Quarterly Report Q1 10

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Quarterly report on the results for the first quarter ended June 30, 2010 Bharti Airtel Limited (Incorporated as a public limited company on July 7, 1995 under the Companies Act, 1956) Bharti Crescent, 1, Nelson Mandela Road, Vasant Kunj, Phase II, New Delhi – 110 070, India August 11, 2010 The financial statements included in this quarterly report fairly presents in all material respects the financial condition, results of operations, cash flows of the company as of, and for the periods pres
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    Quarterly report on the results for the first quarter ended June 30, 2010Bharti Airtel Limited (Incorporated as a public limited company on July 7, 1995 under the Companies Act, 1956)Bharti Crescent, 1, Nelson Mandela Road, Vasant Kunj, Phase II, New Delhi – 110 070, India   August 11, 2010 The financial statements included in this quarterly report fairly presents in all material respects the financial condition, results ofoperations, cash flows of the company as of, and for the periods presented in this report.| Mobile Services I Telemedia Services I Enterprise Services | Digital TV Services |   Page 2 of 46   Supplemental Disclosures Safe Harbor : - Some information in this report may containforward-looking statements. We have based these forward-looking statements on our current beliefs, expectations andintentions as to facts, actions and events that will or mayoccur in the future. Such statements generally are identifiedby forward-looking words such as “believe,” “plan,”“anticipate,” “continue,” “estimate,” “expect,” “may,” “will” orother similar words.A forward-looking statement may include a statement of theassumptions or bases underlying the forward-lookingstatement. We have chosen these assumptions or bases ingood faith, and we believe that they are reasonable in allmaterial respects. However, we caution you that forward-looking statements and assumed facts or bases almostalways vary from actual results, and the differencesbetween the results implied by the forward-lookingstatements and assumed facts or bases and actual resultscan be material, depending on the circumstances. Youshould also keep in mind that any forward-looking statementmade by us in this report or elsewhere speaks only as of thedate on which we made it. New risks and uncertaintiescome up from time to time, and it is impossible for us topredict these events or how they may affect us. We have noduty to, and do not intend to, update or revise the forward-looking statements in this report after the date hereof. Inlight of these risks and uncertainties, any forward-lookingstatement made in this report or elsewhere may or may notoccur and has to be understood and read along with thissupplemental disclosure. General Risk : - Investment in equity and equity relatedsecurities involve a degree of risk and investors should notinvest any funds in this Company unless they can afford totake the risk of losing their investment. For taking aninvestment decision, investors must rely on their ownexamination of Bharti Airtel including the risks involved. Convenience translation : - We publish our financialstatements in Indian Rupees. All references herein to“Indian Rupees” and “Rs” are to Indian Rupees and allreferences herein to “US dollars” and “US$” are to UnitedStates dollars. All translations from Indian Rupees to UnitedStates dollars were made (unless otherwise indicated) usingthe rate of Rs 46.60 = US $1.00. Similarly all transactionsfrom United States Dollars to Indian Rupees were made(unless otherwise stated) using the rate of US$ 0.0215 =Re.1, being the RBI Reference rate as announced by theReserve Bank of India on June 30, 2010. All amountstranslated into United States dollars as described above areprovided solely for the convenience of the