DIRECTORS' REPORT Dear Shareholders, Your Directors have pleasure in presenting the seventeenth annual report on the business and operations of the Company together with the audited financial statements for the year ended March 31, 2012. OVERVIEW Bharti Airtel is one of the world's leading providers of telecommunication services with presence in 20 countries including India, Sri Lanka, Bangladesh and 17 countries in the African continent. The Company served an aggregate of 251.65 Mn customers as on March 31, 2012 providing mobile, voice and data solutions using 2G, 3G and 4G technologies. In terms of number of wireless customers, the Company is among the top 5 in the world. The Company provides fixed line voice and data solutions to 3.3 Mn customers in 87 cities in India. The Company also offers an integrated suite of telecom solutions to its enterprise customers, in addition to providing long distance connectivity in India, Africa and rest of the world. The Company also offers Digital TV and IPTV Services in India. All these services are rendered under a unified brand "airtel" either directly or through subsidiary companies. The Company also deploys, owns and manages passive infrastructure pertaining to telecom operations under its subsidiary, Bharti Infratel Limited that owns 42% of Indus Towers Limited. Together, Bharti Infratel and Indus Towers are the largest passive infrastructure service providers in India. FINANCIAL RESULTS AND RESULTS OF OPERATIONS In line with the amended statutory guidelines, the Company has adopted IFRS (International Financial Reporting Standards) for consolidation of accounts from the financial year 2010-11 onwards. LIQUIDITY The Company generates healthy operational cash flows and maintains sufficient cash and financing arrangements to meet its strategic objectives. It deploys a robust cash management system to ensure timely servicing of its liquidity obligations. The Company has also been able to arrange for adequate liquidity at an optimized cost to meet its business requirements and has minimized the amount of funds tied-up in the current assets. As of March 31, 2012, the Company has cash and cash equivalents of Rs. 20,300 Mn and short term investments of Rs. 18,132 Mn. During the year ended March 31, 2012, the Company generated operating free cash flow of Rs. 101,319 Mn. The net debt -EBITDA ratio as on March 31, 2012 was at 2.56 and the net debt - equity ratio was at 1.29. The net debt in USD terms decreased from USD 13,427 Mn as on March 31, 2011 to USD 12,714 Mn as on March 31, 2012. The Company manages the short-term liquidity to generate optimum returns by deploying surpluses albeit only in the debt and money market instruments including in high rated liquid and income debt fund schemes, fixed maturity plans, bank fixed deposits and other similar instruments. The Company is comfortable with its present liquidity position and foreseeable liquidity needs. It has adequate facilities in place and robust cash flows to meet liquidity requirements for executing its business plans and meeting with any evolving requirements. The Company also enjoys strong access to capital markets across debt, equity and hybrids. GENERAL RESERVE Out of the total profit of Rs. 57,300 Mn on a standalone basis of Bharti Airtel Limited for the financial year ended March 31, 2012, an amount of Rs. 4,300 Mn has been transferred to the General Reserve. DIVIDEND The Board recommends a final dividend of Rs. 1 per equity share of Rs. 5 each (20% of face value) for the financial year 2011-12. The total dividend payout inclusive of Rs. 616 Mn as tax on dividend, will amount to Rs. 4,414 Mn. The payment of dividend is subject to the approval of the shareholders at the ensuing annual general meeting of the Company. SUBSIDIARY COMPANIES As on March 31, 2012, the Company has 123 subsidiaries as set out in page no. 225 of the annual report (for abridged annual report please refer page no. 73). Pursuant to the General Circular No. 2/2011 dated February 8, 2011 issued by the Ministry of Corporate Affairs, Government of India, the Board of Directors have consented for not attaching the balance sheet, statement of profit & loss and other documents as set out in section 212(1) of the Companies Act, 1956 in respect of its subsidiary companies for the year ended March 31, 2012. Annual accounts of these subsidiary companies, along with related information are available for inspection at the Company's registered office and the registered office of the respective subsidiary companies. Copies of the annual accounts of the subsidiary companies will also be made available to Bharti Airtel's investors and subsidiary companies' investors upon request. The statement