for the year ended March 31, 2006
(Rs. ‘000)
Particulars For the year ended For the year ended
March 31, 2006 March 31, 2005
A. Cash flow from operating activities:

Net profit / (loss) before tax 22,857,955 15,642,762
Adjustments for:
Depreciation 14,323,385 10,196,167
Interest Expense 2,368,111 3,169,997
Interest Income (169,656) (77,200)
(Profit)/Loss on Fixed Assets sold (34,684) 3,896
(Profit)/Loss on sale of Investments (106,786) (398,280)
ESOP Expenditure written off 127,067 47,080
Provision for Deferred Bonus 71,921 –
Licence fee written off 1,146,827 1,110,400
Debts/Advances Written off 1,301,308 168,297
Provision for Bad and Doubtful Debts/Advances
(Net of write back) 2,534,684 1,583,887
Liability no longer required written back (176,761) –
Provision for Gratuity and Leave Encashment 269,274 184,218
Unrealized Foreign Exchange (gain) /loss 152,902 (26,685)
Gain from swap arrangements (45,307) (211,415)
Provision for Wealth Tax 15 22
Operating profit before working capital changes 44,620,255 31,393,146
Adjustments for changes in working capital :

- (Increase)/Decrease in Sundry Debtors (5,535,291) (2,917,644)
- (Increase)/Decrease in Other Receivables (6,480,746) 2,443,817
- (Increase)/Decrease in Inventories 138,394 (115,671)
- Increase/(Decrease) in Trade and Other Payables 14,893,742 1,834,610
- Increase/(Decrease) in Security Deposit from Customers – –
Cash generated from operations 47,636,354 32,638,258
Taxes (Paid)/Received (2,164,334) (2,579,313)
Net cash from operating activities 45,472,020 30,058,945
B. Cash flow from Investing activities:

Adjustments for changes in :
Purchase of Fixed Assets (52,516,784) (8,818,279)
Proceeds from Sale of Fixed Assets 119,982 509,112
Net Proceeds from Investments 71,831,468 66,365,086
Purchase of Investments (69,445,786) (80,265,026)
Licence fee paid for new circles – (50,000)
Interest Received (Revenue) 165,506 45,337
Advances Given to Subsidiary companies – (335,753)
Acquisition on Subsidiaries/Joint Ventures (156,947) (753,487)
Net cash used in investing activities (50,002,561) (23,303,010)
87
(Rs. ‘000)
March 31, 2006 March 31, 2005
C. Cash flow from financing activities:

Proceeds from long term borrowings
Receipts 23,725,487 11,119,681
Payments (34,690,540) (13,114,483)
FCCB issue expenses – (96,861)
Proceeds from short term borrowings
Net movement in cash credit facilities and short term loans 16,810,679 344,149
Interest Paid (2,162,259) (2,694,794)
Gain from swap arrangements 80,107 211,415
Net cash used in financing activities 3,763,474 (4,230,893)
Net Increase/(Decrease) in Cash and Cash Equivalents (767,067) 2,525,042

Opening Cash and Cash Equivalents 3,841,352 1,333
Cash and Cash Equivalents acquired on amalgamation – 1,314,977
Cash and cash equivalents as at March 31, 2006 3,074,285 3,841,352
Cash and cash equivalents comprise:

Cash and Cheques in hand 820,236 740,730
Balance with Scheduled Banks 2,254,049 3,100,622
Notes :
1. Figures in brackets indicate cash outgo.
2. Previous year figures have been regrouped and recast wherever necessary to conform to the current year classification.
3. Cash and cash equivalents includes Rs.109,045 thousands pledged with various authorities (Previous year Rs.55,112
thousands) which are not available for use by the Company.
This is the Cash Flow Statement referred to

PRICE WATERHOUSE
88
Schedules Annexed to and forming part of Accounts
As at As at
Particulars March 31, 2006 March 31, 2005
(Rs. ‘000) (Rs. ‘000)
SCHEDULE : 1
SHARE CAPITAL
Authorised
2,500,000,000 (Previous Year 2,500,000,000)
Equity Shares of Rs. 10 each 25,000,000 25,000,000
Issued, Subscribed and Paid up
1,893,879,304 Equity Shares of Rs.10 each fully paid up 18,938,793 18,533,668
(Previous year 1,853,366,767 Equity Shares of Rs.10 each)
Capital Suspense Account
[Refer Note (4) below] – 27,221
Notes:
1. Of the above 1,516,390,970 Equity Shares (Previous year 1,516,390,970)
issued as fully paid up bonus shares out of Share Premium Account.
2. Of the above shares 20,088,445 (Previous year Nil) shares are allotted as
fully paid up upon the conversion of OCRD without payment being
received in cash.
3. Of the above shares 17,701,967 (Previous year Nil) shares are allotted
as fully paid up upon the conversion of FCCBs.
4. Of the above shares 2,722,125 (Previous year 2,722,125) shares are
allotted as fully paid up under the scheme of amalgamation without
payments being received in cash. – 27,221
18,938,793 18,560,889
SCHEDULE : 2
RESERVES AND SURPLUS
Share Premium
Opening balance 31,254,879 29,706,859
Adjustment under the scheme of amalgamation – 1,548,020
Additions during the year 7,499,667 –
38,754,546 31,254,879
Revaluation Reserve 21,284 21,284
Debenture Redemption Reserve

Opening balance 3,363,240 –
Acquired under the scheme of amalgamation – 884,386
Transfer from / (to) Profit and Loss Account during the year (2,307,348) 2,478,854
1,055,892 3,363,240
Less:
Utilization during the period – –
Difference of consideration and value of net assets acquired under a
scheme of amalgamation – –
1,055,892 3,363,240
Profit & Loss Account
Balance brought forward (7,864,333) –
Acquired on acquisition – –
Add: Profit / (Loss) during the period 20,120,794 –
12,256,461 –
Less:
Adjustments:
Difference of consideration and value of net assets acquired under a
scheme of amalgamation
Amount utilized for issue of shares to minority – –
Pre-acquisition Loss adjusted against reserves – –
Transferred to Debenture Redemption Reserve (Net) (2,307,348) –
Profit & Loss Account 14,563,809 –
54,395,531 34,639,403
89
As at As at
(Rs. ‘000) (Rs. ‘000)
SCHEDULE : 3
SECURED LOANS
Debentures 3,132,500 4,672,857
Loans and Advances from Banks :
– Term Loan 675,000 3,578,245
Others Loans and Advances :
– Term Loans 24,809,896 31,333,530
– Vehicle Loans 16,311 14,128
28,633,707 39,598,760
Note : Amount repayable within one year 3,710,888 6,015,731
SCHEDULE : 4
UNSECURED LOANS
Short Term Loans and Advances
From Banks 18,424,572 1,560,389
From Others – 3,750,000
Other Loans and Advances
From Parties - Other than Financial Institutions 904,629 5,033,760
19,329,201 10,344,149
Note : Amount repayable within one year 18,426,116 5,310,388
90
91
SCHEDULE 5 :
FIXED ASSETS
(Refer Notes 2, 3, 8, 14 and 15 on Schedule 22 ) (Rs. ‘000)
Gross Block Value Depreciation/ Amortisation Net Block Value
As at Additions Sale/ As at As at For the Sale/ As at As at As at

PARTICULARS April 01, during Adjustment March 31, April 01, year Adjustment March 31, March 31, March 31,
2005 the year during 2006 2005 during 2006 2006 2005
the year the year
INTANGIBLE ASSETS
Software 83,993 – – 83,993 52,059 19,870 – 71,929 12,064 31,934
Bandwidth 2,042,997 305,749 15,027 2,333,719 209,700 184,142 15,027 378,815 1,954,904 1,833,297
Licences 21,141,521 – – 21,141,521 5,835,670 1,146,827 – 6,982,497 14,159,024 15,305,851
TANGIBLE ASSETS
Leasehold Land 44,414 10,885 – 55,299 2,289 471 – 2,760 52,539 42,125
Freehold Land 328,975 63,424 8,400 383,999 – – – – 383,999 328,975
Building 1,366,313 169,192 71,221 1,464,284 289,776 69,146 6,661 352,261 1,112,023 1,076,537
Leasehold Improvements 686,812 412,538 – 1,099,350 219,185 119,779 – 338,964 760,386 467,627
Plant & Machinery 97,852,219 45,191,240 1,603,937 141,439,522 22,853,065 11,562,600 664,295 33,751,370 107,688,152 74,999,154
Computers 7,715,462 2,329,961 70,737 9,974,686 4,572,703 2,138,061 55,946 6,654,818 3,319,868 3,142,759
Office Equipment 651,782 242,359 6,861 887,280 417,818 129,706 8,130 539,394 347,886 233,964
Furniture & Fixture 407,992 155,006 22,876 540,122 260,337 82,466 22,876 319,927 220,195 147,655
Vehicles 78,439 40,372 10,601 108,210 42,214 16,815 5,125 53,904 54,306 36,225
Vehicle on Finance Lease 5,386 – – 5,386 1,632 329 – 1,961 3,425 3,754
TOTAL 132,406,305 48,920,726 1,809,660 179,517,371 34,756,448 15,470,212 778,060 49,448,600 130,068,771 97,649,857
Capital Work-in-Progress – – – – – – – – 23,412,498 9,944,602
GRAND TOTAL 132,406,305 48,920,726 1,809,660 179,517,371 34,756,448 15,470,212 778,060 49,448,600 153,481,269 107,594,459
Previous Year 100,728,710 32,857,954 1,180,359 132,406,305 24,117,233 11,306,567 667,352 34,756,448 97,649,857
Notes:
1. Capital Work-in-Progress includes:
(a) Capital advances of Rs.1,026,633 thousand (Previous year Rs. 540,326 thousand).
(b) Borrowing cost of Rs.Nil (Previous year Rs.11,912 thousand).
2. Addition to fixed assets during the year include:
(a) Rs. 178,859 thousand of Loss (Previous year loss of Rs. 9,773 thousand) on account of fluctuations in foreign exchange rates.
(b) Borrowing costs capitalised Rs. 31,132 thousand (Previous year Rs.13,207 thousand).
3. Lease hold land of Rs. 955 thousand (Previous year Rs.955 thousand) represents land acquired on lease cum sale basis from Karnataka Industrial Areas Development Board.
4. Capital Work-in-Progress as on March 31, 2006 is net of Rs. 89,785 thousand being loss (Previous year includes Rs. 142,382 thousand gain) on account of fluctuation in Exchange rate.
5. Additions during the year includes Rs. Nil thousand (Previous year Rs. 140,418 thousand) allocated from pre-operative expenditure. (Refer Schedule 6).
6. Freehold Land and Building includes Rs. 26,468 thousand (Previous year Rs. 26,468 thousand) and Rs. 71,477 thousand (previous year Rs. 71,477 thousand) respectively, in respect of which
registration of title in favour of group is pending.
7. The remaining amortisation period of licence fees as at March 31, 2006 ranges between 8 to 19 years for Unified Access Service Licence and 14 to 16 years for Long Distance.
8. Capital Work-in-Progress includes goods in transit Rs. 4,116,163 thousand (Previous year Rs. 960,717 thousand).
9. Computers include Gross Block of assets capitalised during the year under finance lease Rs.3,426,544 thousand (Previous year Rs.1,879,716 thousand and depreciation charged for the
year Rs.1,576,976 thousand (Previous year Rs.529,232 thousand), Net book value Rs. 1,849,566 thousand.
As at As at
(Rs. ‘000) (Rs. ‘000)
SCHEDULE : 6
PRE-OPERATIVE EXPENDITURE PENDING ALLOCATION
Opening Balance
Acquired under the schemes of amalgamation – 5,891
Additions during the period
Network Operating Expenses
Insurance Premium – 1,007
Repairs and Maintenance – 26,388
Power & Fuel – 19,454
Rent – 25,999
Leased Line – 12,914
Others – 29,343
Sub-Total – 115,105
Personnel Expenses
Salaries – 161,053
Contribution to Provident & Other Funds – 5,172
Staff Welfare – 11,056
Recruitment & Training – 29,282
Selling Expenses
Advertisement & Marketing – 94,306
Other selling & distribution – 15,143
Administrative & Other Expenses

Legal & Professional – 19,224
Rates and Taxes – 10,392
Power and Fuel – 4,614
Travelling and Conveyance – 56,009
Rent – 13,982
Repairs and Maintenance – Buildings – 94
– Plant and Machinery – 86
– Others – 13,610
Insurance – 576
Miscellaneous – 32,175
Collection and Recovery – 1,245
Charity & Donation – –
Finance Expenses
Other Bank/Finance Charges – 4,814
Depreciation – 2,541
Total – 596,370
Less: Allocated to Fixed Assets – 140,418

Less: Transferred to Profit & Loss Account – 455,952
– –
Total amount carried to Balance Sheet – –
92
As at As at
(Rs. ‘000) (Rs. ‘000)
SCHEDULE : 7
INVESTMENTS
Current
Other than Trade (Quoted)
– Government securities 475,421 1,035,840
– Mutual Funds, Debentures and Bonds 1,956,326 3,674,826
Other than Trade (Unquoted)
– Government securities 1,800 1,800
2,433,547 4,712,466
Long Term Investments : Trade (Unquoted)

Investment in Subsidiaries
Bharti Hexacom Limited: 122,751,980 (Previous year 122,751,980)
Equity shares of Rs.10/- each fully paid up. 4,332,748 4,332,748
Bharti Comtel Limited: 100,000 (Previous year 100,000)
Equity shares of Rs.10/- each fully paid up. 1,000 1,000
Satcom Broadband Equipment Limited: 24,859,200
(Previous year 12,678,192) Equity shares of Rs.10/- each fully paid up. 248,973 126,976
Bharti Aquanet Limited 1,275,000 (Previous year 1,275,000)
Equity shares of Rs.10/- each fully paid up. 102,000 102,000
Investment in Joint Ventures

Bridge Mobile PTE Limited: 1,000,000 (Previous year 1,000,000)
Equity shares of USD 1 each fully paid up. 43,763 43,763
Forum I Aviation Ltd. Equity Share of 9,95,000 of Rs.10 each. 34,950 –
4,763,434 4,606,487
7,196,981 9,318,953
Aggregate Market Value of Quoted Investments 2,439,862 4,727,055

Aggregate amount of Quoted Investments 2,431,747 4,710,666
Aggregate amount of Unquoted Investments 4,765,234 4,608,287
SCHEDULE : 8
INVENTORY
Stock-In-Trade 177,444 315,838
177,444 315,838
93
As at As at
(Rs. ‘000) (Rs. ‘000)
SCHEDULE : 9
SUNDRY DEBTORS
(Unsecured, considered good unless otherwise stated)
Billing Debtors :
– Debts outstanding for a period exceeding six months
– Considered good 1,403,976 833,659
– Considered doubtful 3,438,771 3,290,974
Less : Provision for doubtful debts (3,438,771) 1,403,976 (3,290,974) 833,659
Other debts
– Considered good 9,357,733 6,323,784
– Considered doubtful 1,299,548 874,422
Less : Provision for doubtful debts (1,299,548) 9,357,733 (874,422) 6,323,784
10,761,709 7,157,443
SCHEDULE : 10
CASH AND BANK BALANCES
Cash in Hand 61,085 41,260
Cheques in Hand 759,151 699,470
Balances with Scheduled Banks
– in Current Account 1,197,913 1,008,879
– in Fixed deposits * 1,055,049 2,090,973
– in Deposit Account as Margin Money 1,087 770
3,074,285 3,841,352
[Includes Rs.109,045 thousand pledged with various
authorities (Previous year Rs.55,112 thousand)]
SCHEDULE : 11
OTHER CURRENT ASSETS, LOANS AND ADVANCES
Interest Accrued on Investment 37,776 33,626
Advances and Loans to Subsidiary Companies :
Bharti Comtel Limited 447,523 182,718
Bharti Hexacom Limited 317,533 23,435
Bharti Broadband Limited
(formerly Comsat Max Limited) 412,331 1,177,387 129,905 336,058
Advances Recoverable in cash or in kind or
for value to be received
Considered good 9,514,753 6,702,289
Considered doubtful 2,369,135 407,374
Less: Provision (2,369,135) 9,514,753 (407,374) 6,702,289
Accrued Billing Revenue 3,469,604 2,675,433
Advance to ESOP Trust 195,906 251,519
Advance Tax (Net of provision for tax Rs. 3,038,518 thousand), 980,374 671,754
(Previous Year Rs. 1,373,275 thousand)
Balance with Custom Authorities 153,697 5,416
15,529,497 10,676,095
94
As at As at
(Rs. ‘000) (Rs. ‘000)
SCHEDULE : 12
CURRENT LIABILITIES AND PROVISIONS
Current Liabilities
Sundry Creditors :
Total outstanding dues of Small Scale Industrial
Undertaking (s)* (Refer Note 23 on Schedule 23) 6,613 4,186
Total outstanding dues of Creditors other than
Small Scale Industrial Undertaking (s)* 44,440,883 44,447,496 29,019,526 29,023,712
Advance Billing and Prepaid Card Revenue 14,150,174 7,648,023
Premium on Redemption of Bonds
(Refer Note 11 on Schedule 23) 75,952 595,564
Interest accrued but not due 519,709 403,957
Other Liabilities 2,110,193 1,138,226
Advance Received from customers 589,655 684,479
Security Deposits (Refer Note 14 on Schedule 23) 2,762,604 2,585,873
* This information has been compiled in respect of
parties to the extent they could be identified as
Small Scale and ancilliary undertakings on the basis
of information available with the Company.
64,655,783 42,079,834
Provisions
Gratuity 244,008 77,017
Leave Encashment 231,510 129,227
Provision for Fringe Benefit Tax (Net of payments of
Rs. 10,246 thousand, Previous year Rs. Nil) 19,765 –
Other Provisions 1,840,404 913,517
2,335,851 1,119,910
66,991,634 43,199,744
SCHEDULE : 13
MISCELLANEOUS EXPENDITURE
(To the extent not written off or adjusted)
Deferred Employee Compensation Expense*
Opening Balance 13,372 13,035
Add: Addition/(Adjustments) during the year (4,118) (14,720)
Less: Amortisation for the year** 5,806 47,080
3,448 13,372
* Relating to Employee Stock Option Plan 2001 and 2004

** Net of stock compensation income of Rs. 3,777 thousand
Premium on Redemption of Debentures
Opening Balance 570,111 –
Add : Addition/(writeback) during the year (404,059) 693,027
Less : Amortisation for the year 90,100 122,916
75,952 570,111
79,400 583,483
95
For the year ended For the year ended
(Rs. ‘000) (Rs. ‘000)
SCHEDULE : 14
OTHER INCOME
Liabilities/Provisions no longer required written back 176,761 222,313
Profit on Sale of Assets (Net) 34,684 –
Miscellaneous 407,535 189,338
618,980 411,651
SCHEDULE : 15
NETWORK OPERATING EXPENDITURE
Interconnect charges and PSTN Rentals 1,454,270 640,248
Power and Fuel 2,989,626 1,440,779
Rent 1,669,731 968,576
Insurance 32,053 36,262
Repairs and Maintenance – Building 406,842 138,796
– Plant and Machinery 3,033,254 1,908,587
– Others 325,539 144,436
Leased Line and Gateway charges 685,067 712,486
Other Network Operating Expenses 812,454 810,302
11,408,836 6,800,472
SCHEDULE : 16
COST OF SALES OF GOODS
Opening Stock 315,838 –
Acquired under the schemes of amalgamation – 200,167
Add : Purchases 738,540 1,089,152
Less : Simcard Utilisation 194,347 252,144
Less : Internal issues / capitalised 8,544 300
Less : Closing Stock 177,444 315,838
674,043 721,037
SCHEDULE : 17
PERSONNEL EXPENDITURE
Salaries, Wages and Bonus * 6,568,218 4,268,536
Contribution to Provident and Other Funds 362,881 188,074
Staff Welfare 410,856 278,655
Recruitment and Training 412,568 282,386
7,754,523 5,017,651
* Excluding amortisation of Deferred ESOP cost
SCHEDULE : 18
SALES AND MARKETING EXPENDITURE
Advertisement and Marketing 4,003,273 3,255,973
Sales Commission and Incentive 2,689,470 1,883,503
Simcard Utilisation 194,347 252,144
Other Selling and Distribution Expenses 1,126,522 866,456
8,013,612 6,258,076
96
(Rs. ‘000) (Rs. ‘000)
SCHEDULE : 19
ADMINISTRATIVE AND OTHER EXPENDITURE
Legal and Professional 3,776,442 1,525,973
Rates and Taxes 41,192 27,740
Power and Fuel 269,799 166,946
Travelling and Conveyance 735,123 458,245
Rent 405,117 219,086
– Plant and Machinery 69,325 22,890
– Others 168,794 39,507
Insurance 14,465 11,892
Bad debts written off 1,301,308 168,297
Provision for doubtful debts/advances 2,594,939 1,681,613
Less : Provision for doubtful debts written back 60,255 2,534,684 97,726 1,583,887
Collection and Recovery Expenses 1,312,735 908,360

Loss on sale of assets (net) – 3,896
Miscellaneous Expenses 1,239,065 1,036,000
11,953,078 6,241,379
SCHEDULE : 20
FINANCE EXPENSES/(INCOME) (Net)
Interest :
– On Term Loan 1,540,231 1,849,100
– On Debentures 283,995 664,911
– On Others 59,396 143,643
Amortisation of Premium on Redemption of
Foreign Currency Convertible Bonds 90,100 122,916
Other Finance Charges 394,389 389,427
2,368,111 3,169,997
Less : Income
Profit on sale of Current Investments 106,786 398,280
Interest Income :
– from Current Investments Other than Trade
[Gross of TDS Rs. 20,949 thousand; Previous year
Rs. 831 thousand] 153,270 72,275
– from loans and advances etc. 16,386 2,214
Exchange Fluctuation Gain/(Loss) (Net) (209,649) 23,918

Gains from swap arrangements 45,307 211,415
Other Finance Income – 2,711
112,100 710,813
2,256,011 2,459,184
SCHEDULE : 21
AMORTISATION
(Refer Note 3 and 13 on Schedule 22)
Amortisation of Licence Fee 1,146,827 1,110,400
Personnel – Deferred ESOP Cost 127,067 47,080
1,273,894 1,157,480
97
SCHEDULE: 22
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
1. BASIS OF PREPARATION
These financial statements have been prepared under the historical cost convention on the accrual basis of accounting,
in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956
as adopted consistently by the Company.
2. FIXED ASSETS
Fixed Assets are stated at cost of acquisition and subsequent improvements thereto, including taxes, duties, freight and
other incidental expenses related to acquisition and installation. Capital work-in-progress is stated at cost.
Site restoration cost obligations are capitalized when it is probable that an outflow of resources will be required to settle
the obligation and a reliable estimate of the amount can be made.
The fixed 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-99) has been capitalised as an asset.
3. DEPRECIATION / AMORTISATION
Depreciation is provided on straight-line method at the rates and in the manner prescribed in Schedule XIV to the
Companies Act, 1956 on all assets, except for the following on which depreciation is provided on straight line method
to write off the cost of the fixed assets over their estimated useful lives as below:
Rate of Depreciation per annum
Building 5%
Building on Leased Land 5%
Office Equipment 20.00% / 50.00%
Computer / Software 33.33%
Vehicles 20.00%
Furniture and Fixtures 20.00%
Plant & Machinery 6.67% / 10.00% / 50.00%
Leasehold Land Period of lease
Leasehold Improvements Period of lease or 10 years whichever is less
Assets individually costing Rs. 5 thousand or less are fully depreciated in the month of purchase. Software up to Rs. 500
thousand is written off in the year of purchase.
Bandwidth capacity is depreciated over the period of the agreement subject to a maximum of 15 years.
Additional depreciation is provided as appropriate, towards diminution in value of assets.
The Entry Fee capitalised is being amortised equally over the period of the license and the one time licence fee is being
amortised equally over the balance period of licence from the date of commencement of commercial operations.
The site restoration cost obligation capitalized is being depreciated over the period of the useful life of the related asset.
4. REVENUE RECOGNITION AND RECEIVABLES
Mobile Services: Service revenue is recognised on completion of provision of services. Service revenue includes income
on roaming commission and access charges passed on to other operators, and is net of discounts and waivers. Revenue,
net of discount, from sale of goods is recognised on transfer of all significant risks and rewards to the customer and when
no significant uncertainty exists regarding realisation of the consideration.
On introduction of new prepaid products, processing fees on recharge coupon is being recognised over the estimated
customer relationship period or coupon validity period, as applicable.
98
Telephone and Broadband and Long Distance Services: Service revenue is recognised on completion of provision of
services. Revenue on account of bandwidth service is recognised on time proportion basis in accordance with the related
contracts. Billing Revenue includes access charges passed on to other operators, and is net of discounts and waivers.
Revenue, net of discount, from sale of goods is recognised on transfer of all significant risks and rewards to the customer
and when no significant uncertainty exists regarding realisation of consideration.
Enterprise Services: Revenue, net of discount, from sale of goods is recognised on transfer of all significant risks and
rewards to the customer and when no significant uncertainty exists regarding realisation of consideration.
Service Revenues includes 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.
Revenue from prepaid dialup packs is recognised on the actual usage basis and is net of sales return and discount.
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: Provision for doubtful debts is made for dues outstanding for more than 90 days in case
of active subscribers, and dues from customers who have been deactivated other than those covered by security deposit,
or in specific cases where management is of the view that the amounts are recoverable.
Provision for doubtful debts, in case of Other Telecom Operators on account of their ILD traffic and on account of
Interconnect Usage Charges (IUC), is made for dues outstanding more than 120 days from the date of billing after
considering any amount payable to that operator pertaining to the same period or in specific case when management is
of the view that the amount is recoverable.
Accrued Billing revenue: Accrued billing revenue represent revenues 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.
5. INVENTORIES
Inventories for mobile operations are valued at the lower of cost and net realisable value. Cost is determined on First in
First out basis.
Inventories for telephone and broadband and long distance services and enterprise services are valued at the lower of
cost and net realisable value. Cost is determined on a weighted average basis.
6. INVESTMENT
Current Investments are valued at lower of cost and fair market value.
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.
7. LICENSE FEES – REVENUE SHARE

With effect from August 1, 1999 the variable Licence fee computed at prescribed rates of revenue share is being charged
to the Profit and Loss Account in the year in which the related revenue arises. Revenue for this purpose comprises
adjusted gross revenue as per the license agreement of the license area to which the licence pertains.
8. TRANSLATION OF ITEMS IN FOREIGN CURRENCY

Transactions in Foreign Currency are recorded at the exchange rate prevailing at the date of the transaction. Monetary
items are restated at year-end foreign exchange rates. Resultant exchange differences arising on payment or conversion
of liabilities are recognised as income or expense in the year in which they arise except in respect of liabilities for
acquisition of fixed assets, where such exchange difference is adjusted in the carrying cost of the respective fixed asset.
Gain or loss on forward exchange contract, not in the nature of hedge, is calculated based on difference between
forward rate available at the reporting date for the remaining maturity of the contract (or forward rate last used to
measure gain or loss) and the contracted forward rate which is recognized as income or expense for the year.
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The premium or discount arising at the inception of other forward exchange contracts is amortized as income or expense
over the life of the contract and exchange difference on such contracts is recognised as income or expense in the
reporting period in which the exchange rate change, except, in respect of liabilities incurred for acquiring fixed assets, in
which case, such difference is adjusted in carrying amount of the respective fixed assets.
9. RETIREMENT BENEFITS
Contribution to provident fund is made at predetermined rates and is charged to Profit and Loss Account. The Company
has provided for the liability at year end on account of unavailed earned leave as per the actuarial valuation as per the
Projected Unit Credit Method.
The Company either contributes to a Company Gratuity Scheme with Life Insurance Corporation of India to cover the
gratuity liability for its employees, such contribution being charged to the Profit and Loss Account for the year or
provides the gratuity liability in its books. Liability at the year-end in both cases is determined on the basis of actuarial
valuation, based on the Projected Unit Credit Method.
10. PRE-OPERATIVE EXPENDITURE
Expenditure incurred by the Company from the date of acquisition of license for a new circle, up to the date of
commencement of commercial operations of the circle, not directly attributable to fixed assets are charged to the Profit
and Loss Account in the year in which such expenditure is incurred.
11. LEASES
a) As Lessee – Operating Lease
Lease Rentals in respect of assets taken on ‘Operating Lease’ are charged to the Profit and Loss Account on a straight-
line basis over the lease term.
b) As Lessee – Finance Lease
Assets acquired on ‘Finance Lease’ which transfer risk and rewards of ownership to the Company are capitalized as
assets by the Company at the lower of fair value of the leased property or the present value of the related lease
payments or where applicable, estimated fair value of such assets.
Amortization 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 finance charge using the internal rate of return method.
The finance charge is allocated over the lease term so as to produce a constant periodic rate of interest on the
remaining balance of liability.
c) As Lessor – Operating Lease
Lease income in respect of ‘Operating Lease’ is recognised in the Profit and Loss Account on a straight-line basis over
the lease term.
d) As Lessor – Finance Lease
Finance leases as a dealer lessor are recognized as a sale transaction in the Profit and Loss Account and are treated
like other outright sales.
Finance Income is recognized based on a pattern reflecting a constant periodic rate of return on the net investment
of the lessor outstanding in respect of the lease.
e) Initial direct costs are expensed in the Profit and Loss Account at the inception of the lease.
12. TAXATION
Tax expense for the year, comprising current tax, deferred tax and Fringe Benefit Tax is included in determining the net
profit/(loss) for the year.
Deferred tax assets are recognised for all deductible timing differences and carried forward to the extent there is
reasonable certainty that sufficient future taxable profit will be available against which such deferred tax assets can
be realised.
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Deferred tax assets to the extent they pertain to brought forward losses and unabsorbed depreciation, are recognised
only to the extent that there is virtual certainty of realisation, based on expected profitability in the future as estimated by
the Company.
Deferred tax assets and liabilities are measured at the tax rates that have been enacted or substantively enacted by the
balance sheet date.
13. MISCELLANEOUS EXPENDITURE
a) Premium on redemption of debentures is recognised as an expense to the Profit and Loss Account over the period
of the related contract.
b) Employee Stock Option Plan 2001 and 2004 (‘ESOP’) - The aggregate amount of liability on account of ESOP as
ascertained at year-end is being carried forward as Deferred Employee Compensation Benefit under Miscellaneous
Expenditure to be written off on a straight-line basis over the related vesting period of individual options.
14. BORROWING COST
Borrowing cost attributable to the acquisition or construction of a qualifying asset is capitalised as part of the cost of that
asset. Other borrowing costs are recognised as an expense in the period in which they are incurred.
15. IMPAIRMENT OF ASSETS
Assets that are subject to amortization are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which
the assets’ carrying amount exceeds its recoverable amount. The recoverable amount is the higher of the assets fair value
less costs to sell and value in use.
For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable
cash flows (cash generating units).
16. SEGMENTAL REPORTING

a) Primary Segment:
The Company operates in four primary business segments viz. Broadband & Telephone Services, Mobile Services,
Long Distance Services and Enterprise Service.
b) Secondary Segment:
The Company has operations within India as well as with entities located in other countries. The operations in India
constitute the major part, which is the only reportable segment, the remaining portion being attributable to others.
17. EARNING PER SHARE