reader, and norepresentation is made that the Indian Rupees or UnitedStates dollar amounts referred to herein could have been orcould be converted into United States dollars or IndianRupees respectively, as the case may be, at any particularrate, the above rates or at all. Any discrepancies in anytable between totals and sums of the amounts listed are dueto rounding off. Information contained on our websitewww.airtel.in is not part of this Quarterly Report. Use of Certain Non-GAAP measures : - This resultannouncement contains certain information on theCompany’s results of operations and cash flows that havebeen derived from amounts calculated in accordance withInternational Financial Reporting Standards (IFRS), but arenot in themselves IFRS measures. They should not beviewed in isolation as alternatives to the equivalent IFRSmeasures and should be read in conjunction with theequivalent IFRS measures. Further, disclosures are alsoprovided under “Use of Non - GAAP financialinformation” on page 24Others: In this report, the terms “we”, “us”, “our”, “Bharti”, or“the Company”, unless otherwise specified or the contextotherwise implies, refer to Bharti Airtel Limited (“BhartiAirtel”) and its subsidiaries, Bharti Hexacom Limited (“BhartiHexacom”), Bharti Airtel Services Limited, Bharti InfratelLimited (Bharti Infratel), Bharti Infratel Ventures Limited(subsidiary of Bharti Infratel Limited), Bharti TelemediaLimited (Bharti Telemedia), Bharti Airtel (USA) Limited,Bharti Airtel (UK) Limited, Bharti Airtel (Canada) Limited,Bharti Airtel (Hong Kong) Limited, Bharti Airtel Lanka(Private) Limited, Bharti Airtel (Singapore) Private Ltd,Network i2i Limited, Bharti Airtel Holdings (Singapore) PteLimited, Bharti Infratel Lanka (Private) Limited (subsidiary ofBharti Airtel Lanka (Private) Limited), Bharti AirtelInternational (Netherlands) B.V., Bharti International(Singapore) Pte Ltd, Warid Telecom International Limited,Airtel M Commerce Services Limited, Bharti Airtel (Japan)Kabushiki Kaisha (subsidiary of Bharti Airtel Holdings(Singapore) Pte Ltd), Bharti Airtel (France) SAS (subsidiaryof Bharti Airtel Holdings (Singapore) Pte Ltd), Bharti AirtelInternational (Mauritius) Limited, Bharti Airtel Africa B.V.(name changed from Zain Africa B.V.), Bharti AirtelAcquisition Holdings B.V. (name changed from CeltelAcquisition Holdings BV), Bharti Airtel Burkina FasoHoldings B.V. (name changed from Celtel Burkina FasoHoldings BV), Bharti Airtel Cameroon Holdings B.V. (namechanged from Celtel Cameroon Holdings BV), Bharti AirtelChad Holdings B.V. (name changed from Celtel ChadHoldings BV), Bharti Airtel Congo Holdings B.V. (namechanged from Celtel Congo Holdings BV), Bharti AirtelGabon Holdings B.V. (name changed from Celtel GabonHoldings BV), Bharti Airtel Ghana Holdings B.V. (namechanged from Celtel Ghana Holdings BV), Bharti AirtelKenya B.V. (name changed from Celtel Kenya BV), BhartiAirtel Kenya Holdings B.V. (name changed from CeltelKenya Holdings BV). Disclaimer: - This communication does not constitute anoffer of securities for sale in the United States. Securitiesmay not be sold in the United States absent registration oran exemption from registration under the U.S. Securities Actof 1933, as amended. Any public offering of securities to bemade in the United States will be made by means of aprospectus and will contain detailed information about theCompany and its management, as well as financialstatements.    