Chairman's Message

Dear Investor, The year 2004-05 will be remembered as a year in which Bharti established itself as a LeaderInnovator in the telecom sector in India. It was a year when it faced big challenges like sensitive regulatory environment & hyper competition. I am pleased to share that Bharti emerged stronger than ever before making a difference to the Indian economy, earning global recognitions along the way. It was a year when Bharti continued it's focus on customer needs, strengthened it's management teams and emerged a clear leader in the market. We are today the largest mobile service provider in India, both in terms of revenues as well as subscribers. In March, Bharti became the first telecom company to complete an all India footprint covering all 23 telecom circles of India. Bharti rolled out a world class GSM network in thousands of towns, cities and villages. Airtel today proudly presents itself from the Indus to the Indian Ocean and from Sabarmati to the Brahmaputra. It has rolled out in the

Andaman & Nicobar Islands, the North East, and in the interiors of Rajasthan. The year also witnessed the unification of brand Airtel. Airtel now straddles across a suite of telecom services that your company provides. Your company established itself firmly in all the four key areas of telecom, i.e. mobile services under the Mobility Leaders group and the three divisions under the Infotel Leaders group, the Airtel Enterprise Service's group, which looks after large corporates, the Long Distance operating group, which provides domestic and international long distance services and the Broadband & Telephone services group, which provides high quality fixed line and broadband services. Your company reinforced its position as an innovator in the market by launching of a slew of new products & services like the Blackberry, HelloTunes, and Airtel Live.

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Bharti,

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2 All India presence refers to presence in all mobile circles as defined by the DoT, Government of India. It does not refer to coverage of 100% of the land area of the country.

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3 Although the policy decision has been announced by the government, the detailed guidelines are still awaited.

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To The Members, The Directors are pleased to present the Tenth Annual Report covering the operating and financial performance of Bharti Tele-Ventures Limited (Bharti or the Company) for the .inancial Year ended March 31, 2005. Bharti is one of the leading private integrated telecommunications service providers in India and the only private player to have All India presence. The Company recently completed 10 years of its existence and has seen tremendous growth in its first decade of operations. Some of the key financial highlights of the .inancial Year 2004-05 include :
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million for the year ended March 31, 2004. The net finance cost for the year was Rs. 2,439 million as compared to Rs. 2,693 million for the corresponding period last year. The finance cost reduced with the net debt coming down from Rs. 42,292 million to Rs. 41,171 million. This has been made possible due to replacement of certain old borrowings by new borrowings at lower finance cost and on significant cash flow benefits arising out of capex contracts. The earnings before tax for the year ended March 31, 2005 was Rs. 15,832 million and the net profit was at Rs. 12,116 million leading to an earnings per share of Rs 6.593. The net debt for the year ended March 31, 2005 was Rs. 41,171 million resulting in the net debt to EBITDA of 1.34 times and interest (net) coverage ratio of 12.57 times. .inancial highlights of Bharti (Standalone) During the year, Bharti Cellular Limited and Bharti Infotel Limited, subsidiaries of the Company, merged with the Company with effect from April 1, 2004 by an order of the Honble High Court of Delhi, dated May 21, 2005. .inancials for the year ended March 31, 2005 given below are post merger figures. (Rs. in Million) Particulars Year Ended March 31, 2005 79,442

.irst GSM operator to cross customer base of ten (10) million .irst operator to have an All-India footprint .ull year consolidated gross revenues of Rs. 82 billion (~US$ 2 billion) and consolidated EBITDA of Rs. 31 billion .ull year consolidated net profit of Rs. 12 billion Year-on-year growth of the customer base of 66% resulted in a 62% increase in revenues, 80% increase in EBITDA, and 108% growth in net profit.

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.inancial Review .inancial highlights of Bharti (Consolidated) (Rs. in Million) Particulars Gross Revenue EBITDA Cash Profit from Operations Earnings before taxation Net Profit/(Loss) March 31, March 31, Y-o-Y 2005 2004 Growth (%) 81,558 30,658 28,219 15,832 12,116 50,369 17,055 14,363 5,527 5,837 61.9% 79.8% 96.5% 186.4% 107.6%

Gross Revenue Income before .inance Expenses Tax, Depreciation and Amortisation (EBITDA) Less: .inance Expenses/(Income) (Net) Depreciation Profit before Tax Provision for Taxation Provision for Deferred Tax Profit after Tax

29,940 2,459 10,194 15,643 86 3,450 12,107

The consolidated revenues and EBITDA for the year ended March 31, 2005 was Rs. 81,558 million and Rs. 30,658 million respectively. The consolidated revenues and EBITDA grew by 62% and 80% respectively for the year ended March 31, 2005. The EBITDA margin (ratio of EBITDA to total revenues) for the year was 37.6% as compared to 33.9% for the year ended March 31, 2004. The cash profit from operations for the year ended March 31, 2005 was Rs. 28,219 million as compared to Rs. 14,363

Dividend The Directors believe that there are tremendous growth opportunities available in the Telecom Sector and the Company should capitalize on these by further expanding and strengthening its existing networks. This will enhance the value of the esteemed shareholders in the long run. Therefore, with a view to invest the profits in expansion plans, the Directors do not recommend any dividend for the year ended March 31, 2005.

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Highlights of the Year Major Agreements & Alliances :

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Brand Unification :
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During the year, the Company entered into a regional mobile services agreement with six other leading mobile operators (Globe Telecom Philippines, Maxis Malaysia, Optus Australia, SingTel Singapore, Taiwan Cellular Corporations Taiwan, and Telkomsel Indonesia) to form a regional alliance, Bridge Alliance. The alliance will build shared mobile infrastructure, products, and develop regional mobile services for a potential base of 300 million customers. The Company and Videsh Sanchar Nigam Limited (VSNL) entered into an agreement to share BTVLs national long distance network for a period of 15 years for a consideration of Rs. 5,000 million. The Company entered into a contract to build and manage AirTels circles with major international vendors namely Nokia, Siemens and Ericsson to manage services and expand AirTels GSM/GPRS network into rural India. Bharti and Ericsson also entered into a nationwide Intelligent Network contract. Pursuant to the order passed by the Honble High Court of Delhi dated May 21, 2005, Bharti Cellular Limited (BCL) and Bharti Infotel Limited (BIL) the two major operating subsidiary companies have been merged with the Company with effect from April 1, 2004. Prior to merger of BCL with the Company, Bharti Mobile Limited operating in circles of Karnataka, Andhra Pradesh and Punjab was merged with BCL. The Company acquired an additional stake of 1% from M/s. .ouad M. T. Al Ghanim Trading & Cont. Co. Kuwait one of the Shareholder of Bharti Hexacom Limited (formerly known as Hexacom India Limited). With the acquisition of the above 1% equity stake, Bhartis holding in Bharti Hexacom stands increased to 68.50%. Bharti Hexacom owns Licenses to operate cellular services in the Rajasthan and North East Circles. Bharti (through its erstwhile 100% subsidiary Bharti Infotel Limited, which has now been merged with the Company) has acquired 100% equity stake in Bharti Broadband Limited (BBL) (formerly known as Comsat Max Limited) by acquiring its holding company Satcom Broadband Equipment Limited (SBEL) (formerly known as CMax Infocom Limited). Bharti Broadband offers comprehensive, secure and integrated VSAT solutions for enterprises while SBEL is engaged in the sale of broadband equipments.

The Company has unified all its telecom offerings under the flagship brand Airtel, after the advent of the unified license regime. Under Brand Unification, the Company has restructured its businesses under Mobile Services and Infotel Services. Infotel Services comprises of Broadband & Telephone Services, Long Distance Services, and Enterprise Services.

Capital Market and Ratings : During the year, the Companys scrip was included in the .utures & Options segment on the National Stock Exchange of India Limited. The Company was amongst the worlds top ten companies on share price gain given its 276% change in price per share over last year according to the Business Week (July 26-August 2, 2004). The Company has always enjoyed best ratings from various rating agencies. During the year the following ratings were assigned :
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Mergers & Acquisitions :

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Standard and Poors Rating - BB corporate credit rating (equivalent to Indias Sovereign rating). .itch Ratings - BB senior unsecured foreign currency rating. Information and Credit Rating Agency (ICRA) upgraded the Companys rating to LAA+, a high quality credit rating and indicative of high safety. CRISIL - AAA/Stable rating to the Companys Long-Term Debt. This rating indicates the highest safety with regard to timely payment of interest and principal.

New Products/Initiatives :
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The Company became the first and only telecom operator to provide the BlackBerry wireless solution to Indian customers. The Company launched Airtel Live a multi-access entertainment portal on the mobile as an initiative to drive convergence in the entertainment and communication space. The Company was the first wireless services operator to introduce Ring Back Tones innovative services (Hello Tunes). The Company introduced Indias first Stock and Portfolio Tracker on the mobile in association with the Bombay Stock Exchange. Airtel subscribers can use the Airtel Portfolio Manager to view live stock quotes and analyze status of their portfolio.

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Business Review During the financial year 2004-05, the Company crossed key milestones and maintained its position as a leading telecommunications services provider in India by continuously improving its strategy and enhancing its operations. Some of the key highlights include the following :
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might to take full advantage of the rapidly growing telecom market. The revenues from the mobile services for the financial year were Rs. 55,436 million, a growth of 69% over the revenues in the previous financial year. The mobile services business contributed 68% to the consolidated revenues. The Company recorded a growth in revenues despite reductions in tariffs and intense competition. This robust growth came on account of increases in subscriber base, higher traffic on its networks, and expansion of non-voice services. With mobile tariffs in India being the lowest in the world, the Companys prime focus is on ensuring customer satisfaction through network quality, superior customer service and continuous innovation in valueadded services that would help in expanding its mobile subscriber base and drive up volumes. The key financial results of the mobile segment for the year ended March 31, 2005 are presented below : .inancial highlights of Mobile Services (Consolidated) (Rs. in Million) Particulars Gross Revenue Earnings before interest and taxation March 31, March 31, Y-o-Y 2005 2004 Growth (%) 55,436 10,385 32,871 5,156 68.60% 101.40%

The Company became the first mobile services company to have an all India footprint covering all the 23 circles. The Company has expanded its coverage of its broadband and telephone services from 5 circles to 14 circles. The Company became the first GSM mobile services company in India to cross the 10 million-customer mark. The Company converted 21 of its 23 cellular services licenses to the Unified Access Service License (UASL). The Company has applied for the migration of the Rajasthan cellular license (owned by Bharti Hexacom) to the UAS License and proposes to convert the North East circle cellular license in the near future.

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As on March 31, 2005, the Company had a combined subscriber base of 11,841,542, which included 10,984,280 mobile subscribers and 857,262 broadband and telephone subscribers. The Companys total subscriber base grew by 66% in the financial year, over that of the previous year. .or the financial year, the consolidated revenues and consolidated operating profits before interest, tax, depreciation and amortization, as per Indian GAAP, were Rs. 81,558 million and Rs. 30,658 million respectively. Mobile Services The Company launched mobile operations in seven new circles of Assam, Bihar, Jammu & Kashmir, North East, Orissa, Uttar Pradesh (East), and West Bengal. The acquisition of a 68.5% stake in Bharti Hexacom (Rajasthan and North East circles) and launch of new operations have made the Company the only mobile services provider with an all India footprint. The Company added 4.5 million mobile subscribers during the year, garnering a 26.8% share of the all India GSM mobile market. The Companys strong performance helped to consolidate its leadership in the market and has given it the

Broadband and Telephone Services The Companys strategy for the broadband and telephone business is to provide these services to potentially high telecommunication revenue generating customers with high usage of voice and data services. These customers are typically present in high-density commercial and industrial areas. The subscriber base for the broadband and telephone services grew by 35% to end the year with 857,262 subscribers as on March 31, 2005. The Company focused on acquiring customers for the DSL services and as on March 31, 2005, had approximately 118,000 broadband & telephony customers subscribing to such services. The revenues for the broadband and telephone services increased by 46% during the financial year to Rs. 11,311 million.

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The key financial results of the broadband & telephone services for the year ended March 31,2005 are presented below : .inancial highlights of Broadband & Telephone Services (Consolidated) (Rs. in Million) Particulars Gross Revenue Earnings before interest and taxation Long Distance Services The Company complements its mobile and broadband & telephone services with national and international long distance services. During the financial year, the Company saw significant growth in the long distance traffic carried on its network. Larger numbers of captive customers and substantial increase in revenues from leased lines helped achieve robust growth in the long distance services business. The Company also established gateway facilities in various parts of India and entered into important interconnect agreements with government-owned telecom companies as well as private sector service providers. The Company had approximately 29,000 kilometers of fibre on its national long distance network as of March 31, 2005. The key financial results of the long distance services division for the year ended March 31, 2005 are presented below : .inancial highlights of Long Distance Services (Consolidated) (Rs. in Million) Particulars Gross Revenue Earnings before interest and taxation March 31, March 31, Y-o-Y 2005 2004 Growth (%) 18,737 4,716 12,182 2,727 53.80% 72.90% March 31, March 31, Y-o-Y 2005 2004 Growth (%) 11,311 1,442 7,766 (59) 45.60%

The key financial results of the enterprise services division for the year ended March 31, 2005 are presented below : .inancial highlights of Enterprises Services (Consolidated) (Rs. in Million) Particulars Gross Revenue Earnings before interest and taxation March 31, March 31, Y-o-Y 2005 2004 Growth (%) 5,406 2,284 2,624 1,087 106.0% 110.2%

Enterprise Services The enterprise services group is a solutions-based communication group, especially created to deliver integrated services to corporate customers. As a partner committed to the business needs of its customers, the Company understands the unique challenges that drive business growth and is committed to provide customized offerings through its portfolio of mobile, broadband & telephone, and data & internet solutions.

Regulatory and Key Industry Developments During the year, the following regulatory developments have taken place: 1. Telecom Regulatory Authority of India (TRAI) introduced a revised ADC regime w.e.f. .ebruary 01, 2005 after a public consultative exercise. In March 2005, TRAI initiated a review of the prevailing Interconnection Usage Charges (IUC) regime through public consultation. In the meanwhile, in April, TRAI introduced additional ADC on calls originated by Roaming Subscribers. 2. On the tariff front, TRAI prescribed ceiling tariffs for Domestic Leased Circuits (DLC) implemented w.e.f May 01, 2005. It also initiated a consultative exercise to review IPLC tariffs. 3. During the course of the year, TRAI submitted its recommendations to the DoT on Unified Licensing Regime (January 2005) and Spectrum related matters (May 2005). 4. During the course of the year, the following policy changes were introduced by the DoT : a. In May 2005, DoT permitted Inter-Service Area connectivity between Mumbai & Maharashtra; Chennai & Tamil Nadu; Kolkata & West Bengal and UP (East) & UP (West) service areas and removed zero prefix for dialing Cell-to-Cell and .ixedtoCell calls between the aforesaid service areas. The Company has expressed its concerns on the above to protect the interests of National Long Distance Licensees and preserve level playing field in the industry. b. In March 2005, DoT directed all operators who provide fixed wireless services to ensure that the terminal used for fixed wireless services is strictly confined to the subscribers premises. c. In .ebruary 2005, Union Cabinet approved the hike of foreign direct investment cap in the telecom sector to 74 percent from 49 percent. Implementation of the said policy is awaited.

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In December 2004 DoT announced Guidelines for amending the licenses of Internet Service Providers (ISPs) to allow them to provide VPN Services upon payment of Entry .ee of Rs.10 crores/Rs.2 crores/ Rs.1 crore for Category A, B & C licenses respectively and an annual Licence .ee @ 8% of AGR. The Company has applied for the said amendment to our license. e. In October 2004, DoT introduced the Broadband Policy 2004 to accelerate the growth of broadband services in the Country. f. In June 2004, DoT announced reduction in license fee payable by Infrastructure Provider Category II (IP II) licensees from the existing 15% to 6% of Adjusted Gross Revenue (AGR). Share Capital The Company allotted 2,00,88,445 Equity Shares of Rs. 10/each to M/s. Shyam Cellular Infrastructure Projects Limited (SCIPL) upon exercise of option of conversion of Optionally Convertible Redeemable Debentures (OCRDs) by SCIPL on different dates in April-June 2005. The OCRDs were issued to them in May 2004 as part consideration for the acquisition of its equity stake in Bharti Hexacom Limited (formerly Hexacom India Limited). ADR Offering Pursuant to the resolution passed by the members in the Annual General Meeting held on August 20, 2004, the Board of Directors were authorised for sponsorship of Secondary American Depository Receipt Offering of 200 million equity Shares. Due to lack of sponsorship interest by the principal shareholders, the Board has decided not to proceed further with the ADR issue. Corporate Governance Bharti has always believed that Corporate Governance is more a way of business life than a mere legal compulsion. It is the application of best management practices, compliance of law in true letter and spirit and adherence to ethical standards for effective management and distribution of wealth and discharge of social responsibilities for sustainable development of all stakeholders. In compliance of the requirements of Clause 49 of the Listing Agreement with the Stock Exchanges, a statement of compliance is provided in the Corporate Governance Section of the Annual Report. A Certificate by Price Waterhouse, Chartered Accountants, Auditors on compliance with the conditions of Corporate Governance under clause 49 of the Listing Agreement is also annexed to the Corporate Governance Report. Corporate Social Responsibility At Bharti, Corporate Social Responsibility (CSR) is embedded in the values of the Company and based on this, the Company undertakes a number of initiatives every year. During the year, the Company responded to the Tsunami disaster by

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investing over 20 crores in mobile network in Andaman & Nicobar Islands and Crisis Communication Centres in Tamil Nadu. In addition, if continued its efforts in the area of education by way of setting up Computer Centres and Libraries for disadvantaged children across the country. Employees stock option plan Existing Scheme The disclosures 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 set out in the Annexure A to this Report. A certificate from M/s. Price Waterhouse, Chartered Accountants, Statutory Auditors, with regards to the implementation of the Company Employees Stock Option Plan, would be placed before the members in the ensuing Annual General Meeting. Employees stock option plan Proposed Scheme Human Resource is the key to the success of any organisation. Bharti has always valued its human resource and has chosen best of the HR practices. Accordingly an ESOP Scheme was introduced in 2002, which benefited the employees. With the tremendous growth of the Company, the number of employees has also grown manifolds and the Directors feel that in line with the industry practices, the Company should extend the benefits of ESOP to the employees who have joined in recent past. The ESOPs also act as a retention tool for well-performing employees who are contributing to the growth of the Company. In view of this, another Employee Stock Option Scheme has been proposed, the terms and conditions of which are being placed for the approval of the members by way of special resolution at the ensuing Annual General Meeting. The Board of Directors recommends the same for approval. Awards n The Company was awarded the Indian Mobile Operator of the Year 2005 by Asian MobileNews in June 2005.
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The Company had been awarded as Indias Best Managed Company as per the 2004 poll results on Best Managed Companies and Corporate Governance announced by Asiamoney in December 2004. The Company was ranked as Indias 2nd Best Employer based on a survey conducted by Hewitt Associates in December 2004. The study identifies Best Employers in India based on employee opinions, the organizations employment and people practices, and the perspective of the organizations senior leadership. Bharti became the top most Telecom Company and was featured amongst the top three companies across the sectors in the ET 500, published in June 2005. The Companys flagship brand Airtel received three awards at the prestigious Advertising Agencies Association Of India (AAAI) awards in December 2004. v Silver for the Brand Campaign of the Year. v Silver for the Best Advertising .ilm.

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Bronze for its Smiley ad campaign. The Company was awarded with the World Communications Best Brand Award of the Year by the London-based Emap Communications Group in October 2004. The award recognizes outstanding performance by companies and brands in the global telecommunications industry. Companies are evaluated on actual market performance parameters such as revenue growth, market share and growth, and demonstration of leadership in product and service innovations. n The Company featured in .orbes 2004 A-list, or 400 of the worlds Best Big Companies. With this list, .orbes attempts to identify the worlds most attractive big public companies for investors. The .orbes A-list features only those companies that have market capitalization or sales of $5 billion or more. n Mr. Sunil Bharti Mittal, Chairman & Group Managing Director, was granted with the Best People CEO Award by Hewitt Associates in December 2004. n Mr Sunil Bharti Mittal, Chairman & Group Managing Director, had been named the Ernst & Young Entrepreneur Of The Year 2004. n Mr. Sunil Bharti Mittal, Chairman & Group Managing Director, became the first member from India to be inducted on the GSM Association (GSMA), the global trade association representing the GSM Industry, for the term 2005-06. GSMA has more than 670 mobile operators including 3G, as of January 2005. Directors Mr. Sunil Bharti Mittal, Mr. Rakesh Bharti Mittal, Mr. Rajan Bharti Mittal, Mr. Akhil Gupta and Mr. Lim Toon retire by rotation at forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. Article 146 of the Articles of Association of the Company permits the appointment of Executive Directors as non-rotational Directors. The Board recommends the re-appointment of Mr. Sunil Bharti Mittal, Mr. Rajan Bharti Mittal and Mr. Akhil Gupta, the Executive Directors as Directors not liable to retire by rotation and Mr. Rakesh Bharti Mittal and Mr. Lim Toon as Directors liable to retire by rotation.
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A brief resume, expertise and details of other directorship of these Directors are given in the Explanatory Statement annexed to the Notice of ensuing Annual General Meeting. The Company has also received notices from shareholders of the Company proposing the appointment of Mr. Sunil Bharti Mittal, Mr. Rajan Bharti Mittal and Mr. Akhil Gupta as Directors not liable to retire by rotation. During the year, Mr. Dalip Pathak ceased to be a Director of BTVL with effect from .ebruary 28, 2005. The Board places on record its sincere appreciation for the valuable contributions made by Mr. Dalip Pathak during his tenure. Mr. Pathak had actively participated in the deliberations of

the Board and the Company was benefited immensely from his inputs. .ixed Deposits During the year, the Company has not accepted any fixed deposits from the public. Auditors The Statutory Auditors of the Company, M/s. Price Waterhouse, Chartered Accountants, New Delhi, retire at the conclusion of ensuing Annual General Meeting of the company and are eligible for re-appointment. M/s. Price Waterhouse have sought the re-appointment and have confirmed that their re-appointment if made, shall be within the limits of Section 224(1B) of the Companies Act, 1956. The Audit Committee and the Board recommends the reappointment of Price Waterhouse, Chartered Accountants as Auditors of the Company. Auditors Report The Board has duly examined the statutory auditors report to accounts and the clarifications, wherever necessary, have been included in the Notes to Accounts, section of the Annual Report. Conservation of Energy, Technology Absorption and .oreign Exchange The Company being a service provider organisation, most of the information as required under Section 217(1)(e) read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 as amended are not applicable. However the information as applicable have been given in Annexure B to the report. Particulars of Employees Information as per the provisions of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particular of Employees) Rule 1975 as amended forms part of this Report and are given in Annexure C of this Report. Directors Responsibility Statement Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors to the best of our knowledge and belief confirm that : (i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; (ii) they have selected and applied consistently and made judgments and estimates that are reasonable and prudent so as 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;

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(iv) they have prepared the annual accounts on a going concern basis. Subsidiary Companies As required under Section 212 of the Companies Act, 1956, the Audited Balance Sheet and Profit & Loss Account along with the respective reports of the Board of Directors and the Auditors thereon of the subsidiary companies for the year ended March 31, 2005 are attached. The statement pursuant to Section 212 of the Companies Act, 1956 also forms part of the Annual Report. Acknowledgements The Directors place on record their sincere appreciation for the significant contribution, made by the employees, who through their competence, hard work, solidarity, co-operation and support have enabled the Company to establish nationwide footprint as an integrated and leading telecom player.

The Directors also take this opportunity to thank the Department of Telecommunications (DoT), Central and the State Governments, other statutory bodies, vendors, lenders, bankers, financial institutions, for their untainted and consistent support to the Company. Last but not the least the Directors would like to thank various partners viz. Bharti Telecom, Singapore Telecom International Pte. Ltd., Warburg Pincus and other valuable shareholders for their support and contribution. We look forward to their continued support in the future.

