Q209 - Airtel Published Financials

BHARTI AIRTEL LIMITED Registered Office: Qutab Ambience, H-5/12, Mehrauli Road, New Delhi – 110030 Financial results for the second quarter and half year ended September 30, 2008 1.

Consolidated summarised financial results of Bharti Airtel Limited and its subsidiaries prepared as per United States Generally Accepted Accounting Principles (US GAAP)

(In Rs Crore except ratios) Half Year Ended

Quarter Ended Particulars

September 2008

September 2007

Audited

Audited

Y-o-Y Growth

September 2008

September 2007

Audited

Audited

Y-o-Y Growth

Total revenues

9,020.30

6,337.40

42%

17,503.60

12,242.00

EBITDA

3,699.30

2,709.70

37%

7,221.40

5,156.34

40%

Cash profit from operations

3,125.20

2,597.09

20%

6,464.10

5,218.91

24%

Earnings/(loss) before taxation

1,972.40

1,747.15

13%

4,353.90

3,637.22

20%

Current tax expense/ (income)

176.30

212.02

-17%

481.60

436.84

10%

1,796.10

1,535.13

17%

3,872.30

3,200.38

21%

Earnings/(loss) after current tax expense Deferred tax expense / (income) Net profit / (loss) EBITDA / Total revenues

(301.00) 2,046.30 41.0%

(98.52) 1,613.93 42.8%

(278.10) 27%

4,071.30 41.3%

43%

36.06 3,125.53 42.1%

30%

2.

Consolidated summarised financial results of Bharti Airtel Limited and its subsidiaries prepared as per Indian Generally Accepted Accounting Principles (IGAAP) (In Rs. Crore except per share data) Quarter Ended September 30, Half Year Ended September 30,

S. No.

1

Particulars

a) Net Sales/ Income from Operations b) Other Operating Income

2

2008

2007

2008

2007

Year ended March 31, 2008

Audited

Audited

Audited

Audited

Audited

8,923.57 -

6,324.93 -

17,429.57 -

12,198.45

27,012.24

-

-

Total Income

8,923.57

6,324.93

17,429.57

12,198.45

27,012.24

Total Expenditure

6,430.62

4,548.95

12,465.26

8,812.13

19,452.43

(a) Employee Cost

441.64

378.60

843.23

731.76

1,472.15

1,102.18

881.34

2,099.34

1,670.19

3,591.41

(c) License Fees & Spectrum Charges

909.24

628.12

1,763.01

1,210.84

2,689.96

(d) Access & Interconnection Charges

1,290.56

931.73

2,532.76

1,838.86

4,111.14

(e) Network Operating Expenses

1,432.28

740.59

2,650.76

1,399.72

3,242.95

(f) Sales & Marketing

590.48

390.66

1,140.84

828.72

1,905.83

(g) Administration & others

584.64

530.65

1,261.00

1,009.91

2,102.51

79.60

67.26

174.32

122.13

336.48

2,492.95 29.16

1,775.98 61.80

4,964.31 90.74

3,386.32 145.50

7,559.81 279.61

(b) Depreciation

(h) Other Expenditure

4

Profit from Operations before Other Income, Interest & Exceptional Items (1-2) Other Income

5

Profit before Interest & Exceptional Items (3-4)

6

Interest Expense / (Income) Net

2,522.11 1,099.56

1,837.78 (7.79)

5,055.05 1,005.03

3,531.82 (272.69)

7,839.42 527.87

7

Profit after Interest but before Exceptional Items

1,422.55

1,845.57

4,050.02

3,804.51

7,311.55

8

Exceptional items

9

Profit (+) /Loss(-) from Ordinary Activities before tax

10

Tax Expense -Current Tax

3

-Fringe Benefit Tax -Deferred Tax 11

Net profit (+)/ loss(-) from Ordinary Activities after tax

1,422.55

-

-

-

-

1,845.57

4,050.02

3,804.51

7,311.55

(292.11)