pursuant to the above referred circular is annexed as part of the Notes to Consolidated Accounts of the Company on page no. 231 of the annual report (for abridged annual report please refer page no. 77). ABRIDGED FINANCIAL STATEMENTS In terms of the provisions of section 219(1)(b)(iv) of the Companies Act, 1956, the Board of Directors have decided to circulate the abridged annual report containing salient features of the balance sheet and statement of profit & loss to the shareholders for the financial year 2011-12. Full version of the annual report will be available on Company's website www.airtel.in and will also be made available to investors upon request. In support of the green initiative of the Ministry of Corporate Affairs, the Company has also decided to send the annual report through email to those shareholders who have registered their email id with their depository participant/Company's registrar & share transfer agent. In case a shareholder wishes to receive a printed copy, he/she may please send a request to the Company, which will send a printed copy of the annual report to the shareholder. QUALITY Deeply embedded in Bharti's DNA, operational excellence is pivotal to reinforce competitive advantage through a culture of process enhancements and elimination of non-conformances. Bharti has set a strong culture emphasizing quality based on foundations of constant customer focus, profitability and stability. The quest for operational excellence is further strengthened by the unique strategy-to-success framework, comprising of six inter-related quality initiatives that accelerate process re-engineering through radical process re-design based on customer voice. All our processes are continually assessed by external consultants leading to Certifications like TL9000, BCP DR (Business Continuity Process & Data Redundancy), ISO 27001, OHSAS (Occupational Health and Safety Advisory Services). The Company's zest towards operational and business excellence has been recognized through Golden Peacock award for corporate excellence established by the Institute of Directors in 1992 to honour and recognize unique achievements in corporate excellence. BRANDING The year 2011-12 was marked by significant achievements on the brand front as airtel strengthened its position as a youth brand. The Company yet again captured the imagination of the nation with the high impact Har Friend Zaroori Hai (HFZ) brand campaign that was launched in August 2011. Apart from positioning airtel, the jingle touched the right chord with the customers across demographics and geographies. The brand theme positively impacted the Top of Mind Awareness scores (ToMA) and Brand preference scores. The campaign generated massive online engagement and was later enhanced in January 2012 with 20 new online commercials. In line with the international brand positioning, Sri Lanka launched an outstanding Sinhala adaptation of HFZ, including a flash mob outside Colombo Railway Station. The campaign was also embraced by Bangladesh and built a significant connect with audiences there as well. The association with Formula One TM for the 2011 airtel Grand Prix of India was another first for airtel. The airtel Delhi Half Marathon (ADHM) 2011 enabled us to further augment our brand position. Moving towards epitomizing our service superiority, during the year we launched our new service campaigns, signifying our differentiated services - *121#, Instant help 24 x 7 and My Airtel My Offer customized offers. Further at the end of the year, the pan-India launch of airtel money with the tag line- baat sirf paison ki nahin hai' -continued airtel's quest to enrich lives of millions. The various initiatives undertaken this year took brand airtel to greater heights and the success is evident from being named India's most trusted mobile services brand in the Economic Times Brand Equity 2011 survey. Airtel was also awarded third position in the list of top 100 Indian brands. In Africa, we have re-positioned the brand airtel in line with the global brand strategy, to focus on the youth and to be committed to delivering fresh and exciting products and great customer experience. The first step in bringing this positioning to life has been achieved through the launch of exciting youth campaigns rolled out using local insights. More specifically, in Kenya we have rolled out the Mini 254 campaign, (I am '254' which is the international dialing code for Kenya). In Nigeria, we launched Club 10; in DRC, Lobo Nayo Club 10, in Burkina Faso, The Airtel Choco, in Tanzania Supa 5 campaign, and in Gabon Ndoss. All the campaigns were very youth oriented and delivered an exciting youth proposition, built around a strong CUG (Closed