Page 3 of 46 TABLE OF CONTENTS Section 1 Bharti Airtel – Performance at a glance 4Section 2 An Overview 5Section 3 Key Accounting Changes 7Section 4 Financial Highlights as per IFRS 4.1 Consolidated - Summary of Consolidated Financial Statements 84.2 Region wise - Summary of Consolidated Financial Statements 94.3 Segment wise - Summary of Statement of Operations 104.4 Region wise & Segment wise - Investment and Contribution 12 Section 5 Operating Highlights 14Section 6 Management Discussion & Analysis 6.1 India & South Asia 186.2 Africa 196.3 Results of Operations 20 Section 7 Stock Market Highlights 22Section 8 Use of Non GAAP Financial Information 24Annexure Detailed Financial and Related Information A.1 Consolidated Financial Statements as per IFRS 27A.2 Trend & Ratio Analysis 30A.3 Key Accounting Policies as per IFRS 36A.4 Reconciliation between IFRS and USGAAP 40 Glossary 42    Page 4 of 46 Section 1BHARTI AIRTEL – PERFORMANCE AT A GLANCE 1. IFRSIFRSIFRSIFRSIFRS2007200820092010Sep 2009Dec 2009Mar 2010Jun 2010 Operating Highlights Total Customer Base000’s39,01364,26897,594137,013115,837125,263137,013183,372Total Minutes on NetworkMn Min176,679314,504506,070643,109151,745 160,964 182,001206,213Network SitesNos39,22469,14193,368107,443100,320 103,050 107,443 118,963Total EmployeesNos20,31425,54324,53818,35418,598 18,201 18,354 24,843No. of countries of operationNos11232 2 3 18Population Coveredbn1.131.141.181.361.181.181.361.82 Consolidated Financials RevenueRs mn185,196 270,250 369,615 418,472 103,785 103,053 107,491 122,308EBITDA before Acquisition Related CostRs mn74,508 113,715 151,678 168,609 43,007 40,823 41,805 45,122Acquisition Related CostRs mn---976 --976 982 EBITDA after Acquisition Related CostRs mn74,508 113,715 151,678 167,633 43,007 40,823 40,829 44,140Cash profit from operations before Derivative &Exchange FluctuationsRs mn71,210 110,579 151,990 162,301 41,675 39,566 39,588 42,103Cash profit from operations after Derivative &Exchange FluctuationsRs mn73,070 111,374 140,065 167,455 40,924 41,088 41,185 39,942Profit / (Loss) before TaxRs mn48,860 76,537 93,073 105,091 25,860 25,336 24,411 20,719Net income Rs mn42,571 67,008 84,699 89,768 22,630 21,949 20,443 16,816Net DebtRs mn42,30642,05769,63523,92069,21547,73323,920602,308Shareholder's Equity Rs mn135,553217,042303,945421,940354,118376,921421,940435,037 Consolidated Financials RevenueUS$ Mn4,297 6,753 7,254 9,271 2,160 2,208 2,381 2,625EBITDA before Acquisition Related CostUS$ Mn1,729 2,841 2,977 3,735 895 875 926 968Acquisition Related CostUS$ Mn---22 --22 21 EBITDA after Acquisition Related CostUS$ Mn1,729 2,841 2,977 3,714 895 875 904 947Cash profit from operations before Derivative &Exchange FluctuationsUS$ Mn1,652 2,763 2,983 3,595 867 848 877 904Cash profit from operations after Derivative &Exchange FluctuationsUS$ Mn1,695 2,783 2,749 3,710 852 880 912 857Profit / (Loss) before TaxUS$ Mn1,134 1,912 1,827 2,328 538 543 541 445Net income US$ Mn988 1,674 1,662 1,989 471 470 453 361Net DebtUS$ Mn982 1,051 1,367 530 1,441 1,023 530 12,925Shareholder's Equity US$ Mn3,145 5,423 5,966 9,347 7,371 8,075 9,347 9,336 Key Ratios Underlying EBITDA Margin 2 %40.2%42.1%41.0%40.3%41.4%39.6%38.9%36.9%Net Profit Margin %23.0%24.8%22.9%21.5%21.8%21.3%19.0%13.7%Net Debt to Funded Equity RatioTimes0.310.190.230.06 0.200.130.061.38Return on Shareholder's Equity %37.4%38.0%32.5%29.0%29.6%27.6%25.1%21.3%Return on Capital employed%28.2%31.7%30.4%24.4%25.7%23.7%21.6%18.4%Particulars UNITS Full Year Ended Quarter EndedUSGAAP 1.   Exchange rate for Rupee conversion to US$ is (a) Rs. 43.10 for the financial year ended March 31, 2007 (b) Rs. 40.02 for the financial year ended March 31, 2008 (c) Rs.50.95 for the financial year ended March 31, 2009 (d) Rs. 48.04 for the quarter ended September 30, 2009, (e) Rs. 46.68 for the quarter ended December 31,2009 (f) Rs. 45.14 for the quarter ended March 31, 2010, (g) Rs. 46.60 for the quarter ended June 30, 2010 being the RBI Reference rate as announced by The Reserve Bank of India at the end of the respective periods.2. Underlying EBITDA Margin is computed before acquisition related costs, of Rs. 976 mn for the quarter ended March 31, 2010 and full year ended March 31, 2010,and of Rs. 982 mn for the quarter ended June 30, 2010.
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