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 year.
The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity
shares.
18. WARRANTY
Provision for warranty 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 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.
20. EMPLOYEE STOCK OPTIONS OUTSTANDING

Employee Stock options outstanding are valued using Black Scholes option – pricing model and the fair value is recognised
as an expense over the period in which the options vest.
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SCHEDULE: 23
NOTES TO ACCOUNTS
1. Bharti Airtel Limited (formerly Bharti Tele-Ventures Limited) (‘BAL’ or ‘the Company’) incorporated in India on July 7, 1995,
is a company promoted by Bharti Telecom Limited (‘BTL’), a company incorporated under the laws of India.
2. New Operations
On April 16, 2005, the Company acquired 49% shareholding in Satcom Broadband Equipment Limited (‘SBEL’) at a
consideration of Rs. 121,997 thousand making SBEL a 100% subsidiary of the Company.
The Company and Bharti Hexacom limited (BHL) have entered into a Scheme of Arrangement for transfer pursuant to
de-merger of North East Circle Undertaking from Bharti Hexacom Limited to the Company effective April 1, 2005, which
has been approved by the Board of Directors of the Company in their meeting held on July 26, 2005 and July 27, 2005
and the Board of Directors of BHL in their meeting held on July 20, 2005. The Company is in the process of filing the
approved scheme in the High Court.
The Company has entered into a Scheme of Amalgamation of Satcom Broadband Equipment Limited (SBEL) and Bharti
Broadband Limited (BBL) with the Company effective October 1, 2005, which has been approved by the Board of
Directors of the Company in their meeting held on July 26, 2005 and the Board of Directors of SBEL and BBL in their
meetings held on July 15, 2005 and July 16, 2005 respectively. The Company is in the process of filing the approved
scheme in the High Court.
3. Guarantees
a) Total Guarantees outstanding as at March 31, 2006 amounting to Rs. 9,090,487 thousand (March 31, 2005
Rs. 5,263,869 thousand) have been taken from the banks.
b) Corporate Guarantees outstanding as at March 31, 2006 amounting to Rs. 241,182 thousand (March 31, 2005
Rs. 95,252 thousand) have been given to banks and financial institutions on behalf of group companies.
4. Contingent liabilities
a) Claims against the Company not acknowledged as debt: (Excluding cases where the possibility of any outflow in
settlement is remote):
(Rs.’000)
As at As at
(i) Taxes, Duties and Other demands
(under adjudication/appeal/dispute)
– Sales Tax (see note 4 b below) 100,887 5,151,974
– Service Tax (see note 4 b below) 589,395 461,382
– Income Tax 288,115 163,309
– Excise Duty – 255,609
– Customs Duty (see note 4 d below) 1,230,678 486,378
– Stamp Duty 529,186 539,267
– Entry Tax (see note 4 e below) 787,390 231,516
– Municipal Taxes 529,171 13,782
– Access Charges/Port Charges 806,025 263,500
– DoT demands (see 4 c (vii) below) 157,955 2,561,838
– Other miscellaneous demands 307,751 54,335
(ii) Claims under legal cases including arbitration matters
(see 4 f below) 356,833 402,622
5,683,386 10,585,512
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Of the above details of unpaid amounts together with forum where dispute is pending as at March 31, 2006 is set out.
Name of the Statute Nature of Amounts Amount Period to Forum when the dispute
the Dues disputed disputed which it is pending
(Rs. ‘000) (Rs. ‘000) Relates
Kerala General Sales Tax Act,1963 Sales Tax 548 548 2003-04 Supreme Court
CST/UP Trade Tax Act,1948 Sales Tax 53 53 2003-04 Asstt. Commissioner
Trade Tax–Noida
CST/UP Trade Tax Act,1948 Sales Tax 172 – 2005-06 Deputy Commissioner
6 – Trade Tax, Meerut
CST/UP Trade Tax Act,1948 Sales Tax 140 – 2001-02 Tribunal, Ghaziabad
CST/UP Trade Tax Act,1948 Sales Tax 4,837 4,837 2004-05 Joint Commissioner
(Appeal)
CST/UP Trade Tax Act,1948 Sales Tax 298 298 2003-04 Joint Commissioner
(Appeal)
CST/UP Trade Tax Act,1948 Sales Tax 251 151 2003-04 Assesing Officer
CST/UP Trade Tax Act,1948 Sales Tax 34 – 2004-05 Assesing Officer
CST/UP Trade Tax Act,1948 Sales Tax 129 129 2004-05 Assesing Officer
Madhya Pradesh Commercial Sales Tax 144 – 1998-99 MP Commercial Tax
Tax Act,1991 Tribunal
Punjab General Sales Tax Act Sales Tax 611 611 2002-03 Sales Tax Tribunal, Punjab
Punjab General Sales Tax Act Sales Tax 80 – 2001-02 Deputy Commsssioner
of Excise & Taxation
West Bengal Sales Tax Act, 1994 6,325 – 2002-03 Asst. Commissioner,
Commercial Tax Officer,
West Bengal
Andhra Pradesh General Sales Tax 2,861 – 2001-02 Appelate Deputy
Sales tax Act, 1957 Commissioner
Bihar Value Added Tax Act, 2005 Sales Tax 28,147 – 2005-06 High Court
Tamil Nadu General Sales Tax Act–1959 Sales Tax 4,178 1,325 2002-03 CTO
CST/UP Trade tax Act,1948 Sales Tax 397 – 2005-06 High Court
Delhi Sales Tax Act,1975 Sales Tax 18,698 3,000 1999-2001 Supreme Court
Tamil Nadu General Sales Sales Tax 10,928 3,773 1999-2001 Appellate Commissioner
Tax Act, 1959
Sub Total (A) 78,831 14,725
Finance Act, 1994 (Service Tax Provisions) Service Tax 4 – 1998-99 Additional Commissioner
Finance Act, 1994 (Service Tax Provisions) Service Tax 56 – 1995-96 Commissioner Appeals
Finance Act, 1994 (Service Tax Provisions) Service Tax 233 – 1998-99 Additional Commissioner
Finance Act, 1994 (Service Tax Provisions) Service Tax 9,313 – 1998-00 Additional Commissioner
Finance Act, 1994 (Service Tax Provisions) Service Tax 18,925 – 1997-99 Additional Commissioner
103
Name of the Statute Nature of Amounts Amount Period to Forum when the dispute
the Dues disputed disputed which it is pending
(Rs. ‘000) (Rs. ‘000) Relates
Finance Act, 1994 (Service Tax Provisions) Service Tax 19,120 – 2001-03 Deputy Commissioner
Finance Act, 1994 (Service Tax Provisions) Service Tax 2,588 – 2003-04 Commissioner of Central Excise
Finance Act, 1994 (Service Tax Provisions) Service Tax 15,502 – 2003-04 Deputy Commissioner of
Service Tax Mumbai
Finance Act, 1994 (Service Tax Provisions) Service Tax 547 – 2003-04 Commissioner of Central Excise
Finance Act, 1994 (Service Tax Provisions) Service Tax 61 – 2004-05 Assistant Commissioner
Finance Act, 1994 (Service Tax Provisions) Service Tax 2,556 – 1997-99 Commissioner Appeals
Finance Act, 1994 (Service Tax Provisions) Service Tax 1,613 – 2003-05 Asstt. Comissioner of Service Tax
Finance Act, 1994 (Service Tax Provisions) Service Tax 13,040 140 2003-04 Deputy Commissioner,
Service Tax
Finance Act, 1994 (Service Tax Provisions) Service Tax 2,054 – 2003-04 Commissioner Appeals
Sub Total (B) 123,414 140
Income Tax Act,1961 Income Tax 5,270 – 2002-04 Income Tax Appellate Tribunal
Income Tax Act,1961 Income Tax 4,924 – 2001-05 Commissioner of Income Tax
(Appeals)
(Appeals)
(Appeals)
(Appeals)
Income Tax Act,1961 Income Tax 11,153 642 2001-02 Commissioner of Income Tax
(Appeals)
Income Tax Act,1961 Income Tax 573 573 1995-96 Income Tax Appellate Tribunal
Sub Total (C) 584,112 381,147
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b) In a case involving the Uttar Pradesh Trade Tax Department and the DoT, the Supreme Court of India had ruled that
a telephone connection along with a telephone set provided by a company rendering basic services tantamount to
a “transfer of right to use the telephone system” and the rentals collected by DoT towards this right to use should
suffer sales tax. Subsequent to the passing of this order, the Cellular Operators as well as the basic operators agitated
the same issue before the Supreme Court by way of a Petition under Article 32 of the Constitution. The Hon’ble
Supreme Court, in spite of its own earlier judgement, admitted the Petitions and vide orders dated September 25,
2003 referred the matter to a larger bench for determination of dispute on merits and further directed that in future
there shall be no coercion for recovery of any dues. Vide an order dated March 2, 2006, the larger bench of the
Hon’ble Supreme Court, while overruling its abovementioned judgment has held, inter alia, that provision of
telecom services does not involve any transfer of right to use the telephone system/network and that imposition of
sales tax on any facilities of telecom services is untenable in law. On Sim cards, the Court has held that depending
upon the facts of the case, (i) if sim card is not being sold, then the state cannot levy sales tax on sim card value as
the same is exigible to service tax; (ii) alternatively, if sim card is being sold, then centre cannot levy service tax on
the sim card value as the same is exigible to sales tax. Accordingly, the respective authorities are in the process of
complying with the Supreme Court order as above in respect of total amount disputed estimated as at March 31,
2006 in respect of sales tax of Rs. 5,742,668 thousand (March 31, 2005 Rs. 4,079,507 thousand) and service tax of
Rs. 236,220 thousand (March 31, 2005 Rs. 140,762 thousand).
c) Erstwhile Bharti Mobile Limited (‘BML’) was awarded license by the DoT to operate cellular services in the state of
Punjab in December 1995. On April 18, 1996, subject to certain conditions, the Company obtained the permission
from the DoT to operate the Punjab license through its wholly owned subsidiary, Evergrowth Telecom Limited
(‘ETL’).
(i) In December 1996, DoT withdrew the permission dated April 18, 1996 . DoT, however, again reinstated the
permission on March 10, 1998 (the period from April 18, 1996 to March 10, 1998 has been hereinafter
referred to as ‘the black-out period’). On July 15, 1999 license was terminated due to alleged non-payment of
license fees, liquidated damages and related penal interest.
(ii) Subsequently in September 2001, BML received from the DoT, an offer for the restoration of the license subject
to the condition that BML pays all the dues (license fee, WPC charges, liquidated damages and related penal
interest) pending the resolution of dispute relating to the license fee for the blackout period. BML accordingly
paid Rs. 4,909,948 thousand as demanded by DoT subject to resolution of the dispute through arbitration.
Consequently the license was restored and an arbitrator appointed for the settlement of the dispute.
(iii) In the arbitration proceedings the order was not favorable to BML. BML subsequently filed objections to the
arbitrator’s award before the Delhi High Court. The Delhi High Court vide orders dated February 19, 2003 issued
notices to the DoT. It is pertinent to note that the issuance of notice means stay of the implementation of the
award. While the ultimate outcome of the matter cannot be predicted with certainty, BML had, in the accounts
for the year ended March 31, 2003, as a matter of conservative accounting, recognized Rs. 1,541,667 thousand
(including Rs. 280,000 thousand recoverable from ETL on account of encashment of bank guarantee) as
license fees in addition to Rs. 800,000 thousand recognized in the year ended March 31, 2002.
(iv) The management has also provided for Rs. 69,340 thousand pertaining to liquidated charges and WPC charges
paid in 2003-04 in accordance with the order of DoT in respect of restoration of Punjab license in the year
2002-03.
(v) In a case against DoT, TDSAT had earlier passed an order, directing DoT to refund the interest accrued on
delayed deposit of license fees, pre NTP 99, due to extension of the effective date of license period by six
months. DoT had filed an appeal against the said order before the Supreme Court, which in its judgement
dated March 4, 2003 upheld the contention of GSM operators.
(vi) In view of the non refund of the complete amount due pursuant to the Order dated March 4, 2003 of the
Hon’ble Supreme Court the COAI moved a clarification application of the Order dated March 4, 2003, before
the Hon’ble Supreme Court which was dismissed as withdrawn. COAI thereafter moved execution applications
in TDSAT which also stands disposed off. The COAI moved to the Supreme Court against the interpretation
advanced by the TDSAT in the execution proceedings. The Supreme Court has admitted the matter. The matter
will now come up for hearing in due course of time.
(vii) The Company received refund order of interest from the DoT in the circles of Andhra Pradesh and Karnataka
amounting to Rs. 770,334 thousand and had taken such amounts as an income to Profit and loss Account
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during the year 2002-03. The Company also received the interest refund order in the case of mobile operations
in Punjab on the same grounds amounting to Rs. 856,644 thousand, which was set off against the interest
claim of DoT amounting to Rs. 2,778,941 thousand in 2002-03. During the year ended March 31, 2005, the
Company received a further refund of Rs. 57,338 thousand. The balance amount of Rs. 1,864,959 thousand
has been provided in the books during the year ended March 31, 2006. Pending decision of the Delhi High
Court, any amount determined as due from the Company on account of interest etc. cannot be quantified till
the matter is sub-judice. Though the Company is of the view that it has a good arguable case, still, as a matter
of conservative accounting practice, it has now provided for the above-mentioned amount of Rs. 1,864,959
thousand.
d) The Customs Authorities, in some states, has issued show cause notices amounting to Rs. 1,230,678 thousand
(included in Note 4 (a) (i) above) (March 31, 2005 Rs. 486,378 thousand) on import of special software on the
ground that this value forms part of the hardware alongwith which the same has been imported. The view of the
Company is that such imports should not suffer any customs duty as such software is an operating software and
exempt from any customs duty.
e) In certain states Entry Tax is levied on receipt of material from outside the state. This position has been challenged
by theCompany in the respective states, on the grounds that the specific Entry Tax is ultravires the constitution,
classification issues have been raised whereby, in view of the Company, the material proposed to be taxed is not
covered under the specific category. The amount under dispute as at March 31, 2006 is Rs. 787,390 thousand
(included in Note 4 (a) (i) above) (March 31, 2005 Rs. 231,516).
f) BAL is currently in litigation with DSS Enterprises Private Limited (‘DSS’) (0.34 per cent equity interest in erstwhile
BCL) on various counts. This inter alia includes alleged claim for specific performance in respect of alleged agreements
to sell the equity interest of DSS in erstwhile Bharti Mobinet Limited. (BMNL) to BAL (formerly BTVL). The case filed
by DSS to enforce the sale of equity shares before the Delhi High Court was transferred to District Court. The suit filed
by DSS was dismissed in default by the Ld. Additional District judge on the ground of non-prosecution. Subsequently,
DSS filed an application for restoration of the suit on which notices were issued to BAL (formerly BTVL) and other
defendants returnable on August 22, 2006.
In respect of the same transaction, Crystal Technologies Private Limited, an intermediary, initiated arbitration
proceedings against the Company demanding Rs. 194,843 thousand (March 31, 2005 Rs. 194,843 thousand)
regarding termination of its appointment as a consultant to negotiate with DSS for the sale of DSS stake in erstwhile
Bharti Mobinet Limited to BAL (formerly BTVL). The next date of hearing is yet to be intimated by the Arbitrator.
5. Export Obligation
Erstwhile BIL and BCL have obtained licenses under the Export Promotion Credit Guarantee (‘EPCG’) Scheme for importing
capital goods at a concessional rate of customs duty against submission of bank guarantee and bonds.
Under the terms of the respective schemes, these companies are required to export goods of FOB value equivalent to, or
more than, five times the CIF value of imports in respect of certain licenses and eight times the duty saved in respect of
licenses where export obligation has been refixed by the order of Director General Foreign Trade, Ministry of Finance, as
applicable.
Accordingly the Companies are now required to export goods of FOB value of at least Rs. 26,550,884 thousand (March
31, 2005 Rs. 23,470,852 thousand).
6. a) Estimated amount of contracts to be executed on capital account and not provided for (net of advances)
Rs. 41,478,800 thousand (March 31, 2005 Rs. 19,491,800 thousand).
b) Under the IT Outsourcing Agreement, the Company has commitments to pay Rs. 3,731,265 thousand (March 31,
2005 Rs. 5,988,619 thousand) during the non-cancellable period of the contract for three years ending on March
31, 2007, comprising finance lease and servicing charges.
7. During the year, the Company has revised its estimations for recognition of site restoration cost and its depreciation from
fifteen years to ten years and has provided depreciation as per the revised estimate of useful life, resulting in a decline in
value of plant and machinery by Rs. 345,053 thousand and a higher charge of depreciation by Rs. 42,926 thousand with
a consequential impact on profit for the year and net assets of the Company as at that date.
8. a) The Company has entered into a Joint Venture agreement dated November 3, 2004 with 7 other overseas mobile
operators to form a regional alliance called the Bridge Mobile Alliance incorporated in Singapore as Bridge Mobile
Pte Ltd. with initial equity to be equally held amongst the eight operators/shareholders. On March 31, 2005 the
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Company invested USD-1,000 thousand in ordinary shares of USD 1 each in Bridge Mobile Pte Ltd. amounting to
Rs. 43,763 thousand.
b) The Company has entered into a Memorandum of Understanding dated July 8, 2005 with 5 other parties to form an
aircraft chartering company called the Forum I Aviation Limited incorporated in India with initial equity to be
equally held amongst the six members. During the period ended March 31, 2006, the Company has invested Rs.
34,950 thousand in ordinary shares of Forum I Aviation Limited.
c) Investment in Joint Ventures
Joint Venture Country of Ownership
Business Interest
Bridge Mobile Pte Ltd. Singapore 12.50%
Forum I Aviation Ltd. India 16.64%
The following represent the Company’s share of Assets and Liabilities, and income and results of the Joint Venture.
They are included in the balance sheet and profit and loss account statement.
As at As at
March 31, 2006 March 31, 2005
Amounts in respect of joint ventures – balance sheet

Reserve and surplus (15,631) –
Fixed assets, net 9,190 –
Investments 2,526
Current assest
Sundry debtors 1,757 –
Cash and bank 29,419 –
Loans and advances 35,475 –
Current liabilities and provisions 14,439 –
Miscellaneous Expenditure – –
(to the extent not written off or adjusted)
Amounts in respect of joint ventures – statement of profit and loss
Turnover 14,203 –
Expenses
Operating expenses 11 –
Selling, general and administration expenses 25,161 –
Interest (net) (1,344) –
Depreciation 1,353 –
Profit before tax (10,978) –
Provision for tax 2 –
Profit after tax (10,980) –
9. Vide a Supply contract and Construction and maintenance agreement executed on March 27, 2004, Alcatel Submarine
Networks of France and Fujitsu Ltd. of Japan provided the SEA-ME-WE-4 Cable Systems (broadly described as a submarine
cable system linking South East Asia and Europe, via the Indian Sub-Continent & Middle East) and will also provide long
term technical support to a consortium of sixteen Telecom operators in various countries including the Company whose
share (8.051%) of the contract price is estimated to be USD 37,840 thousand (March 31, 2005 USD 39,055 thousand).
10. The Company had allotted 37,500 Optionally Convertible Redeemable Debentures (‘OCRDs’) of Rs. 100,000 each
aggregating to Rs. 3,750,000 thousand that were optionally convertible into equity shares at an Agreed Price on a
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preferential basis to the erstwhile shareholders of BHL (the sellers) as part of the consideration for 67.5% equity in Bharti
Hexacom limited acquired during 2004-05. The tenor of the OCRDs was 364 days from and including the date of
allotment. The OCRDs were convertible solely and entirely at the option of the Seller and BAL (formerly BTVL) was not
entitled to convert the same into equity shares unless the Sellers exercised their option to convert. If the Sellers chose not
to convert all or part of the OCRDs, then the outstanding OCRDs were to be redeemed at face value at the end of the tenor.
BAL (formerly BTVL) and the Sellers were to share any upside in the BAL (formerly BTVL) stock price, at the time of
Conversion. The difference between the Relevant Price and the Agreed Price was to be shared in the 60:40 ratio (BTVL:Sellers)
respectively at the time of conversion of the OCRDs. The upside was to be adjusted by way of reducing the number of
shares to be allotted on conversion. The Relevant Price would be the average of the closing prices (as given in the
Exchange Bhav Copy) of BAL (formerly BTVL) shares quoted on NSE and BSE (both) during the three trading days
preceding the Notice Date or the end of the Tenor as applicable.
During the year ended March 31, 2006 the Company has issued 20,088,445 equity shares of Rs. 10/- each fully paid up
to M/s. Shyam Cellular Infrastructures Projects Limited upon conversion of Optionally Convertible Redeemable Debentures
(OCRDs) which is as follows:
(Rs. ‘000)
Date of Allotment No. of Shares Conversion
Allotted Amount
April 24, 2005 5,424,479 1,012,609

May 10, 2005 14,538,078 2,713,881
June 9, 2005 125,888 23,500
11. During the year ended March 31,2005 the Company issued USD 115,000,000 Zero Coupon Convertible Bonds due 2009
(the “Bonds”). The Bonds are convertible at any time on or after June 12, 2004 (or such earlier date as is notified to the
holders of the Bonds by the Issuer) up to April 12, 2009 by holders into fully paid equity shares with full voting rights with
a par value of Rs. 10 each of the Issuer (“Shares”) at an initial Conversion Price (as defined in the “Terms and Conditions
of the Bonds”) of Rs. 233.17 per share with a fixed rate of exchange on conversion of Rs. 43.56 = USD 1.00. The
Conversion Price is subject to adjustment in certain circumstances.
The Bonds may be redeemed, in whole or in part, at the option of the Issuer at any time on or after May 12, 2007 and prior
to April 12, 2009, subject to satisfaction of certain conditions, at their “Early Redemption Amount” (as defined in the
“Terms and Conditions of the Bonds”) at the date fixed for such redemption if the “Closing Price” (as defined in the
“Terms and Conditions of the Bonds”) of the Shares translated into U.S. dollars at the “prevailing rate” (as defined in the
“Terms and Conditions of the Bonds”) for each of 30 consecutive “Trading Days” (as defined in the “Terms and Conditions
of the Bonds”), the last of which occurs not more than five days prior to the date upon which notice of such redemption
is published, is greater than 120 percent of the “Conversion Price” (as defined in the “Terms and Conditions of the
Bonds”) then in effect translated into U.S. dollars at the rate of Rs. 43.56 = USD 1.00.
The Bonds may also be redeemed in whole, and not in part, at any time at the option of the Issuer at their Early
Redemption Amount if less than 5 percent in aggregate principal amount of the Bonds originally issued is outstanding.
The Bonds may also be redeemed in whole at any time at the option of the Issuer at their Early Redemption Amount in
the event of certain changes relating to taxation in India.
Unless previously converted, redeemed or purchased and cancelled, the Bonds will be redeemed in U.S. dollars on May
12, 2009 at 111.84 percent of their principal amount.
The Issuer will, at the option of any holder of any Bonds, repurchase at the Early Redemption Amount such Bonds at such
time as the Shares cease to be listed or admitted to trading on the NSE or upon the occurrence of a “Change of Control”
(as defined in the “Terms and Conditions of the Bonds”) in respect of the Issuer. These Bonds are listed in the Singapore
Exchange Securities Trading Limited (the “SGX-ST”).
108
The Company has during the period ended March 31, 2006 Converted Bonds equivalent to USD 94,756,000 into
17,701,967 equity shares of the Company at the option exercised by the bond holders which is as follows:
Date of Allotment No. of Shares Allotted FCCB Value (USD)
August 12, 2005 840,673 4,500,000

August 20, 2005 706,166 3,780,000
September 15, 2005 3,693,360 19,770,000
September 23, 2005 2,640,088 14,132,000
October 19, 2005 3,462,828 18,536,000
November 7, 2005 2,073,661 11,100,000
December 12, 2005 467,041 2,500,000
January 12, 2006 2,860,159 15,310,000
Feburary 2, 2006 453,588 2,428,000
March 9, 2006 504,403 2,700,000
Total 17,701,967 94,756,000
12. Profit on sale of investments is net of loss on sale of investments Rs. 2,103 thousand (March 31, 2005 Rs. 6,732
thousand).
13. Billing Revenue in the Profit and Loss Account is net of Rebates and Discounts Rs. 27,908 thousand (March 31, 2005
Rs. 1,918,625 thousand).
14. Rs. 2,762,604 thousand (March 31, 2005 Rs. 2,585,873 thousand) included under Current Liabilities, represents refundable
security deposits received from subscribers on activation of connections granted thereto and are repayable on
disconnection, net of outstanding, if any. Sundry debtors are secured to the extent of the amount outstanding against
individual subscribers by way of Security Deposit received from them.
15. As at March 31, 2006 4,195,449 equity shares (March 31, 2005 6,436,266 equity shares) of the Company are held by
Bharti Tele-Ventures Employee’s Welfare Trust (“The Trust”) issued at the rate of Rs. 51.36 per equity share fully paid up.
16. The Loans and Advances granted to subsidiaries and associates are repayable on demand and repayments made during
the year are as mutually agreed.
17. Particulars of securities charged against secured loans taken by the Company are as follow :
Particulars Amount Security charges
Outstanding
(Rs.’000s)
Debentures
z First ranking pari passu charge on
10.55%, 5 Non-Convertible Redeemable Debentures 12,500
all present and future tangible
of Rs. 10,000 thousand each repayment commencing
movable and freehold immovable
from December 2004
assets owned by the Company
10.90%, 27 Non-Convertible Redeemable Debentures of 270,000
including plant and machinery
Rs. 10,000 thousand each repayment commencing from
office equipment, furniture and
December 2006
fixtures fittings, spares tools and
11.45%, 5 Non-Convertible Redeemable Debentures of 50,000 accessories vehicles.
z All rights, titles, interests in the
December 2009
accounts, and monies deposited
11.70%, 45 Non-Convertible Redeemable Debentures of 450,000 and investments made there from
Rs. 10,000 thousand each repayment commencing from and in project documents, book
December 2009 debts and insurance policies.
7.25%, 200 Non-Convertible Redeemable Debentures of 1,400,000
October 2003
8.65%, 95 Non-Convertible Redeemable Debentures of 950,000
Rs. 10,000 each repayable in May 2007
Debentures 3,132,500
109
Outstanding
(Rs.’000s)
Loans and Advances from Banks
Term Loan movable and freehold immovable
assets owned by the Company
Rupee Loan Rs. 400,000 thousand repayable in 4 half 100,000 including plant and machinery
yearly installments beginning March 2005 office equipment, furniture and
fixtures fittings, spares tools and
Rupee Loan Rs.500,000 thousand repayable in 4 half 125,000 accessories vehicles.
yearly installments beginning September 2005 z All rights, titles, interests in the
accounts, and monies deposited
Rupee Loan of Rs.900,000 thousand repayable in 4 half 450,000 and investments made there from
and in project documents, book
yearly installments beginning July 2005
debts and insurance policies.
Term Loan 675,000