User Group) that offered voice, SMS and data value. The key agenda for these campaigns was to drive brand equity among this core target. In our drive to be the market leader on data in Africa, Airtel Africa has launched 3G in 8 countries within a 9-month period. Airtel 3G's key communication objective was to own the Mobile Internet experience in the minds and hearts of our customers in Africa. Airtel 3G provides our customers with new ways to communicate, access to information, conduct business, learn, be entertained, live and experience different facets of their lives. We are now delivering a superior internet experience like no other in our markets and have gone a step further and introduced an innovative new product - the data recharge voucher, in Nigeria. This is a first in Africa from Airtel. Airtel Money is the first m-commerce service in many of our markets in Africa. The communication message was simplified as: Airtel Money: Simple. Secure. Instant, and this platform was used in our educational drive to ensure customers understood what Airtel Money can do. In addition to this, we have also supported Airtel Money with a strong emotive campaign promise for the more advanced M-Commerce markets in Africa which was: with Airtel Money, we can help your money do more. This message is in line with the transformational impact of this product on the daily lives of our consumers. In partnership with Manchester United, the Company also successfully completed the launch of Airtel Rising Stars (ARS). This is an expansive grassroots initiative for under 17s and is a tangible demonstration of our commitment to empowering the youth in Africa, by providing them with the platform to showcase their skills. Given Africa's strong support of the English Premier League, Airtel has also partnered with Arsenal Football Club to cater to the fans in Nigeria, Ghana, Rwanda, Zambia and Uganda. This second partnership, in addition to our Africa Rising Stars platform, will ensure that Airtel owns football in the minds and hearts of our consumers in Africa. MAJOR AGREEMENT AND ALLIANCES The Company has signed the following key agreements/alliances this year: • With Nokia Siemens Networks, Huawei and ZTE for TD-LTE (popularly known as 4G) networks in the telecom circles of Maharashtra, Karnataka and Kolkata respectively. This would also enable a seamless data network cover between existing and this new technology. • With Nokia Siemens Networks, Huawei and Cisco for "Unified Packet Core" in India. This high capacity packet core is access agnostic and caters to 2G, 3G, LTE (4G) customers across the country. • With Ericsson and Nokia Siemens Networks for the Unified Managed Services contract. This has been awarded to Ericsson in 15 circles and for a part of Bangladesh; and Nokia Siemens Networks in 8 telecom circles. This will ensure seamless operations and maintenance of the mobile networks. • With Nokia Siemens Network for Mobile Internet Browsing Solution (MIBS) and Multi Media Messaging solutions (MMSC) across all countries in Africa. • With Alcatel Lucent, Huawei and ZTE for Carrier Ethernet (CEN - Version 2) with capability to handle IP & E1/STM Backhaul in India; with Alcatel Lucent for IP - MPLS core across all countries in Africa • With HP to launch Cloud Enabled Platform (CLEP). • Extension of Managed Services contract for CRBT with Comviva and Onmobile to 9 and 7 countries in Africa, respectively. Also, Managed Services contract for VAS nodes with Comviva extended for all countries in Africa. • With Infosys as the technology partner for m-commerce Platform in India and with Comviva for Africa. • With Universal Music and OnMobile to launch 'My Song My Story' on Airtel, enabling its customers to listen to live concerts nationally. • With Voice Tap to launch "Live Customer Counseling" and "NCERTSolution" on Airtel enabling students to get career counseling from experts through IVR and access NCERT study material through WAP. NEW PRODUCTS/INITIATIVES During the year, the Company launched various new and innovative products and services, directly and through its subsidiaries, which enabled it to strengthen its leadership in an intensely competitive market. Some of the key launches of the year included: • 3G footprint expanded to over 1,100 cities in India at end of March 2012 including 7 service areas with ICR arrangements. • 4G services in Kolkata, based on TD-LTE technology, making India one of the first countries in the world to commercially deploy this cutting-edge technology. • airtel money (Semi Closed Wallet) launched nationally in February 2012, in over 300 towns across 20,000 retail outlets with an acceptance network across 7,500 merchant establishments. • CEM (Customer