.or and on behalf of the Board New Delhi July 26, 2005 Sunil Bharti Mittal Chairman and Managing Director

Annexure - A
IN.ORMATION REGARDING THE EMPLOYEES STOCK OPTION SCHEME
(as on March 31, 2005) a) b) c) d) e) f) g) h) i) j) Number of Stock Options granted Pricing .ormula (Rs.) Option Vested Number of Options exercised Number of shares arising as a result of exercise of option Number of option lapsed Variation of terms of option Money realized by exercise of options (Rs.) Total number of options in force Employee-wise details of options granted to (i) Senior Managerial Personnel. : : : : : : : : : : 12,614,626 Rs. 22.50 12,021,010 8,709,896 8,709,896 3,155,450 Nil Rs. 202,242,660.00 2,975,280 The Company has not granted any options during the year under review to any of its Senior Managerial Personnel. Nil Nil N.A. Rs. 16,904,781.00

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Employees who have been granted 5% or more of the stock options during the financial year. (iii) Employees who have been granted Options during any one year equal to or exceeding 1% of the issued capital Company at the time of grant. Diluted earning per share (EPS) pursuant to issue of shares on exercise of options calculated in accordance with Accounting Standard (AS) 20 Earning Per Share In case, the employees compensation cost is calculated on the basis of intrinsic value of the Stock Option, 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.

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Annexure - B
IN.ORMATION RELATING TO CONSERVATION O. ENERGY, TECHNOLOGY ABSORPTION, RESEARCH AND DEVELOPMENT AND .OREIGN EXCHANGE EARNING AND OUTGO .ORMING PART O. DIRECTORS REPORT IN TERMS O. SECTION 217(1)(e) O. THE COMPANIES ACT, 1956 READ WITH THE COMPANIES (DISCLOSURE O. PARTICULARS IN THE REPORT O. THE BOARD O. DIRECTORS) RULES 1988. Conversation of Energy BTVL 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 has in its endeavour to obtain and deliver the best, has entered into number of tie ups and alliance with major global telecom players to harness and tap the latest and the best technology in the sector. .oreign Exchange Earning 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 being Telecom Service Provider due to its licences restrictions, could 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. (a) Total .oreign Exchange Earning (b) Total .oreign Exchange Outgo : : .or the year Rs. 9,863 Rs. 22,550 million million

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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, 2005 and forming part of the Directors Report
S. No. Name Designation Nature of Employment, whether contractual or otherwise Nature of duties of the employee Qualification(s) Age (in years) Date of Commencement of Employment Total experience (in years) Gross Remuneration (in Rs.) Previous employment/ Designation

(A) EMPLOYED THROUGHOUT THE .INANCIAL YEAR 1. 2. 3. 4. 5. 6. 7. 8. 9. Abhay Savargankar Adesh Pandey Akhil Gupta Alok Kumar Amandeep Singh Amit Shukla Amrita Gangotra Anil Nayar Anjan Choudhury Anurag Prashar Arun Bhardwaj Arun Hariharan Arun Kr. Padhi Arvind Mehra Ashok Juneja Atul Bindal Chief - Technical Head - Customer Service Development Permanent Permanent Technical CSD General Management CRM Technical Marketing Network & IT General Management IT CSD Sales BE Elec. & Telecom. B.Tech. (Mech.) CA B.Tech BE (E & CE) B.Tech, PGDM 39 39 49 47 34 40 20-Apr-02 01-.eb-03 1-Sep-03 6-Jul-01 09-May-03 23-Jun-01 25-Nov-02 1-Apr-03 01-Apr-04 16-Jul-03 1-.eb-02 01-Apr-02 20-Jan-03 17-Dec-01 29-Oct-03 26-Jun-03 16 16 23 26 14 16 16 32 19 18 20 14 26 22 26 20 2,803,733 2,516,920 26,809,936 3,424,193 3,309,467 2,719,474 3,679,437 11,416,630 2,764,747 4,604,557 3,588,297 3,815,885 5,434,287 3,719,644 9,955,345 10,534,331 BSNL, Gujrat/DGM - Technical Pepsico. India Holdings/VP - Operations Consultancy ESCOTEL/Chief General Manager Spice Communications/VP (Tech. & IT), Punjab Communications Ltd.-Manager G.M.PENS/VP -Sales & Marketing HC. Comnet Ltd./CIO Bharti Cellular Ltd.(PO)/ President BCL, Mumbai/General Manager - IT Xerox Modi Corp. Ltd./Executive Director Customer Service Support Ericsson Inc./Director RPG Richo Ltd., Controller Business Operations (South) Bharti Cellular Ltd../Vice President (HR) Caltex Lubricants India Ltd./C.O & Co. Secretary Bharti Broadband Networks Ltd./ Director DHL International/Communication Director Asia Pacific Max New York Life Insurance Company/ Director Supplementary Distribution Dabhol Power Company/.inancial Controller BML-AP & KK/Executive Director & CEO Bharti Telenet,/General Manager Matls. British Telecom., Director ICS South Asia Collettes Group of Companies/Group Business Development Manager

Joint Managing Director Contractual Vice President Vice President Vice President Chief Information Officer Corporate DirectorCharimans Office Vice President - IT Chief Service Delivery Officer Vice President Senior Vice President Chief Human Resource Officer Chief Operating Officer (UP-West) Corporate Director Chief Marketing Officer & Director Mobility Chief Operating Officer-Gujarat Vice President President - Infotel Leaders Group Permanent Permanent Permanent Permanent Permanent Permanent Permanent Permanent Permanent Permanent Permanent Permanent Permanent

BSc. (Maths), 40 MSc. (Ops. Research) BE, PGDM BE BE, PGDBM BE, MBA 54 43 43 41 38 50 41 48 44

49

10. 11. 12. 13. 14. 15. 16.

Quality & MBA - Univ. of Knowledge Mgmt. Illionois Human Resource Operations General Management Marketing MA (Eco.), MBA BCom, .CA, .CS B. Tech., PGDM BE (Mech), MBA

17. 18. 19. 20. 21. 22.

Atul Joshi Avnish Jindal Badri Agarwal

Permanent Permanent Permanent Permanent Permanent Permanent

Operations

MA, MBA

41 39 55 47 46 40

26-Jun-03 28-Aug-01 1-Sep-00 01-Mar-00 1-Mar-02 01-.eb-99

18 16 35 25 24 23

6,746,797 3,266,998 8,383,201 4,309,610 5,276,416 2,766,178

Customer Service Chartered Accountant Operations .inance & Commercial Commercial Operations BCom, CA PGDBM, Dip. in Materials Diploma in Electrical Engg. BA

Bhaskar Chakraborty Chief of Commercial Management Chandan Ghosh Christopher Tobit Vice President Commercial (ILD) Chief Operating Officer - Maharashtra & Goa

Sl. No.

Name

Designation

Nature of Employment, whether contractual or otherwise Permanent Permanent Permanent

Nature of duties of the employee Technical Operations Operations

Qualification(s)

Age (in years)

Date of Commencement of Employment

Total experience (in years)

Gross Previous employment/ Remuneration Designation (in Rs.)

23. 24. 25. 26.

Col. V S Rawat Deepak Gulati Deepak Mehrotra Deepak Pande

Sr. Vice President Chief Executive Officer (Eastern Region) Chief Operating Officer - Karnataka Chief Operating Officer- (Tamil Nadu)

BE (Telecom), ME 56 (Electronics & Telecom) B.Sc, MBA BE (Electrical), MMS 44 40

07-Aug-01 15-Jun-98 30-Oct-03

36.7 23 16

4,667,880 4,935,537 4,657,717

BPL Cellular Ltd./CTO Bharti Cellular Ltd./Chief Executive, Special Project Hindustan Coca Cola Beverages/Region Vice President - Operations

Permanent Contractual Permanent Permanent Permanent

Operations IT & Technology Operations Marketing Internal Audit & Compliance

PGDBM Doctorate & Masters, B.Tech. BE (Mech), PGDBM MBA/BTech CA, MBA

39 41 39 38 46

29-Sep-01 22-Aug-02 08-Oct-01 19-Aug-02 23-.eb-04

14 18 18 16 26

2,761,944 20,948,845 3,385,074 3,020,772 2,521,689

SI.Y/GM (Operations) Bell South Corp. Atlanta/Corporate Officer and Executive VP Spice Communications/VP Standard Chtd. Bank/Marketing Head Pepsi .oods Pvt. Ltd./VP (Corp. Planning)

27. 28. 29. 30.

Dr. Jai Menon Elango Thambiah Gurinder Singh Sandhu Harish Dua

Corporate Director IT & Technology Chief Operating Officer (Kerala) Chief Operating Officer Sr. Vice President Internal Audit & Chief Compliance Officer Sr. Vice President-HR Coporate Director Marketing Group Chief Technical Officer Corporate DirectorHuman Resources Chief Executive Officer & Director Mobility South Central Region & West (Maharashtra) Sr. Vice President Chief Executive Officer-Mumbai Chief Executive Officer & Director Access Business South Corporate DirectorCorporate Affairs Chief Operating Officer-AP Chief Technical Officer

31. 32.

Harish K Gandhi Hemant Sachdev Jagbir Singh Jagdeep Khandpur Jagdish Kini

Permanent Permanent Permanent Permanent Permanent

Human Resource Marketing Technical Human Resource Operations

MBA, LLB B.Com M Phil, MTech, M.Sc., MBA MBA (HR) B.Sc., MBA

48 41 40 45 49

01-Nov-02 1-Apr-99 9-Nov-01 16-Aug-00 15-Sep-00

25 19 18 25 25

5,947,909 8,204,547 6,593,801 8,913,345 12,633,784

Bharti Telenet Ltd., Vice President - HR Bharti Telecom Ltd./Sr. VP (Mktg & Corp.Commn.) Nortel Networks, Singapore/DirectorNetwork Systems & Solutions Ballarpur Industries Ltd./Group VP (HR) Gillette India/Managing Director

50

33. 34. 35.

36. 37. 38.

Jagmohan Bhatt Jayant Khosla K Krishnan

Permanent Permanent Permanent

IT Operations Operations

M.Sc., M.Tech, PGDRM 4 4 BE (Hons.), MBA B.Com, ICWA, CA 41 50

1-Dec-94 22-Mar-04 26-Jan-01

19 18 26

3,320,775 5,916,660 7,415,989

Blue Dart Express/Edp Manager Coca Cola India/VP Operations, Mumbai Saregama (I) Ltd./M.D.

39. 40. 41.

K L Jain K Srinivas K Vijayaraghavan

Permanent Permanent Permanent

Corp.Affairs Operations Technical

B.Sc.(Hons.), MBA B.Tech., PGDM BE (E&E), PG Diploma in Bus. Mgmt, Annamalai Univ. B.Sc, MA (PM) BE (Hons.), M.Tech - Comm B.Sc., MBA

55 41 51

1-Oct-98 7-Nov-02 10-Oct-00

33 18 29

8,754,503 5,149,320 5,814,569

Bharti Healthcare Ltd./Executive Director Hindustan Lever Ltd./Business Manager New Ventures Spice Telecom/Vice President Technical

42. 43. 44.

K S Vijay Kumar M S Ravichandran Madhur Taneja

Vice President Chief Technical Officer - Tamil Nadu Chief Operating Officer - MP & Chattisgarh

Permanent Permanent Permanent

Human Resource Technical Operations

49 55 35

19-Apr-01 9-Apr-01 03-Jan-03

26 31 13

3,157,985 4,078,271 2,582,227

Essar Cellular/CHRO RPG Cellular/Vice President-Tech. & Ops. Pepsico Inc./Mktg. Development Mgr..ritolay

Sl. No.

Name

Designation

Nature of Employment, whether contractual or otherwise Permanent Permanent Permanent

Nature of duties of the employee Operations Operations Sales Marketing Marketing Operations

Qualification(s)

Age (in years)

Date of Commencement of Employment

Total experience (in years)

Gross Previous employment/ Remuneration Designation (in Rs.)

45. 46. 47. 48. 49. 50.

Mandeep Bhatia Manoj Kohli Milan Rao Mohit Bhatnagar Mrinalini Gupta N Arjun

Chief Operating Officer - (Punjab) President - Mobility Leaders Group General Manager

BE, MBA B.Com, LLB, MBA BE, MBA MBA, MS BA (Eco.), MBA (Mktg.) BE, MBA

36 46 34 35 42 47

04-Dec-01 26-Oct-02 1-Apr-03 18-Jan-02 12-Nov-03 1-Oct-00

13 26 11 14 20 25

2,687,567 13,593,662 3,266,105 3,528,529 3,754,466 8,331,908

Spice Telecom-VP (Nepal)/ Escotel Mobile Communications Ltd./ Executive Director & CEO JM Morgan Stanley/Head Sales Brightpond Inc./Co-founder & COO The Hindustan Times/VP Marketing Bharti Telesonic Ltd./Chief Executive Officer & Director VSNL/General Manager Bharti Cellular Ltd./Company Secretary

Head - NPD & Innovation Permanent Vice President Chief Executive Officer & Director Long Distance Business Head-Network Operations Group Chief - Regulatory Affairs & Group Company Secretary Group Chief Technical Officer Head - Network Quality Chief Executive Officer & Director Mobility (Southern Region) Permanent Permanent

51. 52.

N Gambhir Narender Gupta

Permanent Permanent

Network Operations Secretarial & Regulatory

BE Elec. & Telecom. BCom, PGDM, .CS, LLB

56 46

30-Apr-01 1-Apr-01

36 26

2,438,696 4,026,838

53.

Norman Price

Contractual

Technical

42

19-Apr-02

19

19,942,032

Nextel Partners, U.S./Director Engineering & Operations Bonsai Networks India Pvt. Ltd./Country Head (Indian Operations) Bharti Telenet Ltd./CEO, MP

54.

P S Sandhu P Swaminathan

Permanent Permanent

Network & IT Operations

BE, M Tech BTech., PGDM

54 49

07-Aug-01 01-Apr-03

30 26

3,059,900 5,737,934

51

55.

56.

Prasanta Das Sharma Chief - Customer Service & Network Operations-North Pratik Pota Prem Pradeep Head - Acquisition Chief Operating Officer - Access Business South (KK) Vice President Operations Chief Operating Officer Joint Managing Director Chief Operating Officer - Delhi

Permanent

Customer Service BE Elec. & & Network Telecom operations Marketing Operations BE, PGDM BTech, MBA

41

19-Aug-02

20

2,602,771

H.CL/Associate Vice President

57. 58.

Permanent Permanent

36 49

01-Dec-01 15-Oct-01

13 24

4,971,668 4,523,263

HLL/Manager- Marketing Saregama (I) Ltd./Head E-Business

59. 60. 61. 62. 63. 64.

Raghunath Mandava Rahul Mehta Rajan Bharti Mittal Rajiv Jaitly Rajiv Kohli Rajiv Sharma

Permanent Permanent Contractual Permanent

Operations Operations General Management Operations Operations Operations

BTech, PGDBM BA Graduate BE, MBA BTech., PGDM MA, LLB, MBA

38 44 45 44 44 47

29-Sep-03 1-Jun-98 1-Oct-01 18-Mar-02 1-Jun-00 29-Dec-00

2 22 19 20 18 24

3,108,104 3,164,462 20,424,969 4,480,231 4,230,403 5,770,996

HLL/Operations & Mkt. Manager, Bangalore RPG Richo Ltd., Controller Business Operations (South) Bharti Infotel Ltd./MD Data Access India Ltd./Executive Vice President Koshika Telecom Ltd./GM Marketing GMS Technologies/CEO

Chief Executive Officer - Permanent Access Business North (Delhi) Chief Executive Officer - Permanent Broadband and Data Business Group Chief Technical Officer Permanent

65.

Ramamurthy Kolluri Randeep Singh Sekhon

Technical

BTech., MTech.

50

3-Nov-00

25

3,480,689

Siemens Public Communication Networks Ltd. (VP-Information & Broadband) Spice Telecom, Asst. GM, Punjab

66.

Chief Technical Officer

Permanent

Technical

BE

35

01-Aug-01

11

2,617,424

Sl. No.

Name

Designation

Nature of Employment, whether contractual or otherwise Permanent Permanent

Nature of duties of the employee Operations .inance & Commercial

Qualification(s)

Age (in years)

Date of Commencement of Employment

Total experience (in years)

Gross Previous employment/ Remuneration Designation (in Rs.)

67. 68.

Rohtash Mal S C Agrawal

Chief Executive Officer, Access Business MP Vice President

BTech., PGDM Diploma in Mech. Engg., Graduate Dip. Course in Materials Management BTech. BE, MSc Engg., PGDBA MBA (HR) MBA BE (Elect.), MBA (Mktg.) CA, ICWA PGDM BTech (Chem.), MBA BCom (Hons), CA,CS BA,(Hons) .CA, MBA BCom. (Hons.), .CA BE, PGDM ICWAI, MBA

50 53

13-Nov-00 01-Apr-98

29 32

6,047,479 2,809,520

Maruti Udyog Ltd./CGM (Mktg. & Sales) Bharti Telecom Ltd./ Vice President - Materials

69. 70. 71. 72. 73. 74. 75. 76.

S K Sharma S Sivaramakrishnan Saagarika Rai Sandeep Gupte Sanjay Bahl Sanjay Baweja Sanjay Katyal Sanjay Nandrajog

Head- Quality Head-IN/VAS Head HR Western Region Principal Technical Officer Vice President Chief .inancial Officer Vice President Business Development

Permanent Permanent Permanent Permanent Permanent Permanent Permanent

Quality Network & IT Human Resource Technical Knowledge Mgmt. & Quality .in. & Accts. Business Development Operations

49 52 36 37 41 44 39 42

09-May-03 01-Dec-03 05-May-03 25-Sep-01 1-Apr-96 01-.eb-01 24-Mar-04 08-Jan-03

28 26 16 12 22 19 16 18

3,545,583 3,024,906 2,773,928 2,560,623 2,999,288 3,924,666 2,484,301 8,184,764

GE Capital /VP - Quality Think Business Networks Pvt Ltd./VP Rediffusion DY&R/GM - HR Convergelabs/Telecom Consultant Casio Bharti/General Manager Marketing Bharti Cellular Ltd. /VP .inance Data Access India Ltd./ Vice President Global Carrier Sales Pepsic/Market Unit Director

Chief Executive Officer & Permanent Director Mobility (North Central) Group .inancial Controller Permanent Contractual Permanent Permanent Permanent

52
77. 78. 79. 80. 81. Sanjeev Saxena Shamik Das Shankar Prasad Shantanu Banerjee 82. 83. 84. 85. 86. 87. 88. 89. 90. Sharad Mathur Sharlin Thayil Sukanto Aich Sunil Bharti Mittal Sunil Colaso Sunil K Goyal Sunil Tandon Tina Uneken

.in. & Accts. .in. & Accts. .inance & Commercial Operations Human Resource

40 38 42 42 47

1-Jul-03 29-Jun-01 01-Jun-01 28-Jan-04 30-Mar-04

20 17 21 18 23

3,160,630 13,129,773 4,816,806 2,895,494 3,639,842

Bharti Mobile Ltd./C.O Bharti Cellular Ltd./ Chief-Business Development & Strategy Bharti Infotel Ltd./Group C.O Bharti Mobile Ltd. (Vice President - CSD) Indo Rama Synthetics (I) Ltd./ Sr. VP (Corp. HR) BPL Ltd./Vice President BILT, Dy. General Manager - South Ecosoft Technologies Ltd./Head Sales Skycell Comm./GM - Customer Service Bharti Cellular Ltd./CMD Max Healthcare/DGM - Marketing Dabur India Ltd./Sr. Mgr. Corporate Planning Reliance Infocomm./ Head Key National Account British Telecom/Alliance Director

Sarvjit Singh Dhillon Group Chief .inancial Officer Chief .inancial Officer Chief Operating Officer (UP-East) Chief Human Resources Officer Infotel Leaders Group Vice President Marketing Vice President General Manager

Permanent Permanent Permanent Permanent Contractual Permanent Permanent Permanent Contractual

Marketing CSD Sales CSD General Management Marketing Strategic Planning Marketing Alliance & CSR

BE, MBA MBA BE, MBA BA, MA Graduate MBA, BBM ICWAI, MBE, C.A BTech., MBA

44 43 36 44 47 38 36 43

27-Jan-04 28-Dec-00 9-Jul-01 01-Oct-96 1-Oct-01 01-Oct-02 2-Mar-01 04-Nov-03 16-Aug-01

20 19 12 9 19 14 14 18 28

2,507,197 2,666,223 2,415,633 2,439,113 65,824,347 2,483,283 3,079,675 4,669,911 13,863,413

Sumathi Gurumurthi Vice President- CSD Chairman & Managing Director Head - NLD/ILD/Roaming Vice President Head - Corp. Solution Alliance Director

Master of Dutch Law 4 5

Sl. No.

Name

Designation

Nature of Employment, whether contractual or otherwise Permanent Permanent Permanent Permanent

Nature of duties of the employee

Qualification(s)

Age (in years)

Date of Commencement of Employment

Total experience (in years)

Gross Previous employment/ Remuneration Designation (in Rs.)

91. 92. 93. 94.

TK Anand Kumar V Venkatesh Vijaya Sampath Vinod Sawhny

Chief - Technical Vice President Corporate Director & General Counsel Chief Executive Officer & Director Mobility (Northern Region) Chief Operating Officer Vice President Corporate Director Business Development Head - Brand & Communication

Technical CSD Legal Operations

BTech. PGDM, ACA BA, LLB, .CS BE (Mech), PGDBM

50 42 51 46

15-Nov-02 18-Jan-02 1-Jan-04 15-Jul-02

25 19 21 21

3,342,748 5,395,345 6,177,365 8,972,671

Interwave Communications/ Project Director HLL/Marketing Manager (.ood) Ranbaxy Laboratories / VP (Legal & Secretarial) Spice Communications, Punjab, Managing Director

95.

Vinod Sud

Permanent Permanent Permanent Permanent

Operations Special Project Business Development Marketing

BE Electrical Engineering from CA BTech., PGDM BA, MBA

55 40 49 44

01-.eb-02 13-Jul-03 1-Aug-00 04-Nov-03

33 17 27 23

3,479,266 2,701,771 7,713,591 5,061,797

Bharti Cellular Ltd., TN/Chief Operating Officer Eicher Motors Ltd./Head Sales Bharti Telenet Ltd./ Director (Operations) Bristol Myers Squibb, USA/Consultant International Business

96. 97. 98.

Vipin Agarwal Viresh Dayal Vivek Bali

B) EMPLOYED .OR THE PART O. THE .INANCIAL YEAR 1. Aditya Gupta Ajay Puri Vice President Chief Operating Officer - (Orissa) Permanent Permanent Sales Operations BTech., PGDM 37 16-Nov-04 15-May-04 14 24 1,227,570 3,049,908 Shaw Wallace - VP- Marketing Cargill .oods India/Business Head - India .oods

53

2.

Master of Commerce, 4 4 .ulbright .ellowship for Leadership in Mgmt. BE, MBA BE, MTech 36 41

3. 4.

Amit Shankar Nandi Vice President Marketing Anuj Khungar Chief Technical Officer - Access Business North Chief .inancial Reporting

Permanent Permanent

Marketing Technical

22-.eb-05 28-.eb-05

12 18

289,083 561,341

Marico Industries/Marketing Manager Reliance Infocom/Chief Technical Officer Bharti Mobile Ltd./C.O Business Standard Ltd./ Vice President - E-Business Escotel Mobile Communications Ltd., CTO Godfrey Philips India/Director Corp. Affairs BOC Edwards/GM-South Asia & Country Manager, India Triveni Engineering Industries Ltd./ VP-Corp. .inance & Planning Bharti Telenet Ltd. /Chief Sales & Mktg.

5. 6. 7. 8.

Brijesh Mathur

Permanent Permanent Permanent Permanent

.in. & Accts.

CA

43 43 55 42

1-Sep-02 01-Oct-01 07-Aug-01 1-Jan-03

18 19 35 21

2,944,687 3,812,304 4,374,762 6,098,746

Christopher Almeida VP- Sales & Marketing Col. Shiv Raichand Deepak Jolly Chief Technical Officer Head - Corporate Communications

Sales & Marketing MBA Technical Corp. Communication Operations ME (Electronics) BCom., Diploma in Hotel Management Bachelor of Technology (Chemical Engg.) CA BSc., MMS (Mktg.), CSA (PG Dip. in Software)

9.

Deepak Srivastava

Chief Operating - (Bihar) Permanent Officer Group .inancial Controller Chief - CSD Permanent Permanent

45

13-Sep-04

21

1,884,547

10. 11.

Deven Khanna G. Dhananjayan

.in. & Accts. CSD

44 40

1-Sep-04 01-Apr-03

16 20

1,928,070 1,474,937

Sl. No.