182.51

125.35

698.59

816.15

(24.59)

211.74

280.71

549.48

895.47

11.39

6.29

20.94

12.79

40.30

(278.91)

(35.52)

(176.30)

136.32

(119.62)

1,714.66 -

1,663.06 -

3,924.67 -

3,105.92

6,495.40

12

Extraordinary items (net of tax expenses Rs. )

13

Profit (+)/ Loss (-) for the period

1,714.66

1,663.06

3,924.67

3,105.92

-

6,495.40

-

14 15

Minority Interest Net Profit/Loss for the period

46.53 1,668.13

19.30 1,643.76

89.85 3,834.82

37.95 3,067.97

100.02 6,395.38

16

Paid-up equity share capital (Face value Rs.10/- each)

1,898.10

1,897.71

1,898.10

1,897.71

1,897.91

17

Reserves excluding revaluation reserves

23,686.07

12,714.58

23,686.07

12,714.58

19,823.11

18

Earnings per share (in Rs.)

i) Basic

8.789

8.765

20.204

16.173

34.234

ii) Diluted

8.787

8.756

20.199

16.142

34.193

i) Basic

8.789

8.765

20.204

16.173

34.234

ii) Diluted

8.787

8.756

20.199

16.142

34.193

625,812,203

647,359,051

625,812,203

647,359,051

647,558,268

a. Basic and diluted EPS before Extraordinary items

b. Basic and diluted EPS after Extraordinary items

19

Public Shareholding a. Number of shares b. Percentage of shareholding

32.97%

34.11%

32.97%

34.11%

34.12%

Note : The consolidated financial results includes the results of Bharti Airtel Limited and its subsidiaries, Bharti Hexacom Limited, Bharti Airtel Services Limited, Bharti Aquanet Limited, Bharti Infratel Limited, Bharti Telemedia Limited, Bharti Airtel (USA) Limited, Bharti Airtel (UK) Limited, Bharti Airtel (Canada) Limited, Bharti Airtel (Hong Kong) Limited, Bharti Airtel Lanka (Private) Ltd, Bharti Airtel (Singapore) Private Limited, Bharti Airtel Holdings (Singapore) Pte Limited, Network i2i Limited, Bharti Infratel Lanka (Private) Limited (subsidiary of Bharti Airtel Lanka (Private) Limited) and Bharti Infratel Ventures Limited (subsidiary of Bharti Infratel Limited).

3.

Segment Reporting – Audited as per Indian GAAP (as Consolidated Entity)

Particulars

Quarter Ended September 30, 2008 2007 Audited

Audited

Half Year Ended September 30, 2008 2007 Audited

Audited

(In Rs Crore) Year ended March 31, 2008 Audited

1. Segment Revenue Net sale/income from each segment a)

Mobile Services

b)

Telemedia Services

c)

Enterprise Services - Carriers

d)

Enterprise Services - Corporates

e) f)

Passive Infrastructure Services Others

Total Less: Inter Segment Eliminations Net sales/Income

7,299.38

5,084.01

14,219.86

9,787.58

21,869.73

843.60

712.27

1,640.97

1,365.99

2,861.51

1,707.81

1,009.10

3,282.91

1,976.82

4,379.81

391.21

348.11

816.99

616.57

1,388.50

1,227.87

-

2,283.70

-

602.32

92.56

57.05

212.17

102.56

253.69

11,562.43 2,609.70

7,210.54 823.81

22,456.60 4,936.29

13,849.52 1,505.57

31,355.56 4,063.71

8,952.73

6,386.73

17,520.31

12,343.95

27,291.85

2. Segment Results Profit/(Loss) before tax and interest from each segment a)

Mobile Services

1,589.87

1,389.44

3,148.39

2,704.34

5,926.87

b)

Telemedia Services

225.65

167.49

422.96

261.23

610.87

c)