Experience Management), a proactive diagnosis tool that provides a multi-dimensional end-to-end view encompassing network, device, service insights and usage behaviour. • Prepaid Web launched on a pan India basis wherein customers can now visit www.airtel.in to access their account details including online activation, deactivation of value added services & data plans, and to raise and track service requests. • SmartByte - GB on Demand' Service, where a user gets an option to buy chunks of GBs as per his/her requirement. With this service, any customer whose speed gets throttled beyond FUP (Fair Usage Policy) limit, can buy additional high speed quota on the go and enjoy browsing at a higher speed for a longer time. • Twitter on USSD, Facebook on USSD, an innovative way of accessing Twitter/Facebook, first time in India, where airtel customers can access their Twitter/Facebook accounts for nominal charges per day even without activating data services. • Infotainment Portal on *789#, a USSD portal which is a single destination for over 200 types of content across 40 genres. • MO Sports, an integrated mobile sports entertainment service comprising of WAP, video, voice and MMS on subscription as well as a pay-per-consume basis. • Comedy FM, first of its kind service innovation that empowers mobile users with the ability to get radio experience on their devices anytime, anywhere, and allows them to choose from variety of comic shows. • iPhone 4 & iPhone 4S along with bundled data plans. • EOCN (End of Call Notification) for all our prepaid customers' pan-India. This enables the customer to know the data consumed and balance after every such data usage session. • Interactive services launched on Digital TV platform including: a) iExam - an interactive application focusing on competitive exams, targeting young school/college students b) iKids - an interactive channel for kids c) iKissan - offering real time access to crop prices, weather information and localized farming advice d) iDarshan - enabling customers to enjoy Live Aarti from shrines e) iDivine & iDD - mosaic applications designed to save satellite bandwidth wherein the customer sees 4 regional DD and 4 devotional channels respectively in a mosaic format and can further select a channel of his choice basis his language/region preference. • Hello Tunes cRBT launched in 15 African countries which allows the Airtel customer to express his/her identity in different ways. • Music on Demand (Airtel Radio) was launched in 4 African countries and it gives the customer the opportunity to listen to any genre of music that they like any time. • Mobile Classifieds, launched in 5 African countries, allows customers to receive several kinds of ads (car sales, job opportunity, etc) on their mobile. • Google SMS, launched in 4 African countries, allow Airtel customers to keep their chats going by sending texts from their Gmail account to any Airtel customer and receive an instant reply for free. • Blackberry Crosby Tiers, launched in 5 African countries, provides a low priced Blackberry service to our customers compared to the traditional BIS and BES services. This already contributes to 38% of our Blackberry customer base. • Airtel Credit Services were launched in 11 African countries. Airtel customers can easily access airtime, in areas where no airtime distributors are available or even after working hours when airtime distributors are closed, on credit and pay for it in the next recharge. • Call Completion services, launched in 10 African countries, allow the Airtel customer to know who called you when you are not reachable via SMS (Missed call Alert) or Voicemail. This service also allows the customer to record a voice message, which is delivered via SMS on the specified day and time. • DDS (Dynamic Discount Solution) allows us to discount customer voice rates to increase usage in selective underutilized sites. • Implementation of Easy Recharge in 6 African countries which reduces paper voucher costs by providing electronic vouchers and widen the distribution network for airtime across Airtel Africa. • Roaming Suite products were implemented in 14 African countries over the last 8 months. These address cross border roaming issues in-roamer retention and welcome SMSes. Smart Call Assistant gives the roaming customer the opportunity to call by using their current phonebook with numbers that are saved in national format. Short code service allows the customers to use their home call center by dialing the home country customer care number. • 3G footprint expanded to 7 African countries, which has increased data usage, grown customer base as well as data revenue. • Mobile health tips were implemented in 5 African