Name

Designation

Nature of Employment, whether contractual or otherwise Permanent

Nature of duties of the employee

Qualification(s)

Age (in years)

Date of Commencement of Employment

Total experience (in years)

Gross Previous employment/ Remuneration Designation (in Rs.)

12.

Jitendra Rahi

Vice President

Sales

Masters in Marketing 4 2 Mgmt. - Mumbai University BA, PGDMM, MBA BTech., PGDBM MBA MMM Master in PM & IR, Dip. in Training 49 36 41 43 42

01-Sep-04

14

1,556,500

Jumbo Electronics Pvt. Ltd./Head Retail Operations Escotel Mobile Communication Limited/DGM Hero Motors/Chief Operating Officer Bharti Cellular Ltd./VP (HR) Reliance Infocomm Ltd./Head Circle Coordination Customer Care IDEA Cellular Ltd./Chief of HR & TQM

13. 14. 15. 16. 17.

N . Aibara P V V Srinivasa Rao Pritha Chatterjee Radhika Balasubramanian Rajan Dutta

Head - Mkt. Sales & Channel Development Chief Sales & Marketing Sr. Vice President Vice President Chief Human Resources Officer Mobility Leaders Group Director - East Regional Hub

Permanent Permanent Permanent Permanent Permanent

Marketing Sales & Marketing Human Resource CSD Human Resource

08-Apr-04 17-Jan-05 1-Apr-03 02-Jun-03 04-Jan-05

28 11 19 18 21

2,877,742 3,421,938 2,681,125 2,374,752 1,200,724

18. 19. 20. 21. 22. 23.

Rajan Swaroop Randeep Narang Ravindran G Sakthivel P Sudhir Agarwal Sugumaran J

Permanent

Operations Operations Human Resource Human Resource Operations Technical

PGDM (MBA), Mech. Engineer BCom., MBA BSc., MA, M. Phil BBA, PGDPMIR MBA BE (Electronics)

48 43 48 46 40 49

15-Nov-04 11-Apr-01 22-Apr-04 06-May-04 18-.eb-05 24-Jul-00

23 20 26 22 14 25

900,164 1,121,805 7,735,067 2,385,715 323,972 2,892,318

Escotel Mobile Communications Ltd./ CEO and Executive Director Goodyear India Ltd./COO Ernst & Young/HRO Consultant Modi Corp. Ltd./Director BPL Mobile Communications/ Head N/W Performance Institute of Quality Ltd./Sr. VP & Director Sterling Cellular Limited - VP IT

Chief Operating Permanent Officer .ixed Line (West) Chief Human Resources Officer Vice President Chief Operating Officer (NESA) Chief Technical Officer Permanent Permanent Permanent Permanent

54

24. 25.

Vinit Taneja Vivek Khanna

Sr. Vice President Sr. Vice President

Permanent Permanent

Human Resource IT & Technology

BTech. (Mech.), PGDM CISA, CSSP, CSA

47 44

27-Sep-04 19-Jul-01

23 21

1,397,121 4,415,716

Notes : 1. 2. Gross remuneration comprises of Salary, Allowances, Companys Contribution to Provident .und, Variable Pay and Value of Perquisites. The Employee would qualify for being included in Category (A) or (B) on the following basis : 3. 4. 5. .or (A) if the Aggregate Remuneration drawn by him during the Year was not less than Rs. 24,00,000 P.A. .or (B) if the Aggregate Remuneration drawn by him during the part of the Year was not less than Rs. 2,00,000 P.M.

None of the Employees mentioned above is a Relative of any Directors of the Company, except Mr. Sunil Bharti Mittal, Mr. Rakesh Bharti Mittal, Mr. Rajan Bharti Mittal are brothers and Directors on the Board of the Company. None of the Employees mentioned above holds 2% or more Share Capital of the Company. The designation - Director wherever prefixed describing the area of responsibility occurring in the above Statement is not a Board Position except that of Mr. Sunil Bharti Mittal, Mr. Rajan Bharti Mittal & Mr. Akhil Gupta.

Report on Corporate Governance

Report on Corporate Governance

Corporate Governance is the system by which companies are directed and controlled. The Corporate Governance structure specifies the distribution of rights and responsibilities among different participants in the organization, such as, the Board, managers, shareholders and other stakeholders and spells out rules and procedures for making decisions on corporate affairs. By doing this, it also provides a mechanism through which the company objectives are set, the means to achieve those objectives defined and the process of monitoring performance delineated. Bharti has always believed that Corporate Governance is more a way of business life than a mere legal compulsion. It is the application of best management practices, compliance of law in true letter and spirit and adherence to ethical standards for effective management and distribution of wealth and discharge of social responsibilities for sustainable development of all stakeholders. Bharti continues to review its corporate governance practices to ensure that they continue to reflect national and international developments thereby conforming to the best corporate governance practices at all times. It takes feedback into account in its periodic reviews of the guidelines to ensure their continuing relevance, effectiveness and responsiveness to the needs of national and international investors and all other stakeholders. Principles Bhartis corporate governance practices focus on the following main principles: 1. Recognising the respective roles and responsibilities of Board and management To establish an effective mechanism for overseeing the affairs, keeping in view the Companys size, complexity, geographical operations and corporate tradition & culture, the Bhartis framework is designed to:
l l l

enable the Board to provide strategic guidance for the Company and effective overseeing of the management; define the respective roles and responsibilities of senior management to ensure accountability; and ensure a balance of authority such that no single individual has unfettered powers.

2.

Having a Board of appropriate composition, size and commitment to adequately discharge its responsibilities and duties To ensure effectiveness of the Board, facilitating efficient discharge of duties and adding value in the context of the Companys circumstances, the Board periodically reviews its composition and size to ensure a strong element of independence and commitment. Accordingly the Board is structured in such a way that:
l

It has a proper understanding of, and competence to deal with, the current and emerging issues of the business and the benefit of a variety of perspectives and skills. It has the appropriate mix of executive and non-executive directors ensuring Directors commitment and time to participate in the affairs fully. It can effectively review and challenge the performance of management and exercise independent judgment.

3.

Independent verification safeguarding integrity of the Companys financial reporting To ensure the truthful and factual presentation of the Companys financial position, the Company has put in place a structure of review and authorization apart from strong internal audit process. .or this purpose, the Board has also constituted an Audit Committee, which is charged with paying particular attention to the management processes supporting external reporting, the performance and objectivity of the internal audit function, and the performance and independence of the external auditors.

4.

Timely and balanced disclosure of all material information concerning the Company To give investors an equal and timely access to material information, and to ensure that Company announcements are factual, balanced and in compliance with the applicable provisions of law, the Company has put in place a mechanism to ensure that:
l

All investors have equal and timely access to material information concerning the Company including its financial position, performance and governance.

57

Company announcements are factual and presented in a clear and balanced way, disclosing both positive and negative information.

5.

Highest importance to Investor Relations To ensure long term shareholder value creation and to promote shareholder participation in corporate affairs, Bharti has established and maintained communication strategies, including a policy for clarify in notices of meetings. Bharti also maintains its corporate website www.bhartiteleventures.com for convenient access by the shareholders to all material information about the Company. Bhartis endeavors are to empower its shareholders by:
l l l

Communicating effectively with them. Giving them appropriate information about the Company. Making it easy for them to participate in general meetings.

Bharti has a well-defined and time-bound grievance redressal mechanism in place for the speedy redressal of the investor grievances. The Company has also initiated a process of seeking periodic confirmations from the stock exchanges about any pending investor complaints against the Company. 6. Sound system of internal control Bharti has set up an effective internal audit function, independent of the external auditors, to review the effectiveness of the risk management system. Audit Committee of the Board oversees the internal control systems. This system is designed to identify, assess, monitor and control risks. 7. .air review, active encouragement and management effectiveness To ensure consistent effectiveness of the overall management, the performance of the senior executives and officers is subject to review. This includes equipping individuals with the knowledge and information they need to discharge their responsibilities effectively, and reviewing individual and collective performance regularly. Performance evaluation process is fair and transparent and uses both measurable and qualitative indicators. 8. Efficient Executive Remuneration Policy The Company has adopted a remuneration policy that attracts and maintains talented and motivated executives so as to encourage enhanced performance of the Company. The remuneration policy envisages a clear relationship between performance and remuneration, including the link between remuneration paid and the overall corporate performance. Remuneration of managing and whole time directors is determined by the HR/Remuneration Committee of the Board within the permissible limits under the applicable provisions of law and is approved by Shareholders. 9. Corporate Ethics Code of Conduct Bharti has a defined Code of Conduct for ethical business conduct by all its employees and business associates. The Code of Conduct sets forth, inter alia:
l l l l

Values of Bharti The Operating principles to live up to Values of Bharti The responsibilities of the Employees, Management and the Business Associates Maintaining relationship with external parties including Government Agencies, Regulators, Competitors, Media etc. The Insider Trading Policy Corporate Social Responsibility (CSR)

l l

58

These policies support the consistent endeavour to enhance the reputation of the Company Values of Bharti
l l l l

To be responsive to the needs of our customers To trust and respect our employees To continuously improve our services innovatively and expeditiously To be transparent and sensitive in our dealings with all stakeholders.

These values are not to be lost sight of by anyone at Bharti under any circumstances irrespective of the goals that are intended to be achieved. To us, Bhartians means are as important as the end. In pursuit of these values, we are committed to an ethical treatment of all our stakeholders our employees, our customers, our environment, our suppliers and the Government. A firm belief that every Bharti team member holds is that the other persons interest count as much as his own. The Operating Principles are in alignment with Bhartis Values. The essence of these principles is that each employee should conduct the Companys business with integrity, in compliance with applicable laws, and in a manner that excludes considerations of personal advantage. The Operating Principles as enshrined in the Code of Conduct cover the following aspects:
l l l l l l l l l l l l l l

Work Place Conduct Harassment free work place .air Employment Practices Customers and .air Competition Conflict of Interests Gifts & Entertainment Improper payments Working with Government, Regulators and Business Associates. Ethical Advertising and Dealing with Media. Protection of Company Assets including Intellectual Property .inance & Accounting Practices Insider Trading Health and Safety Environment Protection Corporate Social Responsibility Political Activities

10. The Insider Trading Policy Bharti has a well-defined Insider Trading Policy which prohibits its employees and other associates to deal in the securities of the Company based on any unpublished price sensitive information. The Company strongly believes that sound corporate governance is critical to enhance and retain investor trust. Accordingly, the Company endeavours to follow the best corporate governance practices. The Company ensures that various disclosure requirements are complied in both letter and spirit for effective Corporate Governance. The status of compliance with the requirements of Clause 49 of the listing agreements is given elsewhere in this Report. Corporate Governance Rating The Company has been assigned the highest Governance and Value Creation (GVC) rating viz. CRISIL GVC Level 1 rating by CRISIL, which indicates that the Companys capability to create wealth for all its stakeholders is par excellence. However, Corporate Governance is an ongoing process and Bharti is committed to maintain highest standards of Corporate Governance at all times.

59

BOARD O. DIRECTORS The Board of Directors of the Company has an optimum mix of Executive and Non-Executive Directors, which consists of three Executive and eleven Non-Executive Directors. The Company has an Executive Chairman, Mr. Sunil Bharti Mittal and the number of Independent Directors on the Board is - 50% of the total Board strength in compliance with the requirements of clause 49 of the Listing Agreement. The independence of a Director is determined on the basis that such director does not have any material pecuniary relationship with the Company, its promoters, its management or its subsidiaries, which may affect the independence of the judgment of a Director. The Board members possess requisite skills, experience and expertise required to take decisions, which are in the best interest of the Company. During the year, the Board has also approved and adopted a Code of Conduct for all Directors and the Senior Management of the Company. All Directors and the Senior Management shall give their confirmation of compliance with the said Code annually, which shall be placed before the Board. Composition of the Board The details of the Directors on the Board of the Company for the financial year 2004-2005 is as under : S. Name of the Director No. Category Number of other Directorships held 2 8 9 7 6 1 1 6 3 1 Other Committee 1 Membership Member 3 4 2 2 1 5 3 1 Chairman 1 1 2 1

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14.

Notes: 1. 2. 3.

Mr. Sunil Bharti Mittal Executive/Promoter (Chairman & Managing Director) Mr. Akhil Gupta (Joint Managing Director) Mr. Rajan Bharti Mittal (Joint Managing Director) Mr. Rakesh Bharti Mittal Ms. Chua Sock Koong Mr. Lim Toon Mr. Paul O Sullivan Mr. Bashir Currimjee Mr. Donald Cameron Mr. Kurt Hellstrom Mr. Lung Chien Ping Mr. N. Kumar Mr. Pulak Prasad Mr. V. S. Raju Executive Executive/Promoter Non-Executive/Promoter Non-Executive Non-Executive Non-Executive Independent Non-Executive Independent Non-Executive Independent Non-Executive Independent Non-Executive Independent Non-Executive Independent Non-Executive Independent Non-Executive

The committees considered for the purpose are those prescribed under clause 49(IV)(B) of the Listing Agreement(s) viz. Audit Committee, Shareholders/Investors Grievance Committee & Remuneration Committee. The Directorships held by the Directors, as mentioned above, do not include the Directorships held in foreign companies and private limited companies. During the year, Mr. Dalip Pathak, Independent Non-Executive Director ceased to be a Director of the Company with effect from .ebruary 28, 2005.

60

Promoter Non-Promoter 79% 21%

50%

Independent Non-Independent

Executive Non-Executive 79% 50%

21%

IN.ORMATION AVAILABLE TO THE BOARD The requisite information as prescribed under clause 49 of the Listing Agreement is placed before the Board from time to time. These specifically include :
l l l l l l l

Annual operating plans, budgets and any updates therein. Quarterly results for the Company and its operating divisions or business segments. Capital budgets and any updates therein. Minutes of meetings of Audit Committee and other Committees of the Board. The information on recruitment/remuneration of Senior Officers just below the Board level. Material show cause, demand, prosecution notices and penalty notices, if any. Any material default in financial obligations to and by the Company or substantial non-payment for services sold by the Company. Details of any joint venture or collaboration agreement. Transactions involving substantial payment towards goodwill, brand equity or Intellectual Property. Significant developments in Human Resources. Sale of material nature, of investments, subsidiaries, assets, which is not in the normal course of business. Quarterly details of foreign exchange exposures and the steps taken by management to limit the risks of adverse exchange rate movement, if material. Non-compliance of any regulatory, statutory nature or listing requirements and shareholders service.

l l l l l

Aforesaid 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 Presidents of the two main business lines viz. Mobility and Infotel and other Senior Management personnel are also invited to the Board Meetings to present reports on the Companys operations and internal control systems. Attendance at the Board Meetings During the last financial year, the Board met five times, on April 12, 2004, April 22 & 23, 2004, July 22 & 23, 2004, October 28 & 29, 2004 and January 27 & 28, 2005.

61

The attendance of the Directors at the Board meetings as well as at the last Annual General Meeting (AGM) of the Company is as under : Name of the Director Number of Board meetings held 5 5 5
1

Number of meetings Attended 5 5 4 5 2 4 3 5 4 4 4 5 5 5 4

Attendance in Percentage (%) 100% 100% 80% 100% 40% 80% 60% 100% 80% 80% 80% 100% 100% 100% 80%

Attendance at last AGM on August 20, 2004 Yes Yes No No No No No No No Yes No No Yes Yes No

Mr. Sunil Bharti Mittal (Chairman) Mr. Akhil Gupta Mr. Bashir Currimjee Ms. Chua Sock Koong Mr. Dalip Pathak
(1)(3)

5 5 5 5 5 5 5 5 5

Mr. Donald Cameron Mr. Kurt Hellstrom Mr. Lim Toon Mr. N. Kumar Mr. Paul O Sullivan1 Mr. Pulak Prasad
1 1 1 2

Mr. Lung Chien Ping

Mr. Rajan Bharti Mittal Mr. V. S. Raju

1. 2. 3.

5 5 5

Mr. Rakesh Bharti Mittal

One (1) meeting attended through Alternate Director. Two (2) meetings attended through Alternate Director. Mr. Dalip Pathak has ceased to be a Director of the Company with effect from .ebruary 28, 2005.

COMMITTEES O. THE BOARD In compliance with the requirements of the Listing Agreements (both mandatory & non-mandatory) and the SEBI Regulations, the Board has constituted the following Statutory Committees, viz.: 1. 2. 3. 4. Audit Committee HR/Remuneration Committee ESOP Compensation Committee and Investors Grievance Committee.

AUDIT COMMITTEE The Audit Committee of the Board deals in all matters relating to financial reporting, internal controls, risk management, related party transactions etc. and reports back to the Board on the matters. The terms of reference of the Committee among others, include :
l l l l

Oversight of the Companys financial reporting processes and systems. Recommending the appointment and removal of statutory auditors, fixation of audit fee and related expenses. Reviewing the Companys financial and risk management policies, if any. Reviewing with management the half-yearly and annual financial statements, before submission to the Board, focusing primarily on:

62


l l

Changes, if any, in accounting policies and practices; Major accounting entries, qualifications and accounting issues based on the managements discretion and judgement; Compliance with the accounting standards ; Compliance with the stock exchange and legal requirements, concerning financial statements; and Any related party transactions.

Reviewing the adequacy of internal audit functions. Reviewing the findings of any internal investigations by the internal auditors in case of any fraud/ irregularity, if any or failure of internal control systems, if any. Discussion with external auditors before the audit commences, nature and scope of audit as well as have post-audit discussion to ascertain any area of concern.

The unaudited/audited quarterly financial results of the Company are also specifically reviewed by the Audit Committee before these are submitted to the Board for approval. Minutes of each Audit Committee meeting are placed before the Board for noting. Composition and Attendance The Audit Committee consists of five Members with majority of Members being Independent Non-Executive Directors. All Members of the Committee are financially literate and have adequate financial and accounting knowledge. Mr. N. Kumar, Chairman of the Committee is a Non-Executive Independent Director and Mr. Narender Gupta, Company Secretary of the Company acts as the Secretary of the Committee. During the year, the Committee met five times, on April 22, 2004, July 22, 2004, September 20, 2004, October 28, 2004 and January 27, 2005. The composition and Members attendance at the Committee meetings is presented below: S. Member Director No. Category No. of meetings attended (Total meetings held: 5) 5 5 3 5 5 Attendance in Percentage (%) 100% 100% 60% 100% 100%

1. 2. 3. 4. 5.

Mr. N. Kumar (Chairman) Mr. Akhil Gupta Mr. Bashir Currimjee Ms. Chua Sock Koong Mr. Pulak Prasad

Independent Non-Executive Executive Independent Non-Executive Non-Executive Independent Non-Executive

HUMAN RESOURCE (HR)/REMUNERATION COMMITTEE In compliance with the Non-mandatory requirements of Clause 49 of the Listing Agreement, the Board has constituted an HR/ Remuneration Committee, which discharges the following functions :
l

.raming policies and compensation including salaries and salary adjustments, incentives, bonuses, promotion, benefits, stock options and performance targets of top executives. Remuneration of Directors. Strategies for attracting and retaining employees, employee development programmes. Key issues referred by the Board.

l l l

During the year, in view of the common composition of the HR/Remuneration Committee and the ESOP Compensation Committee of the Company constituted in accordance with SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, both the HR/Remuneration Committee and the ESOP Compensation Committee were merged with effect from July 22, 2004.

63

Additional functions that HR/Remuneration Committee performs as ESOP Compensation Committee are :
l

.ormulating policies and procedures to ensure that there is no violation of SEBI (Insider Trading Regulations) and (Prohibition of .raudulent and Unfair Trade Practices relating to Securities Market) Regulations by any employee. Deciding matters relating to options e.g. quantum of options, conditions for lapse of options, exercise of options and frames policies to monitor the same.

Composition and Attendance The Committee has six Members, consisting of three Independent Non-Executive Directors, two Non-Executive Directors and one Executive Director. The Chairman of the Committee, Mr. Rakesh Bharti Mittal, is a Non-Executive Director. The Company Secretary acts as the Secretary of the Committee. During the year, the Committee met four times, on April 22, 2004, July 22, 2004, October 28, 2004 and January 27, 2005. The composition and Members attendance at the Committee meetings is presented below : S. No. Member Director Category No. of meetings attended (Total meetings held:4) 4 4 4 4 3 4 Attendance in Percentage (%) 100% 100% 100% 100% 75% 100%

1. 2. 3. 4. 5. 6.
1

Mr. Rakesh Bharti Mittal1 (Chairman) Mr. Donald Cameron Mr. Paul O Sullivan1 Mr. Rajan Bharti Mittal Mr. Kurt Hellstrom Prof. V. S. Raju

Non-Executive Independent Non-Executive Non-Executive Executive Independent Non-Executive Independent Non-Executive

One (1) meeting attended through Alternate Director.

Note: In view of the increasing responsibilities of the ESOP Compensation Committee (Company has more than 8000 employees) and for better corporate governance the Board in its meeting held on April 28-29, 2005 has split the Committee into separate HR/ Remuneration Committee and the ESOP Compensation Committee.

INVESTORS GRIEVANCE COMMITTEE The Shareholders/ Investors Grievance Committee of the Board looks after redressal of shareholders/ investors complaints like transfer of shares, non-receipt of Annual Reports and others. The meeting of the Committee are 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. Composition and attendance Mr. Rakesh Bharti Mittal, Chairman of the Committee, is a Non-Executive Director and Mr. Narender Gupta, Company Secretary, acts as the Compliance Officer of the Company. The Committee comprises of three members. The attendance of Members at the meetings of Investors Grievance Committee held during last financial year is as under : S. No. Member Director Category No. of meetings attended (Total meetings held:12) 12 12 12 Attendance in Percentage (%) 100% 100% 100%

1. 2. 3.

Mr. Rakesh Bharti Mittal (Chairman) Mr. Rajan Bharti Mittal Mr. Akhil Gupta

Non-Executive Executive Executive

64

NATURE O. COMPLAINTS AND REDRESSAL STATUS During the last financial year, the complaints received by the Company were general in nature which include issues relating to the change in Bank Mandate, change of address and non-receipt of shares, refund orders etc. Given the large investor base of the Company, the numbers of complaints received during the year were moderate, details of which are as under : Type of complaint Non-receipt of any shares (Remat/Transfer/Electronic Credit) Non-receipt of Annual Report Correction/Change of Bank Mandate of Refund Orders Non-receipt of Refund Pay orders Miscellaneous TOTAL No. of complaints 16 14 NIL 01 01 32 Redressed 16 14 NIL 01 01 32 Pending NIL NIL NIL NIL NIL NIL

The above table does not include the responses furnished by the Company on clarifications sought by Stock Exchanges from time to time on various markets related information. All requests for share transfers have been processed and effected except those, which are disputed, and sub-judice. GENERAL BODY MEETINGS The last three Annual General Meetings of the Company were held as under : .inancial Year 2003-2004 Location Air .orce Auditorium, Subroto Park, New Delhi 110 010 Air .orce Auditorium Subroto Park New Delhi 110 010 Air .orce Auditorium Subroto Park New Delhi 110 010 Date August 20, 2004 Time 03.30 P.M.

2002-2003

October 21, 2003

03.30 P.M.

2001-2002

September 20, 2002

03:30 P.M.

Special Resolutions Passed At the last Annual General Meeting held on August 20, 2004, the shareholders had passed the following special resolutions : 1. 2. 3. 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; Authorising amendments to the Companys existing ESOP Scheme; and Authorising Sponsored ADR issue of the Company.

Postal Ballot .or the financial year ended March 31, 2005 there has been no ordinary or special resolution passed by the Companys shareholders that required a postal ballot. REMUNERATION O. DIRECTORS The remuneration paid to the Executive Directors viz. Mr. Sunil Bharti Mittal - Chairman and Managing Director and Mr. Rajan Bharti Mittal and Mr. 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 and the Directors as reviewed by the Remuneration/HR Committee and approved by the Board.

65

The details of the remuneration paid to the Executive Directors during last financial year from the Company and its subsidiary companies in their capacity as Directors/Advisors is as under : Executive Directors S. No 1. 2. 3. Name of the Director Sunil Bharti Mittal Chairman and Managing Director Rajan Bharti Mittal Joint Managing Director Akhil Gupta Joint Managing Director Salary & Allowances 37,415,870/13,673,278/17,786,137/Performance Linked Incentive 33,724,996/9,404,500/12,958,000/Total 71,140,866/23,077,778/30,744,137/-

Note : The above amount excludes Companys contribution/provision for gratuity cost for the year, which is determined annually on actuarial basis.