Enterprise Services - Carriers

625.39

275.23

1,213.61

552.08

1,128.95

d)

Enterprise Services - Corporates

142.92

123.93

292.72

210.55

524.50

e) f)

Passive Infrastructure Services Others

109.00

256.60

-

124.28

(258.95)

(176.67)

(419.29)

(157.29)

(104.32)

Total Less: Inter Segment Eliminations

2,535.54 13.43

1,851.77 13.99

5,075.33 20.28

3,551.53 19.71

7,896.18 56.76

Total profit/(loss) before tax and interest

2,522.11

1,837.78

5,055.05

3,531.82

7,839.42

Less : i) Interest Expense / (Income) Net

1,099.56

(7.79)

1,005.03

Total profit before tax

1,422.55

1,845.57

4,050.02

(272.69) 3,804.51

527.87 7,311.55

3. Capital Employed (Segment assets - Segment liabilities) a)

Mobile Services

6,025.33

8,973.24

6,025.33

8,973.24

4,818.96

b)

Telemedia Services

3,629.65

3,027.83

3,629.65

3,027.83

3,347.59

c)

Enterprise Services - Carriers

3,163.81

3,027.57

3,163.81

3,027.57

3,049.69

d)

Enterprise Services - Corporates

481.63

376.74

481.63

376.74

e)

Passive Infrastructure Services

f)

Others

Total

10,408.05

-

10,408.05

2,860.41

(63.52)

2,860.41

26,568.88

15,341.86

26,568.88

(63.52) 15,341.86

494.72 11,140.25 83.80 22,935.01

4.

Summary of differences in net income/ profit between US GAAP (audited) and Indian GAAP (audited).

(In Rs Crore) Particulars Net profit / (loss) as per US GAAP

Quarter Ended

Half Year Ended

September 30, 2008

September 30, 2008

2,046.30

4,071.30

Add: Differences on account of: Minority Interest and loss of Joint Venture

1.40

(13.60)

166.80

86.40

Amortisation of Goodwill/ Intangibles

20.10

40.00

Being difference in revenue recognition

20.90

14.40

License fee amortisation

14.60

29.20

502.47

201.98

11.80

33.70

(23.50)

(10.00)

1668.13

3,834.82

Deferred Tax expense Less: Differences on account of:

Differences in accounting for finance charges Remeasurement of financial instruments not applicable in IGAAP Differential depreciation provided in IGAAP due to forex fluctuations not considered in US GAAP Net profit/(loss) as per Indian GAAP

5.

Bharti Airtel Limited - Audited financial results for the second quarter and half year ended September 30, 2008 as per Indian GAAP (as Stand alone entity)

(In Rs. Crore except ratios) Quarter Ended September 30, S. No. 1

Particulars a) Net Sales/ Income from Operations b) Other Operating Income

2

-

-

-

-

25,703.51 -

4,331.56

11,556.49

8,375.23

18,483.11

360.59

349.75

718.09

684.99

1,366.64

(b) Depreciation & Amortisation

764.47

841.71

1,489.57

1,592.63

3,280.63

(c) License Fees & Spectrum Charges

856.18

605.45

1,658.07

1,166.75

2,583.82

(d) Access & Interconnection Charges

1,269.22

917.14

2,489.35

1,808.79

4,038.53

(e) Network Operating Expenses

1,571.88

704.45

2,968.84

1,323.48

3,300.47

(f) Sales & Marketing

535.05

363.95

1,038.14

776.19

1,784.91

(g) Administration & others

510.83

502.20

1,115.94

944.95

1,942.95

47.99

46.91

78.49

77.45

185.16

4,610.88

3,296.28

7,220.40

2,358.16

1728.33

28.43

58.64

87.75

138.47

235.86

Profit before Interest & Exceptional Items (3-4)