countries and allow the customer through daily, weekly and monthly subscription to get general health tips via SMS. • Airtel messaging allows the Airtel Africa customer to access their emails, social networks and chat services independent of the actual mobile device. Already implemented in 11 African countries. • Airtel Africa has been granted USD 400,000 by GSMA Development Fund for a 2 year Mobile Farmer pilot for Kenya. This product will provide weather, crop and advisory services to the farming community. This is an acquisition play product. OTHER COMPANY DEVELOPMENTS • Bharti Airtel has expanded its footprint on the African continent by launching its services in Rwanda taking the total count to 17 countries. The Company is now present in 20 countries across the globe. • The Company re-organized the India operations into the B2C (Business to Consumer) and B2B (Business to Business) entities to leverage inherent synergies across multiple product lines. AWARDS & RECOGNITIONS The Company was conferred with many awards and recognitions during the year. Some of them are listed below: • Ranked as the No.1 Service Brand and No.3 in the overall rankings in the annual Brand Equity's Most Trusted Brands Survey. • Telecom Center of Excellence (TCOE) Award for Service Provider with customer focus for best delivery of Network Services - for the year 2011. Instituted by Telecom Centres of Excellence (TCOE) in association with the Department of Telecommunications (DoT) and other reputed industry bodies including COAI, AUSPI and FICCI, the award is a prestigious accolade. • 4 awards at the Telecom Operator Awards 2012 - 'Best National Mobile Operator', 'Best VAS Provider', 'Best Enterprise Services Provider and Best Ad Campaign by an Operator'. • Rated as one of the top 5 best employers, by Aon Hewitt's Best Employers in India 2011 study. • SSON Excellence Award under 'Excellence in Culture Creation' category for Airtel Center of Excellence-Finance, RA, HR and SCM Shared Services. • Featured amongst the Top 25 Companies globally in a study by Fortune- AON Hewitt - on 'The Best Companies for Leaders'. • airtel Digital TV (HD) recognized as 'Product of the year 2012', through an independent survey conducted by the research firm, AC Nielsen. • Voted as India's Best Managed IT Services Brand for Large Enterprises & SMEs by the PC Quest's annual User's Choice Club Awards 2011. • Adjudged as the 'Top Telecom Operator', 'Top Cellular Operator' and 'Top NLD Service Provider' at the Voice & Data (V&D) 100 Awards 2011. • 'Golden Peacock National Quality Award' for the year 2011. • DSCI (Data Security Council of India) Excellence Award 2011 for Security in Telecom. • Awarded in 'Customer Experience Enhancement' and 'Innovative VAS Product' categories at the ETTelecom Awards 2011. • Adjudged as 'Enterprise Telecom Service Provider of the year', 'Wholesale Data Service Provider of the year' and 'Mobile VAS provider of the year' at the Frost & Sullivan 2011 Asia Pacific ICT Awards. • Adjudged as 'Innovative Broadband Provider' in the CMAI Awards 2011. • Airtel's mobile commerce product, Airtel Money, was adjudged the 'Best Mobile Money Service' in Ghana at the Mobile World Ghana Telecoms Awards. • At the 23rd Enugu International Trade Fair in Nigeria, the Company received three awards for its outstanding performance at the fair and contribution to the development and growth of the economy of the south east region. • The Company received The Special Jury Award for Corporate Responsibility which was given for the first time as recognition of the tremendous work done by Airtel Africa in the sphere of education for the under-privileged. This award was received during the "Annual Changemaker Award 2011" Ceremony in February 2012 in New-Delhi. • Airtel's music campaign 'One8' was the first runner-up in the MIDEM International Trade Fair Awards in the category of the most innovative and creative music campaign. CAPITAL MARKET RATINGS As at March 31, 2012, Bharti Airtel Limited is rated by two domestic rating agencies, viz. CRISIL and ICRA, and two international rating agencies, viz. Fitch Ratings and S&P. • CRISIL and ICRA have rated the Company at the top end of their rating scales, both for short term (P1+/A1+) as well as long term (AAA/LAAA) with Negative outlook. • Fitch Ratings maintained its rating at BBB - but moved the outlook to negative. S&P has reaffirmed its rating at BB+ with Stable outlook. SHARE CAPITAL During the year, there was no change in the authorised, issued, subscribed and paid-up equity share capital of the Company which stood at Rs. 18,987,650,480 divided into 3,797,530,096 equity shares of Rs. 5 each as at March 31, 2012. MANAGEMENT DISCUSSION & ANALYSIS