Non-Executive Directors The Non-Executive Directors are paid sitting fee within the prescribed limits for the Board/Committee meetings attended by them. .or the ..Y. ended March 31, 2005, a total of 800,000/- were paid as sitting fee. .urther the shareholders in the last Annual General Meeting of the Company have authorised the Board of the Company to pay commission to the Non-Executive Directors in such manner as the Board may deem fit from time to time. However, the overall limit of commission(s) paid to the Non-Executive Directors in any financial year shall not exceed 1% of the Net Profit of the Company for that year calculated as per the Companies Act, 1956. .or the year ended March 31, 2005 a provision of Rs. 9,801,200/- has been made for payment of commission to all Non-Executive Directors as approved by the Board as per the following table. S. No. 1. 2. 3. 4. 5. 6. Name of the Director Mr. N. Kumar Mr. Bashir Currimjee Mr. Kurt Hellstrom Mr. Donald Cameron Prof. V. S. Raju Mr. Lung Chien Ping Total Actual payment shall be subject to applicable laws. Equity Stock Options to Directors No fresh stock options have been granted to any Director of the Company during the financial year 2004-2005. DISCLOSURES i. Disclosure on materially significant related party transactions There were no transactions of material nature of the Company with the Promoters, Directors, Management, their relatives, or subsidiaries of the Company etc., that had potential conflict with the interest of the Company at large in the last financial year. The related party transactions with the subsidiary/ group companies have been disclosed in the Annual Accounts. ii. Details of non-compliance with regard to Capital Market There have been no instances of non-compliances by the Company and no penalties and/or strictures have been imposed on the Company by Stock Exchanges or SEBI or any statutory authority on any matter related to the capital markets during the last three years. Sitting .ee (in Rs.) 180,000/140,000/120,000/100,000/180,000/80,000/800,000/Commission (in Rs.) 874,800/874,800/2,187,000/4,115,000/874,800/874,800/9,801,200/-

66

iii.

Disclosure of Accounting Treatment There is no deviation in following the treatments prescribed in any Accounting Standard in the preparation of financial statements.

iv.

Ombudsman Policy During the year the Company has implemented an Ombudsman Policy, which outlines the method and process for stakeholders to voice genuine concerns about unprofessional conduct that is in breach with what is laid down in Bhartis Code of Conduct. The policy is aimed to ensure that genuine complainants can raise their concerns in full confidence, without any fear of retaliation or victimisation. 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 will constitute a meeting of the Code Compliance Committee to undertake a full investigation, which may involve both internal and external investigative bodies.

v.

Details of compliance with mandatory requirements and adoption of non-mandatory requirements of Clause 49 of the Listing Agreement Currently only the Indian Laws, more specifically contained in Clause 49 of the Listing agreements with stock exchanges, are applicable to the Company with respect to Corporate Governance. The Company complies fully with all the requirements of Clause 49 pertaining to Board of Directors, Audit Committee, Board Procedure, Remuneration of Directors, Management and Shareholders. Besides mandatory requirements your Company has voluntarily constituted a Remuneration Committee to consider and recommend the remuneration of Executive/Non-Executive Directors. The Company also endeavours to fully comply with all other non-mandatory requirements of Clause 49 as well.

MEANS O. COMMUNICATION
l

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 Companys website. At the end of each quarter the Company does an earnings call with analysts and investors, which is also broadcast live on Companys website, and the transcript is posted on the website soon after. The financial results of the Company are also posted on the SEBIs EDI.AR System and the same can be viewed on the SEBIs website www.sebiedifar.nic.in. The domain name of Companys website is www.bhartiteleventures.com and up-to-date financial results, official news releases, financial analysis reports and other general information about the Company is available on this website. Presentations made to institutional investors or to the analysts, if any, are not communicated, as a corporate policy, to shareholders of the Company. The Report on Management Discussion and Analysis (MDA) forms part of the Annual Report. The next Annual General Meeting would be held on Tuesday, the 6th day of September, 2005 at 3.30 p.m. at Air .orce Auditorium, Subroto Park, New Delhi 110 010.

GENERAL SHAREHOLDERS IN.ORMATION (i)

67

(ii)

.inancial Calendar for the year 2005-2006 April 1, 2005 to March 31, 2006 July 2005 October 2005 January 2006 April 2006 Within 6 months of the close of the financial year In accordance with Section 166 of the Companies Act, 1956

Tentative Schedule : Accounting year .irst Quarter Results Second Quarter and Half Yearly Results Third Quarter Results .ourth Quarter and .ull Year Results Annual Results (Audited) Annual General Meeting

(iii) Book Closure Date : August 27, 2005 to September 6, 2005 (both days inclusive) (iv) The Board of Directors have not recommended any dividend for the financial year 2004-05. (v) Listing on Stock Exchanges and Stock Code The Companys equity shares are listed on :
l l

The National Stock Exchange of India Limited (NSE), Symbol -BHARTI; and The Stock Exchange, Mumbai (BSE), Scrip code - 532454

Listing .ees for the year 2005-2006 has been paid to the Stock Exchange, Mumbai and the National Stock Exchange. (vi) Stock Market Data for the period April 1, 2004 to March 31, 2005 Share price performance in comparison on BSE Month April 04 May 04 June 04 July 04 August 04 September 04 October 04 November 04 December 04 January 05 .ebruary 05 March 05 High (Rs.) 188.90 177.30 151.05 170.80 160.95 151.80 164.60 174.30 235.00 235.95 232.70 240.70 Low (Rs.) 155.00 115.00 124.00 135.50 134.75 131.00 141.70 155.20 174.00 194.00 202.50 195.80 Volume Traded (Rs.) 4,799,527,323 3,942,960,754 3,251,063,002 5,080,404,134 15,232,494,605 2,531,598,130 2,586,952,390 2,368,646,702 6,999,529,038 6,037,026,615 21,571,414,081 28,922,455,322 BSE Sensex High 5979.25 5772.64 5012.52 5200.85 5269.22 5638.79 5803.82 6248.43 6617.15 6696.31 6720.94 6954.86 Low 5599.12 4505.16 4644.00 4843.77 5033.69 5198.72 5581.49 5704.10 6227.83 6102.74 6530.06 6367.86

68

BHARTI Share Price vs BSE Sensex

7000 6500 6000 5500 5000 4500 4000 3500 3000

7
Bharti

10

11

255 230 205 180 155 130 105 80 55 30

Sensex

Month Sensex

Share price performance in comparison with NSE Nifty Month April 04 May 04 June 04 July 04 August 04 September 04 October 04 November 04 December 04 January 05 .ebruary 05 March 05 High (Rs.) 189.00 178.70 151.00 170.75 160.80 151.70 166.90 174.50 245.00 236.25 232.00 250.00 Low (Rs.) 155.00 114.00 123.90 133.00 134.65 130.85 141.80 153.65 173.55 194.00 202.65 197.00 Volume Traded (Rs.) 13,646,016,330 11,557,251,270 9,291,550,823 14,219,433,220 13,775,786,790 8,469,413,212 6,891,694,244 7,051,449,019 16,100,882,870 14,954,520,830 16,917,712,970 11,381,655,810 S&P CNX Nifty Index High 1,912.35 1,837.95 1,566.50 1,638.70 1,658.90 1,760.80 1,829.45 1,963.80 2,088.45 2,120.15 2,110.15 2,183.45 Low 1,771.45 1,292.20 1,437.90 1,472.55 1,573.70 1,619.90 1,737.85 1,776.70 1,944.50 1,894.40 2,036.60 1,971.15

69

Bharti

Share Price vs CNX Nifty

2150 1950 1750

Nifty

1550 1350 1150 950 1 2 3 4 5

Nifty

6
Month

8
Bharti

10

11

12

255 230 205 180 155 130 105 80 55 30

(vii) Registrar and Transfer Agent The share transfer work of the Company is handled by its Registrar and Share Transfer Agent (RTA) viz. M/s. Karvy Computershare Private Limited (previously Karvy Consultants Limited). 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) 23312454/ 23326591/ 23320751-52 .ax. : (91-40) 23311968/ 23323049 Email : bhartitele@karvy.com (viii) Share Transfer System The shares of the Company are traded on the stock exchanges through the Depository system. The Demat ISIN in National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) is: INE 397D01016. All requests received by the Company/ RTA for Dematerialisation/ Re-materialisation/ transfer are disposed off 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, 2005 S. No. 1. 2. 3. 4. 5. 6. 7. 8. No. of equity shares held 1-5000 5,001-10,000 10,001-20,000 20,001- 30,000 30,001-40,000 40,001-50,000 50,001-100,000 10,0001 & above Total No. of Shareholders 47,081 2,869 1,148 470 243 207 316 559 52,893 % to total no. of Shareholders 89.01 5.42 2.17 0.89 0.46 0.39 0.60 1.06 100.00 Number of equity shares of Rs. 10/60,130,740 24,244,100 17,859,120 12,088,640 8,633,390 9,698,450 22,720,580 18,378,292,650 18,533,667,670 % to total no. of equity shares 0.32 0.13 0.10 0.07 0.05 0.05 0.12 99.16 100.00

70

Bharti

(x) A.

Categories of shareholding as on March 31, 2005 Category PROMOTERS HOLDING Promoters* Indian Promoters .oreign Promoters Persons acting in Concert No. of Shares Held 859,986,028 0 1,200,000 861,186,028 19,378,089 33,801,640 452,110,835 505,290,564 24,437,016 18,911,543 20,970,838 415,582,161 6,450,429 264,062 274,126 486,890,175 1,853,366,767 1.32% 1.03% 1.13% 22.42% 0.35% 0.01% 0.01% 26.27% 100.00% 1.05% 1.83% 24.39% 27.27% 46.40% 0.00% 0.06% 46.46% % of Shareholding

S. No.

B.

SUB-TOTAL A NON-PROMOTER HOLDINGS Institutional Investors Mutual .unds and UTI Banks, .inancial Institution, Insurance Companies (Central/State Government Institutions/ Non-Government Institutions) .IIs

C.

SUB-TOTAL B Others Private Corporate Bodies Indian Public NRIs / OCBs .oreign Companies Any other : (i) Trusts (ii) HU. (iii) Clearing Members (NSDL & CDSL) SUB-TOTAL C GRAND TOTAL

(xi) 1.

During the year Company issued Optionally Convertible Redeemable Debentures (OCRDs) of Rs. 375 Crores to M/s. Shyam Cellular Infrastructure Projects Limited as part of swap consideration (total consideration of Rs. 430 Crore) for acquisition of its 67.5% stake in Bharati Hexacom Limited (formerly Hexacom India Limited) having licence for Rajasthan Circle. All the OCRDs have been converted, at the option of the holder, into 2,00,88,445 fully paid equity shares of the Company at a conversion price of Rs. 186.674 per share. After the issue of these shares the issued, subscribed and paid-up capital of the Company stands increased from 1,853,366,767 (Nos.) to 1,873,455,212 (Nos.). .or details please refer to Note 10 in the Notes to Accounts section of the Balance Sheet. During the year the Company also issued USD 115,000,000 Zero Coupon Convertible Bonds (Bonds) due in 2009. The Bonds are convertible at any time after 12th June, 2004 upto 12th April, 2009 by the holders into fully paid equity shares of the Company with a par value of Rs. 10/- each share at an initial conversion price of Rs. 233.17 per share. No holder has exercised the conversion option so far. .or details please refer to Note 11 in the Notes to Accounts section of the Balance Sheet.

2.

(xii) Investors correspondence may be addressed to : Narender Gupta Compliance Officer and Company Secretary Bharti Tele-Ventures Limited Qutab Ambience, H-5/12, Mehrauli Road, New Delhi 110 030 Tel. : 91-11-51666000-07 narender.gupta@bharti.com .ax : 91-11-51666011-12 website : www.bhartiteleventures.com

71

Auditors Certificate
ON COMPLIANCE WITH THE CONDITIONS O. CORPORATE GOVERNANCE UNDER CLAUSE 49 O. THE LISTING AGREEMENTS To the Members of Bharti Tele-Ventures Limited, 1. We have received the implementation of Corporate Governance procedures by Bharti Tele-Ventures Limited (the Company) during the year ended 31st March, 2005, with the relevant records and documents maintained by the Company, furnished to us for our review and the report on Corporate Governance as approved by the Board of Directors. The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination 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. We further 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. 3. On the basis of our review and according to the information and explanations given to us, the conditions of Corporate Governance as stipulated in Clause 49 of the listing agreements with the Stock Exchange(s) have been complied with in all material respects by the Company .or and on behalf of PRICE WATERHOUSE Chartered Accountants U. RAJEEV Partner Place : New Delhi Date : July 27, 2005

2.

72

CONSOLIDATED BHARTI TELE-VENTURES LIMITED

.inancial Statements

74

Report of the Auditors to the Board of Directors of Bharti TeleVentures Limited on the Consolidated .inancial Statements of Bharti Tele-Ventures Limited and its Subsidiaries
1. We have audited the attached consolidated Balance Sheet of Bharti Tele-Ventures Limited and its subsidiaries as at March 31, 2005, the consolidated Profit and Loss Account for the year ended on that date annexed thereto, and the consolidated Cash .low Statement for the year ended on that date, which we have signed under reference to this report. These consolidated financial statements are the responsibility of Companys management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are prepared, in all material respects, in accordance with an identified financial reporting framework and are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. We report that the consolidated financial statements have been prepared by the Company in accordance with the requirements of Accounting Standard 21 Consolidated .inancial Statements issued by the Institute of Chartered Accountants of India and on the basis of the separate audit of financial statements of Bharti Tele-Ventures Limited and its subsidiaries included in the consolidated financial statements. On the basis of the information and explanations given to us and on consideration of the separate audit reports of individual audited financial statements of Bharti TeleVentures Limited and its aforesaid subsidiaries, in our opinion, subject to the matter stated in paragraph 5 below, the impact of which is not ascertainable, the consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India : U. RAJEEV Partner Membership No. .87191 .or and on behalf of Place : New Delhi Date : July 26, 2005 PRICE WATERHOUSE Chartered Accountants (i) in the case of the consolidated Balance Sheet, of the consolidated state of affairs of Bharti TeleVentures Limited and its subsidiaries as at March 31, 2005;

(ii) in the case of the consolidated Profit and Loss Account, of the consolidated results of operations of Bharti Tele-Ventures Limited and its subsidiaries for the year ended on that date; and (iii) in the case of the consolidated Cash .low Statement, of the consolidated cash flows of Bharti Tele-Ventures Limited and its subsidiaries for the year ended on that date. 5. As explained in Note 4(c)(v) on Schedule 23 to the consolidated financial statements regarding pendency of final decision of the Honourable High Court of Delhi, relating to the appeal filed by Bharti Mobile Limited (BML) for refund of interest paid by BML under protest, any amount that might be finally payable is not presently ascertainable pending the appeal orders and hence no provision has been made in the consolidated financial statements as these have not been estimated by the management. Consequentially, Rs.1,864,959 thousand is being carried forward as Loans and Advances.

2.

3.

4.

75

CONSOLIDATED BHARTI TELE-VENTURES LIMITED

Consolidated Balance Sheet as at March 31, 2005

Particulars Schedule No. As at March 31, 2005 (Rs. 000) As at March 31, 2004 (Rs. 000)

SOURCES O. .UNDS Shareholders .unds Share Capital Reserves and Surplus Loan .unds Secured Loans Unsecured Loans Deferred Tax Liability (Refer Note 14 on Schedule 22 and Note 25 on Schedule 23) Minority Interest (Refer Note 11 on Schedule 23) APPLICATION O. .UNDS .ixed Assets Gross Block Less: Depreciation Net Block Capital Work-in-Progress Pre-operative Expenditure Pending Allocation

1 2 3 4

18,560,889 34,639,403 39,619,760 10,386,242 1,011,019 924,569 105,141,882

18,533,668 30,612,529 40,049,035 6,942,465 103,860 96,241,557 112,191,647 26,114,752 86,076,895 4,530,921 90,607,816 5,891 90,613,707 3,345,800 2,437,957 316,827 5,309,652 1,354,194 7,984,377 14,965,050 21,203,716 740,350 21,944,066 (6,979,016) 75,175 6,747,934 96,241,557 (0)

140,627,322 36,802,292 103,825,030 10,166,556 113,991,586 113,991,586 4,780,749 544,835 7,414,710 4,098,042 10,819,812 22,877,399 43,760,812 1,185,269 44,946,081 (22,068,683) 583,483 7,854,746 105,141,882 0

Investments 7 Deferred Tax Asset (Net) (Refer Note 14 on Schedule 22 and Note 25 on Schedule 23) Current Assets, Loans and Advances Inventories 8 Sundry Debtors 9 Cash and Bank Balances 10 Other Current Assets, Loans and Advances 11 Less : Current Liabilities and Provisions Current Liabilities Provisions Net Current Assets Miscellaneous Expenditure (to the extent not written off or adjusted) Profit and Loss Account Statement of Significant Accounting Policies Notes to Accounts This is the Balance Sheet referred to in our report of even date. U. RAJEEV Partner Membership No. .87191 .or and on behalf of PRICE WATERHOUSE Chartered Accountants Place : New Delhi Date : July 26, 2005 12

13

22 23

The Schedules referred to above form an integral part of the Balance Sheet .or and on behalf of the Board AKHIL GUPTA Joint Managing Director NARENDER GUPTA Group Company Secretary SARVJIT SINGH DHILLON Group Chief .inancial Officer

SUNIL BHARTI MITTAL Chairman & Managing Director DEVEN KHANNA Group .inancial Controller

76

Consolidated Profit and Loss Account for the year ended March 31, 2005
Particulars
INCOME Service Revenue Sale of Goods Other Income EXPENDITURE Access Charges Network Operating Cost of Sales of Goods Personnel Sales and Marketing Administrative and Others Profit including other income and before Licence .ee, .inance Expenses/(Income) (Net), Depreciation, Amortisation, Pre-operative Expenditure, Charity and Donation and Taxation Licence fee and Spectrum charges (revenue share) Profit including Other Income and before .inance Expenses/ (Income) (Net), Depreciation, Amortisation, Pre-operative Expenditure, Charity and Donation and Taxation .inance Expenses (Net) Depreciation Amortisation Pre-operative Expenditure written off Charity and Donation Profit before Tax Tax Expenses/(Credit) Current Tax (net of write back for earlier years Rs.914,501 thousand; Previous year Rs.2,758 thousand) Deferred Tax (Refer Note 14 on Schedule 22 and Note 25 on Schedule 23) Profit after Tax Minority Interest (Refer Note 11 on Schedule 23) Profit for the year Transferred to Debenture Redemption Reserve Loss brought forward Adjustments under the schemes of amalgamation during the year (Refer Note 9 on Schedule 23) Profit for pre-acquisition period for 1% stake of BHL acquired adjusted against goodwill Loss carried forward to the Balance Sheet Earnings per share in Rs. (Basic) Earnings per share in Rs. (Diluted) (Refer Note 19 on Schedule 22 and Note 24 on Schedule 23) Statement of Significant Accounting Policies Notes to Accounts 22 23

Schedule No.

.or the year ended March 31, 2005 (Rs. 000)

80,076,607 1,046,428 434,810 81,557,845

.or the year ended March 31, 2004 (Rs. 000)

49,307,797 717,008 344,583 50,369,388 11,436,868 4,347,523 654,041 3,720,772 3,872,571 3,721,563 27,753,338

14

15 16 17 18 19

16,893,080 7,102,625 1,033,364 5,194,200 6,587,648 6,299,448 43,110,365

38,447,480 7,789,494 30,657,986 2,439,179 10,441,487 1,440,296 473,912 31,139 15,831,973 130,861 3,464,514 12,236,598 120,857 12,115,741 2,478,854 9,636,887 (6,747,934) (10,742,998) (701) (7,854,746) 6.528 6.440

22,616,050 5,560,626 17,055,424 2,692,666 6,847,435 1,947,280 25,225 15,661 5,527,157 1,056,746 (1,378,719) 5,849,130 12,236 5,836,894 884,386 4,952,508 (11,700,442) (6,747,934) 3.149 3.149

20 21

This is the Profit and Loss referred to in our report of even date. U. RAJEEV Partner Membership No. .87191 .or and on behalf of PRICE WATERHOUSE Chartered Accountants Place : New Delhi Date : July 26, 2005

The Schedules referred to above form an integral part of the Profit and Loss Account .or and on behalf of the Board AKHIL GUPTA Joint Managing Director NARENDER GUPTA Group Company Secretary SARVJIT SINGH DHILLON Group Chief .inancial Officer

SUNIL BHARTI MITTAL Chairman & Managing Director DEVEN KHANNA Group .inancial Controller

77

CONSOLIDATED BHARTI TELE-VENTURES LIMITED

Consolidated Cash .low Statement for the year ended March 31, 2005
Particulars A. Cash flow from operating activities : Net profit / (loss) before tax .or the year ended March 31, 2005 15,831,973

(Rs. 000)

.or the year ended March 31, 2004 5,527,157 6,847,510 3,253,004 (26,162) (804) (183,884) 71,285 780,290 1,095,705 469,561 585,541 (196,564) 55,382 (73,055) (3,301) (277,237) (69) 17,924,359 (2,593,533) (831,115) (107,836) 5,394,249 19,786,124 (948,205) 18,837,919

Adjustments for : Depreciation 10,444,026 Interest/.inance Expense 3,055,086 Interest/.inance Income (102,576) (Profit)/Loss on .ixed Assets sold 9,583 (Profit)/Loss on sale of Investments (400,180) ESOP Expenditure 47,128 Deferred Revenue Expenditure 122,916 Amortisation of Goodwill 231,145 Licence fee 1,162,023 Debts/Advances Written off 208,233 Provision for Bad and Doubtful Debts/Advances (Net of write back) 1,598,136 Liability no longer required written back (226,356) Provision for Gratuity and Leave Encashment 65,964 Unrealized .oreign Exchange (gain) /loss (28,822) Provision for Warranty 1,829 Gain from swap arrangements (211,415) Provision for Wealth Tax (1,257) Operating profit before working capital changes Adjustments for changes in working capital : (Increase)/Decrease in Sundry Debtors (Increase)/Decrease in Other Receivables (Increase)/Decrease in Inventories Increase/(Decrease) in Trade and Other Payables Cash generated from operations Taxes (Paid)/Received Net cash from operating activities B. Cash flow from Investing activities : Adjustments for changes in : Purchase of fixed assets Proceeds from Sale of fixed assets Net Proceeds from Investments Purchase of Investments Licence fee paid for new circles Interest Received (Revenue) Amount Paid for acquisition of subsidiaries Net cash used in investing activities (27,734,476) 518,342 104,444,000 (105,435,006) (50,000) 66,339 (753,487) (28,944,288) 31,807,436 (3,250,277) (2,920,453) (203,338) 11,077,687 36,511,055 (1,413,212) 35,097,843

(24,493,160) 187,111 36,068,539 (35,678,972) (632,500) 27,271 (1,353,580) (25,875,291)

78

Consolidated Cash .low Statement for the year ended March 31, 2005
Particulars .or the year ended March 31, 2005 C. Cash flow from financing activities : Proceeds from long term borrowings Receipts Payments .CCB issue expenses Proceeds from short term borrowings Net movement in cash credit facilities and short term loans Interest Paid Gain from swap arrangements Net cash used in financing activities Net Increase/(Decrease) in Cash and Cash Equivalents Opening Cash and Cash Equivalents Cash and Cash Equivalents Acquired on Acquisition Cash and cash equivalents as at March 31, 2005 Cash and cash equivalents comprise : Cash and Cheques (in hand) Balance with Scheduled Banks Notes : 1. .igures in brackets indicate cash outgo. 2. 3.

(Rs. 000)

.or the year ended March 31, 2004

7,508,781 (7,670,432) (96,861) (671,111) (3,157,001) 211,415 (3,875,209) 2,278,346 1,354,194 465,502 4,098,042 (0) 742,500 3,355,542

16,146,762 (7,740,548) 2,051,384 (3,230,929) 277,237 7,503,906 466,534 887,660 1,354,194 317,771 1,036,423

Previous year figures have been regrouped and recast wherever necessary to conform to the current year classification. .igures of the earlier year include the figures for Bharti Tele-Ventures Limited, while those for the current year includes figures for Bharti Tele-Ventures Limited alongwith those of (erstwhile) Bharti Cellular Limited and (erstwhile) Bharti Infotel Limited consequent to the scheme of amalgamation effective April 1, 2004. Cash and cash equivalents includes Rs.227,730 thousands pledged with banks (Previous year Rs.1,167 thousand) which are not available for use by the Company.
The Schedule referred to above form an integral part of the Cash .low Statement. .or and on behalf of the Board AKHIL GUPTA Joint Managing Director NARENDER GUPTA Group Company Secretary SARVJIT SINGH DHILLON Group Chief .inancial Officer

4.