Term loan from Financial Institution for Rs.3,000,000 3,000,000
thousand repayable in 11 quarterly installments
commencing from October 2006
Rupee Loan from financial institutions Rs.2500,000 1,500,000
thousand repayable in 10 half yearly installments
beginning March 2007
Foreign Currency Term Loan of USD 86,110 thousand 2,687,000
repayable in 20 half yearly installments beginning
December 2002
August 2003
movable and freehold immovable
Foreign Currency Term Loan of USD 37,009 thousand 1,216,000 assets owned by the Company
repayable in 20 half yearly installments beginning including plant and machinery
February 2004 office equipment, furniture and
Long Term Foreign Currency Loan of USD 30,000 thousand 1,438,500 fixtures fittings, spares tools and
repayable in 10 half yearly installments beginning July 2006 accessories vehicles.
Long Term Foreign Currency Loan of USD 10,000 thousand 384,774 z All rights, titles, interests in the
repayable in 13 half yearly installments beginning June 2005 accounts, and monies deposited
and investments made there from
Long Term Foreign Currency Loan of USD 12,000 thousand 461,729
and in project documents, book
repayable in 13 half yearly installments beginning June 2005
debts and insurance policies.
Long Term Foreign Currency Loan of USD 46,000 thousand 1,673,408
Long Term Foreign Currency Loan of USD 27,956 thousand 696,632
Foreign Currency Term Loan of USD 18,996 thousand 765,000
repayable in 20 half yearly installments beginning May 2005
September 2005
110
Outstanding
(Rs.’000)

January 2006
May 2006
September 2006
September 2005
March 2006
July 2006
November 2006
Term Loan Total 24,809,896
Vehicle Loans From Banks 16,311 Secured by Hypothecation of

vehicles of the Company.
Total 28,633,707
Note : Following shall be excluded from Securities as mentioned above :-

a) Intellectual properties of BAL (formerly BTVL).
b) Investment in subsidiaries of BAL (formerly BTVL).
c) Licenses issued by DoT to operate various telecom services.
111
18. Expenditure/Earnings in Foreign Currency (on accrual basis):
(Rs.’000)
Particulars Period ended Year ended
March 31, 2006 March 31, 2005
Expenditure
On account of :
Interest 909,265 1,175,095
Professional & Consultation Fees 20,706 106,362
Travelling 11,792 9,173
Roaming Charges (Incl. Commission) 831,529 731,870
Membership & Subscription 2,716 5,467
Staff Training & Others 2,535 11,353
Services 15,618 408,885
Annual Maintenance 122,460 8,103
Bandwidth Charges 680,263 256,760
Access Charges 3,987,105 2,146,771
Repairs & Maintenance – 832
Investment – 63,378
Marketing 296 115,597
Material 1,011,797 –
Upfront fee 527,593 145,102
Signalling charges 3,880 2,292
Registration fee 124 –
US Point of Presence Charges 29,524 31,084
Board Meeting Expenses 637 615
Bank Charges 287 –
Directors Commission 5,114 –
Sponsorship 392 –
Delegation fee 734 –
Total 8,164,367 5,218,739
Earnings
Roaming Revenue 2,740,674 2,239,362
Billing Revenue 9,968,082 7,554,242
Swap Income 8,507 63,001
Interest Income 9,078 5,521
EKN Premium Refund 34,016 1,390
Total 12,760,357 9,863,516
19. CIF Value of Imports:

Year ended Year ended
March 31, 2006 March 31, 2005
(Rs.’000) (Rs.’000)
Capital Goods 16,262,423 17,307,308

Components and spare parts 13,142 24,307
Total 16,275,565 17,331,615
112
20. The aggregate managerial remuneration under Section 198 of the Companies Act, 1956 to the directors (including
managing director) is:
(Rs.’000)
Particulars Year ended Year ended
March 31, 2006 March 31, 2005
Whole Time Director
Salary * 90,609 68,875
Reimbursements and Perquisites 680 795
Performance Linked Incentive 102,126 56,087
Total Remuneration payable to Whole Time Directors 193,415 125,757
Non Whole Time Directors
Commission 9,898 9,801
Sitting Fees 710 800
Total amount paid/payble to Non-Whole Time Directors 10,608 10,601
Total Managerial Remuneration 204,023 136,358
* The amount excludes Company’s contribution/provision for gratuity cost for the year, which is determined annually
on actuarial basis.
Computation of Net Profit in accordance with Section 349 of the Companies Act, 1956, and calculation of
Remuneration payable to Directors
(Rs.’000)
Particulars Year ended Year ended
March 31, 2006 March 31, 2005
Net Profit before tax from ordinary activities 22,857,955 15,642,762

Add: Whole Time Director’s Remuneration 192,735 124,962
Add: Reimbursements to Whole Time Directors 680 795
Add: Directors Sitting Fees 710 800
Add: Commission to Non-Whole Time Director 9,898 9,801
Add: Provision for Doubtful Loans and advances 2,659,300 1,583,887
Add: Provision for Wealth Tax 15 22
Net Profit/(Loss) for the year Under Section 349 25,721,293 17,363,029
Maximum Amount paid/payable to Non-Whole Time Directors 257,213 173,630

Restricted to 1%
Maximum Amount paid/payable to Whole Time Directors 2,829,342 1,909,933
Restricted to 11%
Amount Paid/Payable to Directors 204,023 136,358
21. (i) The Central Government’s approval is pending against the application made by erstwhile BML in respect of
remuneration of Rs. 1,943 thousand [Rs. 1,274 thousand for the five month period ended August 31, 2000 and
Rs. 669 thousand for the year ended March 31, 2000 respectively] (March 2003: Rs. 1,943 thousand) payable to the
former Whole Time Director which exceeds the limits prescribed by Schedule XIII of the Companies Act, 1956.
(ii) The Central Government’s approval is pending against the application made by erstwhile BCL in respect of excess
remuneration paid to Whole Time Directors of Rs. 4,063 thousand (March 31, 2005 Rs.4,063 thousand).
(iii) The cumulative amount of excess remuneration paid to the Whole Time Director of the Company pending approval
of Central Government is Rs. 565 thousand (March 31, 2005 Rs. 565 thousand) and is refundable by the director.
(iv) The cumulative amount of excess remuneration paid to Managing Director and Whole Time Directors (erstwhile
‘BIL’) pertaining to earlier years, pending approval of the Central Government is Rs. 3,114 thousand (March 31, 2005
Rs. 3,114 thousand) and is refundable by Directors.
113
22. Auditors Remuneration : (Rs.’000)
March 31, 2006 March 31, 2005
Audit Fee* 63,300 53,401
Certification Fee 2,202 3,730
Reimbursement of Expenses 709 2,352
Other Fees* 15,750 –
Total 81,961 59,483
* Excluding Service Tax
23. Details of SSI Creditors having outstanding balance for more than 30 days
(Rs. ‘000)
Name of SSI creditors As at As at

March 31, 2006 March 31, 2005
Kumar Printers 68 –
Cantech Engineers 80 137
GKA Rajeendran & Co. 123 1
3 GUYS 84 179
S.P. Projects 169 111
Solux Galfab Private Limited 2,926 63
Soumitra Das 16 18
Axis Galvanising Industries 55 370
Globe Detective Agency Pvt. Ltd. 12 77
Shiva Fabricators 53 –
Kotagi Structurals 2,995 452
Ridings Consultants P. Ltd. 26 –
Modern Engineers Construction Co-op. Society Ltd. 6 –
Axis Engineers – 88
Dubas Engineering Pvt. Limited – 323
Jakson Generators (P) Ltd. – 357
Precision Control – 495
Print Screen – 1
Sai Electricals – 117
Selvon Instruments – 964
Shiva Fabricators – 378
Shruti Art – 55
6,613 4,186
114
24. Quantitative Information
2005-06
(Rs. ‘000)
Year ended Purchases Sales/Internal Year ended
(Refer Notes 1) Utilisation March 31, 2006
March 31, 2005 2005-06 2005-06
Particulars Qty. Value Qty. Value Qty. Value Qty. Value

Nos. (‘000) Nos. (‘000) Nos. (‘000) Nos. (‘000)
Handsets – – 320 1,416 320 1,645 – –

Simcards(Note 2) 5,363,201 302,202 26,102,020 684,268 24,859,782 694,368 6,605,439 172,933
TDMA/PAMA VSATs
Assembly sets 145 2,048 – – 49 – 96 1,356
Broadband Interactive
Terminal/Gateways 70 – – – 70 – – –
Internet Modem
& others 18 11,588 2,247 52,856 1,133 18,163 1,132 3,155
– 315,838 – 738,540 – 714,176 – 177,444
2004-05
(Rs. ‘000)
Acquired on Purchases (Refer Sales/Internal As at
Amalgamation Notes 1 & 3 below) Utilisation March 31, 2005
April 1, 2004 2004-05 2004-05
Particulars Qty. Value Qty. Value Qty. Value Qty. Value

Nos. (‘000) Nos. (‘000) Nos. (‘000) Nos. (‘000)
Handsets 69 103 – – 69 – – –
Simcards(Note 2) 2,450,748 152,810 20,381,108 1,050,435 17,468,655 689,604 5,363,201 302,202
TDMA/PAMA VSATs
Assembly sets 145 12,011 – – – – 145 2,048
Broadband Interactive
Terminal/Gateways 70 1,468 – – – – 70 –
Internet Modem 32 33,775 5 21,646 19 38,876 18 11,588
– 200,167 – 1,072,081 – 728,480 – 315,838
1. Includes cost transferred from fixed assets.

2. Excludes value of simcards issued free of cost.
3. The above table does not include the value of Sim card utilization Rs. 194,347 thousand (March 31, 2005 :
Rs. 252,144 thousand), TDMA/PAMA VSATs Assembly sets does not include utilization of Rs 692 thousand
(March 31, 2005 : Rs. 9,963 thousand)
115
25. The details of investments required as per Schedule VI of the Companies Act 1956 are provided below.
a) Details of Investments held as at March 31, 2006
(Rs. ‘000)
As at As at As at As at As at As at
Particulars Rate of March 31, March 31, March 31, March 31, March 31, March 31,
Interest 2006 2006 2006 2005 2005 2005
(No. of Face Cost (No. of Face Cost
Units) Value Units) Value
Other than Trade (Quoted) - Government Securities
9.81% GOI [email protected]% YTM — — — 1,000,000 100,000 119,208
6.18%GOI 2005 — — — 1,500,000 150,000 150,525
6.18%GOI 2005 — — — 1,000,000 100,000 100,370
6.18%GOI 2005 — — — 1,000,000 100,000 100,270
7.05% Canara Bank 2014 50 50000 50,000 150 150,000 150,000
7.15% Union Bank 2015 50 50000 50,000 100 100,000 100,000
11.50% IDBI 2010 — — — 500,000 50,000 59,388
364 Days T Bills Maturing on 14/10/2005 — — — 849,750 84,975 80,599
364 Days T Bills Maturing on 14/10/2005 — — — 849,750 84,975 80,599
364 Days T Bills Maturing on 14/10/2005 — — — 1,000,000 100,000 94,881
9.81%GOI 2013 1,000,000 100000 113,550 — — —
7.30% REC Secured Bonds 60 50000 46,500 — — —
364 Days T Bills Maturing on 14/04/2006 578,000 57800 54,719 — — —
364 Days T Bills Maturing on 14/04/2006 600,000 60000 56,802 — — —
8.07% GOI 2017 1,000,000 — 103,850 — — —
Total (A) 367,800 475,421 1,019,950 1,035,840
Other than trade (Unquoted)

National Saving Certificate 180 1,800 1,800 180 1,800 1,800
Total (B) 1,800 1,800 1,800 1,800
Other than Trade (Quoted) - Mutual Funds,

Debentures and Bonds
Kotak Mahindra Mutual Fund — — — 5,120,185 55,000 55,000
Kotak Mahindra Mutual Fund — — — 4,686,251 51,000 51,000
PRUDENTIAL ICICI MF — — — 9,669,403 100,000 100,000
ABN AMRO Floating Rate Fund — — — 6,480,357 64,804 66,360
ABN AMRO Liquid Fund I Plan — — — 16,708,746 167,087 171,590
Birla Mutual Fund - Liquid - I Plan Premium — — — 6,476,645 64,766 67,955
Deutsche Floating rate fund — — — 10,582,759 105,828 113,031
DSP ML Liquid Fund — — — 3,309,093 33,091 53,623
HDFC Mutual Fund - Cash Mgmt. Saving Plus Plan — — — 21,214,445 212,144 303,910
HDFC Mutual Fund - Cash Mgmt. Saving Plan — — — 21,760,891 217,609 300,000
HSBC Floating Rate Fund — — — 4,243,159 42,432 43,223
HSBC Liquid Fund — — — 1,921,303 19,213 20,000
ING ST Floater — — — 5,939,171 59,392 60,621
ING Vysya Liquid — — — 3,355,543 33,555 34,850
J M Fixed Maturity Plan QSA 5 — — — 20,344,838 203,448 203,448
J M MUTUAL FUND - Equity & Derivative — — — 5,000,000 50,000 50,000
Kotak Floater ST Growth — — — 10,784,823 107,848 117,238
Prudential ICICI Mutual Fund - FMP Series 25 Quaterly — — — 24,987,007 249,870 250,000
Prudential ICICI Mutual Fund - Floating Rate Plan C — — — 2,588,907 25,889 26,734
Principal Floating Rate Fund — — — 4,907,164 49,072 50,364
Reliance Mutual Fund - Floater — — — 6,984,563 69,846 71,752
Reliance Mutual Fund - FMP Quarter Plan 8 — — — 15,000,000 150,000 150,000
Reliance Mutual Fund - FMP Quarter Plan 7 — — — 20,000,000 200,000 200,000
Tata Mutual Fund Floating Rate — — — 20,034,464 200,345 205,980
UTI Floater — — — 7,085,128 70,851 76,370
HDFC (M+55) Floating Rate Bonds 2007 — — — 200 200,000 200,000
5.87% HDFC NCD 2006 — — — 250 250,000 250,000
Kotak Mahindra Bank — — — 1,000 100,000 95,444
ING Vysya Bank — — — 3,000 300,000 286,333
Alliance Mutual Fund - Liquid - I Plan — — — — — —
Birla Mutual Fund - Liquid - I Plan — — — — — —
Canbank Mutual - liquid Fund — — — — — —
Deutsche Mutual Income — — — — — —
116
(Rs. ‘000)
As at As at As at As at As at As at
Particulars Rate of March 31, March 31, March 31, March 31, March 31, March 31,
Interest 2006 2006 2006 2005 2005 2005
(No. of Face Cost (No. of Face Cost
Units) Value Units) Value
Deutsche Liquid Fund — — — — — —

DSP ML Liquid Fund — — — — — —
First India Mutual Fund - Liquid — — — — — —
Grindlay Liquid Fund - I Plan — — — — — —
IL & FS Mutual Fund - Liquid- I Plan — — — — — —
IL & FS Mutual Fund - Income — — — — — —
J M MUTUAL FUND - Liquid - IPlan — — — — — —
KMMF K Liquid - Premiun — — — — — —
Prudential ICICI Liquid - I Plan — — — — — —
Prudential ICICI Mutual Fund - Floating Rate — — — — — —
Reliance Mutual Fund - Liquid — — — — — —
Templeton India Floating Rate ST — — — — — —
Templeton India Mutual Liquid Fund — — — — — —
10.55% Bharti Mobile Debentures 10.55% — — — — — —
ABN AMRO Flexi Debt Fund 9,730,824 — 102,566 — — —
CAN Bank Floater Fund 6,710,663 — 71,421 — — —
Deutsche Liquid Cash Plus - IP 4,973,082 — 54,516 — — —
DSP Liquid Fund 137,116 — 139,941 — — —
Kotak Liquid Premium 8,010,148 — 112,803 — — —
Prudential ICICI Mutual Fund - Floating Rate Plan D 12,774,826 — 130,519 — — —
Tata Liquid Fund 48,567 — 62,405 — — —
UTI Liquid Fund 5,981,755 — 117,338 — — —
ABN AMRO Liquid Fund - I Plan 5,964 — 61 — — —
Birla Mutual Fund - Liquid - I Plan Premium 13,178,755 — 146,195 — — —
GE Capital Services Ltd. NCD 100 — 1,018,561 — — —
Total (C) — 1,956,326 3,453,090 3,674,826
TOTAL (A) + (B) + (C) 369,600 2,433,547 4,474,840 4,712,466
117
25.(b) Details of Investments purchased and redeemed/sold during the year
Balance Purchased Sale/Redemption

as on 1.04.05 During the Year Proceeds
Particulars Units INR Units INR Units INR

(Rs. ‘000) (Rs. ‘000) (Rs. ‘000)
NON-TRADE
9.81% GOI [email protected]% YTM 1,000,000 119,208 – – 1,000,000 117,105
National Saving Certificate 180 1,800 – – – –
Mutual Funds/Bonds
Kotak Mahindra Mutual Fund 5,120,185 55,000 – – 5,120,185 56,238
Kotak Mahindra Mutual Fund 4,686,251 51,000 – – 4,686,251 51,472
Kotak Mahindra Mutual Fund – – 4,665,502 51,000 4,665,502 51,244
Prudential ICICI MF 9,669,403 100,000 – – 9,669,403 100,925
ABN AMRO Floating Rate Fund 6,480,357 66,360 – – 6,480,357 66,766
ABN AMRO Liquid Fund – I Plan 16,708,746 171,590 – – 16,708,746 172,179
Birla Mutual Fund – Liquid – I Plan Premium 6,476,645 67,955 – – 6,476,645 68,027
Deutsche Floating Rate Fund 10,582,759 113,031 – – 10,582,759 113,517
DSP ML Liquid Fund 3,309,093 53,623 – – 3,309,093 53,812
HDFC Mutual Fund – Cash Mgmt. Saving Plus Plan 21,214,445 303,910 – – 21,214,445 305,031
HDFC MutualFund – Cash Mgmt. Saving Plan 21,760,891 300,000 – – 21,760,891 300,337
HSBC Floating Rate Fund 4,243,159 43,223 – – 4,243,159 43,405
HSBC Liquid Fund 1,921,303 20,000 – – 1,921,303 20,018
ING ST Floater 5,939,171 60,621 – – 5,939,171 61,133
ING Vysya Liquid 3,355,543 34,850 – – 3,355,543 34,968
J M Fixed Maturity Plan QSA 5 20,344,838 203,448 – – 20,344,838 206,527
J M MUTUAL FUND – Equity & Derivative 5,000,000 50,000 – – 5,000,000 50,865
Kotak Floater ST Growth 10,784,823 117,238 – – 10,784,823 117,479
Prudential ICICI Mutual Fund – FMP Series 25 Quaterly 24,987,007 250,000 – – 24,987,007 253,332
Prudential ICICI Mutual Fund – Floating Rate Plan C 2,588,907 26,734 – – 2,588,907 26,833
Principal Floating Rate Fund 4,907,164 50,364 – – 4,907,164 50,570
Reliance Mutual Fund – Floater 6,984,563 71,752 – – 6,984,563 72,118
Reliance Mutual Fund – FMP Quarter Plan 8 15,000,000 150,000 – – 15,000,000 152,181
Reliance Mutual Fund – FMP Quarter Plan 7 20,000,000 200,000 – – 20,000,000 202,894
Tata Mutual Fund Floating Rate 20,034,464 205,980 – – 20,034,464 206,687
UTI Floater 7,085,128 76,370 – – 7,085,128 76,639
HDFC (M+55) Floating Rate Bonds 2007 200 200,000 – – 200 200,000
5.87% HDFC NCD 2006 250 250,000 – – 250 250,014
Kotak Mahindra Bank 1,000 95,444 – – 1,000 95,575
ING Vysya Bank 3,000 286,333 – – 3,000 286,774
ABN AMRO Flexi Debt Fund – – 9,730,824 102,566 – –
ABN AMRO Liquid Fund I Plan – – 5,964 61 – –
Birla Mutual Fund – Liquid – I Plan Premium – – 13,178,755 146,195 – –
CAN Bank Floater Fund – – 6,710,663 71,421 – –
Deutsche Liquid Cash Plus – IP – – 4,973,082 54,516 – –
DSP Liquid Fund – – 137,116 139,941 – –
Kotak Liquid Premium – – 8,010,148 112,803 – –
Prudential ICICI Mutual Fund – Floating Rate Plan D – – 12,774,826 130,519 – –
Tata Liquid Fund – – 48,567 62,405 – –
UTI Liquid Fund – – 5,981,755 117,338 – –
Deutsche Liquid Cash Plus – IP – – 30,811,792 320,000 30,811,792 320,058
HDFC Floater – – 21,308,885 237,300 21,308,885 237,402
HDFC Mutual Fund – Cash Mgmt. Saving Plan – – 10,145,148 140,000 10,145,148 140,020
HSBC Liquid Fund – – 19,196,069 200,000 19,196,069 200,086
ABN AMRO Liquid Fund I Plan – – 2,699,873 27,789 2,699,873 27,821
Deutsche Floating rate fund – – 8,062,478 86,419 8,062,478 86,483
Grindlays Cash Fund S-plan C – – 15,228,233 159,795 15,228,233 160,000
HDFC Mutual Fund – Cash Mgmt. Saving Plus Plan – – 3,127,866 44,937 3,127,866 44,969
Kotak Floater ST Growth – – 18,022,188 196,312 18,022,188 196,521
Principal Liquid Fund – – 9,704,310 100,000 9,704,310 100,118
Grindlays Cash Fund S-Plan C – – 7,954,278 83,475 7,954,278 83,599
Grindlays FRF STP Plan C-Super IP – – 10,608,525 111,471 10,608,525 111,520
HSBC Floating Rate Fund – – 9,256,177 94,601 9,256,177 94,695
118

(Rs. ‘000) (Rs .‘000) (Rs. ‘000)
Kotak Floater ST Growth – – 24,642 269 24,642 269

Prudential ICICI Mutual Fund – Floating Rate Plan C – – 21,627,673 223,836 21,627,673 224,167
Reliance Mutual Fund – Liquid – – 1,236,384 20,000 1,236,384 20,027
Grindlays Cash Fund S-Plan C – – 853,390 8,977 853,390 8,984
J M Mutual Fun Floating Rate – – 6,959,174 76,135 6,959,174 76,213
Tata Mutual Fund Floating rate – – 6,766,554 69,894 6,766,554 70,000
Deutsche Floating Rate Fund – – 10,195,167 109,279 10,195,167 109,700
DSP ML Liquid Fund – – 4,304,699 70,000 4,304,699 70,129
HSBC Liquid Fund – – 4,788,538 50,000 4,788,538 50,110
Templeton India TMA – IP – – 95,961 100,000 95,961 100,055
Birla Mutual Fund – Floater – – 5,468,864 60,000 5,468,864 60,009
Reliance Mutual Fund – Liquid – – 475,132 7,711 475,132 7,725
Templeton India Mutual Fund – Floater – – 4,159,111 50,000 4,159,111 50,067
Prudential ICICI Mutual Fund – Floating Rate Plan C – – 197,075 2,041 197,075 2,051
Deutsche Liquid Cash Plus – IP – – 144,874 1,509 144,874 1,514
DSP ML Floater – – 3,900,651 43,000 3,900,651 43,124
DSP ML Floater – – 7,248,741 80,000 7,248,741 80,140
DSP ML Floater – – 6,940,824 76,616 6,940,824 76,736
Grindlays FRF STP Plan C– Super IP – – 1,287,513 13,529 1,287,513 13,600
Grindlays FRF STP Plan C– Super IP – – 8,179,495 86,149 8,179,495 86,400
HDFC MutualFund – Cash Mgmt. Saving Plus Plan – – 24,753,529 355,629 24,753,529 357,703
ING Vysya Liquid – IP – – 9,551,281 100,000 9,551,281 100,015
Tata Mutual Fund Floating Rate – – 1,946,524 20,106 1,946,524 20,194
DSP ML Floater – – 656,374 7,245 656,374 7,259
DSP ML Floater – – 4,001,497 44,170 4,001,497 44,251
DSP ML Floater – – 528,145 5,830 528,145 5,842
DSP ML Floater – – 11,667,285 128,920 11,667,285 129,054
DSP ML Floater – – 2,894,827 32,000 2,894,827 32,020
Grindlays FRF STP Plan C – Super IP – – 2,264,568 23,851 2,264,568 23,931
119

(Rs. ‘000) (Rs .‘000) (Rs. ‘000)

Reliance Mutual Fund – Liquid TP – IP – – 1,847,450 30,000 1,847,450 30,080
Templeton India Mutual Fund – Floater – – 456,280 5,496 456,280 5,502
ABN AMRO Liquid Fund I Plan – – 760,485 7,846 760,485 7,886
ING Vysya Liquid – IP – – 381,486 4,000 381,486 4,001
Templeton India Mutual Fund –Floater – – 3,870,289 46,622 3,870,289 46,690
UTI Floater – – 4,592,633 49,789 4,592,633 50,000
Deutsche Liquid Cash Plus – IP – – 19,334 202 19,334 202
Principal Floating Rate Fund – – 6,295,460 65,000 6,295,460 65,355
Templeton India Mutual Fund – Floater – – 654,296 7,882 654,296 7,900
UTI Liquid Fund Cash Plan – I Plan – – 63,939 70,000 63,939 70,135
J M Liquid Fund – – 9,507,330 100,000 9,507,330 100,046
Kotak Liquid Premium – – 4,760,313 64,062 4,760,313 64,100
UTI Floater – – 1,864,335 20,211 1,864,335 20,322
UTI Floater – – 8,745,604 95,000 8,745,604 95,330
UTI Floater – – 7,738,179 84,311 7,738,179 84,348
120

(Rs. ‘000) (Rs .‘000) (Rs. ‘000)

UTI Floater – – 4,582,531 49,929 4,582,531 50,000
HSBC Liquid Fund – – 3,853,587 40,475 3,853,587 40,534
HSBC Liquid Fund – – 7,606,660 80,000 7,606,660 80,011
Prudential ICICI Mutual Fund – Short Term – – 15,761,311 200,000 15,761,311 201,789
Prudential ICICI Mutual Fund – Short Term – – 641,351 8,162 641,351 8,211
Reliance Mutual Fund – Short Term Fund – – 17,574,340 202,894 17,574,340 204,657
Reliance Mutual Fund – Floater – – 19,673,989 204,657 19,673,989 204,686
Tata Liquid Fund – – 65,119 80,000 65,119 80,096
UTI Floater – – 1,446,441 15,760 1,446,441 15,794
UTI Floater – – 770,815 8,401 770,815 8,416
Birla Mutual Fund – Short Term Debt – – 4,816,194 60,009 4,816,194 60,406
Deutsche Mutual Fund – Short Term – – 8,754,191 99,291 8,754,191 100,000
ING Vysya Mutual Fund – Short Term Debt – – 9,589,934 99,452 9,589,934 100,000
Kotak Mahindra Mutual Fund – Short Term Debt – – 4,136,607 49,648 4,136,607 50,000
Templeton India Mutual Fund – Short Term Debt – – 79,251 97,312 79,251 98,000
Kotak Liquid Premium – – 796,300 10,718 796,300 10,745
ING Vysya Liquid – – 9,508,777 100,000 9,508,777 100,088
ING Vysya Liquid – – 5,076,644 53,420 5,076,644 53,436
UTI Mutual Fund Short Term – – 4,537,658 50,000 4,537,658 50,099
Grindlays FRF STP Plan C – Super IP – – 790,450 8,392 790,450 8,397
ING Vysya Liquid – – 4,749,466 50,000 4,749,466 50,008
J M Mutual Fund Floating Rate – – 6,346,098 70,000 6,346,098 70,140
Reliance Fixed Maturity 30 Days – – 20,000,000 200,000 20,000,000 200,956
121

(Rs. ‘000) (Rs .‘000) (Rs. ‘000)
Tata Mutual Fund Floating Rate – – 27,029 281 27,029 282

UTI Floater – – 7,487,050 81,599 7,487,050 81,925
UTI Floater – – 1,651,880 18,006 1,651,880 18,075
HDFC Floater – – 8,215,679 92,462 8,215,679 92,640
UTI Floater – – 1,507,496 16,432 1,507,496 16,500
Deutsche Floating Rate Fund – – 690,255 7,489 690,255 7,491
ING ST Floater – – 8,274,784 85,598 8,274,784 86,044
ING ST Floater – – 293,925 3,053 293,925 3,056
HDFC Floater – – 409,997 4,614 409,997 4,629
HDFC Floater – – 3,109,453 35,000 3,109,453 35,104
HDFC Floater – – 9,744,948 110,000 9,744,948 110,017
Birla Mutual Fund – Liquid – I Plan Premium – – 9,440,201 100,490 9,440,201 100,624
CAN Bank Floater – – 4,411,678 45,000 4,411,678 45,055
Deutsche Mutual Fund – Short Term – – 62,518 709 62,518 717
HSBC Liquid Fund – – 8,513,214 90,000 8,513,214 90,014
ING ST Floater – – 14,488,531 150,472 14,488,531 151,001
ING Vysya Liquid – – 7,585,527 80,000 7,585,527 80,118
Tata Liquid Fund SHIP – – 38,171 47,100 38,171 47,172
122