2,386.59

1,786.97

4,698.63

3,434.75

7,456.26

Interest Expense / (Income) Net Profit after Interest but before Exceptional Items Exceptional items Profit (+) /Loss(-) from Ordinary Activities before tax Tax Expenses

1,075.99

-Deferred Tax Net profit (+)/ loss(-) from Ordinary Activities after tax

12

Extraordinary Items (net of tax expenses Rs.Nil )

13

Net Profit(+)/ Loss (-) for the period Paid-up equity share capital (Face value Rs.10/each) Reserves excluding revaluation reserves Earnings per share (in Rs.) a. Basic and diluted EPS before Extraordinary items i) Basic

1,310.60 1,310.60 (294.18) 9.00

(4.88) 1,791.85 1,791.85

1,017.52 3,681.11 3,681.11

(264.60) 3,699.35 3,699.35

483.71 6,972.55 6,972.55

172.70

29.55

667.29

728.35

202.68

276.63

531.23

859.36

10.02

5.57

18.43

11.53

37.23

(313.20)

(35.55)

(265.51)

124.53

(168.24)

1,604.78 -

1,619.15 -

3,651.56 3,651.56

3,032.06 3,032.06

6,244.20 -

1,604.78

1,619.15

6,244.20

1,898.10

1,897.71

1,898.10

1,897.71

1,897.91

22,031.30

12,618.88

22,031.30

12,618.88

18,340.23

8.455

8.534

19.239

15.984

32.910

8.453

8.525

19.234

15.953

32.870

ii) Diluted b. Basic and diluted EPS after Extraordinary items i) Basic

8.455

8.534

19.239

15.984

32.910

ii) Diluted

8.453

8.525

19.234

15.953

32.870

625,812,203

647,359,051

625,812,203

647,359,051

647,558,268

32.97%

34.11%

32.97%

34.11%

34.12%

Public Shareholding a. Number of shares b. Percentage of shareholding

1.

Audited

11,671.51

5,916.21

-Fringe Benefit Tax

17

Audited

16,167.37

(a) Employee Cost

-Current Tax

16

Audited

6,059.89

Total Expenditure

6

15

Audited

8,274.37

25,703.51

5

14

Audited

11,671.51

Other Income

11

Year ended March 31, 2008

16,167.37

4

10

2007

6,059.89

Profit from Operations before Other Income, Interest & Exceptional Items (1-2)

9

2008

8,274.37

3

8

2007

Total Revenue

(h) Other Expenditure

7

Half Year Ended September 30,

2008

The above financial results for the second quarter and half year ended September 30, 2008 have been reviewed by the Audit Committee in its meeting held on October 30, 2008 and approved by the Board of Directors in its meeting held on October 31, 2008.

2.

Segment wise revenue, results and capital employed have been provided separately under segment reporting. The consolidated financial statement has been furnished to provide information about overall business of the Company and its subsidiaries.

3.

Previous year’s / periods’ figures have been regrouped / rearranged, wherever required.

4.

During the quarter ended September 30, 2008 the Company has allotted 80,800 new equity shares to the employees of the Company upon exercise of stock options as per ESOP Scheme 2005. As a result, the paid up equity share capital of the company stands increased from Rs. 1,898.02 crore to Rs. 1,898.10 crore as on September 30, 2008.

5.

Reserves and surplus as at September 30, 2008 include Rs. 81.26 crore towards employee stock option outstanding (net of the related deferred cost) account.

6.

The Company had followed the accounting policy to adjust foreign exchange fluctuation on loans/liability for fixed assets till June 30, 2008, as per the requirement of Schedule VI of the Companies Act, 1956 based on a legal advice. During the period, effective April 1, 2008, the Company has adopted the treatment prescribed in Accounting Standard (AS-11) "Effect of Changes in Foreign exchange Rates" notified in the Companies (Accounting Standard) Rules 2006 dated December 7, 2006. Instead of capitalizing / decapitalizing such fluctuation, as per policy hitherto followed, the Company has, with effect from the April 1, 2008, charged/credited such fluctuations directly to the Profit & Loss Account. Had the Company continued with its earlier policy, net profit after tax would have been higher by Rs 402.66 crore and Rs 655.03 crore for the quarter and half year ended September 30, 2008, respectively, for the Company and the net profit after tax would have been higher by Rs. 421.34 crore and Rs. 681.52 crore for the quarter and half year ended September 30, 2008, respectively, for the Group.