This is the Cash .low Statement referred to in our report of even date. U. RAJEEV Partner Membership No. .87191 .or and on behalf of PRICE WATERHOUSE Chartered Accountants Place : New Delhi Date : July 26, 2005

SUNIL BHARTI MITTAL Chairman & Managing Director DEVEN KHANNA Group .inancial Controller

79

CONSOLIDATED BHARTI TELE-VENTURES LIMITED

Schedules Annexed to and forming part of Accounts

Particulars SCHEDULE : 1 SHARE CAPITAL (Refer Note 16 on Schedule 23) Authorised 2,500,000,000 (Previous year 2,500,000,000) Equity Shares of Rs.10 each Issued, Subscribed and Paid up 1,853,366,767 Equity Shares of Rs.10 each fully paid up (Previous year 1,853,366,767 Equity Shares of Rs.10 each) Of the above 1,516,390,970 (Previous year 1,516,390,970) Equity Shares issued as fully paid up bonus shares out of Share Premium Account Capital Suspense Account (Refer Note 9(a) on Schedule 23) 2,722,125 (Previous Year Nil) Equity Shares of Rs.10/- each fully paid up to be issued to the shareholders of erstwhile Bharti Cellular Limited pursuant to the scheme of amalgamation SCHEDULE : 2 RESERVES AND SURPLUS Share Premium Opening balance Adjustment under the scheme of amalgamation Revaluation Reserve Debentures Redemption Reserve Opening balance Addition during the year As at March 31, 2005 (Rs. 000) As at March 31, 2004 (Rs. 000)

25,000,000 18,533,668

25,000,000 18,533,668

27,221 18,560,889

18,533,668

29,706,859 1,548,020 31,254,879 21,284 884,386 2,478,854 3,363,240 34,639,403

29,706,859 29,706,859 21,284 0 884,386 884,386 30,612,529

SCHEDULE : 3 SECURED LOANS (Refer Note 18 on Schedule 23) Debentures Loans and Advances from Banks : Term Loans Cash Credit Other Loans and Advances : Term Loans Vehicle Loans Note : Amount repayable within one year SCHEDULE : 4 UNSECURED LOANS Short Term Loans and Advances .rom Banks .rom Others (Refer Note 12 on Schedule 23) Other Loans and Advances .rom .inancial Institutions .rom Others (Refer Note 13 on Schedule 23) Note : Amount repayable within one year

4,672,857 3,578,245 21,000 31,333,530 14,128 39,619,760 6,036,731

7,788,750 3,586,246 30,563 28,624,540 18,936 40,049,035 3,731,061

1,606,142 3,750,000 5,030,100 10,386,242 5,356,141

5,942,465 1,000,000 6,942,465

80

SCHEDULE 5 : .IXED ASSETS (Refer Notes 5, 10 and 13 on Schedule 22 and Note 10, 23 (c and e) on Schedule 23)
Gross Block Value Particulars As at April 01, 2004 Acquired under the Scheme of Amalgamation 1,083,169 8,625 1,952 22,877 27,872 1,993,915 45,079 66,975 2,535 3,896 3,256,895 24,595 3,256,895 Additions during the year Sale/ Adjustment during the year As at March 31, 2005 As at April 01, 2004 Acquired under the Scheme of Amalgamation 396,780 962 5,856 12,380 973,787 37,802 44,461 1,598 3,897 1,477,523 1,477,523 Depreciation/Amortisation .or the Sale/ year Adjustment during the year As at March 31, 2005

Schedules Annexed to and forming part of Accounts

(Rs. 000)

Net Block Value As at March 31, 2005 As at March 31, 2004

INTANGIBLE ASSETS Software Bandwidth Goodwill Licences TANGIBLE ASSETS Leasehold Land .reehold Land Building Leasehold Improvements Leasehold VSAT Assets Plant and Machinery Computers Office Equipment Vehicles Vehicle on .inance Lease .urniture & .ixture TOTAL Capital Work-in-Progress GRAND TOTAL Previous Year

46,958 1,352,725 11,123,074 21,085,831 34,664 446,612 1,420,225 407,968 31,954 70,421,364 4,911,755 494,146 73,849 3,571 336,951 112,191,647 4,530,921 112,191,647 86,916,989

37,035 690,272 3,158,345 50,000 10,063 15,144 87,331 295,565 29,962,541 2,911,842 175,747 14,442 2,677 90,637 37,501,641 23,409,880 37,501,641 25,482,569

11,123,074

83,993 2,042,997 3,158,345 22,219,000

36,206 80,695 1,955,317 4,719,580 1,852 243,682 138,334 31,954 15,549,105 2,784,438 340,641 35,335 1,016 196,597 26,114,752 26,114,752 17,412,852

15,853 129,005 231,145 1,162,023 453 80,307 96,862 8,130,590 1,816,279 91,799 13,097 942 68,841 11,837,196 11,837,196 8,723,505

1,955,317 7,336 10,898 631,686 9,522 6,369 6,012 39 2,627,179 2,627,179 21,605

52,059 209,700 231,145 6,278,383 3,267 322,509 236,678 31,954 24,021,796 4,628,997 470,532 44,018 1,958 269,296 26,114,752

31,934 1,833,297 2,927,200 15,940,617 49,772 463,708 1,195,109 476,199 77,236,134 3,211,385 257,391 35,947 4,290 162,047 10,166,556 86,076,895

10,752 1,272,030 9,167,757 16,366,251 32,812 446,612 1,176,543 269,634 54,872,259 2,127,317 153,505 38,514 2,555 140,354 86,076,895 4,530,921 90,607,816

313 53,039 463,708 12,815 1,517,618 18,528 712,877 31,954 1,119,890 101,257,930 28,294 7,840,382 8,945 727,923 10,861 79,965 6,248 141 431,343 12,322,861 140,627,322 17,798,842 10,166,554 12,322,861 140,627,322 207,911 112,191,647

81

36,802,292 103,825,030 36,802,292 113,991,586

Notes : 1. Capital Work-in-Progress includes : (a) 2. Capital advances of Rs.560,700 thousand (Previous year Rs.361,449 thousand) (b) Borrowing cost of Rs.11,912 thousand (Previous year Rs.Nil) Addition to fixed assets during the year include : (a) 3. 4. 5. 6. 7. 8. 9. Rs. 13,297 thousand of Gain (Previous year Rs.420,142 thousand) on account of fluctuations in foreign exchange rates (b) Borrowing costs capitalised Rs. 13,207 thousand (Previous year Rs.23,503 thousand) 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. Capital Work-in-Progress as on March 31, 2005 is net of Rs. 146,465 thousand being gain (Previous year Rs.37,697 thousand) on account of fluctuation in Exchange rate. Additions during the year includes Rs. 140,418 thousand (Previous year Rs. Nil) allocated from pre-operative expenditure. .reehold Land and Building includes Rs. 26,468 thousand (Previous year Rs.26,468 thousand) and Rs. 71,477 thousand (Previous year Rs.85,529 thousand) respectively, in respect of which registration of title in favour of group is pending. The remaining amortisation period of licence fees as at March 31, 2005 ranges between 9 to 20 years for Unified Access Service Licence and 15 to 17 years for Long Distance. The remaining amortisation period of Goodwill as at March 31, 2005 ranges between 10 to 12 years. Capital Work-in-Progress includes goods in transit Rs.980,618 thousand (Previous year Rs.311,821 thousand).

10. Computers include Gross Block of assets capitalised during the year under .inance lease Rs.1,908,724 thousand (Previous year Nil) and depreciation charged for the year Rs.534,880 thousand (Previous year Nil), Net Book value Rs.1,373,843 thousand.

CONSOLIDATED BHARTI TELE-VENTURES LIMITED

Schedules Annexed to and forming part of Accounts

Particulars 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, 2004 Additions during the period Network Operating Expenses Insurance Premium Repairs and Maintenance Plant and Machinery Power and .uel Rent Leased Line Others Sub-Total Personnel Expenses Salaries Contribution to Provident and Other .unds Staff Welfare Recruitment and Training Sub-Total Selling Expenses Advertisement and Marketing Other Selling and Distribution Sub-Total Administrative and Other Expenses Legal and Professional Rates and Taxes Power and .uel Travelling and Conveyance Rent Repairs and Maintenance Charges Building Plant and Machinery Others Insurance Miscellaneous Collection and Recovery Sub-Total .inance Expenses Other Bank/.inance Charges Depreciation Other Income Total Less : Allocated to .ixed Assets Less :Transferred to Profit and Loss Account Total amount carried to Balance Sheet As at March 31, 2005 (Rs. 000) As at March 31, 2004 (Rs. 000)

5,891 1,007 26,388 19,454 25,999 12,914 29,343 115,105 163,882 5,172 11,131 30,668 210,853 97,590 15,663 113,253 19,916 12,232 5,083 57,618 14,136 175 2,100 13,730 590 35,012 1,245 161,837 4,784 2,541 (66) 614,330 140,418 473,912

(0) 226 24 675 393 1,318 10,151 625 200 7,617 18,593 22 4 26 565 8 95 6,691 2,182 978 536 11,055 49 75 31,116 25,225 5,891 5,891

82

Schedules Annexed to and forming part of Accounts

Particulars SCHEDULE : 7 INVESTMENTS (Refer Note 8 on Schedule 22) Current Other than Trade (Quoted) Government securities Mutual .unds and Bonds Other than Trade (Unquoted) Government securities Long Term Investments : Trade (Unquoted) Investment in Joint Ventures Bridge Mobile PTE Limited: 1,000,000 (Previous year Nil) Equity shares of USD 1 each fully paid up. Total Investments Aggregate Market Value of Quoted Investments Aggregate Value of Quoted Investments Aggregate Value of Unquoted Investments SCHEDULE : 8 INVENTORY (Refer Note 7 on Schedule 22) Stock-In-Trade * Includes Goods in Transit Rs.5,250 (Previous Year - Rs. Nil thousand) SCHEDULE : 9 SUNDRY DEBTORS (Refer Note 6 on Schedule 22 and Note 15 on Schedule 23) (Unsecured, considered good unless otherwise stated) Billing Debtors : Debts outstanding for a period exceeding six months Considered good 545,464 Considered doubtful 3,262,522 Less : Provision (3,262,522) Other debts Considered good 4,230,469 Considered doubtful 863,198 Less: Provision (863,198) Other Debtors : Debts outstanding for a period exceeding six months Considered good 329,892 Considered doubtful 138,687 Less : Provision (138,687) Other debts Considered good 2,308,885 Considered doubtful 66,483 Less : Provision (66,483) As at March 31, 2005 (Rs. 000) As at March 31, 2004 (Rs. 000)

1,035,840 3,699,346 4,735,186 1,800

24,040 3,321,760 3,345,800

43,763 4,780,749 4,751,649 4,735,186 45,563

3,345,800 3,409,108 3,345,800

544,835 544,835

316,827 316,827

545,464

318,498 2,387,236 (2,387,236) 3,329,840 504,272 (504,272) 15,227 48,477 (48,477) 1,646,087 46,677 (46,677)

318,498

4,230,469

3,329,840

329,892

15,227

2,308,885 7,414,710

1,646,087 5,309,652

83

CONSOLIDATED BHARTI TELE-VENTURES LIMITED

Schedules Annexed to and forming part of Accounts

Particulars SCHEDULE : 10 CASH AND BANK BALANCES Cash in Hand Cheques in Hand Balances with Scheduled Banks in Current Account in .ixed deposits * in Deposit Account as Margin Money * [Includes Rs.227,730 thousand pledged with various authorities (Previous year Rs.1,167 thousand )] As at March 31, 2005 (Rs. 000) As at March 31, 2004 (Rs. 000)

42,905 699,595 1,052,501 2,301,597 1,444 4,098,042

42,351 275,420 980,359 54,748 1,316 1,354,194

SCHEDULE : 11 OTHER CURRENT ASSETS, LOANS AND ADVANCES (Unsecured, considered good unless otherwise stated) Advances recoverable in cash or in kind or for value to be received Considered good 7,034,068 Considered doubtful 412,841 Less : Provision (412,841) Accrued Billing Revenue Advance to ESOP Trust Advance Tax [(Net of provision for tax Rs.1,431,591 thousand (Previous year Rs. Nil)] Balances with Custom Authorities Interest Accrued on Investment

7,034,068 2,793,372 251,217 696,463 5,617 39,075 10,819,812

5,565,792 14,041 (14,041)

5,565,792 2,067,126 341,637 6,984 2,838 7,984,377

84

Schedules Annexed to and forming part of Accounts

Particulars SCHEDULE : 12 CURRENT LIABILITIES AND PROVISIONS Current Liabilities Sundry Creditors : Total outstanding dues of Small Scale Industrial Undertaking(s)* Total outstanding dues of creditors other than Small Scale Industrial undertakings(s) Advance Billing and Prepaid Card Revenue Premium on Redemption of Bonds Interest accrued but not due on loans Other Liabilities Advance Received from customers Security Deposits (Refer Note 15 on Schedule 23) * As at March 31, 2005 (Rs. 000) As at March 31, 2004 (Rs. 000)

4,345 30,643,404 30,647,749 7,923,904 595,564 403,957 804,828 722,622 2,662,188 43,760,812

4,907 14,329,941 14,334,848 2,890,410 505,874 855,090 149,704 2,467,790 21,203,716

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 19 (c and d) on Schedule 23) Gratuity Leave Encashment Provision for Warranty Provision for Wealth Tax Provision for Tax [Net of Advance Tax Rs.Nil (Previous year Rs.715,036 thousand)] Other Provisions

82,166 134,512 7,200 149 961,242 1,185,269 44,946,081

68,314 82,400 5,371 1,406 582,859 740,350 21,944,066

SCHEDULE : 13 MISCELLANEOUS EXPENDITURE (To the extent not written off or adjusted) (Refer Note 15 on Schedule 22) Deferred Employee Compensation Expense Opening Balance Add : Adjustments during the year Less : Amortisation for the year # # Net of write back Premium on Redemption of Debentures Opening Balance Add : Addition during the year Less : Amortisation for the year

75,175 (14,675) 47,128 13,372 693,027 122,916 570,111 583,483

188,997 (42,537) 71,285 75,175 75,175

85

CONSOLIDATED BHARTI TELE-VENTURES LIMITED

Schedules Annexed to and forming part of Accounts

Particulars SCHEDULE : 14 OTHER INCOME Liabilities/Provisions no longer required written back Profit on Sale of Assets (Net) Miscellaneous .or the year ended March 31, 2005 (Rs. 000) .or the year ended March 31, 2004 (Rs. 000)

226,356 208,454 434,810

196,564 804 147,215 344,583

SCHEDULE : 15 NETWORK OPERATING EXPENDITURE Interconnect charges and PSTN Rentals Installation Power and .uel Rent Insurance Repairs and Maintenance Buildings Plant and Machinery Others Leased Line and Gateway charges Other Network Operating Expenses

648,324 32,104 1,501,552 970,362 36,661 141,690 1,785,873 343,004 827,876 815,179 7,102,625

227,762 14,898 818,644 645,440 37,798 16,586 1,039,633 176,794 505,300 864,668 4,347,523

SCHEDULE : 16 COST O. SALES Opening Stock Add : Stock acquired under acquisition Add : Purchases Add : Cost transferred from fixed assets Less : Simcard Utilisation Less : Internal issues / capitalised Less : Closing Stock

316,827 12,003 1,529,523 252,144 28,010 544,835 1,033,364

(1)208,990 1,017,983 25,090 244,318 36,877 316,827 654,041

SCHEDULE : 17 PERSONNEL EXPENDITURE Salaries, Wages and Bonus* Contribution to Provident and Other .unds Staff Welfare Recruitment and Training * Excluding amortisation of Deferred ESOP Cost

4,430,920 194,587 283,267 285,426 5,194,200

3,221,182 133,386 188,971 177,233 3,720,772

86

Schedules Annexed to and forming part of Accounts

Particulars SCHEDULE : 18 SALES AND MARKETING EXPENDITURE Advertisement and Marketing Sales Commission and Incentive Simcard Utilisation Other Selling and Distribution .or the year ended March 31, 2005 (Rs. 000) .or the year ended March 31, 2004 (Rs. 000)

3,357,372 1,944,932 252,144 1,033,200 6,587,648

1,987,679 1,162,470 244,318 478,104 3,872,571

SCHEDULE : 19 ADMINISTRATIVE AND OTHER EXPENDITURE Legal and Professional Rates and Taxes Electricity and Water Travelling and Conveyance Rent Repairs and Maintenance Buildings Plant and Machinery Others Insurance Bad debts written off Provision for doubtful debts / advances Less : Provision for doubtful debts written back Collection and Recovery Loss on sale of assets (net) Miscellaneous

1,709,271 111,135

948,885 32,077 174,344 476,490 237,761 69,547 12,072 58,555 13,007 208,233 1,598,136 929,062 9,583 1,531,696 6,299,448

1,055,115 469,574

638,109 21,496 90,039 317,785 163,867 63,611 17,500 153,277 13,241 469,561 585,541 540,194 647,342 3,721,563

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CONSOLIDATED BHARTI TELE-VENTURES LIMITED

Schedules Annexed to and forming part of Accounts

Particulars SCHEDULE : 20 .INANCE EXPENSES Interest : On Term Loan On Debentures On Others Amortisation of Premium on Redemption of .oreign Currency Convertible Bonds Other .inance Charges Less : Income Profit on sale of Current Investments Interest Income : from Current Investments (Other than Trade) [Gross of TDS Rs. 4,106 thousand; (Previous year Rs. 963 thousand)] from .ixed deposit, loans and advances etc. [Gross of TDS Rs.657 thousand; (Previous year Rs.73 thousand)] .or the year ended March 31, 2005 (Rs. 000) .or the year ended March 31, 2004 (Rs. 000)

1,850,763 664,911 144,385 122,916 395,027 3,178,002 400,180

1,519,096 1,013,655 384,985 335,268 3,253,004 183,884

89,412 10,453 24,652 211,415 2,711 738,823 2,439,179

8,042 7,289 73,055 277,237 10,831 560,338 2,692,666

Exchange .luctuation Gain (Net) Gains from swap arrangements Other .inance Income

SCHEDULE : 21 AMORTISATION (Refer Note 3, 5 and 15 on Schedule 22 and Note 10 on Schedule 23) Licence .ee Personnel - Deferred ESOP Cost Goodwill

1,162,023 47,128 231,145 1,440,296

1,095,705 71,285 780,290 1,947,280

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SCHEDULE : 22 STATEMENT O. SIGNI.ICANT ACCOUNTING POLICIES The significant accounting policies adopted by Company and its subsidiaries (hereinafter referred to as the Group) in respect of these Consolidated .inancial Statements, are set out below. 1. BASIS O. 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 .inancial Statements issued by the Institute of Chartered Accountants of India, consolidated as per Para 2 below for the year ended March 31, 2005. 2. PRINCIPLES O. CONSOLIDATION These accounts represent consolidated accounts of the Company and its majority owned subsidiaries, all incorporated in India, as follows : Entity Principal Service Relationship Shareholding as at March 31, 2005 51% 100% 68.5%

Bharti Aquanet Limited (BAL) Bharti Comtel Limited (BCTL) Bharti Hexacom Limited (.ormerly known as Hexacom India Limited) Satcom Broadband Equipment Limited (SBEL) (.ormerly known as CMax Infocom Private Limited) Bharti Broadband Limited (BBL) (.ormerly known as Comsat Max Limited)

Submarine Cable landing station Administrative support to BTVL and VSAT equipment trading. Cellular Mobile Telephony Services (CMTS) Enterprise Services and VSAT Equipment Trading

Subsidiary Subsidiary Subsidiary

Subsidiary

51%

Enterprise Services

Subsidiary of Satcom Broadband Equipment Limited

51%

During the year ended March 31, 2005, Bharti Mobile Limited (BML) has been amalgamated with Bharti Cellular Limited (BCL). .urther, Bharti Cellular Limited (BCL) and Bharti Infotel Limited (BIL) have been amalgamated with Bharti Tele-Ventures Limited (BTVL). .or the purpose of this consolidation, jointly owned entities, where BTVL or its subsidiaries own directly or indirectly more than 50 percent of voting rights of a Companys share capital have been accounted for as subsidiaries. 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.

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Schedules Annexed to and forming part of Accounts

3. GOODWILL Goodwill is stated as an excess of the purchase consideration over BTVLs 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. 4. .IXED ASSETS .ixed 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 Group for cellular and basic circles, upon migration to the National Telecom Policy (NTP 1999), i.e. Entry .ee, 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 Office Equipment Computer / Software Vehicles .urniture and .ixtures Plant & Machinery Leasehold Land Leasehold Improvements 5% 20.00% / 50.00% 33.33% 20.00% 20.00% 6.67% / 10.00% / 50.00 % Period of lease 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 .ee 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 lease. 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. 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

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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 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 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. 7. INVENTORIES Inventories for mobile operations are valued at the lower of cost and net realisable value. Cost is determined on .irst in .irst 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 .EES 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 O. ITEMS IN .OREIGN CURRENCY Transactions in .oreign 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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Schedules Annexed to and forming part of Accounts

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. 11. RETIREMENT BENE.ITS 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 straightline basis over the lease term. b) As Lessee .inance Lease Assets acquired on .inance 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 .inance Lease .inance leases as a dealer lessor are recognized as a sale transaction in the Profit and Loss Account and are treated as other outright sales. .inance 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. 14. TAXATION Tax expense for the year, comprising current tax and deferred 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 recognized only for such timing differences which reverse after tax holiday period. Deferred tax assets to

92

Schedules Annexed to and forming part of Accounts

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) b) Premium on redemption of debentures is recognised as an expense to the Profit and Loss Account over the period of the related contract. Employee Stock Option Plan (ESOP) - The aggregate amount of liability on account of ESOP as ascertained at yearend 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 O. 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. .or 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 Groups 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.

93

CONSOLIDATED BHARTI TELE-VENTURES LIMITED

Schedules Annexed to and forming part of Accounts

SCHEDULE : 23 NOTES TO ACCOUNTS 1. Bharti Tele-Ventures Limited (BTVL or the Company) incorporated in India on July7,1995, is a company promoted by Bharti Telecom Limited (BTL), a company incorporated under the laws of India. BTVL together with its subsidiaries is referred to as the Group. New Operations The Group has migrated its Cellular Mobile Licenses in Chennai, Delhi, Kolkata, Mumbai, Gujarat, Haryana, Himachal Pradesh, Kerala, Madhya Pradesh, Maharashtra, Tamil Nadu, Uttar Pradesh (West), Andhra Pradesh, Karnataka and Punjab to Unified Access Service Licenses (UASL) after obtaining the necessary approvals from DoT vide letter dated April 27, 2004. In view of the said letters, all the above licenses now stand converted to UASL w.e.f. April 27, 2004. The Group had acquired UASL in Bihar, Orissa, and Uttar Pradesh (East) and Jammu & Kashmir on .ebruary 10, 2004 and in West Bengal on .ebruary 11, 2004.During the period the Group has also acquired a UASL in Assam on September 17, 2004. The effective date of this license is July 8, 2004. During the year, the Group has commenced commercial services in the telecom circles of Uttar Pradesh (East), West Bengal, Jammu and Kashmir, Bihar, Orissa and Assam. The Group has surrendered its Basic Service Licenses in Delhi, Haryana, Karnataka and Tamil Nadu with effect from October 1, 2004 and in Madhya Pradesh its UASL, which was originally a Basic License and had been converted to UASL, with effect from December 12, 2004. On May 7, 2004, BTVL acquired majority shareholding (67.5%) in Bharti Hexacom Limited (BHL) (erstwhile Hexacom India Limited) which provides cellular mobile telephone services in Rajasthan and North East Circle, at a consideration of Rs. 4,310,750 thousand (inclusive of Rs. 10,750 thousand towards legal costs). .urther, BTVL has also acquired 1% shareholding from certain shareholders of BHL in October 04 for an aggregate consideration of Rs. 21,998 thousand (inclusive of Rs. 1,833 thousand towards legal costs). The Group has now submitted a request for migration of this license to UASL vide letter dated July 26, 2004. BHL has commenced operations in the North East Circle on March 30,2005 and as per agreement the Company needed to fulfill 10% roll out obligations by June 30, 2005 and completion of entire roll out obligation by June 30, 2007. The Company had on June 15, 2005 requested DoT for extension of the period to fulfill first year of roll out obligation, on the submission that as against terms and conditions of the licence agreement whereby the first phase is to be fulfilled within one year from the effective date of agreement, the Company had been granted only 6 months. The management believe that its submission will receive a favourable response from DoT. On January 31, 2005, the Group acquired 51% shareholding in Satcom Broadband Equipment Limited (SBEL) (formerly CMax Infocom Limited) which provides enterprise services in Mumbai, at a consideration of Rs.126,976 thousand. Bharti Broadband Limited (BBL) (formerly Comsat Max Limited) is a 100% subsidiary of SBEL for which SBEL paid Rs.248,492 thousand as purchase consideration to Max India Ltd. 3. Guarantees a) b) Total Guarantees outstanding as at March 31, 2005 amounting to Rs.5,466,562 thousand (March 31, 2004 Rs.4,121,959 thousand) have been taken from the banks. The guarantees and limits relating to guarantees of Rs. Nil (March 31, 2004 Rs. 67,994 thousand) included above are secured against the pari-passu charge on moveable current assets both present and future.