(Rs. ‘000) (Rs .‘000) (Rs. ‘000)
UTI Floater – – 6,932,089 75,562 6,932,089 76,064
UTI Floater – – 642,184 7,000 642,184 7,046
UTI Floater – – 5,041,570 55,000 5,041,570 55,320
UTI Floater – – 4,812,866 52,621 4,812,866 52,810
UTI Liquid Fund – – 90,616 100,000 90,616 100,061
Prudential ICICI Mutual Fund – Liquid – – 4,730,187 78,669 4,730,187 78,900
UTI Floater – – 7,992,051 87,379 7,992,051 87,749
UTI Floater – – 1,115,832 12,202 1,115,832 12,251
Prudential ICICI Mutual Fund – Liquid – – 380,688 6,331 380,688 6,351
Prudential ICICI Mutual Fund – BPBG Blended Plan B – – 9,951,437 100,000 9,951,437 100,370
UTI Floater – – 3,465,436 37,897 3,465,436 38,067
UTI Floater – – 1,996,706 21,835 1,996,706 21,933
DSP ML Floater – – 8,061,049 90,000 8,061,049 90,037
UTI Floater – – 7,147,656 78,165 7,147,656 78,560
UTI Floater – – 2,041,681 22,413 2,041,681 22,440
Kotak Floater ST Growth – – 911,133 10,088 911,133 10,100
UTI Floater – – 5,245,953 57,587 5,245,953 57,769
UTI Floater – – 2,018,783 22,188 2,018,783 22,231
HDFC Mutual Fund – Cash Mgmt. Saving Plus Plan – – 681,161 9,921 681,161 9,975
ABN AMRO Liquid Fund – I Plan – – 2,871,528 30,000 2,871,528 30,142
ING Vysya Liquid – – 9,414,068 100,000 9,414,068 100,014
Reliance Fixed Maturity 30 Days – – 16,000,000 160,000 16,000,000 160,638
ABN AMRO Liquid Fund – I Plan – – 995,667 10,411 995,667 10,473
UTI Liquid Fund – – 56,523 62,614 56,523 62,850
ABN AMRO Floating Rate Fund – – 4,777,603 50,000 4,777,603 50,227
123

(Rs. ‘000) (Rs .‘000) (Rs. ‘000)

Principal Floating Rate Fund – – 512,230 5,366 512,230 5,391
UTI Floater – – 4,804,982 52,812 4,804,982 53,119
UTI Floater – – 4,999,545 55,000 4,999,545 55,269
UTI Floater – – 5,256,667 57,926 5,256,667 58,112
Alliance Cash Manager I Plan – – 12,885,911 145,000 12,885,911 145,349
UTI Floater – – 3,818,154 42,074 3,818,154 42,223
UTI Floater – – 5,210,835 57,500 5,210,835 57,623
UTI Floater – – 3,149,083 34,769 3,149,083 34,824
Grindlay Short Term – – 3,727,699 50,000 3,727,699 50,687
Grindlay Short Term – – 3,718,689 50,000 3,718,689 50,565
UTI Floater – – 488,114 5,389 488,114 5,400
Principal Floating rate Fund – – 1,168,415 12,281 1,168,415 12,308
UTI Floater – – 1,807,632 19,958 1,807,632 20,000
UTI Floater – – 1,348,096 14,884 1,348,096 14,921
UTI Floater – – 7,687,042 84,908 7,687,042 85,079
HSBC Liquid Fund – – 7,519,206 80,160 7,519,206 80,172
ABN AMRO Floating Rate Fund – – 540,068 5,673 540,068 5,690
DSP ML Floater – – 8,878,156 99,264 8,878,156 100,000
UTI Floater – – 8,330 92 8,330 92
UTI Floater – – 7,689,942 85,000 7,689,942 85,252
124

(Rs. ‘000) (Rs .‘000) (Rs. ‘000)

DSP ML Floater – – 65,828 736 65,828 742
DSP ML Floater – – 5,664,888 63,500 5,664,888 63,842
DSP ML Floater – – 870,111 9,781 870,111 9,806
UTI Liquid Fund – – 20,208 22,386 20,208 22,569
Tata Mutual Fund Floating Rate – – 389,066 4,111 389,066 4,119
Principal Floating Rate Fund – – 447,074 4,701 447,074 4,725
HDFC Floater – – 5,742,100 65,000 5,742,100 65,676
HDFC Floater – – 3,000,916 34,273 3,000,916 34,324
HDFC Floater – – 1,377,022 15,727 1,377,022 15,768
HDFC Floater – – 1,750,915 20,000 1,750,915 20,050
DSP ML Floater – – 9,805,476 110,219 9,805,476 110,803
HSBC Short Term – – 10,527,094 120,546 10,527,094 122,787
HSBC Short Term – – 2,333,098 27,017 2,333,098 27,213
ING Vysya Liquid – – 4,681,955 50,000 4,681,955 50,086
Kotak Mahindra Mutual Fund –Short Term Debt – – 29,330 352 29,330 361
Kotak Mahindra Short Term – – 4,140,958 50,000 4,140,958 50,973
Prudential ICICI Mutual Fund – Blended Fund Inst. Plan –B – – 10,030,900 100,370 10,030,900 101,949
125

(Rs. ‘000) (Rs .‘000) (Rs. ‘000)
ABN AMRO Floating Rate Fund I Plan – – 10,000,000 100,000 10,000,000 100,136
ABN AMRO Floating Rate Fund I Plan Plus – – 1,484,381 14,848 1,484,381 14,864
Can Bank Floater – – 7,775,823 80,000 7,775,823 80,524
Can Bank Floater – – 7,741,886 80,000 7,741,886 80,173
UTI Liquid Fund – – 44,764 50,000 44,764 50,106
UTI Liquid Fund – – 89,473 100,000 89,473 100,152
UTI Liquid Fund – – 44,438 49,689 44,438 49,742
Principal Mutual Fund – Short Term – – 7,126,209 80,013 7,126,209 81,618
ABN AMRO Floating Rate Fund – I Plan Plus – – 10,678,982 106,822 10,678,982 106,950
Grindlay Short Term Plan C – – 10,119,862 101,252 10,119,862 101,861
HDFC Mutual fund – Cash Mgmt. Saving Plus Plan – – 3,787,260 55,200 3,787,260 55,987
HSBC Short Term – – 1,984,728 22,983 1,984,728 23,159
HSBC Short Term – – 6,904,121 80,172 6,904,121 80,563
ING Vysya Mutual Fund – Short Term Debt – – 54,276 563 54,276 577
ING Vysya Liquid – – 19,781,220 199,968 19,781,220 200,000
J M Mutual Fund Short Term – – 5,176,226 58,677 5,176,226 59,829
J M Mutual Fund Short Term – – 6,409,365 72,704 6,409,365 74,083
Kotak Floater ST Growth – – 902,119 9,988 902,119 10,108
Tata Mutual Fund – Short Term – – 8,394,614 100,000 8,394,614 102,120
Tata Mutual Fund – Short Term – – 8,285,828 100,000 8,285,828 100,796
UTI Liquid Fund – – 44,994 50,311 44,994 50,372
UTI Liquid Fund – – 3,285 3,674 3,285 3,678
UTI Liquid Fund – – 28,011 31,326 28,011 31,373
UTI Liquid Fund – – 5,024 5,621 5,024 5,627
ING Vysya Liquid – – 10,884,524 110,032 10,884,524 110,162
ING Vysya Liquid Super IP – – 3,936,146 39,797 3,936,146 39,838
Birla Mutual Fund – Liquid – I Plan Premium – – 607,166 6,559 607,166 6,571
UTI Liquid Fund – – 66,479 74,379 66,479 74,571
UTI Liquid Fund – – 22,669 25,394 22,669 25,429
126

(Rs. ‘000) (Rs .‘000) (Rs. ‘000)

Templeton India Mutual Fund – Liquid – – 35,203 60,000 35,203 60,033
Prudential ICICI Mutual Fund – Long Term – – 10,636,261 150,000 10,636,261 152,413
Templeton India Mutual Fund –Floater – – 11,392,004 115,000 11,392,004 115,016
DSP Liquid Fund – – 3,583,566 59,856 3,583,566 60,000
UTI Liquid Fund – – 66,601 74,606 66,601 74,856
UTI Liquid Fund – – 22,371 25,071 22,371 25,144
HDFC Liquid Fund – – 3,664,426 50,000 3,664,426 50,125
UTI Liquid Fund – – 40,090 44,929 40,090 45,067
UTI Liquid Fund – – 4,389 4,921 4,389 4,933
SBI MF MIIF Saving – – 9,069,554 99,895 9,069,554 100,000
DSP Liquid Fund – – 906,672 15,144 906,672 15,204
DSP Liquid Fund – – 4,776,604 80,000 4,776,604 80,098
DSP Liquid Fund – – 1,174,657 19,677 1,174,657 19,698
SBI MF MIIF Saving – – 9,552 105 9,552 105
DSP Liquid Fund – – 3,605,982 60,403 3,605,982 60,487
DSP Liquid Fund – – 559,368 9,379 559,368 9,383
Sahara Mutual Fund – Liquid Fund VP – – 24,376 30,000 24,376 30,047
Templeton India Mutual Fund – Liquid – – 107,361 115,136 107,361 115,186
UTI Liquid Fund – – 84,799 95,079 84,799 95,548
UTI Liquid Fund – IP – – 12,456 14,000 12,456 14,035
UTI Liquid Fund – IP – – 45,633 51,329 45,633 51,417
DSP Liquid Fund – – 11,561,970 193,851 11,561,970 194,180
DSP Liquid Fund – – 11,027,198 185,000 11,027,198 185,198
127

(Rs. ‘000) (Rs .‘000) (Rs. ‘000)

CAN Bank Floater – – 7,235,681 75,000 7,235,681 75,493
CAN Bank Floater – – 2,348,831 24,399 2,348,831 24,507
DSP Liquid Fund – – 99,937 100,000 99,937 100,031
DSP Liquid Fund – – 49,921 49,961 49,921 49,969
HSBC Liquid Fund – – 3,713,779 40,000 3,713,779 40,079
HSBC Liquid Fund – – 5,552,430 59,813 5,552,430 59,921
J M Mutual Fund Floating Rate – – 29,002 326 29,002 328
J M Mutual Fund Floating Rate – – 888,431 10,000 888,431 10,053
Reliance Mutual Fund – FMP VII – – 20,020,985 200,210 20,020,985 201,171
UTI Liquid Fund IP – – 7,708 8,671 7,708 8,692
ABN AMRO Floating Rate Fund – – 657,304 6,625 657,304 6,631
Can Bank Floater – – 7,278,032 75,601 7,278,032 75,947
Can Bank Floater – – 3,263,314 33,963 3,263,314 34,053
DSP Liquid fund – – 119,868 119,962 119,868 120,000
Reliance Mutual Fund – Liquid – – 159,953 1,640 159,953 1,641
DSP Liquid Fund – – 99,781 99,860 99,781 100,000
128

(Rs. ‘000) (Rs .‘000) (Rs. ‘000)

DSP Liquid Fund – – 49,795 49,834 49,795 50,000
CAN Bank Floater – – 2,501,759 26,037 2,501,759 26,195
CAN Bank Floater – – 7,174,768 75,000 7,174,768 75,124
UTI Floater – – 7,559,924 85,000 7,559,924 85,026
DSP Liquid Fund – – 59,714 59,761 59,714 60,019
DSP Liquid Fund – – 39,778 39,847 39,778 39,981
CAN Bank Liquid Fund – – 7,965,969 99,624 7,965,969 100,000
HSBC Liquid Fund – – 945,658 10,187 945,658 10,250
ING Vysya Liquid Super IP – – 441,286 4,495 441,286 4,514
DSP Liquid Fund – – 119,945 120,153 119,945 120,638
DSP Liquid Fund – – 101,075 101,360 101,075 101,658
DSP Liquid Fund – – 27,545 27,645 27,545 27,704
Reliance Mutual Fund – FMP VIII – – 20,117,085 201,171 20,117,085 202,195
DSP Liquid Fund – – 32,238 32,355 32,238 32,441
DSP Liquid Fund – – 98,938 99,411 98,938 99,559
J M Mutual Fund Floating Rate – – 30,804 348 30,804 350
129

(Rs. ‘000) (Rs .‘000) (Rs. ‘000)

DSP Liquid Fund – – 117,074 117,633 117,074 118,000
HSBC Liquid Fund – – 9,205,560 99,952 9,205,560 100,000
DSP Liquid Fund – – 14,337 14,406 14,337 14,453
DSP Liquid Fund – – 49,713 50,000 49,713 50,114
DSP Liquid Fund – – 99,409 100,000 99,409 100,212
DSP Liquid Fund – – 62,218 62,629 62,218 62,720
HDFC Floater – – 16,532,911 191,878 16,532,911 192,000
HSBC Liquid Fund – – 9,214,378 100,048 9,214,378 100,111
DSP Liquid Fund – – 37,126 37,371 37,126 37,488
DSP Liquid Fund – – 86,668 87,310 86,668 87,512
130

(Rs. ‘000) (Rs .‘000) (Rs. ‘000)

J M Mutual Fund Floating Rate – – 150,386 1,711 150,386 1,717
DSP Liquid Fund – – 12,596 12,690 12,596 12,734
DSP Liquid Fund – – 86,323 87,078 86,323 87,266
HDFC Floater – – 699,852 8,122 699,852 8,149
HDFC Floater – – 11,718,945 136,030 11,718,945 136,462
J M Mutual Fund floating Rate – – 9,516,204 108,289 9,516,204 108,712
DSP Liquid Fund – – 72,290 72,922 72,290 73,093
DSP Liquid Fund – – 27,898 28,170 27,898 28,207
Principal Liquid Fund – – 123,526 1,327 123,526 1,332
DSP Liquid Fund – – 70,050 70,733 70,050 70,900
DSP Liquid Fund – – 20,894 21,098 20,894 21,147
DSP Liquid Fund – – 8,747 8,835 8,747 8,853
Prudential ICICI Mutual Fund – Floating Rate Plan D – – 11,612,757 117,571 11,612,757 117,650
ABN AMRO Floating Rate Fund Long Term – – 10,000,000 100,000 10,000,000 101,674
Standard Chartered Liquidity Fund – – 1,494,307 14,979 1,494,307 15,000
ABN AMRO Liquid Fund I Plus Plan – – 9,804,306 100,000 9,804,306 100,067
DSP Liquid Fund – – 50,655 51,165 50,655 51,348
DSP Liquid Fund – – 71,671 72,430 71,671 72,652
CAN Bank Liquid Fund – – 762,556 9,607 762,556 9,654
Standard Chartered Liquidity Fund – – 525,088 5,264 525,088 5,283
HSBC Cash Fund I Plus Plan – – 9,145,449 99,699 9,145,449 100,000
131

(Rs. ‘000) (Rs .‘000) (Rs. ‘000)
LIC Liquid Fund – – 7,168,744 90,000 7,168,744 90,110

LIC Liquid Fund – – 786,768 9,879 786,768 9,890
DSP Liquid Fund – – 47,072 47,570 47,072 47,789
DSP Liquid Fund – – 61,277 62,073 61,277 62,211
LIC Liquid Fund – – 7,946,978 99,788 7,946,978 100,000
DSP Liquid Fund – – 27,569 27,927 27,569 28,008
DSP Liquid Fund – – 49,333 50,000 49,333 50,120
DSP Liquid Fund – – 21,528 21,853 21,528 21,872
CAN Bank Floater Fund – – 9,436,455 99,650 9,436,455 100,000
LIC Liquid Fund – – 822,905 10,333 822,905 10,362
LIC Liquid Fund – – 3,977,060 50,000 3,977,060 50,081
LIC Liquid Fund – – 3,141,333 39,500 3,141,333 39,557
DSP Liquid Fund – – 81,913 83,147 81,913 83,323
DSP Liquid Fund – – 16,394 16,653 16,394 16,677
UTI Liquid Fund – – 5,582,215 109,000 5,582,215 109,098
UTI Liquid Fund – – 1,581,146 30,879 1,581,146 30,902
ABN AMRO Flexi Debt Fund – – 9,656,476 101,674 9,656,476 102,209
ABN AMRO Flexi Debt Fund – – 4,515,190 47,591 4,515,190 47,791
DSP Liquid Fund – – 91,898 93,347 91,898 93,582
DSP Liquid Fund – – 6,302 6,406 6,302 6,418
132

(Rs. ‘000) (Rs .‘000) (Rs. ‘000)
Birla Mutual Fund–Liquid – I Plan Premium – – 4,517,324 49,813 4,517,324 50,000
DSP Liquid Fund – – 116,671 118,594 116,671 118,918
DSP Liquid Fund – – 31,083 31,676 31,083 31,682
UTI Liquid Fund – – 6,099,425 119,121 6,099,425 119,444
UTI Liquid Fund – – 1,560,319 30,506 1,560,319 30,556
Deutsche Liquid Cash Plus–IP – – 4,566,794 49,768 4,566,794 50,000
CAN Bank Floater Fund – – 583,337 6,160 583,337 6,215
DSP Liquid Fund – – 86,671 88,324 86,671 88,511
DSP Liquid Fund – – 39,244 40,000 39,244 40,077
DSP Liquid Fund – – 20,967 21,383 20,967 21,412
Prudential ICICI Mutual Fund – Floating Rate Plan D – – 748,847 7,651 748,847 7,652
UTI Liquid Fund – – 1,764,319 34,494 1,764,319 34,615
UTI Liquid Fund – – 2,822,931 55,271 2,822,931 55,385
UTI Liquid Fund – – 3,305,960 64,729 3,305,960 64,862
UTI Liquid Fund – – 1,566,719 30,692 1,566,719 30,738
CAN Bank Floater Fund – – 84,112 890 84,112 897
DSP Liquid Fund – – 38,876 39,647 38,876 39,724
DSP Liquid Fund – – 137,281 140,059 137,281 140,276
LIC Liquid Fund – – 4,016,123 50,500 4,016,123 50,838
Tata Liquid Fund – – 77,947 100,000 77,947 100,296
Tata Liquid Fund – – 60,389 77,595 60,389 77,704
UTI Liquid Fund – – 475,129 9,308 475,129 9,327
UTI Liquid Fund – – 7,284,174 142,780 7,284,174 142,997
UTI Liquid Fund – – 900,382 17,662 900,382 17,676
Total Non–Trade 3,795,834 61,593,087 64,642,882
133

(Rs. ‘000) (Rs .‘000) (Rs. ‘000)
Trade Investments
6.18% GOI 2005 1,500,000 150,525 1,500,000 150,000
6.18% GOI 2005 1,000,000 100,370 1,000,000 100,000
6.18% GOI 2005 1,000,000 100,270 1,000,000 100,000
7.05% Canara Bank 2014 150 150,000 100 100,055
7.15% Union Bank 2015 100 100,000 50 50,005
11.50% IDBI 2010 500,000 59,388 500,000 59,554
364 Days T Bills Maturing on 14/10/2005 849,750 80,599 849,750 84,975
364 Days T Bills Maturing on 14/10/2005 849,750 80,599 849,750 84,975
364 Days T Bills Maturing on 14/10/2005 1,000,000 94,881 1,000,000 100,000
9.81% GOI 2013 – – 1,000,000 113,550 – –
7.30% REC Secured Bonds – – 50 46,500 – –
364 Days T Bills Maturing on 14/04/2006 – – 578,000 54,719 – –
364 Days T Bills Maturing on 14/04/2006 – – 600,000 56,802 – –
8.07% GOI 2017 – – 1,000,000 103,850 – –
GE Capital Services Ltd. NCD – – 100 1,018,561 – –
HDFC Ltd. Commercial Paper – – 5 48,079 5 48,238
10.90% IDBI OMNI Bonds – – 5 54,800 5 55,325
10.90% IDBI OMNI Bonds – – 5 54,800 5 55,325
8.07% GOI 2017 – – 5 52,420 5 52,445
8.07% GOI 2017 – – 5 52,420 5 52,575
8.07% GOI 2017 – – 5 52,420 5 52,575
8.07% GOI 2017 – – 5 52,420 5 52,600
7.77% SDL Gujarat 2015 – – 108,800 10,880 108,800 10,967
7.77% SDL Karnataka 2015 – – 57,100 5,710 57,100 5,764
7.77% SDL Rajasthan 2015 – – 161,700 16,170 161,700 16,291
7.77% SDL Maharashtra 2015 – – 187,500 18,750 187,500 18,900
6.85% GOI 2012 – – 500,000 50,088 500,000 50,140
7.55% GOI 2010 – – 500,000 51,873 500,000 51,900
7.55% GOI 2010 – – 500,000 51,873 500,000 51,925
7.77% SDL Karnataka – – 500,000 50,400 500,000 51,275
6.65% HDFC 2008 – – 320 320,000 320 319,977
6.65% HDFC 2008 – – 200 200,000 200 199,985
PFC Ltd. Commercial Paper – – 340 166,090 340 166,317
10.25% GOI 2021 – – 500,000 62,375 500,000 62,750
10.25% GOI 2021 – – 500,000 62,320 500,000 62,650
7.25% IDBI 2015 – – 100,000 9,860 100,000 10,010
7.50% GOI 2034 – – 500,000 50,000 500,000 50,275
6.10% PGC 2014 – – 625,000 57,717 625,000 57,906
7.4% IOB 2015 – – 1,000,000 100,000 1,000,000 100,400
10.25% GOI 2021 – – 500,000 62,185 500,000 62,540
7.45% BOB 2015 – – 100 100,000 100 100,400
Standard Chartered Inv & Loan CP – – 1,000,000 99,851 1,000,000 100,000
7.49% GOI 2017 – – 1,500,000 151,830 1,500,000 152,235
HDFC Ltd. CP – – 1,000,000 99,785 1,000,000 100,000
Citi Corp Finance India Ltd. CP – – 2,500,000 249,380 2,500,000 250,000
6.15% Rabo India Finance P Ltd. 2005 – – 1,000,000 100,000 1,000,000 100,000
6% NCD ICICI Securities Ltd. 2005 – – 2,500,000 250,000 2,500,000 250,000
7.40% IOC 2015 – – 200 20,010 200 20,560
6.30% GE Capital Services Ltd. 2005 – – 2,500,000 250,000 2,500,000 250,000
8.07% GOI 2017 – – 500,000 53,110 500,000 53,405
HDFC Ltd. CP – – 400 195,314 400 196,036
6.45% ICICI Securities Ltd. 2005 – – 500 250,000 500 250,000
7.40% IOC 2015 – – 24 23,421 24 23,978
Citifinancial Consumer Finance India Ltd. – – 250 250,000 250 250,000
DSP Merrill Lynch Capital Ltd. – – 400 198,888 400 200,000
7.50% GE Capital Services India – – 50 500,000 50 500,000
12% HUCO 2011 – – 500 53,450 500 54,493
Total Trade 916,632 5,952,671 5,399,726
Others
G E Countywide Intercorporate Deposit – – 1 300,000 1 300,000
DSP ML Capital Ltd. – – 1 250,000 1 250,000
IL & FS ICD – – 1 250,000 1 250,000
G E Countrywide – – 1 250,000 1 250,000
Bank of America – – 1 350,000 1 350,000
6.50% IL & FS Ltd. – – 1 250,000 1 250,000
IL & FS Ltd. – – 1 250,000 1 250,000
Total Others – 1,900,000 1,900,000

Total Investments 4,712,466 69,445,758 71,942,601
134
26. a) The Company uses various premises on lease to install the equipment. A provision is recognized for the costs to be
incurred for the restoration of these premises at the end of the lease period. It is expected that this provision will be
utilized at the end of the lease period of the respective sites as per the respective lease agreements.
b) The Company has introduced bonus plans aimed towards performance and retention of employees who are eligible
based on certain eligibility cirterias. This provision will be utilised at the end of the period of the bonus plan on
payment to the eligible employees.
c) The movement of Provision made for Site Restoration Cost, leave encashment and deferred bonus plan in accordance
with AS–29 ‘Provisions, Contingent liabilities and Contingent Assets’ issued by Institute of Chartered Accountants of
India, is given below:
(i) Site Restoration Cost:

March 31, 2006 March 31, 2005
(In Rs.’000) (In Rs.’000)
Addition during the year 854,966 913,517
Less: Utilised during the year – –
Closing Balance 1,768,483 913,517
(ii) Leave encashment:

March 31,2006 March 31,2005
(In Rs.’000) (In Rs.’000)
Less: Utilised during the year 48,376 40,679
Closing Balance 231,510 129,227
(iii) Deferred Bonus plan:

March 31,2006 March 31,2005
(In Rs.’000) (In Rs.’000)
Opening Balance – –
Acquired under the scheme of amalgamation – –
Addition during the year 71,921 –
Closing Balance 71,921 –
135
27. Information about Business Segments-Primary
For the year ended March 31, 2006
(Rs. ‘000)
Reportable Segments Mobile Broadband & Enterprise Enterprise Others Eliminations Total
Service Telephone Services Services
Services Carriers Corporate
Revenue
Billing Revenue/Sale of Goods
and Other Income 77,886,497 14,368,482 14,617,951 5,956,863 76,000 – 112,905,793
Inter Segment Revenue 1,390,163 705,927 10,009,882 74,110 – (12,180,082) –
Total Revenue 79,276,660 15,074,409 24,627,833 6,030,973 76,000 (12,180,082) 112,905,793
Results
Segment Result, Profit/(Loss) 16,095,910 625,962 7,767,797 1,935,248 (1,310,951) – 25,113,966
Operating Profit/(Loss)
before Finance Expenses 16,095,910 625,962 7,767,797 1,935,248 (1,310,951) – 25,113,966
Net Finance Expense/(Income) net – – – – 2,256,011 – 2,256,011
Net Profit/(Loss) 16,095,910 625,962 7,767,797 1,935,248 (3,566,962) – 22,857,955
Provision for Tax – – – – 1,665,243 – 1,665,243
Fringe Benefit Tax – – – – 190,471 – 190,471
Deferred Tax Expense – – – – 881,447 – 881,447
Net Profit/(Loss) after tax 16,095,910 625,962 7,767,797 1,935,248 (6,304,123) – 20,120,794
Other Information
Segment Assets 117,096,613 30,116,537 25,814,960 7,984,043 8,308,058 – 189,320,211
Inter Segment Assets 2,118,844 10,895,906 19,002,918 3,304,018 41,039,987 (76,361,673) –
Advance Tax
(Net of provision for tax) – – – – 980,374 – 980,374
Total Assets 119,215,457 41,012,443 44,817,878 11,288,061 50,328,419 (76,361,673) 190,300,585
Segmental Liabilities 83,852,497 7,689,976 12,680,132 3,028,685 7,703,252 – 114,954,542
Inter Segment Liabilities 20,075,885 35,645,249 16,305,686 4,272,539 62,314 (76,361,673) –
Deferred Tax Liability – – – – 1,890,459 – 1,890,459
Total Liabilities 103,928,382 43,335,225 28,985,818 7,301,224 9,656,025 (76,361,673) 116,845,001
Capital Expenditure 32,787,757 10,027,692 4,776,788 1,290,082 38,407 – 48,920,726
Depreciation and
Amortisation 10,695,396 2,647,182 1,878,171 313,409 63,121 – 15,597,279
For the year ended March 31, 2005

