Bharti Airtel

The investment has gone down to Rs. 118,130 million in March 2011 from Rs. 157,733 million in March 2010. This is because the investment in current deposits, bonds and mutual funds has gone down from Rs. 46,189million to Rs. 1,081million. There have been no new investments in the Singapore subsidiary compared to last year but an investment of Rs. 4,636 million in the Mauritius subsidiary of Bharti Airtel. Rest of the investments remained similar compared to 2010. In June 30, 2010, the company won bids for spectrum for 3G wireless technologies and Broadband & Wireless Access (BWA) Licence for 11 circles and 4 circles respectively. The company had a cash outflow of Rs. 119,322Mn towards 3G spectrum fees and Rs. 33,144 Mn toward BWA spectrum fees. Spectrum fees for 3G and BWA is partly financed through debts from various banks. On April 1, 2010 Airtel M Commerce Services Limited (AMSL) has been incorporated as a wholly owned subsidiary of Bharti Airtel Limited with an investment of Rs. 20 Mn. Year 2011 2010 2009 2008 2007 ROC 15.97 23.86 28.4 27.95 29.06 ROE 17.43 23.27 33.74 32.04 35.23

The ROC and ROE has been showing a downward trend since 2009 every year. But EBITDA has been increasing over the past 5 years. It rose by approximately 6% over the last years Rs.167,633 Mn. to Rs.199,664 Mn. Higher acquisition related costs incurred in FY2011 had a major impact on the EBITDA margin of the companys combined operations.

2008-09

2009-10

2010-11 199,664

152,858

167,633

EBITDA (Rs. Million)

A major part of the earnings have to be paid to the government as taxes in the form of licence fee, service charges, and spectrum charges of the current and new 3G network resulting in a 32% year on year decline in the bottom line of combined operations (including Africa). This was mainly due to a net loss of Rs224cr incurred in its African operations. There is also a very high depreciation cost. Further the net interest payable of Rs420cr v/s net interest income of Rs128cr and Rs36cr in FY2010 and FY2010, respectively. The other major impact has been on consumers, who will now be asked to pay more. Airtel has increased its tariffs over the past 2 months, indicating a reversal in trend. Continuously declining margins, high 3G and BWA auction prices, constrained spectrum and rural rollout aspirations leave us with little choice but to make some price corrections, an Airtel spokesperson had said soon after increasing prices for some of its prepaid packages. March 31st, 2011 March 31st, 2010 (72,553) 357 291,901 (315,708) 1,193 (6,764)

Purchase of fixed assets (212,304) Proceeds from Sale of fixed assets 346 Proceeds from Sale of Investments 341,871 Purchase of Investments (295,203) Interest Received 573 Net movement in advances given to Subsidiary (25,215) Companies Acquisition/ Subscription/ Investment in (5,514) (14,309) Subsidiaries/ Associate/ Joint Venture Net cash used in investing activities (190,750) (106,018) Thus there was a major cash outflow on investments in fixed assets. The purchase of investments went down comparatively in the past year. The interest received was almost half as is evident from the cash flow statement. Resulting in a net cash outflow of Rs 190,750 Mn. in the financial year 2010-11.