2.

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Schedules Annexed to and forming part of Accounts

4. Contingent Liability a) Claims against the Company not acknowledged as debt. Particulars (A) Taxes and Duties (including Licence .ees and WPC) (under adjudication / appeal / dispute) Sales Tax (see 4 b below) Service Tax (including 4 e below) Income Tax Excise Duty, Customs Duty, Stamp duty and Entry Tax (including 4 d below) Access Charges / Port Charges DoT demands (including 4 c (v) below) Other miscellaneous demands (B) Claims under legal cases including arbitration matters (including 4f below) Total (A+B) b) As at March 31, 2005 (Rs. 000) As at March 31, 2004 (Rs. 000)

5,349,052 471,772 309,842 1,512,770 263,500 2,662,990 80,927 416,242 11,067,095

2,463,500 266,720 339,824 241,521 138,661 1,936,452 78,087 103,303 5,568,068

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 Honble 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. In so far as the assessments already completed as on September 25, 2003 the Honble Supreme Court directed that the operators should file statutory appeals against the assessment orders. The total disputed amount of Sales Tax is currently estimated by the Group to be Rs.5,349,052 thousand (March 31,2004 Rs.2,463,500 thousand) included in note 4(a) above. The amount includes demands actually received amounting to Rs. 3,628,629 thousand (March 31,2004 Rs.2,463,500 thousand). Demands raised have been challenged before the respective high courts and the Supreme Court .The Group has obtained interim stays against enforcement of the demands. Any proceeding initiated now shall be subject to the interim directions passed by the Honble Supreme Court as stated above.

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. 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 damaged 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.

(ii)

(iii) In the arbitration proceedings the order was not favourable to BML. BML has subsequently filed objections to the arbitrators award before the Delhi High Court. The Delhi High Court vide orders dated .ebruary 19, 2003 has 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

95

CONSOLIDATED BHARTI TELE-VENTURES LIMITED

Schedules Annexed to and forming part of Accounts

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 previous year in accordance with the order of DoT in respect of restoration of Punjab licence 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. Consequently, the Company received refund order of interest from the DoT in the mobility circles of Andhra Pradesh and Karnataka amounting to Rs.770,334 thousand and had taken such amounts as an income in the Profit and loss Account 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 had been set off against the interest claim of DoT amounting to Rs.2,778,941 thousand in 2002-03. During the year ended March 05, the Company received a refund of Rs.57,338 thousand. The balance amount of Rs. 1,864,959 thousand (included in 4 (a) above) has been included under Loans and Advances. 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 subjudice. In view of the non refund of the complete amount due pursuant to the Order dated March 4, 2003 of the Honble Supreme Court the COAI moved a clarification application of the Order dated March 4, 2003, before the Honble Supreme Court which was dismissed as withdrawn. COAI has thereafter moved execution applications in TDSAT which also stands disposed off. The COAI is moving the Supreme Court against the interpretation advanced by the TDSAT in the execution proceedings.

d)

The Central Excise department has raised show cause notices to Mobility circles of Mumbai and Kolkata of the Group amounting to approximately Rs. 255,608 thousand included in 4(a) above (March 31, 2004 Rs.190,500 thousand) on an allegation that erection of a cell site amounts to manufacture of telecommunication equipments and hence duty @16 % ought to have been paid on the total value of the equipment installed at the cell site. One of these notices issued by Mumbai IV, Churchgate Commissionerate has been confirmed for a demand of approx Rs.28,434 thousand against which an appeal has been filed with CESTAT and stay obtained. Earlier, similar show cause notices issued to Mobility circles of Himachal Pradesh and Delhi have been quashed by the authorities, who have held that mere placement of equipment at a cell site and connecting them through wires and cables does not amount to manufacture. In the opinion of the Group, other Commissionerates should not overlook the view taken by Commissionerate at Chandigarh and Delhi and hence similar order is expected at CESTAT Mumbai and Kolkata also.

e)

Service Tax authorities have demanded Rs. 47,880 thousand (included in 4 (a) above) (March 31, 2004 Rs.5,342 thousand) on the Group contending that Service Tax is payable on the value/cost of sim cards given to subscribers. Appeal filed against this in the CESTAT has been dismissed and the Company has filed an appeal before the Supreme Court in which interim stay has been given. Show cause notices seeking a demand of Rs.5,740 thousand (March 31, 2004 Rs.17,474 thousand) on the same issue are pending adjudication at the various circles of the Group. The total disputed amount of Service Tax estimated by the Group is Rs. 98,365 thousand (included in 4 (a) above). BTVL 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 Limted (BMNL) to BTVL. The case filed by DSS to enforce the sale of equity shares before the Delhi High Court has been transferred to District Court and was pending consideration of the Ld. Additional District Judge. The suit filed by DSS has been dismissed in default by the Ld. Additional District judge on the ground of non-prosecution. Subsequently, DSS has filed an application for restoration of the suit on which notices has been issued to BTVL and other defendants returnable on August 24, 2005. In respect of the same transaction, Crystal Technologies Private Limited, an intermediary, has initiated arbitration proceedings against the Company demanding Rs.194,843 thousand (Previous year Rs Nil) regarding termination of its appointment as a consultant to negotiate with DSS for the sale of DSS stake in erstwhile Bharti Mobinet Limited to BTVL. Matter is fixed for hearing on July 28, 2005.

f)

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Schedules Annexed to and forming part of Accounts

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 .OB value equivalent to, or more than, five times the CI. 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 .oreign Trade, Ministry of .inance, as applicable. Accordingly these Companies are now required to export goods of .OB value of at least Rs. 24,312,530 thousand (Previous year Rs. 7,900,162 thousand). 6. 7. Estimated amount of contracts to be executed on capital account and not provided for (net of advances) Rs.19,740,686 thousand (March 31,2004 Rs. 7,389,489 thousand). The Company has entered into a Joint Venture agreement dated November 3, 2004 with 6 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 seven operators / shareholders. On March 31, 2005 the Group invested USD 1,000 thousand in ordinary shares of US$1 each in Bridge Mobile Pte. Ltd. amounting to Rs.43,763 thousand. Since the amount has been realized by Bridge Mobile Alliance subsequent to the Balance Sheet date, the amount has been accounted for as per the provisions of AS-13, Accounting for investments, issued by Institute of Chartered Accountants of India. Vide a Supply contract and Construction and maintenance agreement executed on March 27, 2004, Alcatel Submarine Networks of .rance and .ujitsu Ltd. of Japan will provide the SEA-ME-WE-4 Cable Systems (broadly described as a submarine cable system linking South East Asia and Europe via the Indian Sub-Continent and Middle East) and also give long term technical support to a consortium of sixteen telecom operators in various countries including the Company whose share (8.051%) of the contract price is estimated to be US$ 39,055 (approx. Rs.1,710,558 thousand), out of which US$ 8,076 thousand (approx. Rs.355,511thousand) has been disclosed as capital advances. The remaining amount is included in Note 6 above. Amalgamation a) Pursuant to the Scheme of Amalgamation of Bharti Cellular Limited and Bharti Infotel Limited with Bharti Tele-Ventures Limited, as approved by the Honourable High Court of Delhi by its order dated May 21, 2005, which became effective on June 9, 2005 on receipt of Certificate of Registration of Order of Court from the Registrar of Companies, NCT of Delhi, all the assets, liabilities and reserves of erstwhile BCL and BIL were transferred to and vested in the Company with effect from the appointed date i.e. April 1, 2004. The Scheme of Amalgamation has been accounted for in BTVL books under the Pooling of Interest Method as per Accounting Standard 14 on Accounting for Amalgamations issued by The Institute of Chartered Accountants of India whereby the assets, liabilities and reserves of the erstwhile BCL and erstwhile BIL have been recorded in books of BTVL at their respective book value to the erstwhile companies. As per the Scheme of Amalgamation 296,770,700 Equity shares of Rs. 10/- each of BIL held by the Company and 105,745,483 Equity Shares of Rs. 10/- each of BCL held by the Company stand cancelled. Pursuant to the Scheme of Amalgamation and after considering the cancellation of shares held in BIL and BCL by the Company 2,722,125 Equity Shares of Rs. 10/- each of the Company are to be issued to the Shareholders of BCL in the ratio of 15 fully paid up Equity Shares of the Company for every 2 (Two ) fully paid up Equity Shares of Rs. 10/- each held in BCL, which pending allotment has been disclosed under capital suspense account; an amount of Rs. 27,221,250 has been included in the share capital suspense account; as at March 31, 2005 in Schedule 1. b) Pursuant to the Scheme of Amalgamation of Bharti Mobile Limited (BML 100% subsidiary of the BCL) with erstwhile BCL, as approved by the Honourable High Court of Delhi by its order dated July 12, 2004, which became effective on August 6, 2004, on receipt of Certificate of Registration of Order of Court from the Registrar of Companies, NCT of Delhi, all the assets, liabilities and reserves of erstwhile BML were transferred to and vested in the

8.

9.

97

CONSOLIDATED BHARTI TELE-VENTURES LIMITED

Schedules Annexed to and forming part of Accounts

Company with effect from the appointed date i.e. April 1, 2003. BML had a license to provide Cellular Mobile Telephony Services (CMTS) in the circles of Andhra Pradesh, Karnataka and Punjab. The Scheme of Amalgamation has been accounted for in erstwhile BCL books under the Pooling of Interest Method as per Accounting Standard 14 on Accounting for Amalgamations issued by The Institute of Chartered Accountants of India whereby the assets, liabilities and reserves of the erstwhile BML have been recorded in books of the Company at their respective book value to the erstwhile companies. c) The amalgamations within the Group referred to in paragraph (a) and (b) above have the following impact on the opening reserves of the Group. (Rs. 000) Reversal of unamortised goodwill on amalgamation Issue of share capital to minority shareholder of erstwhile BCL Share premium of erstwhile subsidiaries transferred to Share Premium Account adjusted to opening reserves Total 10. Goodwill The following is the detail of Goodwill in the consolidated financial statements of BTVL as at March 31, 2005 : Nature of transaction As at March 31, 2005 (Rs. 000) 3,056,346 9,139 92,860 3,158,345 As at March 31, 2004 (Rs. 000) 7,571,704 329,306 484,844 790,214 23,630 1,923,376 11,123,074 9,167,756 27,221 1,548,021 10,742,998

On Acquisition of : 49 per cent equity interest in erstwhile BCL by BTVL 30.2 per cent equity interest in erstwhile BTNL by BTVL Effective equity interest of 74 per cent in erstwhile BML by BTVL 15 per cent equity interest of Intel in erstwhile Bharti Telespatial Limited (BTPL) by BTVL 10 per cent acquisition of erstwhile BTSOL from Pastel Limited by BTVL 26 per cent equity interest in erstwhile BML by BTVL (erstwhile BCL) 68.5 per cent equity interest in BHL by BTVL 51 per cent equity interest in SBEL by BIL 100 per cent equity interest in BBL by SBEL Total

Note : During the year the Goodwill has been reversed on account of the following amalgamations with the group : (Rs. 000) i) ii) iii) Total Upon merger of BML with BCL Upon merger of BCL with BTVL Upon merger of BIL with BTVL 2,408,220 7,571,704 1,143,150 11,123,074

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 BTVL Minority interest as at the year-end is:

98

Schedules Annexed to and forming part of Accounts

Name of Company Bharti Aquanet Limited Bharti Hexacom Limited (.ormerly, Hexacom India Limited) Satcom Broadband Equipment Limited (formerly CMax Infocom Limited) The amount attributable to the minority shareholders as the year-end is on account of : Particulars As at March 31, 2005 (Rs.000) 698,540 85,750 19,422 120,857 924,569 As at March 31, 2004 (Rs.000) 12,250 85,750 (6,376) 12,236 103,860 As at March 31, 2005 49.00% 31.50% 49.00% As at March 31, 2004 49.00%

Share Capital Share Premium Share of Opening Reserve Share of Current Year Profit/(Loss) Total 12. a)

As mentioned in Note 2 above the Company has acquired 67.5% shareholding in Bharti Hexacom Limited (formerly Hexacom India Limited) on May 7, 2004. The details of net assets acquired and goodwill on acquisition is set out below : (Rs.000) Net Assets acquired as at May 7, 2004 (A) Consideration Optionally Convertible Redeemable Debentures (OCRD) Cash Total Consideration (B) Legal costs on acquisition (C) Goodwill on acquisition (B) + (C) (A) 1,257,077 3,750,000 550,000 4,300,000 10,750 3,053,673

The Group has allotted 37,500 OCRDs of Rs 100,000 each aggregating to Rs. 3,750,000 thousand that are optionally convertible into equity shares at an Agreed Price on a preferential basis to the erstwhile shareholders of BHL (the Sellers). The tenor of the OCRDs is 364 days from and including the date of allotment. These OCRDs shall be convertible solely and entirely at the option of the Seller and BTVL shall not be entitled to convert the same into equity shares unless the Sellers shall have exercised their option to convert. If the Sellers choose not to convert all or part of the OCRDs, then the outstanding OCRDs will be redeemed at face value at the end of the Tenor. BTVL and the Sellers will share any upside in the BTVL stock price, at the time of Conversion. The difference between the Relevant Price and the Agreed Price shall be shared in the 60:40 ratio (BTVL:Sellers) respectively at the time of conversion of the OCRDs. The upside will 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 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. Subsequent to the Balance Sheet date 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 :

99

CONSOLIDATED BHARTI TELE-VENTURES LIMITED

Schedules Annexed to and forming part of Accounts

(Rs. 000) Date of Allotment April 24, 2005 May 10, 2005 June 9, 2005 No. of Shares Allotted 5,424,479 14,538,078 125,888 Conversion Price 1,012,609 2,713,881 23,500

As mentioned in Note 2 above the Group has acquired additional 1% shareholding in BHL (formerly Hexacom India Limited) on October 1, 2004. The details of net assets acquired and goodwill on acquisition is set out below : (Rs.000) Net Assets acquired as at October 1, 2004 (A) Consideration Cash (C) 20,165 1,833 2,673 Legal costs on acquisition (B) Goodwill on acquisition (B) + (C) (A) b) 19,325

As mentioned in Note 2 above the Group has acquired 51% shareholding in Satcom Broadband Equipment Limited (formerly CMax Infocom Private Limited) on January 31, 2005. SBEL has 100% shareholding in Bharti Broadband Limited (formerly Comsat Max 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 January 31, 2005 (A) Consideration (including consideration for Bharti Broadband Limited paid by SBEL) Cash (B) 375,469 101,999 Goodwill on acquisition (B) - (A) 273,470

Subsequent to the Balance Sheet date the Group acquired the remaining 49% share holding in SBEL on April 16,2005 thereby making it a 100% subsidiary of the Group. 13. During the year ended March 31, 2005 the Group has issued U.S.$ 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 = U.S.$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 = U.S.$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.

100

Schedules Annexed to and forming part of Accounts

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). 14. Billing revenue in Profit and Loss Account is net of Rebates and Discounts Rs. 1,920,154 thousand (Previous year : 1,312,319 thousand). 15. Rs.2,662,188 thousand (Previous year Rs. 2,220,178 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, 2005 6,436,266 equity shares (Previous year 10,882,291 equity shares) of the Group are held by Bharti Tele-Ventures Employees Welfare Trust (The Trust), issued at the rate of Rs. 51.36 per equity share fully paid up. 17. The Loans and Advances granted to associates are repayable on demand and repayments made during the year are as mutually agreed. 18. Particulars of securities charged against secured loans taken by the Group are as follow : Particulars Amount Outstanding (Rs. 000) 455,357 Security Charges

Debentures 75, 9.5% Redeemable Non-Convertible Debentures of Rs. 10,000 thousand each amounting to Rs.750,000 thousand repayable in 28 equated installment starting from October, 2002 (BTVL) Secured by way of first ranking pari passu charge on : 1. The whole of movable properties of the Madhya Pradesh (MP) Basic Project including its movable plant and machinery, spares, tools, accessories, and other movables both present and future and the Companys bank accounts, book debts receivables, commissions. 2. Additional security by way of mortgage by deposit of title deeds of immovable properties of the Basic project of the Company situated in the state of Madhya Pradesh. 3. .loating charge on all other assets of the MP Basic Project and current assets charged / to be charged for working capital facility. The above debentures are further secured by Undertaking for non-disposal of share holdings and undertaking for meeting overrun in the project cost and/or working capital from BTVL.

101

CONSOLIDATED BHARTI TELE-VENTURES LIMITED

Schedules Annexed to and forming part of Accounts

Particulars Amount Outstanding (Rs. 000) 1,625,000 Security Charges

8.5%, 200 Non-Convertible Redeemable Debentures of Rs. 10,000 thousand each (BTVL) (Note 1) 10.55%, 60 Non-Convertible Redeemable Debentures of Rs. 10,000 thousand each (BTVL) (Note 1) 10.90%, 90 Non-Convertible Redeemable Debentures of Rs. 10,000 thousand each (BTVL) (Note 1) 11.45%, 60 Non-Convertible Redeemable Debentures of Rs. 10,000 thousand each (BTVL) (Note 1) 8.65%, 95 Non-Convertible Redeemable Debentures of Rs. 10,000 each (BTVL) (Note 1) Debentures Loans and Advances from Banks Term Loan Rupee Loan Rs.500,000 thousand repayable in 4 half yearly installments beginning March 2005 (BTVL) Rupee Loan Rs.500,000 thousand repayable in three installments on completion of 18, 27 and 36 months (BTVL) Rupee Loan Rs.500,000 thousand repayable in 4 half yearly installments beginning September 2005 (BTVL) Rupee Loan of Rs.900,000 thousand repayable in 4 half yearly installments beginning July 2005 (BTVL) .oreign Currency Loan of USD 15,000 thousand repayable in June 2005 (BTVL) (Note 2) .oreign Currency Term Loan of USD 26,670 thousand convertible into term loan after 3 years (BTVL)

412,500 630,000 600,000 .irst ranking pari passu charge on all present and future tangible movable and freehold immovable assets owned by the Company including plant and machinery office equipment, furniture and fixtures fittings, spares tools and accessories vehicles.

950,000

4,672,857

300,000

170,000

All rights, titles, interests in the accounts, and monies deposited and investments made there from and in project documents, book debts and insurance policies.

375,000

900,000

656,100 1,177,145 Secured by first ranking pari passu charge on the whole of the freehold immovable and movable property in relation to the National Long Distance project including its telecommunication equipment, transmission towers, fibre optic backbone, movable plant and machinery, spares, tools etc.

Term Loan

3,578,245

102

Schedules Annexed to and forming part of Accounts

Particulars Amount Outstanding (Rs. 000) 19,765 Security Charges

Cash Credit Cash Credit Rs. 50,000 thousand (BCTL)

Cash Credit Rs. 1,235 thousand [BBL (formerly Comsat Max Limited)] Cash Credit Other Loans and Advances Term loan from .inancial Institution for Rs.3,000,000 thousand repayable in 11 quarterly installments commencing from October, 2006.(BTVL) Rupee Loan from financial institutions Rs.2,500,000 thousand repayable in 10 half yearly installments beginning March 2007 (BTVL)

1,235

Secured by hypothecation of all current assets both present and future, including book debts, monies, receivables, claim bills and contracts of the Company. Secured by first charge on inventories, book debts and all other current assets and second charge on immovable properties.

21,000 3,000,000

2,500,000

.oreign Currency Term Loan of USD 86,110 3,100,745 thousand repayable in 20 half yearly installments beginning December 2002 (BTVL) .oreign Currency Term Loan of USD 37,057 thousand repayable in 20 half yearly installments beginning August 2003 (BTVL) 1,390,238 All rights, titles, interests in the accounts, and monies deposited and investments made there from and in project documents, book debts and insurance policies. .irst ranking pari passu charge on all present and future tangible movable and freehold immovable assets owned by the Company including plant and machinery office equipment, furniture and fixtures fittings, spares tools and accessories vehicles.

.oreign Currency Term Loan of USD 37,009 1,375,745 thousand repayable in 20 half yearly installments beginning .ebruary 2004. (BTVL)

.oreign Currency Term Loan of USD 125,000 5,997,500 thousand repayable in 5 half yearly installments beginning January, 2007 (BTVL) Long Term .oreign Currency Loan of USD 30,000 1,438,500 thousand repayable in 10 half yearly installments beginning July, 2006 (BTVL) Long Term .oreign Currency Loan of USD 10,000 452,675 thousand repayable in 13 half yearly installments beginning June, 2005 (BTVL) Long Term .oreign Currency Loan of USD 12,000 543,210 thousand repayable in 13 half yearly installments beginning June, 2005 (BTVL) Long Term .oreign Currency Loan of USD 46,000 1,673,568 thousand repayable in 20 half yearly installments beginning June, 2004 (BTVL)

103

CONSOLIDATED BHARTI TELE-VENTURES LIMITED

Schedules Annexed to and forming part of Accounts

Particulars Amount Outstanding (Rs. 000) Security Charges

Long Term .oreign Currency Loan of USD 27,956 774,119 thousand repayable in 19 half yearly installments beginning June, 2004 (BTVL) .oreign Currency Term Loan of USD 100,000 4,374,000 thousand repayable in 3 half yearly installments beginning .ebruary, 2009. (BTVL) .oreign Currency Term Loan of USD 18,996 830,882 thousand repayable in 20 half yearly installments beginning May, 2005. (BTVL) .oreign Currency Term Loan of USD 43,035 1,882,348 thousand repayable in 20 half yearly installments beginning September, 2005. (BTVL) Term Loan of Rs. 2,000,000 from a .inancial Institution repayable in 2 equal installments starting September, 2005 (BTVL) 2,000,000

All rights, titles, interests in the accounts, and monies deposited and investments made there from and in project documents, book debts and insurance policies.

Term Loan Vehicle Loans .rom Banks (BTVL) Total

31,333,530 14,128 39,619,760

Secured by first ranking pari passu charge on all movable property including telecommunication equipment, fibre optic assets and all rights, titles, interest in the accounts, monies deposited and investments made therefrom and in project documents, book debts and insurance policies of the Delhi circle basic telephone services. Secured by Hypothecation of vehicles of the Company.