(Rs. ‘000)
Reportable Segments Mobile Broadband & Enterprise Enterprise Others Eliminations Total
Service Telephone Services Services
Services Carriers Corporate
Revenue
Billing Revenue/Sale of Goods
and Other Income 52,774,090 10,642,645 11,091,243 4,921,654 12,308 – 79,441,940
Inter Segment Revenue 794,866 664,544 7,596,963 48,576 367,329 (9,472,278) –
Total Revenue 53,568,956 11,307,189 18,688,206 4,970,230 379,637 (9,472,278) 79,441,940
Results
Segment Result, Profit/(Loss) 9,931,452 1,437,465 4,686,201 2,362,204 (315,376) – 18,101,946
before Finance Expenses 9,931,452 1,437,465 4,686,201 2,362,204 (315,376) – 18,101,946
Net Finance Expense/(Income) net – – – – 2,459,184 – 2,459,184
Net Profit/(Loss) 9,931,452 1,437,465 4,686,201 2,362,204 (2,774,560) – 15,642,762
Provision for Tax – – – – 86,072 – 86,072
Deferred Tax Expense – – – – 3,449,951 – 3,449,951
Net Profit/(Loss) after tax 9,931,452 1,437,465 4,686,201 2,362,204 (6,310,583) – 12,106,739
Other Information
Segment Assets 85,630,271 17,905,094 20,273,214 3,346,207 11,661,083 – 138,815,869
Inter Segement Assets 920,746 7,821,542 13,073,257 1,324,688 37,582,615 (60,722,848) –
Advance Tax
Total Assets 86,551,017 25,726,636 33,346,471 4,670,895 49,915,452 (60,722,848) 139,487,623
Segmental Liabilities 64,213,131 3,679,996 12,739,284 890,107 11,620,135 – 93,142,653
Capital Expenditure 24,408,708* 4,371,934 3,247,497 802,275 27,540 – 32,857,954
Depreciation 7,852,127 1,775,714 1,476,810 196,319 175,593 – 11,476,563
* Includes Rs.50,000 thousand for license fee paid towards Unified Access License.
136
Notes:
1. Others’ represents the unallocated revenue, profit/(loss), assets & liabilities of the Corporate office of the Company
2. Segment results represents Profit/(loss) before Finance expenses and tax.
3. Capital expenditure pertains to gross additions made to fixed assets during the year.
4. Segment Assets include Fixed Assets, Capital Work in progress, Pre-operative expenses pending allocation, Current
Assets and Miscellaneous Expenditure to the extent not written off.
5. Segment Liabilities include Secured and Unsecured loans, current liabilities and provisions.
6. Inter segment assets/liabilities represent the inter segment account balances.
7. Inter segment revenue excludes the provision of telephone services free of cost among Group Companies. Other
Inter segment revenues are accounted for at market prices. These transactions have been eliminated in consolidation.
8. The accounting policies used to derive reportable segment results are consistent with those described in the
“Significant Accounting Policies” note to the financial statements.
9. The Company has revised its estimation for Site Restoration Cost, resulting in a higher charge of depreciation by
Rs. 43,310 thousand in Mobile services and Rs. Nil in Broadband and Telephone service, Long Distance, Enterprise
Services and Others, decrease in Fixed assets and Provisions by Rs. 337,367 thousand in Mobile Services and Rs.
Nil in Broadband and Telephone services, Long Distance, Enterprise Services and Others with corresponding
impact on profit for the year and net assets of the Company.
10. During the year the Company has changed the name of its long distance and Enterprises Services segment to
Enterprise Services Carrier and Enterprise Services Corporate respectively.
Information about Geographical Segment – Secondary
The Company has operations within India as well as with entities located in other countries. The information relating to
the Geographical segments in respect of operations within India, which is the only reportable segment, the remaining
portion being attributable to others, is presented below:
(Rs. ‘000)
Particulars As at As at
March 31, 2006 March 31, 2005
Segment Revenue from external customers based on geographical

location of customers (including Other Income)
Within India 102,396,639 71,888,881
Others 10,509,154 7,553,059
112,905,793 79,441,940
Carrying amount of Segment Assets by geographical location
Within India * 184,038,121 135,553,034
Others 6,262,464 3,934,589
190,300,585 139,487,623
Cost incurred during the year to acquire segment assets by
geographical location
Within India 45,718,253 32,151,849
Others 3,202,473 706,105
48,920,726 32,857,954
Notes:
1. ‘Others’ represents the unallocated revenue, assets and acquisition of segment assets of the Company.
2. Assets include Fixed Assets, Capital work in progress, Investments, Current Assets, Deferred Tax Asset and
Miscellaneous Expenditure to the extent not written off.
3. Cost incurred to acquire segment assets pertain to gross additions made to Fixed Assets during the year.
137
28. Related Party Disclosures:
In accordance with the requirements of Accounting Standards (AS) -18 on Related Party Disclosures, the names of the
related parties where control exists and/or with whom transactions have taken place during the year and description of
relationships, as identified and certified by the management are:
Key Management Personnel :
Sunil Bharti Mittal
Rajan Bharti Mittal
Akhil Gupta
Manoj Kohli
Other Related Parties
Name of the Related Party Relationship
Bharti Comtel Limited Subsidiary Company
Bharti Aquanet Limited Subsidiary Company
Bharti Hexacom limited Subsidiary Company
Bharti Broadband Limited Subsidiary Company
Satcom Broadband Equipment Limited Subsidiary Company
Singapore Telecommunications Limited Entity having Significant Influence
Bharti Telesoft Limited Entity where Key Management Personnel exercises significant influence
Bharti Teletech Limited Entity where Key Management Personnel exercises significant influence
Bharti Telesoft International Limited Entity where Key Management Personnel exercises significant influence
Teletech Services (India) Limited Entity where Key Management Personnel exercises significant influence
Mulberry Projects Private Limited Entity where Key Management Personnel exercises significant influence
Bharti Foundation Entity where Key Management Personnel exercises significant influence
Bharti Tele-Ventures Employees’ Trust Entity where Key Management Personnel exercises significant influence
Forum I Aviation Limited Joint Venture
Bridge Mobile Pte Limited Joint Venture
138
139
Related Party Transaction for 2005–06
(Rs.’000)
Bharti Bharti Bharti Satcom Bharti Singapore Forum l Bridge Bharti Bharti Bharti Teletech Mulberry Bharti Bharti Manoj
Nature of Hexacom Aquanet Broad- Broad- Comtel Telecomm- Aviation Mobile Telesoft Teletech Telesoft Services (I) Projects Founda- Tele- Kolhi
Transaction Limited Limited band band Limited unication Limited Pte Limited Limited Inter- Limited Pvt. tion ventures
Limited Equip- Limited Ltd. national Limited Employee’s
ment Limited Welfare
Limited Trust
Purchase of
Fixed assets (6,902) – – – – – – – (1,555) (303,750) – – – – – –
Sale of Fixed Assets 10,118 – – – – – – – – – – – – – – –
Rendering of Services 310,255 107 – – 64,379 1,426,840 – – – 13 – – – – – –
Receiving of Services (220,906) (30,601) – – – (894,333) (3,775) (9,630) (13,103) (316,667) (22,049) (67,592) (10,938) – – –
Funds transferred/
Includes expenses
incurred on behalf
of others 508,844 503 627,598 8,510 247,770 – 5,800 – 618 15,451 – – – – – –
Funds received/
Includes expenses
incurred on behalf
of company (165,704) (28,896) (333,997) (9,500) (160,516) – – – – (26) – – – – – –
Employee Related
Transaction incurred
on behalf of others 6,546 643 37,608 – – – – – – 108 – – – – – –
Employee Related
Transaction incurred
on behalf of company (4,027) (3) – – – – – – – – – – – – – –
Salary – – – – – – – – – – – – – – – 18,181
Donation – – – – – – – – – – – – – 56,855 – –
Amount received
on exercise of
ESOP options – – – – – – – – – – – – – – (59,732) –
Closing Balance 380,681 (3,599) 470,106 (975) 388,534 318,373 2,025 (2,970) 245,944 (38,513) (4,842) – 7,920 – 215,533
Unsecured Loan – (1,406) – – – – – – – – – – – – – –
Creditors – (2,193) – (975) (58,989) – – (2,970) – (38,513) (4,842) – – – – –
Loan and Advances 317,533 – 412,331 – 447,523 – 2,025 – – – – – 7,920 – 215,533 –
Debtors 63,148 – 57,775 – – 318,373 – – 245,944 – – – – – – –
Closing Balance 380,681 (3,599) 470,106 (975) 388,534 318,373 2,025 (2,970) 245,944 (38,513) (4,842) – 7,920 – 215,533 –
Notes:
1. The above excludes provision of telephone services free of cost among the Group Companies and free of cost use of Billing System of the Company by its subsidiaries.
2. Refer Note 20 on Schedule 23 for Managerial Remuneration paid to Key managerial personnel.
Related Party Transaction for 2004–05
(Rs.’000)
Bharti Bharti Bharti Satcom Bharti Singapore Bharti Bharti Bharti Bharti Bharti Mulberry Ambience Tulip Network
Nature of Hexacom Aquanet Broad- Broad- Comtel Telecomm- Enter- Telecom Telesoft Teletech Telesoft Projects Reality Projects i2i
Transaction Limited Limited band band Limited unication prises Limited** Limited Limited Inter- Private Private Private Limited*
Limited Equip- Limited Private national Limited Limited* Limited*
ment Limited* Limited
Limited
Purchase of Fixed assets (2,774) – – – – – – – – (2,982) (3,475) – – – (674,534)

Sale of Fixed Assets 27,208 – – – – – – – – – – – – – –
Rendering of Services 215,038 113 – – 784 1,326,818 – – 1,926 61 – – – – –
Receiving of Services (85,951) (46,992) – – (11,426) (267,882) – – (1,425) (368,216) (107,722) (6,835) (23,360) (2,929) (67,591)
Funds transferred/Includes expenses
incurred on behalf of others 29,422 76,168 231,520 15 144,714 – – – 36 103,044 – 7,920 – 828 –
Funds received/Includes expenses
incurred on behalf of company (32,965) (33,911) (92,624) – (173,039) – – – (689) (5,179) (8) – – – –
Employee Related Transaction
incurred on behalf of others 299 771 – – – – 247 360 – – – – – – –
Employee Related Transaction
incurred on behalf of company – (554) – – – – (247) (360) – – (13) – – – –
Closing Balance 31,226 (6,287) 138,896 15 236,901 54,941 – – 4,258 (26,129) (24,466) 7,920 95,625 4,113 –
Unsecured Loan – (3,660) – – – – – – – – – – – – –

Creditors – (2,627) – – – – – – – (26,129) (24,466) – – – –
Loan and Advances 23,435 – 129,905 – 182,718 – – – 2,450 – – 7,920 95,625 4,113 –
Debtors 7,791 – 8,991 15 54,183 54,941 – – 1,808 – – – – – –
Closing Balance 31,226 (6,287) 138,896 15 236,901 54,941 – – 4,258 (26,129) (24,466) 7,920 95,625 4,113 –
* Entity where Key Management Personnel exercises significant influence in the year 2004-05.
** Entity having significant influence in the year 2004-05.
Notes:
1. The above excludes provision of telephone services free of cost among the Group Companies and free of cost use of Billing System of the Company by its wholly owned subsidiary.
2. Refer Note 20 on Schedule 23 for Managerial Remuneration paid to Key managerial personnel.
140
29. Leases
a) Operating lease - As a Lessee
The lease rentals charged during the year for cancelable/non-cancellable leases relating to rent of building premises
and cell sites as per the agreements and maximum obligation on long-term non-cancellable operating leases are as
follows:

March 31, 2006 March 31, 2005
(Rs.’000s) (Rs.’000s)
Lease Rentals 2,074,848 1,227,643

Obligations on non-cancellable leases:
Not later than one year 30,560 2,445
Later than one year and not later than five years 146,663 58,362
Total 177,223 60,807
b) Operating Lease – As a Lessor

i) The Company has entered into a non–cancellable lease arrangement to provide approximately 100,000 Fiber
pair kilometers of dark fiber on Indefeasible Right of Use (IRU) basis for a period of 15 years. The lease rental
receivable proportionate to actual kilometers accepted by the customer is credited to the Profit and Loss
Account on a straight – line basis over the lease term. Due to the nature of the transaction, it is not possible to
compute gross carrying amount, depreciation for the year and accumulated depreciation of the asset given on
operating lease as at March 31, 2006 and accordingly, disclosures required by AS 19 is not provided.
ii) The future minimum lease payments receivable are:

March 31, 2006 March 31, 2005
(Rs.’000s) (Rs.’000s)

Later than one year and not later than five years 1,126,936 1,120,000
Later than five year 2,300,829 2,567,699
Total 3,709,499 3,967,699
c) Finance Lease – As a Lessee

During the year the Company has taken certain vehicles on Finance lease. The reconciliation between the total of
minimum lease payments as at March 31, 2006 and their present value is as follows:
Minimum Future Finance Present

Lease Charges Value
Payments
(Rs. ‘000) (Rs. ‘000) (Rs. ‘000)
Not later than one year 375 6 369

Later than one year but not later than five years 156 1 155
Total 531 7 524
As at March 31, 2005

Not later than one year 1,681 96 1,585
Later than one year but not later than five years 1,442 32 1,410
3,123 128 2,995
141
d) Exchange of IRU’s
The Company has also entered into a non-cancellable operating lease to take approximately 922.37 kilometers 2
pair of dark fiber pairs against consideration in cash and exchange of approximately 246.75 kilometers 2 pair of dark
fiber pairs and bandwidth on IRU basis for a period of 15 years. Due to the nature of the transaction, it is not possible
to compute gross carrying amount, depreciation for the year and accumulated depreciation of the asset given on
operating lease as at March 31, 2006 and accordingly, disclosures required by AS 19 is not provided.
e) The Company entered into a composite IT outsourcing agreement, whereby the vendor supplied fixed assets and IT
related services to the Company. Based on the risks and rewards incident to the ownership, the fixed assets received
are accounted for as a finance lease transaction. Accordingly, the asset and liability are recorded at the fair value of
the leased assets at the inception. These assets are depreciated over their useful lives as in the case of the Company’s
own assets.
Since the entire amount payable to the vendor towards the supply of fixed assets during the year is accrued, there
are no minimum lease payments outstanding as at the year-end in relation to these assets and accordingly, other
disclosures as per AS 19 are not applicable.
30. Earnings per share (Basic and Diluted):
As at As at
March 31, 2006 March 31,2005
Basic and Diluted Earnings per Share :
Nominal value of equity shares (Rs.) 10/- 10/-
Profit attributable to equity shareholders (Rs.’000) (A) 20,120,794 12,106,739
Weighted average number of equity shares outstanding
during the year (B) 1,881,838,518 1,853,366,767
Basic earnings per Share (Rs.) (A/B) 10.6921 6.5323
Dilutive effect on profit (Rs.’000) (C )* 4,080 75,652
Profit attributable to equity shareholders for computing Diluted
EPS (Rs.’000) (D)=(A+C) 20,124,874 12,182,391
Dilutive effect on weighted average number of equity shares
outstanding during the year (E)* 15,822,704 37,018,694
Weighted Average number of Equity shares and Equity Equivalent
shares for computing Diluted EPS (F)=(B+E) 1,897,661,222 1,890,385,461
Diluted earnings per share (Rs.) (D/F) 10.6051 6.4444
* Diluted effect on weighted average number of equity shares and profit attributable is on account of Foreign
Currency Convertible Bonds and Optionally Convertible Redeemable Debentures. Refer Notes 10 and 11 above.
31. a) The breakup of net Deferred Tax Asset/(Liability) as on March 31, 2005 is as follows:
(In Rs.’000)
As at As at
March 31, 2006 March 31, 2005
Deferred Tax Assets/(Liabilities) arising from:
(i) Provision for doubtful debts/advances charged in the financial 807,343 544,843
statements but allowed as deduction under the Income Tax Act
in future years (to the extent considered realisable)
(ii) Unabsorbed depreciation allowance and business loss carried – 1,137,463
forward (to the extent considered realizable, on the basis of
estimated future profitability)
(iii) Depreciation claimed as deduction under the Income tax Act but (2,646,398) (2,508,144)
chargeable in the financial statements in future years.
(iv) Other expenses claimed as deduction under the Income Tax Act but
chargeable in the financial statements in future years (Net) (51,404) (183,173)
Net Deferred Tax Asset/(Liability) (1,890,459) (1,009,011)
The Tax impact for the above purpose has been arrived at by applying a tax rate of 33.66% being the prevailing tax
rate for Indian companies under the Income Tax Act, 1961.
142
32. Employee stock compensation
(i) Pursuant to the shareholders’ resolutions dated February 27, 2001 and September 25, 2001, the Company has
introduced the “Bharti Tele-Ventures Employees’ Stock Option Plan” (hereinafter called “the Old Scheme”) under
which the Company decided to grant, from time to time, options to the employees of the Company and its
subsidiaries. The grant of options to the employees under the ESOP Scheme is on the basis of their performance and
other eligibility criteria.
(ii) On August 31, 2001 and September 28, 2001, the Company issued a total of 1,440,000 equity shares at a price of
Rs. 565 per equity share to the Trust. The Company issued bonus shares in the ratio of 10 equity shares for every one
equity share held as of September 30, 2001, as a result of which the total number of shares allotted to the trust
increased to 15,840,000 equity shares.
(iii) Pursuant to the shareholders’ further resolution dated September 6, 2005, the Company announced a new Employee
Stock Option Scheme (hereinafter called “the New Scheme”) under which the maximum quantum of options was
determined at 9,367,276 options to be granted to employees from time to time on the basis of their performance
and other eligibility criteria.
(iv) All above options are planned to be settled in equity at the time of exercise and have maximum period of 7 years
from the date of respective grants. The plans existing during the year are as follows:
a) 2001 Plan under the Old Scheme

The options under this plan have an exercise price of Rs. 22.50 per share and vest on a graded basis as follows:
Vesting period from the grant date Vesting schedule
For options with a vesting On completion of 12 months 20%

period of 36 months: On completion of 24 months 30%
On completion of 36 months 50%
b) 2004 Plan under the Old Scheme

The options under this plan have an exercise price of Rs. 70 per share and vest on a graded basis as follows:

c) Super-pot Plan under the Old Scheme

The options under this plan have an exercise price of Rs. Nil per share and vest on a graded basis as follows:

143
d) 2005 Plan under the New Scheme
The options under this plan have an exercise price in the range of Rs. 221 to Rs. 366 per share and vest on a
graded basis from the effective date of grant as follows:

(v) The Information concerning stock options granted, exercised, forfeited and outstanding at the year-end is as
follows:
As of March 31, 2006

Options Weighted Weighted
(Shares in average average
thousands) exercise price remaining
(Rs.) contractual
life (years)
2001 Plan
Outstanding at beginning of year 2,321 22.50
Granted – –
Exercised 2,024 22.50
Cancelled or expired 27 22.50
Outstanding at the year end 270 22.50 2.94
Exercisable at end of year 270 22.50
2004 Plan
Outstanding at beginning of year 2,134 70.00
Granted – –
Exercised 203 70.00
Cancelled or expired 271 –
Outstanding at the year end 1,660 70.00 4.83
Exercisable at end of year 266 70.00
Superpot Plan
Outstanding at beginning of year – –
Granted 71 –
Exercised 14 –
Cancelled or expired 5 –
Outstanding at the year end 52 – 5.25
Exercisable at end of year 6 –
Weighted average fair value of options granted during the year 71 139.40
2005 Plan
Outstanding at beginning of year – –
Granted 2,589 238.03
Exercised – –
Cancelled or expired – –
Exercisable at end of year – –
Weighted average fair value of options granted during the year 2,589 191.86
144
(vi) The fair value of the options granted during the year under the Super-pot Plan and the New Scheme is estimated on
the date of grant using the Black-Scholes model with the following assumptions.
Superpot Scheme Scheme 2005
Risk Free Interest Rates 4.59% p.a. to 5.30% p.a. 6.65% p.a. to 7.33% p.a.
Expected Life 12 to 36 months 48 to 66 months
Expected Volatility 55.15% 44.48% to 45.87%
Expected Dividend 0.00% 0.00%
Expected volatility is determined by taking into account the closing prices of stock listed on Bombay Stock Exchange
from February 18, 2002 i.e. the date of the initial public offer (IPO).
(vii) The balance of deferred stock compensation as on March 31, 2006 is Rs. 388,149 thousand (March 31, 2005
Rs. 13,370 thousand) and total employee compensation cost recognized for the year then ended is Rs. 127,067
thousand (March 31, 2005 Rs. 47,128 thousand).
33. a) During the year there have been seven instances of employee frauds reported across five circles of the Company.
These frauds are in the nature of extending favours to third parties. The amounts of these cases are not presently
quantifiable. The management has taken appropriate action against these employees.
b) During the year there was an instance of financial misstatement at one of the circles of the Company, estimated at
approximately Rs. 125,721 thousand, which have been appropriately adjusted in the financial statements. The
Company has taken appropriate action against the circle management.
34. The Company has undertaken to provide financial support, to it’s subsidiaries – Bharti Comtel Limited and Satcom
Broadband Equipment Limited.
35. Previous Year figures have been regrouped or reclassified, wherever necessary, to conform to current year classifications.
145
Balance Sheet Abstract and Company’s General Business Profile
I. Registration Details
Registration No. 7 0 6 0 9 State Code 5 5
Balance Sheet Date 3 1 - 0 3 - 0 6

Date Month Year
II. Capital raised during the year (Amount in thousands)
Public Issue Rights Issue
N I L N I L
Bonus Issue Private Placement
N I L 4 0 5 1 2 5
III. Position of mobilisation and deployment of funds (Amount in thousands)

Total Liabilities Total Assets
1 2 3 3 0 8 9 5 1 1 2 3 3 0 8 9 5 1
Sources of funds Paid up Capital Reserves and Surplus
1 8 9 3 8 7 9 3 5 4 3 9 5 5 3 1
Secured Loans Unsecured Loans

2 8 6 3 3 7 0 7 1 9 3 2 9 2 0 1
Application of funds Net Fixed Assets Investments
1 5 3 4 8 1 2 6 9 7 1 9 6 9 8 1
Net Current Assets Miscellaneous Expenditure
(3 7 4 4 8 6 9 9) 7 9 4 0 0
IV. Performance of the Company (Amount in thousands)

Turnover Total Expenditure
1 1 2 9 0 5 7 9 3 9 0 0 4 7 8 3 7
Profit/(Loss) Before Tax Profit/(Loss) After Tax
2 2 8 5 7 9 5 6 2 0 1 2 0 7 9 4
Earning per Share in Rs. Dividend Rate
1 0 . 6 9 N I L
V. Generic names of three principal products/services of the Company (as per monetary terms)
Item Code No. (ITC Code) NO T A P P L I C A B L E
Product Description BASIC AND CELLULAR TELEPHONE SERVICES, BROAD-

BAND & LONG DISTANCE COMMUNICATION SERVICES
On behalf of the Board

SUNIL BHARTI MITTAL AKHIL GUPTA
Chairman & Managing Director Joint Managing Director

Place : New Delhi Intergration)
146
Section 212
STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT 1956,

RELATING TO SUBSIDIARY COMPANIES
1. Name of Subsidiary Bharti Bharti Bharti Satcom

Aquanet Hexacom Comtel Broadband
Limited Limited Limited Equipment
Limited
2. Financial Year of the Subsidiary ended on : 31-03-2006 31-03-2006 31-03-2006 31-03-2006
3. Shares of the Subsidiary held by the company
on the above dates:
(a) Nos. 1,275,000 122,751,980 100,000 24,859,200
(b) Face Value Rs. 10/- Rs. 10/- Rs. 10/- Rs. 10/-
(c) Extent of Holding 51% 68.5% 100% 100%
4. Net aggregate amount of profit / losses of the
Subsidiary for the above financial year so far as
they concern members of the Company (Rs.)
(a) Dealt with the accounts of the Company
for the year ended 31-03-2006 Nil Nil Nil Nil
(b) Not dealt with in the Accounts of the Company
for the year ended 31-03-2006 (Rs. in Thousands) 5,624 567,879 (80,048) 4,320
5. Net aggregate amount of profits / (losses) for the
previous financial years of the Subsidiary, since it
became a Subsidiary so far as they concern the
members of the Company (Rs.)
(a) Dealt with in the Accounts of the Company
for previous financial years Nil Nil Nil Nil
(b) Not dealt with in the Accounts of the Company
for previous financial years (Rs. in Thousands) 17,584 322,581 (23,707) (9,097)
On behalf of the Board

SUNIL BHARTI MITTAL AKHIL GUPTA
Chairman & Managing Director Joint Managing Director

147
Consolidated Financial Statements with Auditors’ Report
Report of the Auditors to the Board of Directors of

Bharti Airtel Limited (Formerly Bharti Tele-Ventures Limited) on the Consolidated
Financial Statements of Bharti Airtel Limited and its Subsidiaries
1. We have audited the attached consolidated Balance basis of separate audit of financial statements of Bharti
Sheet of Bharti Airtel Limited (Formerly Bharti Tele- Airtel Limited and its subsidiaries included in the
Ventures Limited) and its subsidiaries as at March 31, consolidated financial statements.
2006, the consolidated Profit and Loss Account for the
year ended on that date annexed thereto and the 4. On the basis of the information and explanations given
consolidated Cash Flow Statement for the year ended to us, and on consideration of the separate audit reports
on that date, which we have signed under reference to of individual audited financial statements of Bharti Airtel
this report. These consolidated financial statements are Limited and its aforesaid subsidiaries, in our opinion,
the responsibility of the Company’s management. Our consolidated financial statements give a true and fair
responsibility is to express an opinion on these view in conformity with the accounting principles
consolidated financial statements based on our audit. generally accepted in India:
2. We conducted our audit in accordance with auditing (i) in the case of the consolidated Balance Sheet, of the
standards generally accepted in India. Those Standards consolidated state of affairs of Bharti Airtel Limited and
require that we plan and perform the audit to obtain its subsidiaries as at March 31, 2006;
reasonable assurance about whether the consolidated
financial statements are prepared, in all material respects, (ii) in the case of the consolidated Profit and Loss Account,
in accordance with an identified financial reporting of the consolidated results of operations of Bharti Airtel
framework and are free of material misstatement. An Limited and its subsidiaries for the year ended on that
audit includes examining, on a test basis, evidence date; and
supporting the amounts and disclosures in the
consolidated financial statements. An audit also includes (iii) in the case of the consolidated Cash Flow Statement, of
assessing the accounting principles used and significant the consolidated cash flows of Bharti Airtel Limited and
estimates made by management, as well as evaluating its subsidiaries for the year ended on that date.
the overall consolidated financial statement
presentation. We believe that our audit provides a
reasonable basis for our opinion.
U. RAJEEV
3. We report that the consolidated financial statements Partner
have been prepared by the Company in accordance
with the requirements of Accounting Standard 21 For and on behalf of
‘Consolidated Financial Statements’ issued by the Place: New Delhi PRICE WATERHOUSE
Institute of Chartered Accountants of India and on the Date: April 28, 2006 Chartered Accountants
148
Consolidated Balance Sheet as at March 31, 2006
Schedule As at As at
(Rs. ’000) (Rs. ’000)
SOURCES OF FUNDS
Shareholders’ Funds
Share Capital 1 18,938,793 18,560,889
Employee Stock Option Outstanding 505,961 –
Less: Deferred Stock Compensation 384,701 121,260 –
Reserves and Surplus 2 54,563,810 34,639,403
Loan Funds
Secured Loans 3 28,399,081 39,619,760
Unsecured Loans 4 19,329,267 10,386,242
Deferred Tax Liability (Net)
(Refer Note 14 on Schedule 22, Note 25 on Schedule 23 1,948,431 1,011,019
and Note 2 on Schedule 22)
Minority Interest 1,091,048 924,569
124,391,690 105,141,882
APPLICATION OF FUNDS
Fixed Assets
Gross Block 5 190,488,165 140,627,322
Less: Depreciation 52,302,210 36,802,292
Net Block 138,185,955 103,825,030
Capital Work-in-Progress 24,364,837 10,166,556
162,550,792 113,991,586
Pre-operative Expenditure Pending Allocation 6 – –
162,550,792 113,991,586
Investments 7 2,479,545 4,780,749
Current Assets, Loans and Advances
Inventories 8 381,320 544,835
Sundry Debtors 9 11,140,089 7,414,710
Cash and Bank Balances 10 3,510,627 4,098,042
Other Current Assets, Loans and Advances 11 15,089,432 10,819,812
30,121,468 22,877,399
Less: Current Liabilities and Provisions 12
Current Liabilities 68,399,949 43,760,812
Provisions 2,439,565 1,185,269
70,839,514 44,946,081
Net Current Assets (40,718,046) (22,068,682)
Miscellaneous Expenditure
(to the extent not written off or adjusted) 13 79,399 583,483
Profit and Loss Account – 7,854,746
124,391,690 105,141,882
This is the Balance Sheet referred to The Schedules referred to above form an integral part of the Balance Sheet.
PRICE WATERHOUSE
149
Consolidated Profit and Loss Account
for the year ended March 31, 2006
Schedule For the year ended For the year ended

(Rs. ’000) (Rs. ’000)
INCOME
Service Revenue 115,392,605 80,076,607
Sale of Goods 1,248,248 1,046,428
Other Income 14 614,240 434,810
117,255,093 81,557,845
EXPENDITURE
Access Charges 21,795,091 16,893,080
Network Operating 15 12,125,988 7,102,625
Cost of Sales of Goods 16 1,146,560 1,026,989
Personnel 17 8,005,395 5,170,882
Sales and Marketing 18 8,335,924 6,442,162
Administrative and Others 19 12,459,623 6,474,627
63,868,581 43,110,365
Profit including other income and before Licence Fee,
Licence fee and Spectrum charges (revenue share) 11,136,540 7,789,494
Profit including Other Income and before Finance Expenses/
(Income) (Net), Depreciation, Amortisation, Pre-operative
Expenditure, Charity and Donation and Taxation 42,249,972 30,657,986
Finance Expenses (Net) 20 2,244,107 2,439,179
Depreciation 14,819,199 10,441,487
Amortisation 21 1,599,575 1,440,296
Pre-operative Expenditure written off 29,668 473,912
Charity and Donation 102,534 31,139
Profit Before Tax 23,454,889 15,831,973
Tax Expenses /(Credit)
– Current 1,773,852 130,861
– Deferred 937,413 3,464,514
– Fringe Benefit Tax 197,593 –
Profit After Tax 20,546,031 12,236,598
Minority Interest (Refer Note 11 on Schedule 23 and
Note 2 on Schedule 22) 266,545 120,857
Profit for the year 20,279,486 12,115,741
Transferred (from)/to Debenture Redemption Reserve (2,307,348) 2,478,854
22,586,834 9,636,887
Loss brought forward (7,854,746) (6,747,934)
Adjustments under the schemes of amalgamation during the year – (10,742,998)
Profit for pre-acquisition period for 1% stake of BHL acquired – (701)
Profit/ (Loss) carried forward to the Balance Sheet 14,732,088 (7,854,746)
Earnings per share in Rs. (Basic) 10.776 6.528
Earnings per share in Rs. (Diluted) 10.689 6.440
This is the Profit and Loss Account referred to The Schedules referred to above form an integral part of the
in our report of even date. Profit and Loss Account.
PRICE WATERHOUSE
150
Consolidated Cash Flow Statement
for the year ended March 31, 2006
(Rs. ’000)
March 31, 2006 March 31, 2005
A. Cash flow from operating activities:
Net profit / (loss) before tax 23,454,889 15,831,973
Adjustments for:
Depreciation 14,819,199 10,444,026
Interest Expense 2,385,639 3,178,002
Interest Income (201,627) (102,576)
(Profit)/Loss on Fixed Assets sold (24,607) 9,583
(Profit)/Loss on sale of Investments (108,940) (400,180)
ESOP Expenditure written off 127,067 47,128
Amortisation of Goodwill 268,325 231,145
Pre-operative Expenditure Written off 410 –
Provision for Deferred Bonus 73,622 –
Licence fee written off 1,204,183 1,162,023
Debts / Advances Written off 1,317,725 208,233
Provision for Bad and Doubtful Debts/Advances (Net of write back) 2,620,280 1,598,136
Liability no longer required written back (147,681) (226,356)
Provision for Gratuity and Leave Encashment 270,530 65,964
Provision for Inventory for obsolete/Damaged stock 78,796 9,420
Unrealized Foreign Exchange (gain) /loss 154,246 (28,822)
Provision for Warranty (4,567) 1,829
Gain from swap arrangements (45,307) (211,415)
Provision for Wealth Tax 15 (1,257)
Inventory Written Off 9,014 11,267
Operating profit before working capital changes 46,251,211 31,828,123
Adjustments for changes in working capital :