REPORT In accordance with the listing agreement requirements, the Management Discussion & Analysis report is presented in a separate section forming part of the Annual Report. CORPORATE GOVERNANCE The Company is committed to maintain the highest standards of Corporate Governance. The Directors adhere to the requirements set out by the Securities and Exchange Board of India's Corporate Governance Practices and have implemented all the stipulations prescribed. A detailed report on Corporate Governance pursuant to the requirements of clause 49 of the listing agreement forms part of the annual report. However, in terms of the provisions of section 219(1)(b)(iv) of the Act, the abridged annual report has been sent to the members of the Company excluding this report. A certificate from the auditors of the Company, M/s. S.R. Batliboi & Associates, Chartered Accountants, Gurgaon confirming compliance of conditions of corporate governance as stipulated under clause 49 is annexed to the report as Annexure A. SECRETARIAL AUDIT REPORT Keeping with the high standards of corporate governance adopted by the Company and also to ensure proper compliance with the provisions of various corporate laws, the regulations and guidelines issued by the Securities and Exchange Board of India, the listing agreement, the Company has voluntarily started a practice of the secretarial audit from a practicing company secretary. The Company has appointed M/s. Chandrasekaran Associates, Company Secretaries, New Delhi, to conduct secretarial audit of the Company for the financial year ended March 31, 2012, who has submitted their report confirming the compliance with all the applicable provisions of various corporate laws. The Secretarial Audit Report is provided separately in the annual report. However, in terms of the provisions of section 219(1)(b)(iv) of the Act, the abridged annual report has been sent to the members of the Company excluding this report. CORPORATE SOCIAL RESPONSIBILITY At Bharti Airtel, Corporate Social Responsibility (CSR) encompasses much more than social outreach programs and is an integral part of the way the Company conducts its business. Detailed information on the initiatives of the Company towards CSR activities is provided in the Corporate Social Responsibility section of the annual report. DIRECTORS Ms. Chua Sock Koong, Mr. Craig Edward Ehrlich, Mr. Nikesh Arora, Mr. Rajan Bharti Mittal and Mr. Rakesh Bharti Mittal retire by rotation at the forthcoming annual general meeting and being eligible, offer themselves for re-appointment. A brief resume, nature of expertise, details of directorships held in other public limited companies, of the directors proposing re-appointment along with their shareholding in the Company as stipulated under clause 49 of the listing agreement with the stock exchanges is appended as an annexure to the notice of the ensuing annual general meeting. The Board recommends their appointment. Lord Evan Mervyn Davies has expressed his inability to continue as a director on the Board of the Company from the conclusion of the ensuing annual general meeting. In addition, in line with the Policy of Independent Directors adopted by the Board, H.E. Dr. Salim Ahmed Salim, independent director, has completed his term of office and will step down from the Board from the conclusion of the ensuing annual general meeting. The Board would appoint new directors in their place in due course in compliance with the statutory requirements. FIXED DEPOSITS The Company has not accepted any fixed deposits and as such, no amount of principal or interest was outstanding as of the balance sheet date. AUDITORS The Statutory Auditors of the Company, M/s. S. R. Batliboi & Associates, Chartered Accountants, Gurgaon, retire at the conclusion of the ensuing annual general meeting of the Company and have confirmed their willingness and eligibility for re-appointment and have also confirmed that their re-appointment, if made, will be within the limits under Section 224(1B) of the Companies Act, 1956. The Board recommends their re-appointment for the next term. AUDITORS' REPORT The Board has duly examined the Statutory Auditors' report to the accounts, which is self explanatory and clarifications wherever necessary, have been included in the Notes to Accounts section of the annual report. As regards the comments under paras i(a) and i(b) of the annexure to the Independent Auditors' Report regarding updation of quantitative and situation details relating to certain fixed assets in the Fixed Assets Register and reconciliation of the physical verification results, the Company has strengthened its process for periodic updation of the Fixed Assets Register at frequent intervals