Note 1 :

.ollowing shall be excluded from Securities as mentioned above :a) b) c) Intellectual properties of BTVL Investment in subsidiaries of BTVL Licenses issued by DoT to operate various telecom services

Note 2 :

As explained in Note 9(a), pursuant to the scheme of amalgamation of erstwhile BCL and BIL with BTVL,all the assets and liabilities of erstwhile BCL and BIL have been taken over by the BTVL and accordingly ,the above loans are now secured by the property of BTVL. The Group has adopted AS-11(revised) issued by the Institute of Chartered Accounts of India during the period ended March 31, 2005, which necessitated change in its accounting policy relating to accounting for forward exchange contracts. As a result of this change in the accounting policy the profit for the period is higher by Rs.18,537 thousands, current liabilities are higher by Rs. 122,845 thousands and secured loan are lower by Rs. 122,845 thousands, with consequential impact on the net assets of the Group. During the year ended March 31, 2005, on a conservative basis, the Group has included the treasury income of the head office of erstwhile BCL and erstwhile BIL in the Adjusted Gross Revenue (AGR) of the respective companies for the computation of Revenue share License fees and WPC charges for the period April, 2003 to March, 2005, while such inclusion is being contested by the Group, resulting in a higher charge to the profit and loss account which amounts to Rs. 180,064 thousand, with a consequential impact on the net assets of the Group is as follows :

19. a)

b)

104

Schedules Annexed to and forming part of Accounts

(Rs. 000) Period 2003-04 2004-05 Total c) License fees 50,835 83,971 134,806 WPC 15,682 29,576 45,258 Total 66,517 113,547 180,064

The Group 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. The Company has adopted AS-29 Provisions, Contingent Liabilities and Contingent Assets issued by the ICAI during the period ended March 31, 2005, which necessitated change in its Accounting policy relating to capitalization of site restoration costs. As a result of the change in accounting policy, the profit for the period is lower by Rs.53,777 thousand on account of depreciation, fixed assets and provisions are higher by Rs. 961,242 thousand with a consequential impact on the net assets of the Company. The movement of Provision made for Site Restoration Cost and leave encashment are given below : i) Site Restoration Cost : (Rs.000) Year ended March 31, 2005 Opening Balance as on April 1, 2004 Addition during the year Less : Utilised during the year Closing Balance as on March 31, 2005 ii) Leave encashment : Year ended March 31, 2005 (Rs.000) Opening Balance as on April 1, 2004 Addition during the year Less : Utilised during the year Closing Balance as on March 31, 2005 82,400 92,945 40,833 134,512 961,242 961,242

d)

20. Profit on sale of investments is net of loss on sale of investments Rs. 6,732 thousand (Previous year 12 thousand).

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CONSOLIDATED BHARTI TELE-VENTURES LIMITED

Schedules Annexed to and forming part of Accounts

21. Information about Business Segments Primary .or the year ended March 31, 2005
Reportable Segments Mobile Services Broadband & Telephone Services Long Distance Services Enterprise Services

(Rs. 000)

Others

Eliminations

Total

Revenue Billing Revenue/Sales of Goods and Other Income Inter Segment Revenue Total Revenue Results Segment Result, Profit/(Loss) Operating Profit/(Loss) before .inance Expenses Net .inance Expenses/ (Income) net Net Profit/(Loss) Provision for Tax Deferred Tax Expenses Minority Share Net Profit/(Loss) after tax Other Information Segment Assets Inter Segment Assets Advance Tax (Net of provision for tax) Total Assets Segmental Liabilities Inter Segment Liabilities Minority Interest Deferred Tax Liability Total Liabilities Capital Expenditure Depreciation Non Cash Expenses other than Depreciation (Amortisation) 89,213,406 921,566 18,270,396 7,560,446 20,388,847 13,094,937 3,519,715 1,884,957 10,155,264 (10,874) 141,536,754 696,463 10,384,665 10,384,665 10,384,665 10,384,665 1,441,987 1,441,987 1,441,987 1,441,987 4,716,022 2,284,148 (544,796) (544,796) 2,439,179 (10,874) 18,271,152 54,621,629 814,274 10,646,178 664,544 10,931,824 7,805,577 5,345,906 59,760 12,308 367,329 (9,711,484) 81,557,845

55,435,903 11,310,722 18,737,401 5,405,666

379,637 (9,711,484) 81,557,845

4,716,022 2,284,148

(10,874) 18,271,152 2,439,179

4,716,022 2,284,148 (2,983,975) 6,891 (13,150) 130,861 3,464,514 127,116

(10,874) 15,831,973 130,861 3,464,514 120,857

4,709,131 2,297,298 (6,706,466)

(10,874) 12,115,741

37,582,942 (61,044,848) 696,463

90,134,972 25,830,842 33,483,784 5,404,672 48,434,669 (61,055,722) 142,233,217 65,514,119 22,197,861 3,678,045 24,020,307 12,746,477 12,835,844 1,393,745 1,985,157 11,619,697 94,952,083 924,569 1,011,019

5,679 (61,044,848) 924,569 1,011,019

87,711,980 27,698,352 25,582,321 3,378,902 13,560,964 (61,044,848) 96,887,671 25,853,008 7,100,077 4,371,933 1,815,141 3,255,070 1,328,110 835,745 155,811 27,540 44,889 34,343,296 10,444,028

1,025,967

102,311

69,108

5,701

360,125

1,563,212

106

Schedules Annexed to and forming part of Accounts

.or the year ended March 31, 2004 (Rs 000)
Reportable Segments Mobile Services Broadband & Telephone Services Long Distance Services Enterprise Services

Others

Eliminations

Total

Revenue Billing Revenue/Sale of Goods and Other Income Inter Segment Revenue Total Revenue Results Segment Result, Profit/(Loss) Operating Profit/(Loss) before .inance Expenses .inance Expenses/ (Income) (net) Net Profit/(Loss) Provision for Tax Deferred Tax Expense/(Income) Minority Share Net Profit/(Loss) after tax Other Information Segment Assets Inter Segment Assets Deferred Tax Asset Total Assets Segment Liabilities Inter Segment Liabilities Minority Interest Provision for Tax (net of Advance Tax) Total Liabilities Capital Expenditure Depreciation Non-Cash Expenses other than Depreciation (Amortisation) 15,882,698 4,047,097 4,377,354 1,277,896 3,021,061 1,020,660 587,377 132,814 20,960 38,711 23,559,193 6,847,435 64,156,879 15,045,534 135,235 2,318,015 17,159,348 1,109,916 2,194,292 594,980 10,645,039 (201,360) 108,999,732 2,437,957 5,155,732 5,155,732 5,155,732 5,155,732 (59,381) (59,381) (59,381) (59,381) 2,726,981 2,726,981 2,726,981 2,726,981 1,086,766 1,086,766 (690,274) (690,274) 2,692,666 8,219,824 8,219,824 2,692,666 5,527,158 1,056,746 (1,378,719) 12,236 5,836,895 32,066,040 804,725 7,505,781 260,235 8,205,975 3,976,237 2,588,311 35,762 2,624,073 3,281 298,996 (5,375,955) 50,369,388

32,870,765 7,766,016 12,182,212

302,277 (5,375,955) 50,369,388

1,086,766 (3,382,940) 1,056,746 (1,378,719) 12,236

1,086,766 (3,073,203)

36,706,425 (40,864,571) 2,437,957

64,292,114 17,363,549 18,269,264 48,316,846 4,359,057 8,298,960 6,814,722

2,789,272 49,789,421 (41,065,931) 111,437,689 1,007,235 2,547,348 3,554,583 6,420,609 (50,000) 68,352,707 103,860 582,859 69,039,426

19,401,198 12,099,897

1,407 (40,864,572) 103,860 582,859

67,718,044 16,458,954 15,113,682

7,108,735 (40,914,572)

1,121,541

106,364

66,691

5,642

647,042

1,947,280

107

CONSOLIDATED BHARTI TELE-VENTURES LIMITED

Schedules Annexed to and forming part of Accounts

Notes : 1. 2. 3. 4. 5. 6. 7. 8. 9. Others represents the unallocated revenue, profit/(loss), assets & liabilities of the Group. Segment results represents Profit/(loss) before .inance expenses and tax. Capital expenditure pertains to gross additions made to fixed assets during the year excluding goodwill. Segment Assets include .ixed Assets, Capital Work in progress, Pre-operative expenses pending allocation, Investments, Current Assets and Miscellaneous Expenditure to the extent not written off. Segment Liabilities include Secured and Unsecured loans and Current Liabilities and provisions. Inter segment assets/liabilities represent the inter segment account balances. 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. The accounting policies used to derive reportable segment results are consistent with those described in the Significant Accounting Policies note to the financial statements. a) The Group has accounted for Site Restoration Cost during the year, resulting in a higher charge of depreciation by Rs. 53,777 thousand in Mobile services and Rs. Nil in Broadband and Telephone services, Long Distance , Enterprise Services and Others, increase in .ixed assets and Provisions by Rs. 961,242 thousand in Mobile Services and Rs. Nil in Broadband and Telephone services, Long Distance , Enterprise Services and Others with corresponding impact on profit and loss for the year and net assets of the Group. The Group has adopted AS-11(revised) issued by the Institute of Chartered Accountants of India during the period ended March 31, 2005, which necessitated change in its accounting policy relating to accounting for forward exchange contracts. As a result of this change in the accounting policy the profit for the period is higher by Rs. 5,128 thousands in Mobile services, Rs. 13,409 thousand in Long Distance and Rs. Nil in Broadband and Telephone services, Enterprise Services and Others, current liabilities are higher by Rs. 122,845 thousands in Mobile services and Rs. Nil in Broadband and Telephone services, Long Distance, Enterprise Services and Others and secured loan are lower by Rs. 122,845 thousands in Mobile services and Rs. Nil in Broadband and Telephone services, Long Distance, Enterprise Services and Others, with consequential impact on the net assets of the Group.

b)

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, 2005. (Rs. 000) Particulars Segment Revenue from external customers based on geographical location of customers (including Other Income) Within India Others Carrying amount of Segment Assets by geographical location Within India Others Cost incurred during the year to acquire segment assets by geographical location Within India Others As at March 31, 2005 As at March 31, 2004

73,974,580 7,583,265 81,557,845 138,260,058 3,973,159 142,233,217

45,588,193 4,781,195 50,369,388 107,561,132 3,876,557 111,437,689

33,637,191 706,105 34,343,296

22,816,541 742,652 23,559,193

108

Schedules Annexed to and forming part of Accounts

Notes : 1. 2. 3. Others represents the unallocated revenue, assets and acquisition of segment assets of the Group. Assets include .ixed Assets, Capital work in progress, Investments, Current Assets, Deferred Tax Asset and Miscellaneous Expenditure (to the extent not written off). Cost incurred to acquire segment assets pertain to gross additions made to .ixed Assets during the year. 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 Other Related Parties Name of the Related Party Bharti Telecom Limited Singapore Telecommunications Limited Telecommunication Consultants of India Ltd. Bharti Enterprises Private Limited Bharti Telesoft Limited Bharti Teletech Limited Lily Projects Private Limited (formerly Bharti Infotrac Limited) Bharti Systel Limited* Bharti Overseas Trading Company Bharti Telesoft International Limited Ambience Realty Private Limited Teletech Services (India) Limited Network i2i Limited Tulip Projects Private Limited Bharti Global Limited Mulberry Projects Private Limited Relationship Entity having Significant Influence Entity having Significant Influence Joint Venturer of a subsidiary Associate Company Associate Company Associate Company Associate Company Associate Company Associate Company Associate Company Associate Company Associate Company Associate Company Associate Company Associate Company Associate Company

22. Related Party Disclosures :

* Bharti Systel Limited merged with Bharti Teletech Limited with effect from 2nd November, 2004 (appointed date April 1, 2003).

109

Related Party Transactions for 2004-05

(Rs. 000) Nature of transaction Network i2i Bharti Limited Enterprise Private Limited 3,272 (674,534) 1,802 13,475 (10,185) (67,591) 742,124 8,363 8,363 8,363 247 (247) Bharti Telecom Limited 360 (360) Bharti Telesoft Limited 572 689 36 (689) 2,001 (118) Bharti Teletech Limited (8,996) 102,982 180 (2,982) 62 (5,179) 7,668 (275) Bharti Telesoft International Limited 4,160 (7,635) (8) (107,722) 86,752 (13) (24,466) (24,466) (24,466) Ambience Reality Private Limited 95,625 (23,360) 23,360 95,625 95,625 95,625 Teletech Services (I) Limited (26,782) 26,782 Tulip Mulberry Projects Projects Private Private Limited Limited 828 (2,929) 6,214 4,113 4,113 4,113 7,920 7,920 Singapore TelecommuniTelecommu- cation Consulnications tants of India Limited Limited 175,198 1,326,818 (34) 2,029 (1,995)

CONSOLIDATED BHARTI TELE-VENTURES LIMITED

Schedules Annexed to and forming part of Accounts

Opening Balance .und transferred Payment made for expenses incurred on our behalf Purchase of assets Expenses incurred on behalf of Group Companies Expenses incurred by Group Companies Sale of services to Group Companies Payment received against sale of services Purchase of Services from Group Companies Payment made to Group Companies for purchase of assets/service rendered Employee related transaction incurred on behalf of Group Companies Employee related transaction incurred by Group Companies on behalf of us Closing balance Creditors Loan and Advances Debtors Closing Balance

(1,179,193) (6,835) 6,835 7,920 7,920 (267,882) 54,941 54,941 54,941

(1,425) (368,216) 3,267 4,333 2,450 1,883 4,333 248,627 (26,129) (26,129) (26,129)

110

Note : 1. 2. The above excludes provision of telephone services free of cost among the group companies. Payment made to key Managerial Personnel is Rs.159,132 thousand (Previous Year Rs. 84,942 thousand).

Related Party transaction for 2003-04

(Rs. 000)

Schedules Annexed to and forming part of Accounts

Nature of transaction

Network i2i Limited

Bharti Enterprise Private Limited 123 (123)

Bharti Telecom Limited (600)

Bharti Telesoft Limited (3,291)

Bharti Teletech Limited (1,601) 816 (294) (855) 726 450 (568) 3,239

Bharti Infotrac Limited (1,881) 1,889 (1,094) 1,086

Bharti Ambience Systel Reality Private Limited Limited (7,751) (67) 1,170 53 (4,317) 95,625

Singapore Telecommunications Limited (49,913) 992,291 (644,350) (122,830)

Opening Balance .und received Payment made for expenses incurred on our behalf Payment received for expenses incurred Purchase of assets Expenses incurred on behalf of Group Companies Expenses incurred by Group Companies Sale of services to Group Companies Payment received against sale of services Purchase of Services from Group Companies Employee related transaction incurred on behalf of Group Companies Closing balance Creditors Loan and Advances Debtors Closing Balance

(634,044) 634,044

1,200 (519) 519 (600)

167 (173) 165 (444) 934 3,214

572 572 572

2 1,915 1,915 1,915

(10,912) (10,912) (10,912)

95,625 95,625 95,625

175,198 175,198 175,198

111

Note : 1. The above excludes provision of telephone services free of cost among the group companies. 2. Payment made to key Managerial Personnel is Rs. 84,942 thousand.

CONSOLIDATED BHARTI TELE-VENTURES LIMITED

Schedules Annexed to and forming part of Accounts

23. 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 : As at March 31, 2005 (Rs. 000) Lease Rentals debited to Profit and Loss Account Obligations on non-cancelable leases: Not later than one year Later than one year but not later than five years Later than five years Total b) Operating Lease As a Lessor i) The Group has entered into a nonoperating lease arrangement to provide approximately 100,000 .iber 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. During the year, the Group has entered into a non-cancellable operating lease to take approximately 1,062 .iber pair kilometers of dark fiber against consideration in cash and exchange of approximately 373 fiber pair kilometers of dark fiber and bandwidth on IRU basis for a period of 15 years. This transaction has not commenced as at the Balance date. The future minimum lease payments receivable are : As at March 31, 2005 (Rs. 000) Not later than one year Later than one year but not later than five years Later than five years Total c) .inance Lease As a Lessor During the year the Group has given certain VSAT assets under .inance lease. The reconciliation between the total of minimum lease payments at Balance Sheet date and their present value is as below : Gross Investment Unearned .inance (Rs.000) Income (Rs.000) Lease Rentals debited to Profit and Loss Account Not later than one year Later than one year but not later than five years Total 45,746 29,730 33,887 63,617 8,535 4,585 3,485 8,070 Present value (Rs.000) 37,211 25,145 30,402 55,547 280,000 1,120,000 2,567,699 3,967,699 As at March 31, 2004 (Rs. 000) 34,591 18,059 52,650 1,248,258 2,445 58,362 60,807 As at March 31, 2004 (Rs. 000) 809,307 19,646 82,295 284,954 386,895

ii)

iii)

Note: The unguaranteed residual value of finance lease accruing to the group is Nil.

112

Schedules Annexed to and forming part of Accounts

d) .inance Lease-As a lessee The Group has taken certain vehicles on .inance Lease. The reconciliation between the total of minimum lease payments at Balance Sheet date and their present value is as below : Minimum Lease .uture .inance Payments (Rs. 000) Charges (Rs. 000) Lease Rentals debited to Profit and Loss Account Not later than one year Later than one year but not later than five years Total e) 3,123 1,681 1,442 3,123 128 96 32 128 Present value (Rs. 000) 2,995 1,585 1,410 2,995

During the year, the Group entered into a composite IT outsourcing agreement, whereby the vendor supplied fixed assets and IT related services. 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 Companys 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. Under the IT Outsourcing Agreement, the Company has commitments to pay Rs. 5,988,619 thousand during the non-cancelable period of the contract for three years ending on March 31, 2007, comprising finance lease and servicing charges.

24. Earnings per Share As at March 31, 2005 Basic and Diluted Earnings per Share : Nominal value of equity shares (Rs.) Profit attributable to equity shareholders (Rs. 000) (A) Weighted average number of equity shares outstanding during the year (B) Basic earnings per Share (Rs.) (A / B) Dilutive effect on profit (Rs. 000) (C )* Profit attributable to equity shareholders for computing Diluted EPS (Rs000) (D)=(A+C) Dilutive effect on weighted average number of equity shares outstanding during the year (E)* Weighted Average number of Equity shares and Equity Equivalent shares for computing Diluted EPS (.)=(B+E) Diluted earnings per share (Rs.) (D/.) * 10/12,115,741 1,856,088,892 6.528 75,652 12,191,393 37,018,694 1,893,107,586 6.440 As at March 31, 2004 10/5,836,894 1,853,366,767 3.149 5,836,894 1,853,366,767 3.149

Diluted effect on weighted average number of equity shares and profit attributable is on account of .oreign Currency Convertible Bonds and Optionally Convertible Redeemable Debentures. Refer notes 12 (a) and 13 above.

113

CONSOLIDATED BHARTI TELE-VENTURES LIMITED

Schedules Annexed to and forming part of Accounts

25. a) Break-up of net deferred tax asset into major components of the respective balances is as follows : (Rs.000) March 31, 2005 Deferred Tax Assets/(Liabilities) arising from : (i) Expenses charged in the financial statements but allowable as deductions in future years under the Income Tax Act (to the extent considered realisable) (ii) Unabsorbed depreciation allowance and business loss carried forward (to the extent considered realizable based on future profit projections) (iii) Difference between depreciation as per financial statement and depreciation as per Income Tax Return Net Deferred Tax Asset/(Liability) 388,258 1,145,678 (2,544,955) (1,011,019) March 31, 2004 2,821,730 1,657,010 (2,040,783) 2,437,957

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. b) The Group was, under its income tax assessments ,being allowed licence fee (Revenue Share) on a straight line basis over the licence period and was thus recognizing deferred tax accordingly. Subsequent to the year end, a decision by the Appellate authorities ruled that licence fee (Revenue Share) would be deductible in the year of incurrence , resulting in a reversal of deffered tax asset recognized earlier to the extent of Rs. 511,672 thousand in these financial statements and in non-recognition of deferred tax asset on licence fee (Revenue Share) from April 1,2004. The Central Governments 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. The Central Governments 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 (Previous year Rs.4,063 thousand).

26. (i)

(ii)

(iii) The cumulative amount of excess remuneration paid to the Whole-time Director (BTVL) pending approval of Central Government is Rs. 565 thousand (Previous year 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 (Previous year Rs. 3,114 thousand) and is refundable by Directors. 27. 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. 28. Previous year figures have been regrouped/reclassified, wherever necessary, to conform to current years classification.

114

BHARTI TELE-VENTURES LIMITED

Bharti Tele-Ventures Limited

116

Auditors Report to the Members of Bharti Tele-Ventures Limited

1. We have audited the attached Balance Sheet of Bharti Tele-Ventures Limited, as at March 31, 2005, and the related Profit and Loss Account and Cash .low Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditors Report) Order, 2003, as amended by the Companies (Auditors Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of The Companies Act, 1956 of India (the Act) and on the basis of such checks of the books and records of the company as we considered appropriate and according to the information and explanations given to us, we further report that : i. (a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets. iv. discrepancies, if any, that may be identified. (c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the company during the year. The inventory (excluding stocks with third parties) has been physically verified by the management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

ii.

(a)

2.

(b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business. (c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

3.

iii.

(b) The fixed assets of Company are physically verified by the management according to a phased programme designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies between the book records and physical inventory have been noticed other than in some circles where the company is in the process of reconciling the book records and physical inventory and accordingly, we are unable to comment on

According to the information and explanations given to us, the Company has neither granted nor taken any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, clauses (iii)(b), (c), (d), (f) and (g) of the Companies (Auditors Report) Order, 2003, as amended by the Companies (Auditors Report) (Amendment) Order, 2004 are not applicable to the company for the current year. In our opinion and according to the information and explanations given to us, having regard to the explanation that certain items purchased are of special nature for which suitable alternative sources do not exist for obtaining comparative quotations, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services, except for certain general information systems controls which have been strengthened subsequent to the end of the year. .urther, on the basis of our examination of the books and records of the company, and

117

BHARTI TELE-VENTURES LIMITED

according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system. v. (a) According to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete. ix. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities, though there have been slight delays in a few cases.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees .ive Lakhs in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time. vi. The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under.

vii. In our opinion, the Company has an internal audit system commensurate with its size and nature of its business. viii. We have broadly reviewed the books of account maintained by the company in respect of products Name of the Statute Nature of the Dues Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Amounts (Rs.000) 1,268 1,488 47,784 67,491 876,047 7,245 277,706 21,556 1,085

(b) According to the information and explanations given to us and the records of the company examined by us, the particulars of dues of income tax, sales tax, wealth tax, service tax, customs duty, excise duty and cess as at March 31, 2005 which have not been deposited on account of a dispute are as follows : Period to Which it Relates 1995-96 1997-98 1998-99 1999-00 2000-01 1997-98 to 2002-03 1996-97 to 2004-05 2002-03 2003-04 .orum where the dispute is pending Appellate Tribunal Delhi Appellate Tribunal Delhi Appellate Tribunal Delhi Appellate Tribunal Delhi High Court of Delhi High Court of Delhi High Court of Karnataka & Karnataka Appellate Tribunal Supreme Court Supreme Court

CST / Delhi Sales Tax, 1975 CST / Delhi Sales Tax,1975 CST / Delhi Sales Tax,1975 CST / Delhi Sales Tax,1975 CST / Delhi Sales Tax,1975 CST / Delhi Sales Tax,1975 Karnataka Sales Tax Act,1957 Kerala General Sales Tax Act,1963 Kerala General Sales Tax Act,1963

118

Name of the Statute

Nature of the Dues Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax

Amounts (Rs.000) 416 233 75,046 3,750 10,026 1,136 4,100 406 140 494 53 143 183 15,698 104 168,135 3,160 1,169 5,986 87,825

Period to Which it Relates 1996-97 & 1997-98 2000-01 1999-00 2003-04 1997-98 to 2002-03 2004-05 2002-03 2003-04 2001-02 2004-05 2003-04 2003-04 2004-05 1999-00 & 2000-01 1998-99 2000-01 & 2001-02 1996-97 1999-00 2000-01 1997-98

.orum where the dispute is pending DCCT - Appellate Stage ACCT - Appellate Stage West Bengal Appellate & Revisional Board High Court of Allahabad, Lucknow Bench High Court of Allahabad, Lucknow Bench Deputy Commissioner-Trade Tax Deputy Commissioner-Trade Tax Deputy Commissioner-Trade Tax Before Tribunal, Ghaziabad Asstt. Comm. Mobile Squad, Meerut Asst. Commissioner Trade Tax, Noida A.C., Kulesra Check Post A.C., Vijaynagar Check Post Supreme Court Appellate Authority, MP Commercial Tax Supreme Court Assistant Appellate Commissioner Assistant Appellate Commissioner Assistant Appellate Commissioner Madras High Court

West Bengal Sales Tax Act,1994 West Bengal Sales Tax Act,1994 West Bengal Sales Tax Act,1994 CST / UP Trade Tax Act,1948 CST / UP Trade Tax Act,1948 CST / UP Trade Tax Act,1948 CST / UP Trade Tax Act,1948 CST / UP Trade Tax Act,1948 CST / UP Trade Tax Act,1948 CST / UP Trade Tax Act,1948 CST / UP Trade Tax Act,1948 CST / UP Trade Tax Act,1948 CST / UP Trade Tax Act,1948 Delhi Sales Tax Act,1975 Madhya Pradesh Commercial Tax Act,1991 Andhra Pradesh General Sales Tax Act,1957 Tamil Nadu General Sales Tax Act,1959 Tamil Nadu General Sales Tax Act,1959 Tamil Nadu General Sales Tax Act,1959 Tamil Nadu General Sales Tax Act,1959