– (Increase)/Decrease in Sundry Debtors (5,748,529) (3,250,277)
– (Increase)/Decrease in Other Receivables (5,885,376) (2,920,453)
– (Increase)/Decrease in Inventories 75,705 (224,025)
– Increase/(Decrease) in Trade and Other Payables 16,312,918 11,077,687
Cash generated from operations 51,005,929 36,511,055
Taxes (Paid)/Received (2,306,611) (1,413,212)
Net cash from operating activities 48,699,318 35,097,843
B. Cash flow from Investing activities:

Adjustments for changes in :
Purchase of fixed assets (55,343,408) (27,734,476)
Proceeds from Sale of fixed assets 118,777 518,342
Net Proceeds from Investments 71,943,399 104,444,000
Purchase of Investments (69,826,973) (105,435,006)
Licence fee paid for new circles – (50,000)
Interest Received (Revenue) 201,627 66,339
Amount paid for acquisition of subsidiaries/joint ventures (121,997) (753,487)
Net cash used in investing activities (53,028,575) (28,944,288)
151
(Rs. ’000)
March 31, 2006 March 31, 2005
C. Cash flow from financing activities:

Proceeds from long term borrowings
Receipts 23,725,487 7,508,781
Payments (26,818,595) (7,670,432)
FCCB issue expenses – (96,861)
Proceeds from short term borrowings
Net movement in cash credit facilities and short term loans 8,891,080 (671,111)
Interest Paid (2,179,787) (3,157,001)
Realised Gain from swap arrangements 80,107 211,415
Net cash used in financing activities 3,698,292 (3,875,209)
Net Increase/(Decrease) in Cash and Cash Equivalents (630,965) 2,278,346

Opening Cash and Cash Equivalents 4,098,042 1,354,194
Cash and Cash Equivalents on consolidation of Joint Ventures 43,550 465,502
Cash and cash equivalents as at March 31, 2006 3,510,627 4,098,042
Cash and cash equivalents comprise:

Cash and Cheques in hand 861,581 742,500
Balance with Scheduled Banks 2,649,046 3,355,542
Notes :
1. Figures in brackets indicate cash outgo.
2. Previous year figures have been regrouped and recast wherever necessary to conform to the current year classification.
3. Cash and cash equivalents includes Rs.230,294 thousands pledged with various authorities (Previous year Rs.227,730
thousands) which are not available for use by the Company.
This is the Cash Flow Statement referred to

PRICE WATERHOUSE
152
Schedules Annexed to and forming part of Accounts
As at As at
(Rs. ’000) (Rs. ’000)
SCHEDULE : 1
SHARE CAPITAL
Authorised
2,500,000,000 (Previous year 2,500,000,000)
Equity Shares of Rs.10 each 25,000,000 25,000,000
Issued, Subscribed and Paid up
1,893,879,304 Equity Shares of Rs.10 each fully paid up 18,938,793 18,533,668
(Previous year 1,853,366,767 Equity Shares of Rs.10 each)
[Refer Note (a), (b) and (c) below]
Capital Suspense Account
[Refer Note (d) below] – 27,221
Notes:
a) Of the above 1,516,390,970 Equity Shares
(Previous year 1,516,390,970) issued as fully paid up bonus
shares out of Share Premium Account.
b) Of the above shares 20,088,445 (Previous year Nil) shares are
allotted as fully paid up upon the conversion of OCRD without
payment being received in cash. [Refer Note 12 on Schedule 23]
c) Of the above shares 17,701,967 (Previous year Nil) shares are
allotted as fully paid up upon the conversion of FCCBs.
[Refer Note 14 on Schedule 23]
d) Of the above shares 2,722,125 (Previous year 2,722,125) shares
are allotted as fully paid up under the scheme of amalgamation
without payments being received in cash.
18,938,793 18,560,889
SCHEDULE : 2
RESERVES AND SURPLUS
Share Premium
Opening balance 31,254,879 29,706,859
Adjustment under the scheme of amalgamation – 1,548,020
Additions during the year 7,499,667 –
38,754,546 31,254,879
Revaluation Reserve 21,284 21,284
Debentures Redemption Reserve
Opening balance 3,363,240 884,386
Transfer from / (to) Profit and Loss Account during the year (2,307,348) 2,478,854
1,055,892 3,363,240
Profit and Loss Account 14,732,088 –
54,563,810 34,639,403
153
As at As at
(Rs. ’000) (Rs. ’000)
SCHEDULE : 3
SECURED LOANS
Debentures 2,882,500 4,672,857
Loans and Advances from Banks :
– Term Loans 675,000 3,578,245
– Cash Credit 15,373 21,000
Other Loans and Advances :
– Term Loans 24,809,897 31,333,530
– Vehicle Loans 16,311 14,128
28,399,081 39,619,760
* Note : Amount repayable within one year 3,417,929 6,036,731
SCHEDULE : 4
UNSECURED LOANS
Short Term Loans and Advances
From Banks 18,426,182 1,606,142
From Others – 3,750,000
From Others 903,085 5,030,100
19,329,267 10,386,242
Note: Amount repayable within one year 18,426,182 5,356,141
154
155
SCHEDULE 5 :
FIXED ASSETS
(Refer Note 3, 4, 5, 10, 13, 16 and 17 on Schedule 22 and Note 10, 24 on Schedule 23)
(Rs.’000)
Gross Block Value Depreciation/Amortisation Net Block
As at Additions Sale/ As at As at For the Sale/ As at As at As at

PARTICULARS April 01, during Adjustment March 31, April 01, year Adjustment March 31, March 31, March 31,
2005 the year during 2006 2005 during 2006 2006 2005
the year the year
INTANGIBLE ASSETS
Goodwill 3,158,345 26,581 – 3,184,926 231,145 268,325 – 499,470 2,685,456 2,927,200
Software 83,993 – – 83,993 52,059 19,870 – 71,929 12,064 31,934
Bandwidth 2,042,997 305,749 15,027 2,333,719 209,700 184,142 15,027 378,815 1,954,904 1,833,297
Licence 22,219,000 – – 22,219,000 6,278,383 1,204,183 – 7,482,566 14,736,434 15,940,617
TANGIBLE ASSETS
Leasehold Land 53,039 10,885 – 63,924 3,267 568 – 3,835 60,089 49,772
Freehold Land 463,708 63,424 8,400 518,732 – – – – 518,732 463,708
Building 1,517,618 172,453 71,379 1,618,692 322,509 81,658 6,671 397,496 1,221,196 1,195,109
Leasehold Improvements 712,877 415,313 – 1,128,190 236,678 118,790 – 355,468 772,722 476,199
Plant and Machinery 101,289,884 47,886,250 1,620,721 147,555,413 24,053,750 11,998,111 674,419 35,377,442 112,177,971 77,236,134
Computers 7,840,382 2,365,818 70,737 10,135,463 4,628,997 2,170,765 55,946 6,743,816 3,391,647 3,211,385
Office Equipment 727,923 249,868 11,919 965,872 470,532 141,460 11,176 600,816 365,056 257,391
Furniture & Fixture 431,343 156,286 22,876 564,753 269,296 86,899 22,876 333,319 231,434 162,047
Vehicle 79,965 40,887 11,612 109,240 44,018 17,017 6,084 54,951 54,289 35,947
Vehicle on Finance Lease 6,248 – – 6,248 1,958 329 – 2,287 3,961 4,290
TOTAL 140,627,322 51,693,514 1,832,671 190,488,165 36,802,292 16,292,117 792,199 52,302,210 138,185,955 103,825,030
Capital Work-in-Progress 24,364,837 10,166,556
GRAND TOTAL 140,627,322 51,693,514 1,832,671 190,488,165 36,802,292 16,292,117 792,199 52,302,210 162,550,792 113,991,586
Previous Year 112,191,647 37,501,641 12,322,861 140,627,322 26,114,752 11,837,196 2,627,179 36,802,292
Notes:
1. Capital Work In Progress includes:
a) Capital advances of Rs.1,102,966 thousand (Previous year Rs.560,700 thousand)
b) Borrowing cost of Rs.Nil (Previous year Rs.11,912 thousand)
2. Addition to fixed assets during the year include:
(a) Rs. 193,117 thousand of Loss (Previous year loss of Rs. 13,297 thousand) on account of fluctuations in foreign exchange rates.
(b) Borrowing costs capitalised Rs. 31,132 thousand (Previous year Rs.13,207 thousand).
3. Leasehold land of Rs. 955 thousand (Previous year Rs. 955 thousand) represents land acquired on lease cum sale basis from Karnataka Industrial Areas Development Board.
4. Capital Work-in-Progress as on March 31, 2006 is net of Rs. 93,312 thousand being loss (Previous year includes Rs. 146,465 thousand gain) on account of fluctuation in Exchange rate.
5. Additions during the year includes Rs. 12,567 thousand (Previous year Rs. 140,418 thousand) allocated from pre–operative expenditure. (Refer Schedule 6).
6. Freehold Land and Building includes Rs. 26,468 thousand (Previous year Rs. 26,468 thousand) and Rs. 71,477 thousand (Previous year Rs. 71,477 thousand) respectively, in respect of which
registration of title in favour of group is pending.
7. Building includes building on leasehold land Rs. 17,288 thousand (Previous year Rs.17,288 thousand).
8. The remaining amortisation period of licence fees as at March 31, 2006 ranges between 8 to 19 years for Unified Access Service Licence and 14 to 16 years for Long Distance.
9. Capital Work-in-Progress includes goods in transit Rs. 4,378,002 thousand (Previous year Rs. 980,618 thousand)
10. Computers include Gross Block of assets capitalised during the year under finance lease Rs.3,466,160 thousand (Previous year Rs.1,908,724 thousand) and depreciation charged for the
year Rs.1,593,770 thousand (Previous year Rs. 534,880 thousand), Net book value Rs. 1,849,568 thousand.
11. The remaining amortisation period of Goodwill as at March 31, 2006 ranges between 9 to 11 years.
As at As at
(Rs. ’000) (Rs. ’000)
SCHEDULE : 6
PRE-OPERATIVE EXPENDITURE PENDING ALLOCATION
(Refer note 12 on Schedule 22 and Note 2 on Schedule 23)
Opening Balance as on April 1, 2005 – 5,891
Additions during the period
Network Operating Expenses
Insurance Premium – 1,007
Repairs and Maintenance – Plant and Machinery 174 26,388
Power and Fuel 275 19,454
Rent 4,263 25,999
Leased Line 1,853 12,914
Others – 29,343
Sub-Total 6,565 115,105
Personnel Expenses
Salaries 18,889 163,882
Contribution to Provident and Other Funds 970 5,172
Recruitment and Training 951 30,668
Sub-Total 22,804 210,853
Selling Expenses
Advertisement and Marketing 86 97,590
Other Selling and Distribution 4,395 15,663
Sub-Total 4,481 113,253
Administrative and Other Expenses

Legal and Professional 936 19,916
Rates and Taxes – 12,232
Power and Fuel 293 5,083
Rent 2,911 14,136
Repairs and Maintenance charges – Building 9 175
– Plant and Machinery 7 2,100
– Others 32 13,730
Insurance 10 590
Collection and Recovery – 1,245
Sub-Total 7,701 161,837
Finance Expenses
Other Bank/Finance Charges 274 4,784
Depreciation 410 2,541
Other Income – (66)
Total 42,235 614,330
Less : Allocated to Fixed Assets 12,567 140,418

Less :Transferred to Profit and Loss Account 29,668 473,912
Total amount carried to Balance Sheet – –
156
As at As at
(Rs. ’000) (Rs. ’000)
SCHEDULE : 7
INVESTMENTS
Current
Other than Trade (Quoted)
– Government securities 475,421 1,035,840
– Mutual Funds and Bonds 2,002,324 3,699,346
2,477,745 4,735,186
Short term Unquoted
– Government securities 1,800 1,800
Long Term Invesmtent Trade (Unquoted)
Investment in Joint Ventures
Bridge Mobile PTE Limited: 1,000,000 (Previous year 1,000,000) – 43,763
Equity shares of USD 1 each fully paid up.
Total Investments 2,479,545 4,780,749
Aggregate Market Value of Quoted Investments 2,483,474 4,751,649

Aggregate Value of Quoted Investments 2,477,745 4,735,186
Aggregate Value of Unquoted Investments 1,800 45,563
SCHEDULE : 8
INVENTORY
Stock-In-Trade* 381,320 544,835
381,320 544,835
* Includes Goods in Transit Rs. 11,377 thousand.
(Previous year Rs. 5,250 thousand)
* Net of Provision for diminution in value Rs. 88,216 thousand
(Previous year Rs. 9,420 thousand)
SCHEDULE : 9
SUNDRY DEBTORS
Debtors :
Debts outstanding for a period exceeding six months
– Considered good 1,402,327 875,356
– Considered doubtful 3,605,826 3,401,209
Less : Provision (3,605,826) 1,402,327 (3,401,209) 875,356
Other debts
– Considered good 9,737,762 6,539,354
– Considered doubtful 1,372,351 929,681
Less: Provision (1,372,351) 9,737,762 (929,681) 6,539,354
11,140,089 7,414,710
157
As at As at
(Rs. ’000) (Rs. ’000)
SCHEDULE : 10
CASH AND BANK BALANCES
Cash in Hand 93,353 42,905
Cheques in Hand 768,228 699,595
Balances with Scheduled Banks
– in Current Account 1,288,859 1,052,501
– in Fixed Deposits * 1,355,360 2,301,597
– in Deposit Account as Margin Money 4,827 1,444
3,510,627 4,098,042
* [Includes Rs. 230,294 thousand pledged with various authorities
(Previous year Rs. 227,730 thousand )]
SCHEDULE : 11
OTHER CURRENT ASSETS, LOANS AND ADVANCES
Interest Accrued on Investment 53,645 39,075
Advances recoverable in cash or in kind or for
value to be received
Considered good 9,913,091 7,034,068
Considered doubtful 2,385,834 412,841
Less : Provision (2,385,834) 9,913,091 (412,841) 7,034,068
Accrued Billing Revenue 3,632,421 2,793,372
Advance to ESOP Trust 195,604 251,217
Advance Tax [(Net of provision for tax Rs.3,243,619 thousand
(Previous year Rs.1,469,767 thousand)] 1,031,629 696,463
Balances with Custom Authorities 263,042 5,617
15,089,432 10,819,812
158
As at As at
(Rs. ’000) (Rs. ’000)
SCHEDULE : 12
CURRENT LIABILITIES AND PROVISIONS
Current Liabilities
Sundry Creditors :
Total outstanding dues of Small
Scale Industrial Undertaking (s)* 6,613 4,345
Total outstanding dues of creditors other than
Small Scale Industrial Undertakings (s) 47,934,313 47,940,926 30,643,404 30,647,749
Advance Billing and Prepaid Card Revenue 14,743,243 7,923,904
Premium on Redemption of Bonds 106,996 595,564
Interest accrued but not due on loans 519,709 403,957
Other Liabilities 1,580,064 804,828
Advance Received from customers 638,521 722,622
Security Deposits (Refer Note 15 on Schedule 23) 2,870,490 2,662,188
68,399,949 43,760,812
* This information has been compiled in respect of parties
to the extent they could be identified as Small Scale and
ancillary undertakings on the basis of information available
with the Company.
Provisions
(Refer Note 11, 20 and 21 on Schedule 22 and Note 20 on Schedule 23)
Gratuity 249,283 82,166
Leave Encashment 237,925 134,512
Provision for Warranty 2,633 7,200
Provision for Fringe Benefit Tax [Net of amounts paid
Rs.10,246 thousand (Previous year Nil)] 9,519 –
Other Provisions 1,940,041 961,242
2,439,565 1,185,269
70,839,514 44,946,081
SCHEDULE : 13
MISCELLANEOUS EXPENDITURE
(To the extent not written off or adjusted)
Deferred Employee Compensation Expense
Add: Adjustments during the year (4,119) (14,675)
Less: Amortisation for the year # 5,806 47,128
3,447 13,372
# Net of write back
Premium on Redemption of Debentures
Add : Addition/(Write back) during the year (404,059) 693,027
Less : Amortisation for the year 90,100 122,916
75,952 570,111
79,399 583,483
159
(Rs. ’000) (Rs. ’000)
SCHEDULE : 14
OTHER INCOME
Liabilities/Provisions no longer required written back 147,681 226,356
Profit on Sale of Assets (Net) 24,607 –
614,240 434,810
SCHEDULE : 15
NETWORK OPERATING EXPENDITURE
Interconnect charges and PSTN Rentals 685,577 648,324
Installation 55,909 32,104
Power and Fuel 3,155,832 1,501,552
Rent 1,730,610 970,362
Insurance 33,881 36,661
– Plant and Machinery 2,801,756 1,785,873
– Others 773,797 343,004
Leased Line and Gateway charges 805,776 827,876
Other Network Operating Expenses 1,672,532 815,179
12,125,988 7,102,625
SCHEDULE : 16
COST OF SALES
Opening Stock 544,835 316,827
Add : Stock acquired under acquisition – 12,003
Add : Purchases 1,243,519 1,523,148
Less : Simcard Utilisation 194,348 252,144
Less : Internal issues/capitalised 66,126 28,010
Less : Closing Stock * 381,320 544,835
1,146,560 1,026,989
* Net of obsolete inventory written off Rs. 9,014
thousand (Previous year Rs. 11,267 thousand)
* Net of provision for diminution in value Rs.78,796
thousand (Previous year Rs.9,420 thousand)
SCHEDULE : 17
PERSONNEL EXPENDITURE
Salaries, Wages and Bonus* 6,791,852 4,407,602
Contribution to Provident and Other Funds 369,714 194,587
Recruitment and Training 424,100 285,426
8,005,395 5,170,882
* Excluding amortisation of Deferred ESOP Cost
160
(Rs. ’000) (Rs. ’000)
SCHEDULE : 18
SALES AND MARKETING EXPENDITURE
Advertisement and Marketing 4,113,547 3,357,372
Sales Commission and Incentive 2,820,676 1,937,470
Simcard Utilisation 194,348 252,144
Other Selling and Distribution 1,207,353 895,176
8,335,924 6,442,162
SCHEDULE : 19
ADMINISTRATIVE AND OTHER EXPENDITURE
Legal and Professional 4,015,033 1,583,943
Rates and Taxes 48,497 32,077
Power and Fuel 274,492 174,344
Rent 425,087 237,761
– Plant and Machinery 21,345 12,072
– Others 223,916 58,555
Insurance 15,395 13,007
Bad debts written off 1,317,725 208,233
Provision for doubtful debts/advances 2,727,945 1,709,271 –
Less : Provision for doubtful debts written back 107,665 2,620,280 111,135 1,598,136
Provision for diminution in value of inventory 78,796 9,420
Collection and Recovery 1,355,166 921,456
Loss on sale of assets (net) – 9,583
Miscellaneous 1,206,937 1,070,003
12,459,623 6,474,627
161
(Rs. ’000) (Rs. ’000)
SCHEDULE : 20
FINANCE EXPENSES
Interest :
– On Term Loan 1,540,231 1,850,763
– On Debentures 261,299 664,911
– On Others 61,281 144,385
Amortisation of Premium on Redemption of Foreign
Currency Convertible Bonds 90,100 122,916
Other Finance Charges 432,728 395,027
2,385,639 3,178,002
Less : Income
Profit on sale of Current Investments 108,940 400,180
Interest Income :
– from Current Investments (Other than Trade)
(Gross of TDS Rs.20,956 thousand; Previous year Rs. 4,763 thousand) 178,043 89,412
– from loans and advances etc. 23,584 10,453
Exchange fluctuation Gain /(Loss) (Net) (214,342) 24,652
Gains from swap arrangements 45,307 211,415
Other Finance Income – 2,711
141,532 738,823
2,244,107 2,439,179
SCHEDULE : 21
AMORTISATION
(Refer Note 3, 5 and 15 on Schedule 22 and Note 10 on Schedule 23)
Licence Fee 1,204,183 1,162,023
Personnel - Deferred ESOP Cost 127,067 47,128
Goodwill 268,325 231,145
1,599,575 1,440,296
162
SCHEDULE : 22
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies adopted by Bharti Airtel Limited (formerly Bharti Tele-Ventures Limited) ('BAL' or 'the
Company') and its subsidiaries (hereinafter referred to as the “Group”) in respect of these Consolidated Financial Statements,
are set out below.
1. BASIS OF PREPARATION
These consolidated financial statements are prepared under the historical cost convention on the accrual basis of
accounting and reporting requirements of Accounting Standard 21 ‘Consolidated Financial Statements’ issued by the
Institute of Chartered Accountants of India, consolidated as per Para 2 below for the year ended March 31, 2006.
2. PRINCIPLES OF CONSOLIDATION
These accounts represent consolidated accounts of the Company and its majority owned subsidiaries and joint ventures,
all incorporated in India except Bridge Mobile Pte Limited which is incorporated in Singapore , as follows:
Entity Principal Service Relationship Shareholding

as at
March 31, 2006
Bharti Aquanet Limited (‘BAQL’) Submarine Cable landing station Subsidiary 51%
Bharti Comtel Limited (‘BCTL’) Administrative support to

BAL and VSAT equipment trading Subsidiary 100%
Bharti Hexacom Limited (‘BHL’) Cellular Mobile Telephony Subsidiary 68.5%

Services (CMTS)
Bharti Broadband Limited (BBL) Enterprise Services Subsidiary 100%
Satcom Broadband Equipment Enterprise Services and VSAT Subsidiary 100%