7.

During the quarter, the Company contributed Rs 20 crore in its wholly owned subsidiary Bharti Airtel Lanka (Private) Limited towards equity; and Rs. 34.31 crore in its subsidiary Bharti Hexacom Limited as a subscription to the right issue in proportion to the existing shareholding.

8.

Status of investor complaints as on September 30, 2008 is as follows: Complaints pending as on July 1, 2008 Complaints received during the quarter Complaints resolved during the quarter Pending as on September 30, 2008

Nil 13 13 ===== Nil =====

6.

Segment Reporting - Audited as per Indian GAAP (as Stand alone entity)

Particulars

Quarter Ended September 30, 2008 2007 Audited

Audited

(In Rs Crore) Year ended Half Year Ended September 30, March 31, 2008 2008 2007 Audited

Audited

Audited

1. Segment Revenue Net sale/income from each segment a)

Mobile Services

b)

Telemedia Services

c)

Enterprise Services - Carriers

d) e)

Enterprise Services - Corporates Others

6,797.88

4,809.38

13,252.64

9,266.48

20,603.05

835.91

707.31

1,626.53

1,356.89

2,840.00

1,688.24

1,012.56

3,250.73

1,962.79

4,340.89

373.72

330.75

737.90

581.08

1,264.47

0.23

0.75

35.88

2.73

4.99

Total Less: Inter Segment Eliminations

9,695.98 1,393.18

6,860.75 742.22

18,903.68 2,648.56

13,169.97 1,359.99

29,053.40 3,114.03

Net sales/Income

8,302.80

6,118.53

16,255.12

11,809.98

25,939.37

2. Segment Results Profit/(Loss) before tax and interest from each segment a) Mobile Services

5,538.82

1,481.48

1,312.11

2,923.33

2,559.47

b)

Telemedia Services

224.56

168.86

421.35

264.41

613.62

c)

Enterprise Services - Carriers

632.61

280.52

1,229.98

557.87

1,160.07

d) e)

Enterprise Services - Corporates Others

156.71

120.88

300.73

211.77

505.47

(108.77)

(95.40)

(176.76)

(158.77)

(361.72)

Total profit/(loss) before tax and interest Less :

2,386.59

1,786.97

4,698.63

i) Interest Expense / (Income) Net

1,075.99

(4.88)

1,017.52

Total profit before tax

1,310.60

1,791.85

3,681.11

3,434.75 (264.60)

7,456.26 483.71

3,699.35

6,972.55

3. Capital Employed (Segment assets - Segment liabilities) a)

Mobile Services

5,418.71

8,491.76

5,418.71

8,491.76

5,299.83

b)

Telemedia Services

3,623.02

2,976.29

3,623.02

2,976.29

3,375.77

c)

Enterprise Services - Carriers

3,127.76

2,431.59

3,127.76

2,431.59

3,058.49

d)

Enterprise Services - Corporates

515.11

417.73

515.11

417.73

501.22

e)

Others

10,701.56

694.68

10,701.56

694.68

8,070.05

23,386.16

15,012.05

23,386.16

15,012.05

20,305.36

Total

For Bharti Airtel Limited

New Delhi October 31, 2008 “Bharti Airtel”, or “the Company”, wherever stated stands for Bharti Airtel Limited. For more details on the financial results, please visit our website www.bhartiairtel.in

Sd/Sunil Bharti Mittal Chairman & Managing Director