and a time bound plan has been put in place to complete the pending updation of the physical verification results in the Fixed Assets Register. Further, the financial impact of the physical verification has been given effect to in the books of accounts. As regards the comment under para xxi of the annexure to the Independent Auditors' Report to address the issues of fraud by employees and external parties, the Company has taken appropriate steps including issuance of warning letters, termination of service of the errant employees, termination of the contract/agreements with the external parties, legal action against the external parties involved, blacklisting the contractors, etc. The Company is further strengthening its internal control systems to reduce the probability of occurrence of such events in future. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO For the Company, being a service provider organization, most of the information as required under section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, as amended is not applicable. However, the information as applicable has been given in Annexure B to this report. EMPLOYEES STOCK OPTION PLAN The Company values its employees and is committed to adopt the best HR practices. The employees of the Company are presently eligible for two ESOP schemes under 2001 and 2005 Employee Stock Option Policy. Besides attracting talent, the Schemes also help in retention of talent and experience. The ESOP Scheme 2001 is administered through a Trust, whereby the shares held in the Trust are transferred to the employee as and when the concerned employee exercises stock options under the Scheme. Till March 2010, under ESOP Scheme 2005, the employees were allotted new equity shares upon exercise of stock options. Post April 2010, the Company has started purchasing its equity shares up to the limit approved by the shareholders in the existing Trust and appropriates the same towards the Scheme. Accordingly, under the ESOP Scheme 2005, the Company now acquires shares from the secondary market in the Trust and transfers the same to the respective employees in lieu of allotment of fresh equity shares. Disclosure in compliance with clause 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, as amended, are provided in Annexure C to this report. A certificate from M/s. S. R. Batliboi & Associates, Chartered Accountants, Statutory Auditors, with respect to the implementation of the Company Employee's Stock Option Schemes would be placed before the shareholders at the ensuing annual general meeting and a copy of the same will also be available for inspection at the registered office of the Company. PARTICULARS OF EMPLOYEES The information as are required to be provided in terms of section 217(2A) of the Companies Act, 1956 read with the Companies (Particular of Employees) Rules, 1975 have been set out in Annexure D to this report. In terms of the provisions of section 219(1)(b)(iv) of the Act, the abridged annual report that has been sent to the members of the Company does not contain this annexure. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to Section 217(2AA) of the Companies Act, 1956, the directors to the best of their knowledge and belief confirm that: I. The applicable accounting standards have been followed along with proper explanation relating to material departures, in the preparation of the annual accounts for the year ended March 31, 2012; II. They have selected and applied consistently and made judgments and estimates that are reasonable and prudent to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit of the Company for that period; III. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 and for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; IV. They have prepared the annual accounts on a going concern basis. ACKNOWLEDGEMENTS Your directors wish to place on record their appreciation to the Department of Telecommunications (DoT), the Central Government, the State Governments in India, Government of Bangladesh, Government of Sri Lanka and Governments in the 17 countries in Africa, the Company's bankers and business associates, for the assistance, co-operation and encouragement they extended to the Company and also to the employees for their continuing support and unstinting efforts in ensuring an excellent all round operational performance. The directors would like to thank various partners viz. Bharti Telecom, Singapore Telecommunications Ltd., and other shareholders for their support and contribution. We look forward to their continued support in the future. For and on behalf of the Board Sunil Bharti Mittal Chairman and Managing Director Place: New Delhi Date: May 2, 2012 |