Limited (SBEL) Equipment trading
Bridge Mobile Pte Limited Mobile Services Joint Venture 12.5%
Forum I Aviation Limited Buy, sell, lease, hire, maintain, Joint Venture 16.64%
operate and run Aircrafts /
Helicopters etc.
On April 16, 2005, 49% of the share capital of Satcom Broadband Equipment Limited (SBEL) was transferred to BAL
making SBEL a 100% subsidiary of the Company.
For the purpose of this consolidation, jointly owned entities, where BAL or its subsidiaries own directly or indirectly more
than 50 percent of voting rights of a Company’s share capital have been accounted for as subsidiaries.
The Group’s interests in jointly controlled entities are accounted for by proportionate consolidation.
The Group combines its share of the joint ventures’ individual income and expenses, assets and liabilities and cash flows
on a line-by-line basis with similar items in the Group’s financial statements.
The equity and net income attributable to minority shareholders’ interest are shown separately in the Balance Sheets and
Profit and Loss Account, respectively.
All inter-Company balances have been eliminated in the consolidation. The consolidated financial statements are prepared
using uniform accounting policies for like transactions and other events in similar circumstances.
3. GOODWILL
Goodwill is stated as an excess of the purchase consideration over BAL’s interest in the net identifiable assets acquired.
Goodwill is carried at cost less accumulated amortisation and is amortised on a straight-line basis over the remaining
period of the service licence of the acquired Company from the date of acquisition.
163
4. FIXED ASSETS
Fixed Assets are stated at cost of acquisition and subsequent improvements thereto, including taxes, duties, 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 outflow of resources will be required to settle
the obligation and a reliable estimate of the amount can be made.
The fixed component of license fee payable by the Group 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 Group
for acquiring new licences (post NTP-99) (basic, cellular, national long distance and international long distance services)
has been capitalised as an asset.
5. DEPRECIATION / AMORTISATION
Depreciation is provided on straight-line method at the rates and in the manner prescribed in Schedule XIV to the
Companies Act, 1956 on all assets, except for the following on which depreciation is provided on straight line method
to write off the cost of the fixed assets over their estimated useful lives:
Rate of Depreciation per annum
Building 5%
Office Equipment 20.00% / 50.00%
Computer / Software 33.33%
Vehicles 20.00%
Furniture and Fixtures 20.00%
Plant & Machinery 6.67% / 10.00% / 50.00%
Leasehold Land Period of lease
Leasehold Improvements Period of lease or 10 years whichever is less
Assets individually costing Rs. 5 thousand or less are fully depreciated in the month of purchase. Software up to Rs. 500
thousand is written off in the year of purchase.
Bandwidth capacity is depreciated over the period of the agreement subject to a maximum of 15 years.
Additional depreciation is provided as appropriate, towards diminution in value of assets
The Entry Fee capitalised is being amortised equally over the period of the license and the one time licence fee is being
amortised equally over the balance period of licence from the date of commencement of commercial operations.
The site restoration cost obligation capitalised is being depreciated over the period of the useful life of the related asset.
6. REVENUE RECOGNITION AND RECEIVABLES
Mobile Services: Service revenue is recognised on completion of provision of services. Service revenue includes income
on roaming commission and access charges passed on to other operators, and is net of discounts and waivers. Revenue,
net of discount, from sale of goods is recognised on transfer of all significant risks and rewards to the customer and when
no significant uncertainty exists regarding realisation of the consideration.
On introduction of new prepaid products, processing fees on recharge coupon is being recognised over the estimated
customer relationship period or coupon validity period, as applicable.
Telephone and Broadband and Long Distance Services: Service revenue is recognised on completion of provision of
services. Revenue on account of bandwidth service is recognised on time proportion basis in accordance with the related
contracts. Billing Revenue includes access charges passed on to other operators, and is net of discounts and waivers.
Revenue, net of discount, from sale of goods is recognised on transfer of all significant risks and rewards to the customer
and when no significant uncertainty exists regarding realisation of consideration.
164
Enterprise Services: Revenue, net of discount, from sale of goods is recognised on transfer of all significant risks and
rewards to the customer and when no significant uncertainty exists regarding realisation of consideration.
Service Revenues includes 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.
Revenue from prepaid dialup packs is recognised on the actual usage basis and is net of sales return and discount.
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:
Provision for doubtful debts is made for dues outstanding for more than 90 days in case of active subscriber, and dues
from customers who have been deactivated other than those covered by security deposit, or in specific cases where
management is of the view that the amounts are recoverable.
Provision for doubtful debts, in case of Other Telecom Operators on account of their ILD traffic and on account of
Interconnect Usage Charges (IUC), is made for dues outstanding more than 120 days from the date of billing after
considering any amount payable to that operator pertaining to the same period or in specific case when management is
of the view that the amount is recoverable.
Accrued Billing revenue:
Accrued billing revenue represent revenues recognised 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.
7. INVENTORIES
Inventories for mobile operations are valued at the lower of cost and net realisable value. Cost is determined on First in
First out basis.
Inventories for telephone and broadband and long distance services and enterprise Services are valued at the lower of
cost and net realisable value. Cost is determined on a weighted average basis.
8. INVESTMENT
Current Investments are valued at lower of cost and fair market value.
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.
9. LICENSE FEES – REVENUE SHARE
With effect from August 1, 1999 the variable Licence fee computed at prescribed rates of revenue share is being charged
to the Profit and Loss Account in the year in which the related revenue arises. Revenue for this purpose comprises
adjusted gross revenue as per the license agreement of the license area to which the licence pertains
10. TRANSLATION OF ITEMS IN FOREIGN CURRENCY
Transactions in Foreign Currency are recorded at the exchange rate prevailing at the date of the transaction. Monetary
items are restated at year-end foreign exchange rates. Resultant exchange differences arising on payment or conversion
of liabilities are recognised as income or expense in the year in which they arise except in respect of liabilities for
acquisition of fixed assets, where such exchange difference is adjusted in the carrying cost of the respective fixed asset.
Gain or loss on forward exchange contract, not in the nature of hedge, is calculated based on difference between
forward rate available at the reporting date for the remaining maturity of the contract (or forward rate last used to
measure gain or loss) and the contracted forward rate which is recognised as income or expense for the year.
165
The premium or discount arising at the inception of other forward exchange contracts is amortised as income or expense
over the life of the contract and exchange difference on such contracts is recognised as income or expense in the
reporting period in which the exchange rate change, except, in respect of liabilities incurred for acquiring fixed assets, in
which case, such difference is adjusted in carrying amount of the respective fixed assets.
11. RETIREMENT BENEFITS
Contribution to provident fund is made at predetermined rates and is charged to Profit and Loss Account. The Group has
provided for the liability at year end on account of unavailed earned leave as per the actuarial valuation as per the
Projected Unit Credit Method.
The Group either contributes to a Group Gratuity Scheme with Life Insurance Corporation of India to cover the gratuity
liability for its employees, such contribution being charged to the Profit and Loss Account for the year or provides the
gratuity liability in its books. Liability at the year-end in both cases is determined on the basis of actuarial valuation, based
on the Projected Unit Credit Method.
12. PRE-OPERATIVE EXPENDITURE
Expenditure incurred by the Group from the date of acquisition of license for a new circle, up to the date of commencement
of commercial operations of the circle, not directly attributable to fixed assets are charged to the Profit and Loss account
in the year in which such expenditure is incurred.
13. LEASES
a) As Lessee – Operating Lease
Lease Rentals in respect of assets taken on ‘Operating Lease’ are charged to the Profit and Loss Account on a straight-
line basis over the lease term.
b) As Lessee – Finance 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 leased property or the present value of the related lease
payments or where applicable, estimated fair value of such assets.
Amortization 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 finance charge using the internal rate of return method.
The finance charge is allocated over the lease term so as to produce a constant periodic rate of interest on the
remaining balance of liability.
c) As Lessor – Operating Lease
Lease income in respect of ‘Operating Lease’ is recognised in the Profit and Loss Account on a straight-line basis over
the lease term.
d) As Lessor – Finance Lease
Finance leases as a dealer lessor are recognised 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 reflecting a constant periodic rate of return on the net investment
of the lessor outstanding in respect of the lease.
e) Initial direct costs are expensed in the Profit and Loss Account at the inception of the lease.
14. TAXATION
Tax expense for the year, comprising current tax, deferred tax and Fringe Benefit Tax is included in determining the net
profit/ (loss) for the year.
Deferred tax assets are recognised for all deductible timing differences and carried forward to the extent there is reasonable
certainty that sufficient future taxable profit will be available against which such deferred tax assets can be realised.
Deferred tax is recognised only for such timing differences which reverse after tax holiday period. Deferred tax assets to
166
the extent they pertain to brought forward losses and unabsorbed depreciation, are recognised only to the extent that
there is virtual certainty of realisation, based on expected profitability in the future as estimated by the Company.
Deferred tax assets and liabilities are measured at the tax rates that have been enacted or substantively enacted by the
Balance Sheet date.
15. MISCELLANEOUS EXPENDITURE
a) Premium on redemption of debentures is recognised as an expense to the Profit and Loss Account over the period
of the related contract.
b) Employee Stock Option Plan (‘ESOP’) - The aggregate amount of liability on account of ESOP as ascertained at year-
end is being carried forward as Deferred Employee Compensation Benefit under Miscellaneous Expenditure to be
written off on a straight-line basis over the related vesting period of individual options.
16. BORROWING COST
Borrowing cost attributable to the acquisition or construction of a qualifying asset is capitalised as part of the cost of that
asset. Other borrowing costs are recognised as an expense in the period in which they are incurred.
17. IMPAIRMENT OF ASSETS
Assets that are subject to amortisation are reviewed 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 identifiable
cash flows (cash generating units).
18. SEGMENTAL REPORTING
a) Primary Segment:
The Group operates in four primary business segments viz. Broadband & Telephone Services, Mobile Services, Long
Distance Services and Enterprise Service.
b) Secondary Segment:
The Group has operations within India as well as with entities located in other countries. The operations in India
constitute the major part, which is the only reportable segment, the remaining portion being attributable to others.
19. EARNING PER SHARE
The earnings considered in ascertaining the Group’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 year.
The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity
shares.
20. WARRANTY
Provision for warranty is based on past experience and technical estimates.
21. PROVISIONS
Provisions are recognised 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.
22. EMPLOYEE STOCK OPTIONS OUTSTANDING
Employee Stock options outstanding are valued using Black Scholes option – pricing model and the fair value is recognised
as an expense over the period in which the options vest.
167
SCHEDULE : 23
NOTES TO ACCOUNTS
1. Bharti Airtel Limited (formerly Bharti Tele-Ventures Limited)(‘BAL’ or ‘the Company’) incorporated in India on July 7, 1995,
is a company promoted by Bharti Telecom Limited (‘BTL’), a company incorporated under the laws of India. BAL together
with its subsidiaries is referred to as ‘the Group’.
2. New Operations
On April 16, 2005, the Group acquired 49% shareholding in Satcom Broadband Equipment Limited (‘SBEL’) at a consideration
of Rs. 121,997 thousand making SBEL a 100% subsidiary of the Group.
Bharti Airtel Limited (formerly Bharti Tele-Ventures Limited) (BAL) and Bharti Hexacom Limited (BHL) have entered into
a Scheme of Arrangement for transfer pursuant to de-merger of North East Circle Undertaking from Bharti Hexacom
Limited to the Group effective April 1, 2005, which has been approved by the Board of Directors of BAL in their meeting
held on July 26, 2005 and July 27, 2005 and the Board of Directors of BHL in their meeting held on July 20, 2005. The
Group is in the process of filing the approved scheme in the High Court.
BAL has entered into a Scheme of Amalgamation of Satcom Broadband Equipment Limited (SBEL) and Bharti Broadband
Limited (BBL) with the Group effective October 1, 2005, which has been approved by the Board of Directors of the BAL
in their meeting held on July 26, 2005 and the Board of Directors of SBEL and BBL in their meetings held on July 16, 2005
and July 15, 2005 respectively. The Group is in the process of filing the approved scheme in the High Court.
Bharti Hexacom Limited has migrated its Cellular Mobile Telephone Licence to Unified Access Service Licence with effect
from April 10, 2006 in the telecom circle of Rajasthan.
3. Guarantees
Total Guarantees outstanding as at March 31, 2006 amounting to Rs. 9,362,505 thousand (March 31, 2005 Rs. 5,466,562
thousand) have been taken from the banks.
4. Contingent Liability
a) Claims against the Group not acknowledged as debt
(Rs.’000)
March 31, 2006 March 31, 2005
(i) Taxes, Duties and Other demands

(under adjudication / appeal / dispute)
– Sales Tax (see 4 b below) 104,709 5,373,072
– Service Tax (see 4 b below) 648,369 471,772
– Income Tax 288,115 309,842
– Excise Duty – 255,609
– Customs Duty (see 4 d below) 1,230,678 486,378
– Stamp Duty 529,343 539,267
– Entry Tax (see 4 e below) 801,120 231,516
– Municipal Taxes 529,171 13,782
– Access Charges / Port Charges 806,025 263,500
– DoT demands (see 4 c (vii) and 4 g below) 218,518 2,662,990
– Other miscellaneous demands 307,751 54,735
(ii) Claims under legal cases including arbitration matters 361,698 404,632
5,825,497 11,067,095
b) In a case involving the Uttar Pradesh Trade Tax Department and the DoT, the Supreme Court of India had ruled that a
telephone connection along with a telephone set provided by a company rendering basic services tantamount to a
“transfer of right to use the telephone system” and the rentals collected by DoT towards this right to use should suffer
sales tax. Subsequent to the passing of this order, the Cellular Operators as well as the basic operators agitated the same
issue before the Supreme Court by way of a Petition under Article 32 of the Constitution. The Hon’ble Supreme Court,
in spite of its own earlier judgement, admitted the Petitions and vide orders dated September 25, 2003 referred the
168
matter to a larger bench for determination of dispute on merits and further directed that in future there shall be no
coercion for recovery of any dues. Vide an order dated March 2, 2006, the larger bench of the Hon’ble Supreme Court,
while overruling its abovementioned judgement has held, inter alia, that provision of telecom services does not
involve any transfer of right to use the telephone system / network and that imposition of sales tax on any facilities
of telecom services is untenable in law. On Sim cards, the Court has held that depending upon the facts of the case,
(i) if sim card is not being sold, then the state cannot levy sales tax on sim card value as the same is exigible to service
tax; (ii) alternatively, if sim card is being sold, then centre cannot levy service tax on the sim card value as the same
is exigible to sales tax. Accordingly, the respective authorities are in the process of complying with the Supreme
Court order as above in respect of total amount disputed estimated as at March 31, 2006 in respect of sales tax of
Rs. 6,052,432 thousand (March 31, 2005 Rs. 4,297,037 thousand) and service tax of Rs. 257,574 thousand (March
31, 2005 Rs. 98,365 thousand).
c) Erstwhile Bharti Mobile Limited (‘BML’) was awarded license by the DoT to operate cellular services in the state of
Punjab in December 1995. On April 18, 1996, subject to certain conditions, the Group obtained the permission from
the DoT to operate the Punjab license through its wholly owned subsidiary, Evergrowth Telecom Limited (‘ETL’).
(i) In December 1996, DoT withdrew the permission dated April 18, 1996 . DoT, however, again reinstated the
permission on March 10, 1998 (the period from April 18, 1996 to March 10, 1998 has been hereinafter
referred to as ‘the black-out period’). On July 15, 1999 license was terminated due to alleged non-payment of
license fees, liquidated damages and related penal interest.
(ii) Subsequently in September 2001, BML received from the DoT, an offer for the restoration of the license subject
to the condition that BML pays all the dues (license fee, WPC charges, liquidated damages and related penal
interest) pending the resolution of dispute relating to the license fee for the blackout period. BML accordingly
paid Rs. 4,909,948 thousand as demanded by DoT subject to resolution of the dispute through arbitration.
Consequently the license was restored and an arbitrator appointed for the settlement of the dispute.
(iii) In the arbitration proceedings the order was not favourable to BML. BML subsequently filed objections to the
arbitrator’s award before the Delhi High Court. The Delhi High Court vide orders dated February 19, 2003 issued
notices to the DoT. It is pertinent to note that the issuance of notice means stay of the implementation of the
award. While the ultimate outcome of the matter cannot be predicted with certainty, BML had, in the accounts
for the year ended March 31, 2003, as a matter of conservative accounting, recognised Rs. 1,541,667 thousand
(including Rs. 280,000 thousand recoverable from ETL on account of encashment of bank guarantee) as
license fees in addition to Rs. 800,000 thousand recognised in the year ended March 31, 2002.
(iv) The management has also provided for Rs. 69,340 thousand pertaining to liquidated charges and WPC charges paid
in 2003-04 in accordance with the order of DoT in respect of restoration of Punjab license in the year 2002-03.
(v) In a case against DoT, TDSAT had earlier passed an order, directing DoT to refund the interest accrued on
delayed deposit of license fees, pre NTP 99, due to extension of the effective date of license period by six
months. DoT had filed an appeal against the said order before the Supreme Court, which in its judgement
dated March 4, 2003 upheld the contention of GSM operators.
(vi) In view of the non refund of the complete amount due pursuant to the Order dated March 4, 2003 of the
Hon’ble Supreme Court the COAI moved a clarification application of the Order dated March 4, 2003, before
the Hon’ble Supreme Court which was dismissed as withdrawn. COAI thereafter moved execution applications
in TDSAT which also stands disposed off. The COAI moved to the Supreme Court against the interpretation
advanced by the TDSAT in the execution proceedings. The Supreme Court has admitted the matter. The matter
will now come up for hearing in due course of time.
(vii) The Group received refund order of interest from the DoT in the circles of Andhra Pradesh and Karnataka
amounting to Rs. 770,334 thousand and had taken such amounts as an income to Profit and Loss Account
during the year 2002-03. The Group also received the interest refund order in the case of mobile operations in
Punjab on the same grounds amounting to Rs. 856,644 thousand, which was set off against the interest claim
of DoT amounting to Rs. 2,778,941 thousand in 2002-03. During the year ended March 31, 2005, the Group
received a further refund of Rs. 57,338 thousand. The balance amount of Rs. 1,864,959 thousand has been
169
provided in the books during the year ended March 31, 2006. Pending decision of the Delhi High Court, any
amount determined as due from the Group on account of interest etc. cannot be quantified till the matter is
sub-judice. Though the Group is of the view that it has a good arguable case, still, as a matter of conservative
accounting practice, it has now provided for the above-mentioned amount of Rs. 1,864,959 thousand.
d) The Customs Authorities, in some states, demanded Rs. 1,230,678 thousand (included in 4 (a) (i) above) (March 31,
2005 Rs. 486,378 thousand) on import of special software on the ground that this value forms part of the hardware
alongwith which the same has been imported. The view of the Group is that such imports should not suffer any
customs duty as such software is an operating software and exempt from any customs duty.
e) In certain states Entry Tax is levied on receipt of material from outside the state. This position has been challenged
by the Group in the respective states, on the grounds that the specific Entry Tax is ultravires the constitution,
classification issues have been raised whereby, in view of the Group, the material proposed to be taxed is not
covered under the specific category. The amount under dispute as at March 31, 2006 is Rs. 801,120 thousand
(included in 4 (a) (i) above) (March 31, 2005 Rs. 231,516)
f) BAL is currently in litigation with DSS Enterprises Private Limited (‘DSS’) (0.34 per cent equity interest in erstwhile
BCL) on various counts. This inter alia includes alleged claim for specific performance in respect of alleged agreements
to sell the equity interest of DSS in erstwhile Bharti Mobinet Limited. (BMNL) to BAL. The case filed by DSS to enforce
the sale of equity shares before the Delhi High Court was transferred to District Court. The suit filed by DSS was
dismissed in default by the Ltd. Additional District judge on the ground of non-prosecution. Subsequently, DSS filed
an application for restoration of the suit on which notices were issued to BAL and other defendants returnable on
August 22, 2006.
In respect of the same transaction, Crystal Technologies Private Limited, an intermediary, initiated arbitration
proceedings against the Group demanding Rs. 194,843 thousand (March 31, 2005 Rs. 194,843 thousand) regarding
termination of its appointment as a consultant to negotiate with DSS for the sale of DSS stake in erstwhile Bharti
Mobinet Limited to BAL. The next date of hearing is yet to be intimated by the Ld. Arbitrator.
g) During the current year the Group has received demands from DoT pertaining to Bharti Broadband Limited amounting
to Rs. 50,563 thousand against which an appeal has been filed before Hon’ble TDSAT (included in note 4(a) (i)
above). The erstwhile promoter of the Bharti Broadband Limited has undertaken to reimburse the Company in the
event of the claim being payable.
5. Export Obligation
BAQL, erstwhile BIL and erstwhile BCL have obtained licenses under the Export Promotion Credit Guarantee (‘EPCG’)
Scheme for importing capital goods at a concessional rate of customs duty against submission of bank guarantee and
bonds.
Under the terms of the respective schemes, these companies are required to export goods of FOB value equivalent to, or
more than, five times the CIF value of imports in respect of certain licenses and eight times the duty saved in respect of
licenses where export obligation has been refixed by the order of Director General Foreign Trade, Ministry of Finance, as
applicable.
Accordingly these Companies are now required to export goods of FOB value of at least Rs. 27,158,252 thousand (March
31, 2005 Rs. 24,312,530 thousand)
6. a) Estimated amount of contracts to be executed on capital account and not provided for (net of advances)
Rs. 42,954,081 thousand (March 31, 2005 Rs. 19,740,686 thousand).
b) Under the IT Outsourcing Agreement, the Group has commitments to pay Rs. 3,731,265 thousand (March 31, 2005
Rs. 5,988,619 thousand) during the non-cancellable period of the contract for three years ending on March 31,
2007, comprising finance lease and servicing charges.
7. During the current quarter, the Group has revised its estimations for recognition of site restoration cost and its depreciation
from fifteen years to ten years and has provided depreciation as per the revised estimate of useful life, resulting in a
decline in value of plant and machinery by Rs. 366,159 thousand and a higher charge of depreciation by Rs. 44,829
thousand with a consequential impact on profit for the year and net assets of the Group as at that date.
170
8. a) The Group has entered into a Joint Venture agreement dated November 3, 2004 with 7 other overseas mobile
operators to form a regional alliance called the Bridge Mobile Alliance incorporated in Singapore as Bridge Mobile
Pte Ltd. with initial equity to be equally held amongst the eight operators / shareholders. On March 31, 2005 the
Group invested USD-1,000 thousand in ordinary shares of USD 1 each in Bridge Mobile Pte Ltd. amounting to
Rs. 43,763 thousand.
b) The Group has entered into a Memorandum of Understanding dated July 8, 2005 with 5 other parties to form an
aircraft chartering company called the Forum I Aviation Limited incorporated in India with initial equity to be
equally held amongst the six members. During the period ended March 31, 2006 the Group has invested Rs. 34,950
thousand in ordinary shares of Forum I Aviation Limited.
c) Investment in Joint Ventures
Joint Venture Country of Business Ownership Interest
Bridge Mobile Pte Ltd. Singapore 12.50%
Forum I Aviation Ltd. India 16.64%
The following represent the group’s share of Assets and Liabilities, and income and results of the Joint Venture. They are
included in the balance sheet and profit and loss account statement.
As at As at
March 31, 2006 March 31, 2005
Amounts in respect of joint ventures - balance sheet

Reserve and Surplus (15,631) –
Fixed Assets, Net 9,190 –
Investments 2,526 –
Current Assest
Sundry Debtors 1,757 –
Cash and Bank 29,419 –
Loans and Advances 35,475 –
Current Liabilities and Provisions 14,439 –
Amounts in respect of Joint Ventures – Statement of Profit and Loss

Turnover 14,203 –
Expenses
Operating Expenses 11 –
Selling, General and Administration Expenses 25,161 –
Interest (Net) (1,344) –
Depreciation 1,353 –
Profit Before Tax (10,978) –
Provision for Tax 2 –
Profit After Tax (10,980) –
9. Vide a Supply contract and Construction and Maintenance Agreement executed on March 27, 2004, Alcatel
Submarine Networks of France and Fujitsu Ltd. of Japan provided the SEA-ME-WE-4 Cable Systems (broadly described
as a submarine cable system linking South East Asia and Europe, via the Indian Sub-Continent & Middle East) and
will also provide long-term technical support to a consortium of sixteen Telecom operators in various countries
including the Group whose share (8.051%) of the contract price is estimated to be USD 37,840 thousand
(March 31, 2005 USD 39,055 thousand).
171
10. Goodwill
The following is the detail of Goodwill in the consolidated financial statements of BAL as at March 31, 2006:
(Rs.’000)
Nature of Transaction As at As at
March 31, 2006 March 31, 2005
On Acquisition of :
68.5 per cent equity interest in BHL by BAL 3,056,346 3,056,346
100 per cent equity interest in SBEL by BAL 31,070 9,139
100 per cent equity interest in BBL by SBEL 92,860 92,860
Proportionate consolidation of Bridge Mobile Pte Ltd. 4,650 –
Total 3,184,926 3,158,345
11. Minority interest represents that part of the net results of operations and of the net assets of a subsidiary attributable to
interests which are not owned, directly or indirectly through subsidiary (ies) by BAL Minority interest as at the year-end is:
Name of Company As at As at
March 31, 2006 March 31, 2005
Bharti Aquanet Limited 49.00% 49.00%

Bharti Hexacom Limited 31.50% 31.50%
Satcom Broadband Equipment Limited – 49.00%
The amount attributable to the minority shareholders as the year-end is on account of:
(Rs.’000)
March 31, 2006 March 31, 2005
Share Capital 576,730 698,540

Share Premium 85,750 85,750
Share of Opening Reserve 162,023 19,422
Share of current year Profit/(Loss) 266,545 120,857
Total 1,091,048 924,569
12. The Group had allotted 37,500 Optionally Convertible Redeemable Debentures (‘OCRDs’) of Rs. 100,000 each aggregating
to Rs. 3,750,000 thousand that were optionally convertible into equity shares at an Agreed Price on a preferential basis
to the erstwhile shareholders of BHL (the sellers) as part of the consideration for 67.5% equity in Bharti Hexacom Limited
acquired during 2004-05. The tenor of the OCRDs was 364 days from and including the date of allotment. The OCRDs
were convertible solely and entirely at the option of the Seller and BAL was not entitled to convert the same into equity
shares unless the Sellers exercised their option to convert. If the Sellers chose not to convert all or part of the OCRDs, then
the outstanding OCRDs were to be redeemed at face value at the end of the tenor. BAL and the Sellers were to share any
upside in the BAL stock price, at the time of Conversion. The difference between the Relevant Price and the Agreed Price
was to be shared in the 60:40 ratio (BAL:Sellers) respectively at the time of conversion of the OCRDs. The upside was to
be adjusted by way of reducing the number of shares to be allotted on conversion. The Relevant Price would be the
average of the closing prices (as given in the Exchange Bhav Copy) of BAL shares quoted on NSE and BSE (both) during
the three trading days preceding the Notice Date or the end of the Tenor as applicable.
During the year ended March 31, 2006 the Group has issued 20,088,445 equity shares of Rs. 10/- each fully paid up to
M/s. Shyam Cellular Infrastructures Projects Limited upon conversion of Optionally Convertible Redeemable Debentures
(OCRDs) which is as follows:
(Rs. ‘000)
Date of Allotment No. of Shares Allotted Conversion Amount
April 24, 2005 5,424,479 1,012,609
May 10, 2005 14,538,078 2,713,881
June 9, 2005 125,888 23,500
172
13. As mentioned in Note 2 above the Group has acquired 49% shareholding in Satcom Broadband Equipment Limited on
April 16, 2005. SBEL has 100% shareholding in Bharti Broadband Limited. The details of net assets of consolidated SBEL
acquired and goodwill on the date of acquisition is set out below:
(Rs. ’000)
Net Assets acquired as at April 16, 2005 (A) 100,067

Consideration (including consideration for Bharti Broadband Limited paid by SBEL)
- Cash (B) 121,997
Goodwill on acquisition (B) - (A) 21,930
14. During the year ended March 31, 2005 the Group issued USD 115,000,000 Zero Coupon Convertible Bonds due 2009
(the “Bonds”). The Bonds are convertible at any time on or after June 12, 2004 (or such earlier date as is notified to the
holders of the Bonds by the Issuer) up to April 12, 2009 by holders into fully paid equity shares with full voting rights with
a par value of Rs. 10 each of the Issuer (“Shares”) at an initial Conversion Price (as defined in the “Terms and Conditions
of the Bonds”) of Rs. 233.17 per share with a fixed rate of exchange on conversion of Rs. 43.56 = USD 1.00. The
Conversion Price is subject to adjustment in certain circumstances.
The Bonds may be redeemed, in whole or in part, at the option of the Issuer at any time on or after May 12, 2007 and prior
to April 12, 2009, subject to satisfaction of certain conditions, at their “ Early Redemption Amount” (as defined in the
“Terms and Conditions of the Bonds”) at the date fixed for such redemption if the “Closing Price” (as defined in the
“Terms and Conditions of the Bonds”) of the Shares translated into U.S. dollars at the “prevailing rate” (as defined in the
“Terms and Conditions of the Bonds”) for each of 30 consecutive “Trading Days” (as defined in the “Terms and Conditions
of the Bonds”), the last of which occurs not more than five days prior to the date upon which notice of such redemption
is published, is greater than 120 per cent of the “Conversion Price” (as defined in the “Terms and Conditions of the
Bonds”) then in effect translated into U.S. dollars at the rate of Rs. 43.56 = USD 1.00.
The Bonds may also be redeemed in whole, and not in part, at any time at the option of the Issuer at their Early
Redemption Amount if less than 5 per cent in aggregate principal amount of the Bonds originally issued is outstanding.
The Bonds may also be redeemed in whole at any time at the option of the Issuer at their Early Redemption Amount in
the event of certain changes relating to taxation in India.
Unless previously converted, redeemed or purchased and cancelled, the Bonds will be redeemed in U.S. dollars on
May 12, 2009 at 111.84 per cent of their principal amount.
The Issuer will, at the option of any holder of any Bonds, repurchase at the Early Redemption Amount such Bonds at such
time as the Shares cease to be listed or admitted to trading on the NSE or upon the occurrence of a “Change of Control”
(as defined in the “Terms and Conditions of the Bonds”) in respect of the Issuer. These Bonds are listed in the Singapore
Exchange Securities Trading Limited (the “SGX-ST”).
The Group has during the period ended March 31, 2006 Converted Bonds equivalent to USD 94,756,000 into 17,701,967
equity shares of the Group at the option exercised by the bond holders which is as follows:
Date of Allotment No. of Shares Allotted FCCB Value (USD)

August 12, 2005 840,673 4,500,000
August 20, 2005 706,166 3,780,000
September 15, 2005 3,693,360 19,770,000
September 23, 2005 2,640,088 14,132,000
October 19, 2005 3,462,828 18,536,000
November 7, 2005 2,073,661 11,100,000
December 12, 2005 467,041 2,500,000
January 12, 2006 2,860,159 15,310,000
Feburary 2, 2006 453,588 2,428,000
March 9, 2006 504,403 2,700,000
Total 17,701,967 94,756,000
173
15. Rs. 2,870,490 thousand (March 31, 2005 2,662,188 thousand) included under Current Liabilities, represents refundable
security deposits received from subscribers on activation of connections granted thereto and are repayable on
disconnection, net of outstanding, if any. Sundry debtors are secured to the extent of the amount outstanding against
individual subscribers by way of Security Deposit received from them.
16. As at March 31, 2006 4,195,449 equity shares (March 31, 2005 6,436,266 equity shares) of the Group are held by Bharti
Tele-Ventures Employee’s Welfare Trust (“The Trust”), issued at the rate of Rs. 51.36 per equity share fully paid up.
17. Billing Revenue in the Profit and Loss Account is net of Rebates and Discounts Rs. 61,467 thousand (March 31, 2005
Rs. 1,920,154 thousand).
18. The Loans and Advances granted to associates are repayable on demand and repayments made during the year are as
mutually agreed.
19. Particulars of securities charged against secured loans taken by the Group are as follows :
Particulars Amount Security Charges

Outstanding
(Rs. ’000)
Debentures
10.55%, 5 Non-Convertible Redeemable 12,500
Debentures of Rs. 10,000 thousand
each repayment commencing
from December 2004
• First ranking pari passu charge on all
present and future tangible movable and
from December 2006
freehold immovable assets owned by the
11.45%, 5 Non-Convertible Redeemable 50,000 Company including plant and machinery
Debentures of Rs. 10,000 thousand office equipment, furniture and fixtures
each repayment commencing fittings, spares tools and accessories
from December 2009 vehicles.
• All rights, titles, interests in the accounts,
and monies deposited and investments
from December 2009
made there from and in project
7.25%, 200 Non-Convertible Redeemable 1,400,000 documents, book debts and insurance
Debentures of Rs. 10,000 thousand policies.
from October 2003
Debentures of Rs. 10,000
each repayable in May 2007
Debentures 2,882,500
174
Outstanding
(Rs. ’000)
Loans and Advances from Banks

Term Loan
Rupee Loan Rs. 400,000 thousand Repayable 100,000 • First ranking pari passu charge on all present
in 4 half yearly installments beginning and future tangible movable and freehold
March 2005 immovable assets owned by the Company
including plant and machinery office
Rupee Loan Rs.500,000 thousand Repayable 125,000 equipment, furniture and fixtures fittings,
in 4 half yearly installments beginning spares tools and accessories vehicles.
September 2005
• All rights, titles, interests in the accounts, and
Rupee Loan of Rs. 900,000 thousand 450,000 monies deposited and investments made
Repayable in 4 half yearly installments there from and in project documents, book
beginning July 2005 debts and insurance policies.
Term Loan 675,000

Cash Credit • Secured by hypothecation of all current assets
Cash Credit Rs. 50,000 thousand (BCTL) 15,373 both present and fututre, including book
debts, monies, receivables, claim bills and
contracts of the Company.
Cash Credit 15,373

Term loan from Financial Institution for 3,000,000
Rs. 3,000,000 thousand repayable in
11 quarterly installments commencing
from October 2006
Rupee Loan from financial institutions 1,500,000
Rs. 2500,000 thousand repayable in
10 half yearly installments beginning
March 2007
Foreign Currency Term Loan of USD 86,110 2,687,000
thousand repayable in 20 half yearly
installments beginning December 2002
installments beginning August 2003
installments beginning February 2004
Long Term Foreign Currency Loan of 1,438,500
USD 30,000 thousand repayable in
10 half yearly installments
beginning July 2006
Long Term Foreign Currency Loan of 384,774
USD 10,000 thousand repayable in 13 half
yearly installments beginning June 2005
175
Outstanding
(Rs. ’000)

Long Term Foreign Currency Loan of 1,673,408
Foreign Currency Term Loan of 765,000
yearly installments beginning May 2005
installments beginning September 2005
• First ranking pari passu charge on all present
and future tangible movable and freehold
immovable assets owned by the Company
installments beginning January 2006.
including plant and machinery office
Foreign Currency Term Loan of 2,333,000 equipment, furniture and fixtures fittings,
USD 52,125 thousand repayable in 20 half spares tools and accessories vehicles.
yearly installments beginning May 2006
• All rights, titles, interests in the accounts, and
Foreign Currency Term Loan of USD 48,310 2,155,000 monies deposited and investments made
thousand repayable in 20 half yearly there from and in project documents, book
installments beginning September 2006 debts and insurance policies.
Foreign Currency Term Loan of USD 5,000 219,700
installments beginning September 2005
installments beginning March 2006
installments beginning July 2006
installments beginning November 2006
Term Loan Total 24,809,897

Vehicle Loans From Banks 16,311 • Secured by Hypothecation of vehicles of the
Company.
Total 28,399,081
176
Note : Following shall be excluded from Securities as mentioned above:-
a) Intellectual properties of BAL.
b) Investment in subsidiaries of BAL.
c) Licenses issued by DoT to operate various telecom services.
20. a) The Group has introduced bonus plans aimed towards performance and retention of employees who are eligible
based on certain eligibility criterias. This provision will be utilised at the end of the period of the bonus plan on
payment to the eligible employees.
b) The movement of Provision made for Site Restoration Cost, leave encashment, deferred bonus plan and warranty
charges in accordance with AS-29 ‘Provisions, Contingent Liabilities and Contingent Assets’ issued by Institute of
Chartered Accountants of India, is given below:
i) Site Restoration Cost:
(Rs. ‘000)
March 31, 2006 March 31, 2005

Closing Balance 1,866,419 961,242
ii) Leave encashment:

(Rs. ‘000)
March 31, 2006 March 31, 2005

Less: Utilised during the year 50,734 40,833
iii) Deferred Bonus plan:

(Rs. ‘000)
March 31, 2006 March 31, 2005
Opening Balance – –
Addition during the year 73,622 –
Closing Balance 73,622 –
iv) Warranty Charges:

(Rs. ‘000)
March 31, 2006 March 31, 2005

Less: Utilised/Reversed during the year 7,298 600
177
21. Profit on sale of investments is net of loss on sale of investments Rs. 2,103 thousand (March 31, 2005 Rs. 6,732
thousand).
22. Information about Business Segments – Primary
For the year ended March 31, 2006 (Rs. ‘000)
Reportable Segments Broadband & Enterprises Enterprise

Mobile Telephone Services Services
Services Services Carriers Corporate Others Eliminations Total
Revenue
Billing Revenue/Sale of 81,660,647 14,369,149 14,369,560 6,857,577 (1,840) – 117,255,093

Goods and Other Income
Inter Segment Revenue 1,434,342 705,927 10,304,307 75,504 – (12,520,080) –
Total Revenue 83,094,989 15,075,076 24,673,867 6,933,081 (1,840) (12,520,080) 117,255,093
Results
Segment Result, Profit/(Loss) 16,853,850 605,793 7,794,046 1,761,538 (1,316,231) – 25,698,996
before Finance Expenses 16,853,850 605,793 7,794,046 1,761,538 (1,316,231) – 25,698,996
Net Finance Expense/

(Income) – – – – 2,244,107 – 2,244,107
Net Profit/(Loss) 16,853,850 605,793 7,794,046 1,761,538 (3,560,338) – 23,454,889
Provision for Tax – – – – 1,773,852 – 1,773,852
Fringe Benefit Tax – – – – 197,593 – 197,593
Deferred Tax Expense – – – – 937,413 – 937,413
Minority Share 261,141 – 5,404 – – – 266,545
Net Profit/(Loss) after tax 16,592,709 605,793 7,788,642 1,761,538 (6,469,196) – 20,279,486
Other Information
Segment Assets 126,674,072 30,348,910 25,883,831 7,805,110 3,487,652 – 194,199,575
Inter Segment Assets 2,115,780 10,705,203 19,061,109 4,077,043 41,044,678 (77,003,813) –
Advance Tax
(Net of provision for tax) – – – – 1,031,629 – 1,031,629
Total Assets 128,789,852 41,054,113 44,944,940 11,882,153 45,563,959 (77,003,813) 195,231,204
Minority Interest 974,893 – 116,155 – – – 1,091,048
Capital Expenditure 35,477,562 10,089,375 4,817,384 1,243,597 39,015 – 51,666,933
Depreciation
and amortisation 11,444,626 2,647,423 1,882,629 380,973 63,123 – 16,418,774
178
For the year ended March 31, 2005 (Rs. ‘000)
Reportable Segments Broadband & Enterprises Enterprise

Mobile Telephone Services Services
Services Services Carriers Corporate Others Eliminations Total
Revenue
Billing Revenue/Sale of 54,621,629 10,646,178 10,931,824 5,345,906 12,308 – 81,557,845
Goods and Other Income
Inter Segment Revenue 814,274 664,544 7,805,577 59,760 367,329 (9,711,484) –
Total Revenue 55,435,903 11,310,722 18,737,401 5,405,666 379,637 (9,711,484) 81,557,845
Results
Segment Result, Profit/(Loss) 10,384,665 1,441,987 4,716,022 2,284,148 (544,796) (10,874) 18,271,152
before Finance Expenses 10,384,665 1,441,987 4,716,022 2,284,148 (544,796) (10,874) 18,271,152
Net Finance Expense/ – – – – 2,439,179 – 2,439,179

(Income) net
Net Profit/(Loss) 10,384,665 1,441,987 4,716,022 2,284,148 (2,983,975) (10,874) 15,831,973

Provision for Tax – – – – 130,861 – 130,861
Deferred Tax Expense – – – – 3,464,514 – 3,464,514
Minority Share – – 6,891 (13,150) 127,116 – 120,857
Net Profit/(Loss) after tax 10,384,665 1,441,987 4,709,131 2,297,298 (6,706,466) (10,874) 12,115,741
Other Information
Segment Assets 89,213,406 18,270,396 20,388,847 3,519,715 10,155,264 (10,874) 141,536,754
Inter Segment Assets 921,566 7,560,446 13,094,937 1,884,957 37,582,942 (61,044,848) –
Advance Tax
Total Assets 90,134,972 25,830,842 33,483,784 5,404,672 48,434,669 (61,055,722) 142,233,217
Minority Interest – – – – 924,569 – 924,569
Deferred Tax Liabilities – – – – 1,011,019 – 1,011,019
Capital Expenditure 25,853,008 4,371,933 3,255,070 835,745 27,540 – 34,343,296
Depreciation and 8,126,044 1,917,452 1,397,218 161,512 405,014 – 12,007,240

Amortisation
Notes:
1. ‘Others’ represents the unallocated revenue, profit/(loss), assets and liabilities of the Group.
2. Segment results represents Profit/(loss) before Finance expenses and tax.
3. Capital expenditure pertains to gross additions made to fixed assets during the year excluding goodwill.
4. Segment Assets include Fixed Assets, Capital Work in progress, Pre-operative expenses pending allocation, Investments,
Current Assets and Miscellaneous Expenditure to the extent not written off.
5. Segment Liabilities include Secured and Unsecured loans and Current Liabilities and provisions.
6. Inter segment assets/liabilities represent the inter segment account balances.
7. Inter segment revenue excludes the provision of telephone services free of cost among Group Companies. Other Inter
segment revenues are accounted for at market prices. These transactions have been eliminated in consolidation.
179
8. The accounting policies used to derive reportable segment results are consistent with those described in the “Significant
Accounting Policies” note to the financial statements.
9. As explained in point number 8 above , the Group has revised its estimation for Site Restoration Cost, resulting in a higher
charge of depreciation by Rs. 44,829 thousand in Mobile services and Rs. Nil in Broadband and Telephone services, Long
Distance, Enterprise Services and Others, decrease in Fixed assets and Provisions by Rs. 366,159 thousand in Mobile
Services and Rs. Nil in Broadband and Telephone services, Long Distance, Enterprise Services and Others with corresponding
impact on profit for the year and net assets of the Group.
10. During the year the Group has changed the name of its long distance and Enterprises Services segment to Enterprise
Services Carrier and Enterprise Services Corporate respectively.
Information about Geographical Segment - Secondary
The Group has operations within India as well as with entities located in other countries. The information relating to the
Geographical segments in respect of operations within India, which is the only reportable segment, the remaining
portion being attributable to others, is presented below for the year ended March 31, 2006
(Rs.’000)
March 31, 2006 March 31, 2005
Segment Revenue from external customers based on

geographical location of customers (including Other Income)
Within India 106,714,546 73,974,580
Others 10,540,547 7,583,265
117,255,093 81,557,845
Carrying amount of Segment Assets by geographical location
Within India 188,965,061 138,260,058
Others 6,266,143 3,973,159
195,231,204 142,233,217
Cost incurred during the year to acquire segment assets by
geographical location
Within India 48,464,460 33,637,191
Others 3,202,473 706,105
51,666,933 34,343,296
Notes:
1. ‘Others’ represents the unallocated revenue, assets and acquisition of segment assets of the Group.
2. Assets include Fixed Assets, Capital work in progress, Investments, Current Assets, Deferred Tax Asset and Miscellaneous
Expenditure (to the extent not written off).
3. Cost incurred to acquire segment assets pertain to gross additions made to Fixed Assets during the year.
180
23. Related Party Disclosures:
In accordance with the requirements of Accounting Standards (AS) -18 on Related Party Disclosures, the names of the
related parties where control exists and/or with whom transactions have taken place during the year and description of
relationships, as identified and certified by the management are:
List of Related Parties:
Key Management Personnel:
Sunil Bharti Mittal
Rajan Bharti Mittal
Akhil Gupta
Manoj Kohli
Other Related Parties
Name of the Related Party Relationship
Singapore Telecommunications Limited Entity having Significant Influence
Bharti Telesoft Limited Entity where Key Management Personnel exercises

significant influence
Bharti Teletech Limited Entity where Key Management Personnel exercises

Bharti Telesoft International Limited Entity where Key Management Personnel exercises
Teletech Services (India) Limited Entity where Key Management Personnel exercises
Mulberry Projects Private Limited Entity where Key Management Personnel exercises
Bharti Foundation Entity where Key Management Personnel exercises

Bharti Tele-Ventures Employees’ Trust Entity where Key Management Personnel exercises
181
Related Party transaction for 2005-06
(Rs. ’000)
Singapore Bharti Bharti Teletech Bharti Mulberry Bharti Bharti Manoj

Nature of Transactions Telecommuni- Telesoft Teletech Services (I) Telesoft Projects Founda- Tele-Ventures Kohli
cations Limited Limited Limited International Pvt. Ltd. tion Employees’
Limited Limited Welfare Trust
Purchase of Fixed assets – (1,555) (303,750) – – – – –
Rendering of Services 1,426,840 – 13 – – – – – –
Receiving of Services (894,333) (13,103) (317,339) (144,794) (23,217) (10,938) – – –
Funds transferred/Includes expenses incurred on behalf of others – 618 15,451 – – – – – –
Funds received/Includes expenses incurred on behalf of company – – (26) – – – – – –
Employee Related Transaction incurred on behalf of others – – 108 – – – – – –
Salary – – – – – – – – 18,181
Donation – – – – – – 84,855 – –
Amount received on exercise of ESOP options – – – – – – – (59,732) –
Closing Balance 318,372 246,019 (36,537) – (4,841) 7,920 – 215,533 –
Creditors – – (38,513) – (4,841) – – – –
Loan and Advances – – 1,976 – – 7,920 – 215,533 –
Debtors 318,372 246,019 – – – – – – –
Closing Balance 318,372 246,019 (36,537) – (4,841) 7,920 – 215,533 –
Notes:
1) The above excludes provision of telephone services free of cost among the Group Companies.
2) Payment made to Key Management Personnel (excluding Manoj Kohli) is Rs. 193,414 thousand (March 31, 2005 Rs. 159,132 thousand).
182
183
Related Party Transactions for 2004-05
(Rs. ’000)
Singapore Bharti Bharti Bharti Bharti Bharti Telesoft Mulberry Ambience Tulip Network Teletech Telecommuni-
Nature of transaction Telecommu- Enterprises Telecom Telesoft Teletech International Projects Reality Projects i2i Services (I) cation Consul-
nications Private Limited** Limited Limited Limited Pvt. Ltd. Pvt. Ltd.* Pvt. Ltd.* Limited* Limited tants of India
Limited Limited* Limited**
Purchase of Fixed assets – – – – (2,982) (7,635) – – – (674,534) – –
Sale of Fixed Assets – – – – – – – – – – – –
Rendering of Services 1,326,818 – – 2,001 7,668 – – – – 13,475 – –
Receiving of Services (267,882) – – (1,425) (368,216) (107,722) (6,835) (23,360) (2,929) (67,591) (26,782) –
Funds transferred/ Includes expenses incurred
on behalf of others – – – 36 103,044 4,160 7,920 – 828 1,802 – 2,029
Funds received/ Includes expenses incurred
on behalf of company – – – (689) (5,179) (8) – – – – – –
Employee Related Transaction incurred
on behalf of others – 247 360 – – – – – – – – –
Employee Related Transaction incurred
on behalf of company – (247) (360) – – (13) – – – – – (1,995)
Closing Balance 54,941 – – 4,333 (26,129) (24,466) 7,920 95,625 4,113 8,363 – –
Creditors – – – – (26,129) (24,466) – – – – – –
Loan and Advances – – – 2,450 – – 7,920 95,625 4,113 – – –
Debtors 54,941 – – 1,883 – – – – – 8,363 – –
Closing Balance 54,941 – – 4,333 (26,129) (24,466) 7,920 95,625 4,113 8,363 – –
* Entity where Key Management Personnel exercises significant influence in the year 2004–05.
** Entity having significant influence in the year 2004–05.
Notes:
1. The above excludes provision of telephone services free of cost among the group companies
2. Payment made to Key Managerial Personnel is Rs. 159,132 thousand (March 31, 2004 Rs. 84,942 thousand).
24. Leases
a) Operating Lease – As a Lessee
The lease rentals charged during the year for cancellable/non-cancellable leases relating to rent of building premises and
cell sites as per the agreements and maximum obligation on long-term non-cancelable operating leases are as follows:
(Rs. ’000)
As at As at
March 31, 2006 March 31, 2005
Lease Rentals debited to Profit and Loss Account 2,162,871 1,248,258

Obligations on non-cancellable leases:
Later than one year but not later than five years 159,600 58,362
Later than five years 30,095 –
Total 220,255 60,807
b) Operating Lease - As a Lessor
i) The Group has entered into a non-operating lease arrangement to provide approximately 100,000 Fiber pair
kilometers of dark fiber on Indefeasible Right of Use (IRU) basis for a period of 15 years. The lease rental receivable
proportionate to actual kilometers accepted by the customer is credited to the Profit and Loss Account on a straight
- line basis over the lease term. Due to the nature of the transaction, it is not possible to compute gross carrying
amount, depreciation for the year and accumulated depreciation of the asset given on operating lease as at
March 31, 2006 and accordingly, disclosures required by AS 19 is not provided.
ii) The future minimum lease payments receivable are:
(Rs. ’000)
As at As at
March 31, 2006 March 31, 2005

Later than one year but not later than five years 1,126,936 1,120,000
Later than five years 2,300,829 2,567,699
Total 3,709,499 3,967,699
c) Finance Lease - As a Lessor
During the year the Group has given certain VSAT assets under Finance lease. The reconciliation between the total
of minimum lease payments as at March 31, 2006 and their present value is as follows:
(Rs. ’000)
Gross Unearned Present
Investment Finance Income value
Not later than one year 20,353 2,949 17,404
Later than one year but not later than five years 21,445 1,550 19,895
Total 41,798 4,498 37,299
As at March 31, 2005
(Rs. ’000)
Gross Unearned Present
Investment Finance Income value
Not later than one year 29,730 4,585 25,145
Later than one year but not later than five years 33,887 3,485 30,402
Total 63,617 8,070 55,547
Note: The unguaranteed residual value of finance lease accruing to the group is Nil (Previous year Nil).
184
d) Finance Lease – As a Lessee
The group has taken certain vehicles on Finance Lease.The reconciliation between the total of minimum lease payments
as at March 31, 2006 and their present value is as follows:-
(Rs. ’000)
Lease Payments Charges value
Not later than one year 376 6 370

Later than one year but not later than five years 157 1 156
Total 533 7 526
As at March 31, 2005 (Rs. ’000)

Lease Payments Charges value
Not later than one year 1,681 96 1,585
Later than one year but not later than five years 1,442 32 1,410
Total 3,123 128 2,995
e) Exchange of IRU’s
The Group has also entered into a non-cancelable operating lease to take approximately 922.37 kilometers 2 pair of dark
fiber against consideration in cash and exchange of approximately 246.75 kilometers 2 pair of dark fiber for a period of
15 years. Due to the nature of the transaction, it is not possible to compute gross carrying amount, depreciation for the
year and accumulated depreciation of the asset given on operating lease as at March 31, 2006 and accordingly, disclosures
required by AS 19 is not provided.
f) The Group entered into a composite IT outsourcing agreement, whereby the vendor supplied fixed assets and IT related
services to the Group. Based on the risks and rewards incident to the ownership, the fixed assets received are accounted
for as a finance lease transaction. Accordingly, the asset and liability are recorded at the fair value of the leased assets at
the inception. These assets are depreciated over their useful lives as in the case of the Group’s own assets.
Since the entire amount payable to the vendor towards the supply of fixed assets during the year is accrued, there are no
minimum lease payments outstanding as at the year-end in relation to these assets and accordingly, other disclosures as
per AS 19 are not applicable.
25. Break-up of net deferred tax asset/(liability) into major components of the respective balances is as follows:
(Rs. ’000)
March 31, 2006 March 31, 2005
Deferred Tax Assets/(Liabilities) arising from:
(i) Provision for doubtful debts/advances charged in the financial
statements but allowed as deduction under the Income Tax Act
in future years (to the extent considered realisible) 877,288 556,542
(ii) Unabosorbed depreciation allowance and business loss carried
forward (to the extent considered realizable, on the basis of
estimated future profitably) — 1,145,678
(iii) Depreciation claimed as deducation under the Income Tax Act
but chargable in the financial statement in future years (2,785,099) (2,544,955)
(iv) Other expenses claimed as deducation under the Income Tax Act
but chargable in the financial statements in future years (Net) (40,620) (168,284)
Net Deferred Tax Asset/(Liability) (1,948,431) (1,011,019)
The tax impact for the above purpose has been arrived at by applying atax rate of 33.66% being the prevailing tax rate for
Indian Companies under the Income Tax Act, 1961.
185
26. Employee stock compensation
(i) Pursuant to the shareholders’ resolutions dated February 27, 2001 and September 25, 2001, the Group has
introduced the “Bharti Tele-Ventures Employees’ Stock Option Plan” (hereinafter called “the Old Scheme”) under
which the Group decided to grant, from time to time, options to the employees of the Group and its subsidiaries.
The grant of options to the employees under the ESOP Scheme is on the basis of their performance and other
eligibility criteria.
(ii) On August 31, 2001 and September 28, 2001, the Group issued a total of 1,440,000 equity shares at a price of
Rs. 565 per equity share to the Trust. The Group issued bonus shares in the ratio of 10 equity shares for every one
equity share held as of September 30, 2001, as a result of which the total number of shares allotted to the trust
increased to 15,840,000 equity shares.
(iii) Pursuant to the shareholders’ further resolution dated September 6, 2005, the Group announced a new Employee
Stock Option Scheme (hereinafter called “the New Scheme”) under which the maximum quantum of options was
determined at 9,367,276 options to be granted to employees from time to time on the basis of their performance
and other eligibility criteria.
(iv) All above options are planned to be settled in equity at the time of exercise and have maximum period of 7 years
from the date of respective grants. The plans existing during the year are as follows:
a) 2001 Plan under the Old Scheme
The options under this plan have an exercise price of Rs. 22.50 per share and vest on a graded basis as follows:
Vesting period from the grant date Vesting Schedule
For options with a vesting period of 36 months: On completion of 12 months 20%



b) 2004 Plan under the Old Scheme.
The options under this plan have an exercise price of Rs. 70 per share and vest on a graded basis as follows:

186
c) Super-pot Plan under the Old Scheme
The options under this plan have an exercise price of Rs. Nil per share and vest on a graded basis as follows:

d) 2005 Plan under the New Scheme
The options under this plan have an exercise price in the range of Rs. 221 to Rs. 366 per share and vest on a graded
basis from the effective date of grant as follows:

(v) The Information concerning stock options granted, exercised, forfeited and outstanding at the year-end is as follows:

Options Weighted Average Weighted Average
(Shares in exercise price remaining contractual
thousands) (Rs.) life (years)
2001 Plan
Outstanding at beginning of year 2,321 22.50 —
Granted — — —
Exercised 2,024 22.50 —
Cancelled or expired 27 22.50 —
Outstanding at the year end 270 22.50 2.94
Excercisable at end of year 270 22.50 —
2004 Plan
Outstanding at beginning of year 2,134 70.00 —
Granted — — —
Exercised 203 70.00 —
Cancelled or expired 271 — —
Excercisable at end of year 266 70.00 —
Super-pot Plan
Outstanding at beginning of year — — —
Granted 71 — —
Exercised 14 — —
Cancelled or expired 5 — —
Outstanding at the year end 52 — 5.25
Excersible at end of year 6 — —
Weighted average fair value of 71 139.40 —
options granted during the year
187
Options Weighted Average Weighted Average

(Shares in exercise price remaining contractual
thousands) (Rs.) life (years)
2005 Plan
Outstanding at beginning of year — —

Granted 2,589 238.03
Exercised — —
Cancelled or expired — —
Excersible at end of year
Weighted average fair value of 2,589 191.86 —
options granted during the year
(vi) The fair value of the options granted during the year under the Super-pot Plan and the New Scheme is estimated on
the date of grant using the Black-Scholes model with the following assumptions:
Super-pot Scheme Scheme 2005
Risk Free Interest Rates 4.59% p.a. to 5.30% p.a. 6.65% p.a. to 7.33 p.a.
Expected Life 12 to 36 months 48 to 66 months
Expected Volatility 55.15% 44.48% to 45.87%
Expected Dividend 0.00% 0.00%
Expected volatility is determined by taking into account the closing prices of stock listed on Bombay Stock Exchange
from February 18, 2002 i.e. the date of the Initial Public Offer (IPO).
(vii) The balance of deferred stock compensation as on March 31, 2006 is Rs. 388,148 thousand (March 31, 2005
Rs. 13,370 thousand) and total employee compensation cost recognised for the year then ended is Rs. 127,067
thousand (March 31, 2005 Rs. 47,128 thousand).
27. (i) The Central Government’s approval is pending against the application made by erstwhile BML in respect of
remuneration of Rs. 1,943 thousand [Rs. 1,274 thousand for the five month period ended August 31, 2000 and
Rs. 669 thousand for the year ended March 31, 2000 respectively](March 31, 2003 Rs. 1,943 thousand) payable to
the former Whole-Time Director which exceeds the limits prescribed by Schedule XIII of the Companies Act, 1956.
(ii) The Central Government’s approval is pending against the application made by erstwhile BCL in respect of excess
remuneration paid to Whole Time Directors of Rs. 4,063 thousand (March 31, 2005 Rs.4,063 thousand).
(iii) The cumulative amount of excess remuneration paid to the Whole Time Director (‘BAL’) pending approval of Central
Government is Rs. 565 thousand (March 31, 2005 Rs. 565 thousand) and is refundable by the Director.
(iv) The cumulative amount of excess remuneration paid to Managing Director and Whole Time Directors (erstwhile
‘BIL’) pertaining to earlier years, pending approval of the Central Government is Rs. 3,114 thousand (March 31, 2005
Rs. 3,114 thousand) and is refundable by Directors.
188
28. Earnings per Share
As at As at
March 31, 2006 March 31, 2005
Basic and Diluted Earnings per Share :

Nominal value of equity shares (Rs.) 10/- 10/-
Profit attributable to equity shareholders (Rs. ’000) (A) 20,279,486 12,115,741
Weighted average number of equity shares outstanding
during the year (B) 1,881,838,518 1,856,088,892
Basic earnings per Share (Rs.) (A / B) 10.776 6.528
Dilutive effect on profit (Rs. ’000) (C )* 4,080 75,652
Profit attributable to equity shareholders for computing
Diluted EPS (Rs’000) (D)=(A+C) 20,283,566 12,191,393
Dilutive effect on weighted average number of equity shares
outstanding during the year (E)* 15,822,704 37,018,694
Weighted Average number of Equity shares and Equity Equivalent
shares for computing Diluted EPS (F)=(B+E) 1,897,661,222 1,893,107,586
Diluted earnings per share (Rs.) (D/F) 10.689 6.440
Diluted effect on weighted average number of equity shares and profit attributable is on account of Foreign Currency
Convertible Bonds and Optionally Convertible Redeemable Debentures. Refer notes 12 and 14 above.
29. As at the year end, the accumulated losses exceed the paid up share capital of Bharti Comtel Limited. However, in view
of the support from the holding Company, the accounts are prepared on a going concern basis.
30. Previous year figures have been regrouped / reclassified, wherever necessary, to conform to current year’s classification.
189
Statement pursuant to exemption received under Section 212 (8) of the Companies Act, 1956
relating to subsidiary companies for the year ended March 31, 2006
Sr. Name of the Subsidiary Reporting Capital Reserves Total Total Investments Turnover Profit Provision Profit Proposed Country
No. Company Currency Assets Liabilities Other than Before for After Dividend
Investment Taxation Taxation Taxation
in Subsidiary
1. Bharti Hexacom Limited INR 1,792,000 1,302,900 6,938,221 3,843,321 — 3,923,107 1,009,583 180,563 829,020 — India
2. Bharti Aquanet Limited INR 25,000 212,046 248,618 11,572 43,472 47,844 11,120 93 11,027 — India
3. Satcom Broadband Equipment Limited INR 248,592 (19,796) 318,614 89,818 — 94,302 2,358 (1,962) 4,320 — India
4. Bharti Comtel Limited INR 1,000 (103,755) 582,751 685,505 — 566,555 (72,688) 7,360 (80,048) — India
5. Bharti Broadband Limited INR 292,000 (194,133) 717,209 619,342 280,877 254,539 (41,863) (4,358) (37,505) — India
Note: As required under para iii of the Approval letter dated April 26, 2006, issued by the Ministry of Company Affairs, Indian rupee equivalents of the figures given in
foreign currencies in the accounts of the subsidiaries companies, have been given based on the exchange rates as on 31.03.2006.
190

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Directors’ Report

The strong operational performance of the Company during Subsidiary companies

The Company, being a service provider organization, most

with the Companies (Disclosure of Particulars in the Report

1) Number of Stock Options granted 2,763,000 16,826,505*

3) Option Vested Nil 14,284,826

4) Number of options exercised Nil 10,808,282

5) Number of shares arising as a result of Nil 10,808,282

6) Number of option lapsed 164,500 3,253,147

7) Variation of terms of option NA NA

8) Money realized by exercise of options NA 219,420,557.5

9) Total number of options in force 2,598,500 2,765,076

10) Employee-wise details of options granted to

11) Diluted Earning Per Share (EPS) pursuant to Nil N.A.

12) In case, the employees compensation cost is N.A. Rs. 37,736,249

13) For options whose exercise price either

14) A description of the method and significant

i) risk-free interest rate; i) The Government Securities curve yields NA

Foreign Exchange Earnings and Outgo

(a) Total Foreign Exchange Earning : Rs. 12,760 million

(b) Total Foreign Exchange Outgo : Rs. 24,440 million

(A) EMPLOYED THROUGHOUT THE FINANCIAL YEAR

(B) EMPLOYED FOR PART OF THE FINANCIAL YEAR

Regulation on Code of z Effective March 21, 2006

Regulation on Quality of z Effective July 01, 2005.

Regulatory Brief Comment

3.1. Mobile Services 3.2.2 Enterprise Services

4. OUTLOOK We maintain insurance for our assets equal to the

our business. look to Bharti Airtel as a hunting ground for talent.

operators. employee motivation.

THE COMPANY’S GOVERNANCE PHILOSOPHY

z Transparency in disclosure and communication of relevant financial and operational information;

z Integrity and ethics in all our dealings;

Corporate governance rating

a) Strategic supervision and direction – by the Board of directors;

c) Strategic control and implementation – by the Airtel Management Board;

e) Technology management – by the Airtel Technology Council.

This multi-tier structure for Corporate Governance ensures that:

Composition of the Board

Promoter Independent Executive

Sunil Bharti Mittal Executive director – Promoter 8 — —

Sunil Bharti Mittal 4 4 Yes

1. One meeting attended through alternate director.

COMMITTEES OF THE BOARD

2. HR/ Remuneration Committee

3. ESOP Compensation Committee and

4. Investors’ Grievance Committee.

The key responsibilities of the Audit Committee include the following:

f) Disclosure of any related party transactions; and

g) Qualifications in the draft audit report.

The Audit Committee is empowered, pursuant to its terms of reference, to:

z Management discussion and analysis of financial condition and results of operations;

z Management letters/letters of internal control weaknesses issued by the statutory auditors;

z Internal audit reports relating to internal control weaknesses;

The Audit Committee held four meetings during 2005-06, on

z April 28, 2005

z July 26, 2005

z October 27 and 28, 2005 and

z January 23 and 24, 2006

Member Director Category No. of Audit Committee Meetings