119

BHARTI TELE-VENTURES LIMITED

Name of the Statute

Nature of the Dues

Amounts (Rs.000)

Period to Which it Relates 1998-99 1999-00 2000-2001 2001-02 2002-03 2002-03

.orum where the dispute is pending

Tamil Nadu General Sales Tax Act,1959 Tamil Nadu General Sales Tax Act,1959 Tamil Nadu General Sales Tax Act,1959 Tamil Nadu General Sales Tax Act,1959 Tamil Nadu General Sales Tax Act,1959 Tamil Nadu General Sales Tax Act,1959 Sub-Total (A) .inance Act, 1994 (Service Tax Provisions) .inance Act, 1994 (Service Tax Provisions) .inance Act, 1994 (Service Tax Provisions) .inance Act, 1994 (Service Tax Provisions) .inance Act, 1994 (Service Tax Provisions) .inance Act, 1994 (Service Tax Provisions) .inance Act, 1994 (Service Tax Provisions) .inance Act, 1994 (Service Tax Provisions) .inance Act, 1994 (Service Tax Provisions) .inance Act, 1994 (Service Tax Provisions)

Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax

99,849 161,490 281,955 485,717 683,302 4,178 3,396,364

Madras High Court Madras High Court Madras High Court Madras High Court Madras High Court CTO

Service Tax Service Tax Service Tax Service Tax Service Tax Service Tax Service Tax Service Tax Service Tax Service Tax

26,354 4,828 9,805 12,718 14,745 880 5,342 6,133 117 1,053

1997-98 to 1999-00 1999-00 1999-00 & 2000-01 2001-02 & 2002-03 1997-98 to 2002-03 1996-97 1995-96 to 1997-98 1995-96 to 1997-98 1995-96 1996-97

AC/DC AC/DC AC/DC AC/DC AC/DC CESTAT CESTAT CESTAT Commissioner Appeals Commissioner Appeals

120

Name of the Statute

Nature of the Dues Service Tax Service Tax Service Tax Service Tax Service Tax Service Tax Service Tax Service Tax Service Tax Service Tax Service Tax

Amounts (Rs.000) 300 1,424 2,406 2,556 1,547 1,075 26,037 47,821 1,498 3,183 195,443 365,265

Period to Which it Relates 1997-98 1995-96 to 1997-98 2004-05 1997-98 & 1998-99 2003-04 2001-02 to 2003-04 2004-05 1998-99 to 2002-03 1995-96 to 1999-00 2002-03 & 2003-04 2003-04

.orum where the dispute is pending Commissioner Appeals Commissioner Appeals Deputy Commissioner of Central Excise ITAT Commissioner of Service Tax High Court Commissioner of Service Tax CEGAT Assessing Officer Assessing Officer Assessing Officer

.inance Act, 1994 (Service Tax Provisions) .inance Act, 1994 (Service Tax Provisions) .inance Act, 1994 (Service Tax Provisions) .inance Act, 1994 (Service Tax Provisions) .inance Act, 1994 (Service Tax Provisions) .inance Act, 1994 (Service Tax Provisions) .inance Act, 1994 (Service Tax Provisions) .inance Act, 1994 (Service Tax Provisions) .inance Act, 1994 (Service Tax Provisions) .inance Act, 1994 (Service Tax Provisions) .inance Act, 1994 (Service Tax Provisions) Sub-Total (B) Customs Act,1962

Customs Duty

144,847

2004-05

Appraiser of Customs, Special Investigation & Intelligence Branch

Sub-Total (C) Income Tax Act,1961 Income Tax Act,1961 Income Tax Act,1961 Sub-Total (D) Income Tax Income Tax Income Tax

144,847 5,216 8,936 13,039 27,191 2000-01 2001-02 2002-03 Income Tax Appellate Tribunal Income Tax Appellate Tribunal Income Tax Appellate Tribunal

121

BHARTI TELE-VENTURES LIMITED

Name of the Statute

Nature of the Dues Excise Duty Excise Duty Excise Duty Excise Duty Excise Duty

Amounts (Rs.000) 3,024 11,975 56,968 1,784 30,663

Period to Which it Relates 2001-02 & 2002-03 2001-02 & 2002-03 2003-04 2003-04 2003-04

.orum where the dispute is pending Kolkata IV Commissionerate, Central Excise Kolkata IV Commissionerate, Central Excise CESTAT, Mumbai Bandra, Mumbai V Commissionerate Office of the Central Excise Mumbai-II, Lalbaugh, Parel, Mumbai. Appeal to be filed in CESTAT Commissioner - Central Excise

Central Excise Act, 1944 Central Excise Act, 1944 Central Excise Act, 1944 Central Excise Act, 1944 Central Excise Act, 1944

Central Excise Act, 1944 Sub-Total (E) Grand Total (A+B+C+D+E) x.

Excise Duty

151,194 255,608 4,189,275

2003-04

The accumulated losses of the Company as at March 31, 2005 is less than fifty percent of its networth as at that date and the Company has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year. According to the records of the company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date.

entries have been made therein. .urther, such securities have been held by the company in its own name or are in the process of transfer in its name, except to the extent of the exemption granted under Section 49 of the Act. xv. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the company, for loans taken by others from banks or financial institutions during the year, are not prejudicial to the interest of the company.

xi.

xii. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. xiii. In our opinion, and according to the information and explanations given to us, the provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the company. xiv. In our opinion, the Company has maintained proper records of transactions and contracts relating to dealing or trading in shares, securities, debentures and other investments during the year and timely

xvi. In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained. xvii. On the basis of an overall examination of the balance sheet of the company, in our opinion and according to the information and explanations given to us, funds amounting to Rs.26,840,702 thousand raised on a short-term basis (primarily representing capital creditors) have been used for long-term investment (represented by fixed assets).

122

xviii. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year. xix. The Company has created security or charge in respect of debentures issued and outstanding at the year-end. xx. The Company has not raised any money by public issues during the year. xxi. During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the company, noticed or reported during the year, nor have we been informed of such case by the management other than subscriber frauds to the extent of Rs.53,400 thousand as reported in Note 31 on Schedule 23. 4. .urther to our comments in the Annexure referred to in paragraph 3 above, we report that : (a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit; 5.

referred to in sub-section (3C) of Section 211 of the Act; (e) On the basis of written representations received from the directors, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2005 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act; In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto give in the prescribed manner the information required by the Act and subject to the matter stated in para 5 below, give a true and fair view in conformity with the accounting principles generally accepted in India : (i) (ii) in the case of the Balance Sheet, of the state of affairs of the company as at March 31, 2005; in the case of the Profit and Loss Account, of the profit for the year ended on that date; and

(f)

(iii) in the case of the Cash .low Statement, of the cash flows for the year ended on that date. As explained in Note 4(c)(v) on Schedule 23, no provision has been made towards disputed interest payable to the Department of Telecommunication (DoT) as the amount cannot be determined by the Company, against which a payment of Rs. 1,864,959 thousand made under protest is being carried forward under Loans and Advances. U. RAJEEV Membership No. .87191 Partner Place : New Delhi Date : July 26, 2005 .or and on behalf of PRICEWATERHOUSE Chartered Accountants

(b) In our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books; (c) The Balance Sheet, Profit and Loss Account and Cash .low Statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash .low Statement dealt with by this report comply with the accounting standards

123

BHARTI TELE-VENTURES LIMITED

Balance Sheet as at March 31, 2005

Particulars Schedule No. As at March 31, 2005 (Rs. 000) As at March 31, 2004 (Rs. 000)

SOURCES O. .UNDS Shareholders .unds Share Capital Reserves and Surplus Loan .unds Secured Loans Unsecured Loans Deferred Tax Liability (Refer Note 12 on Schedule 22 and 30 on Schedule 23) Total APPLICATION O. .UNDS .ixed Assets Gross Block Less: Depreciation Net Block Capital Work-in-Progress Preoperative Expenditure Pending Allocation Investments Current Assets, Loans and Advances Inventories Sundry Debtors Cash and Bank Balances Other Current Assets, Loans and Advances Less: Current Liabilities and Provisions Current Liabilities Provisions Net Current Assets Miscellaneous Expenditure (to the extent not written off or adjusted) Profit and Loss Account Total Statement of Significant Accounting Policies Notes to Accounts This is the Balance Sheet referred to in our report of even date U. RAJEEV Partner Membership No. .87191 .or and on behalf of PRICE WATERHOUSE Chartered Accountants Place : New Delhi Date : July 26, 2005

1 2 3 4

18,560,889 34,639,403 39,598,760 10,344,149 1,009,011 104,152,212

18,533,668 29,714,890 13,597 6,250,000 54,512,155 318,428 172,857 145,571 994 146,565 146,565 17,626,656 1,333 36,882,246 36,883,579 135,527 22,153 157,680 36,725,899 13,035 54,512,155

132,406,305 34,756,448 97,649,857 9,944,602

6 7 8 9 10 11 12

107,594,459 107,594,459 9,318,953 315,838 7,157,443 3,841,352 10,676,095 21,990,728 42,079,834 1,119,910 43,199,744 (21,209,016)

13

583,483 7,864,333 104,152,212

22 23

The Schedules referred to above form an integral part of the Balance Sheet .or and on behalf of the Board AKHIL GUPTA Joint Managing Director

SUNIL BHARTI MITTAL Chairman & Managing Director

DEVEN KHANNA Group .inancial Controller

NARENDER GUPTA SARVJIT SINGH DHILLON Group Company Secretary Group Chief .inancial Officer

124

Profit and Loss Account for the year ended March 31, 2005
Particulars INCOME Service Revenue Sale of Goods Other Income EXPENDITURE Access Charges Network Operating Cost of Sales of Goods Personnel Sales and Marketing Administrative and Others Total Expenditure Profit/(Loss) including other income and before Licence .ee, .inance Expenses/(Income) (Net), Depreciation, Amortisation, Pre-operative Expenditure, Charity and Donation and Taxation Licence fee & Spectrum charges (revenue share) Profit including Other Income and before .inance Expenses/ (Income) (Net), Depreciation, Amortisation, Pre-operative Expenditure, Charity and Donation and Taxation .inance Expense/(Income)(Net) Depreciation Amortisation Pre-operative Expenditure written off Charity and Donation Profit/(Loss) before Tax Tax Expenses Current Tax (net of write back for earlier years Rs.914,501 thousand; Previous year Rs.1,497 thousand) Deferred Tax Expense / (Income) (Refer Note 12 on Schedule 22 and Note 30 on Schedule 23) Profit after Tax Transferred to Debenture Redemption Reserve Profit brought forward Losses acquired under the scheme of amalgamation (Refer Note 9 (a) and 9(b) on Schedule 23) Difference of consideration and value of net assets acquired under the scheme of amalgamation (Refer Note 9 (a) and 9(b) on Schedule 23) Profit/(Loss) carried forward to the Balance Sheet Earnings per share (in Rs.) - Basic Earnings per share (in Rs.) - Diluted (Refer Note 17 on Schedule 22 and Note 29 on Schedule 23) Statement of Significant Accounting Policies Notes to Accounts 20 21 Schedule No. .or the year ended March 31, 2005 (Rs. 000) 78,301,809 728,480 411,651 79,441,940 15 16 17 18 19 16,831,728 6,800,472 721,037 5,040,969 6,363,424 6,112,713 41,870,343 .or the year ended March 31, 2004 (Rs. 000) 300,780 300,780 253,899 4,420 99,303 357,622

14

37,571,597 7,631,456

(56,842)

29,940,141 2,459,184 10,193,626 1,157,480 455,952 31,137 15,642,762 86,072 3,449,951 12,106,739 2,478,854 9,627,885 8,031 (7,010,894) (10,489,355) (7,864,333) 6.5323 6.4444 22 23

(56,842) (117,107) 38,711 19,088 2,466 (1,197) 3,663 3,663 4,368 8,031 0.0020 0.0020

This is the Profit and Loss Account referred to in our report of even date U. RAJEEV Partner Membership No. .87191 .or and on behalf of PRICE WATERHOUSE Chartered Accountants Place : New Delhi Date : July 26, 2005

The Schedules referred to above form an integral part of the Profit and Loss Account .or and on behalf of the Board AKHIL GUPTA Joint Managing Director

SUNIL BHARTI MITTAL Chairman & Managing Director

DEVEN KHANNA Group .inancial Controller

NARENDER GUPTA SARVJIT SINGH DHILLON Group Company Secretary Group Chief .inancial Officer

125

BHARTI TELE-VENTURES LIMITED

Cash .low Statement for the year ended March 31, 2005
(Rs. 000) Particulars A. Cash flow from operating activities : Net profit / (loss) before tax Adjustments for: Depreciation Interest/.inance Expense Interest/.inance Income (Profit)/Loss on .ixed Assets sold (Profit)/Loss on sale of Investments ESOP Expenditure Deferred Revenue Expenditure Licence fee Debts/Advances Written off Provision for Bad and Doubtful Debts/Advances (Net of write back) Provision for Gratuity and Leave Encashment Unrealized .oreign Exchange (gain)/loss Gain from swap arrangements Provision for Wealth Tax Operating profit before working capital changes Adjustments for changes in working capital : (Increase)/Decrease in Sundry Debtors (Increase)/Decrease in Other Receivables (Increase)/Decrease in Inventories Increase/(Decrease) in Trade and Other Payables Increase/(Decrease) in Security Deposit from Customers Cash generated from operations Taxes (Paid) / Received Net cash from operating activities B. Cash flow from investing activities : Adjustments for changes in : Purchase of .ixed Assets Proceeds from Sale of .ixed Assets Net Proceeds from sale of Investments Purchase of Investments Licence fee paid for new circles Interest Received (Revenue) Advances Given to Subsidiary companies Acquisition of Subsidiaries Net cash used in investing activities .or the year ended March 31, 2005 15,642,762 10,196,167 3,047,081 (77,200) 3,896 (398,280) 47,080 122,916 1,110,400 168,297 1,583,887 184,218 (26,685) (211,415) 22 31,393,146 (2,917,644) 2,443,817 (115,671) 1,834,610 32,638,258 (2,579,313) 30,058,945 .or the year ended March 31, 2004 2,466 38,711 213,653 (197,701) (149) (133,059) 19,088 6,436 (50,555) (89,145) 49,560 (90,140) 13,869 (76,271)

(8,818,279) 509,112 66,365,086 (80,265,026) (50,000) 45,337 (335,753) (753,487) (23,303,010)

(21,097) 4,272 27,816,350 (30,632,003) (3,380,689) 197,687 (6,015,480)

126

Cash .low Statement for the year ended March 31, 2005
(Rs. 000) Particulars .or the year ended March 31, 2005 .or the year ended March 31, 2004

C. Cash flow from financing activities : Proceeds from long term borrowings Receipts Payments .CCB issue expenses Proceeds from short term borrowings Net movement in cash credit facilities and short term loans Interest Paid Gain from swap arrangements Net cash used in financing activities Net Increase/(Decrease) in Cash and Cash Equivalents Opening Cash and Cash Equivalents Cash and Cash Equivalents acquired on amalgamation Cash and cash equivalents as at March 31, 2005 (0) Cash and cash equivalents comprise: Cash and Cheques in hand Balance with Scheduled Banks

11,119,681 (13,114,483) (96,861) 344,149 (2,694,794) 211,415 (4,230,893) 2,525,042 1,333 1,314,977 3,841,352 740,730 3,100,622

2,507,097 (5,385) 3,750,000 (161,983) 6,089,729 (2,022) 3,355 1,333 26 1,307

Notes : 1. .igures in brackets indicate cash outgo. 2. Previous year figures have been regrouped and recast wherever necessary to conform to the current year classification. 3. .igures of the previous year represents the figures for Bharti Tele-Ventures Limited, while those for the current year include figures for Bharti Tele-Ventures Limited with of (erstwhile) Bharti Cellular Limited and (erstwhile) Bharti Infotel Limited consequent to the scheme of amalgamation effective April 1, 2004 (Refer Note 9 on Schedule 23). Consequently figures for the current year are not comparable to those for the earlier year. 4. Cash and cash equivalents includes Rs.55,112 thousands pledged with banks (Previous year Rs.Nil) which are not available for use by the Company. 5. The following Assets/Liabilities acquired under the scheme of amalgamation, have not been considered in the above Cash .low Statement (Refer Note 9 on Schedule 23) .ixed Assets (including CWIP and Pre-operative expenditure and net of accumulated depreciation) 81,001,704 Current Assets (other than Cash) 14,238,939 Current Liabilities and Provisions 22,240,764 Loan .unds 77,710,477 Share Premium 1,548,020 Unamortised Licence .ee 20,748,152 Deferred Tax Assets 2,440,940 Miscellaneous Expenditure (to the extent not written off or adjusted) 62,138 This is the Cash .low Statement referred to in our report of even date U. RAJEEV Partner Membership No. .87191 .or and o1n behalf of PRICE WATERHOUSE Chartered Accountants Place : New Delhi Date : July 26, 2005 The Schedules referred to above form an integral part of the Cash .low Statement .or and on behalf of the Board SUNIL BHARTI MITTAL Chairman & Managing Director AKHIL GUPTA Joint Managing Director

DEVEN KHANNA Group .inancial Controller

NARENDER GUPTA SARVJIT SINGH DHILLON Group Company Secretary Group Chief .inancial Officer

127

BHARTI TELE-VENTURES LIMITED

Schedules Annexed to and forming part of Accounts

Particulars SCHEDULE : 1 SHARE CAPITAL (Refer Note 15 on Schedule 23) Authorised 2,500,000,000 (Previous Year 2,500,000,000) Equity Shares of Rs. 10 each Issued, Subscribed and Paid up 1,853,366,767 Equity Shares of Rs.10 each fully paid up (Previous year 1,853,366,767 Equity Shares of Rs.10 each) Of the above 1,516,390,970 (Previous year 1,516,390,970) equity shares issued as fully paid up bonus shares out of Share Premium Account Capital Suspense Account (Refer Note 9 on Schedule 23) 2,722,125 Equity Shares (Previous Year Nil ) of Rs.10/- each fully paid up to be issued to the shareholders of erstwhile Bharti Cellular Limited pursuant to the scheme of amalgamation SCHEDULE : 2 RESERVES AND SURPLUS Share Premium Opening Balance Acquired under the scheme of amalgamation Revaluation Reserve Acquired under the scheme of amalgamation Debenture Redemption Reserve Acquired under the scheme of amalgamation Additions during the year Profit and Loss Account SCHEDULE : 3 SECURED LOANS (Refer Note 17 on Schedule 23) Debentures Loans and Advances from Banks : Term Loans Others Loans and Advances : Term Loans Vehicle Loan Note : Amount repayable within one year SCHEDULE : 4 UNSECURED LOANS Short Term Loans and Advances .rom Banks .rom Others (Refer Note 10 on Schedule 23) Other Loans and Advances .rom .inancial Institutions* .rom Others (Refer Note 11 on Schedule 23) * Loan of Nil (Previous year Rs.2,000,000 thousand) is secured by way of hypothecation of assets of a subsidiary Company. Note : Amount repayable within one year As at March 31, 2005 (Rs. 000) As at March 31, 2004 (Rs. 000)

25,000,000 18,533,668

25,000,000 18,533,668

27,221 18,560,889

18,533,668

29,706,859 1,548,020 31,254,879 21,284 21,284 884,386 2,478,854 3,363,240 34,639,403

29,706,859 29,706,859 8,031 29,714,890

4,672,857 3,578,245 31,333,530 14,128 39,598,760 6,015,731

13,597 13,597 6,978

1,560,389 3,750,000 5,033,760 10,344,149 5,310,388

3,750,000 2,500,000 6,250,000

128

SCHEDULE 5 : .IXED ASSETS (Refer Notes 2, 3, 8 and 14 on Schedule 22 and Note 28(b) and 28 (d) on Schedule 23)
Gross Block Value Particulars As at April 01, 2004 Acquired under the Scheme of Amalgamation 46,958 1,352,725 21,091,521 34,664 287,188 1,292,542 407,968 31,954 70,170,204 4,874,105 468,954 30,370 2,709 318,420 100,410,282 4,529,908 100,410,282 Additions during the year Sale/ Adjustment during the year As at March 31, 2005 As at April 01, 2004 Acquired under the Scheme of Amalgamation 36,206 80,695 4,725,270 1,852 226,661 138,332 31,954 15,422,763 2,754,160 320,567 19,319 690 185,907 23,944,376 23,944,376 Depreciation .or the Sale/ year Adjustment during the year As at March 31, 2005

Schedules Annexed to and forming part of Accounts

(Rs. 000)

Net Block Value As at March 31, 2005 As at March 31, 2004

INTANGIBLE ASSETS Software Bandwidth Licences TANGIBLE ASSETS Leasehold Land .reehold Land Building Leasehold Improvements Leasehold VSAT Assets Plant and Machinery Computers Office Equipment Vehicles Vehicle on .inance Lease .urniture & .ixture TOTAL Capital Work-in-Progress GRAND TOTAL Previous Year 26,643 6,514 17,288 158,123 29,101 22,800 43,125 14,834 318,428 994 318,428 306,198 37,035 690,272 50,000 10,063 15,144 80,020 280,084 28,595,798 2,838,641 168,899 14,442 2,677 74,879 32,857,954 21,747,139 32,857,954 20,103 313 12,763 18,528 1,103,860 26,385 8,871 9,498 141 83,993 2,042,997 21,141,521 44,414 328,975 1,366,313 686,812 31,954 97,820,265 7,715,462 651,782 78,439 5,386 407,992 1,653 3,738 103,512 22,301 18,457 15,347 7,849 172,857 172,857 137,896 15,853 129,005 1,110,400 437 69,096 88,013 7,922,431 1,803,761 87,200 12,809 942 66,620 11,306,567 11,306,567 38,711 7,634 10,898 627,595 7,519 8,406 5,261 39 667,352 667,352 3,750 52,059 209,700 5,835,670 2,289 289,776 219,185 31,954 22,821,111 4,572,703 417,818 42,214 1,632 260,337 34,756,448 31,934 1,833,297 15,305,851 42,125 328,975 1,076,537 467,627 74,999,154 3,142,759 233,964 36,225 3,754 147,655 97,649,857 9,944,602 26,643 4,861 13,550 54,611 6,800 4,343 27,778 6,985 145,571 994 146,565

129

1,180,359 132,406,305 16,333,440 9,944,601

1,180,359 132,406,305 7,873 318,428

34,756,448 107,594,459 172,857 145,571

Notes: 1. Capital Work-in-Progress includes : (a) Capital advances of Rs.540,326 thousand (Previous year Nil) (b) Borrowing cost of Rs.11,912 thousand (Previous year Nil) 2. Addition to fixed assets during the year include : (a) Rs. 9,773 thousand of Loss (Previous year Nil) on account of fluctuations in foreign exchange rates (b) Borrowing costs capitalised Rs. 13,207 thousand (Previous year Nil) 3. Leasehold land of Rs. 955 thousand (Previous year Nil) represents land acquired on lease cum sale basis from Karnataka Industrial Areas Development Board. 4. Capital Work-in-Progress as on March 31, 2005 is net of Rs. 142,382 thousand being gain (Previous year Nil) on account of fluctuation in Exchange rate. 5. Additions during the year includes Rs. 140,418 thousand (Previous year Nil) allocated from pre-operative expenditure. (Refer Schedule 6). 6. .reehold Land and Building includes Rs. 26,468 thousand (Previous year Nil) and Rs. 71,477 thousand (Previous year Nil) 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, 2005 ranges between 9 to 20 years for Unified Access Service Licence and 15 to 17 years for Long Distance. 8. Capital Work-in-Progress includes goods in transit Rs. 960,717 thousand (Previous year Nil). 9. Computers include Gross Block of assets capitalised during the year under .inance lease Rs.1,879,716 thousand (Previous year Nil) and depreciation charged for the year Rs.529,232 thousand (Previous year Nil), Net Book value Rs.1,350,483 thousand.

BHARTI TELE-VENTURES LIMITED

Schedules Annexed to and forming part of Accounts

Particulars SCHEDULE : 6 PRE-OPERATIVE EXPENDITURE PENDING ALLOCATION (Refer Note 10 on Schedule 22 and Note 2 on Schedule 23) Opening Balance as on April 1, 2004 Acquired under the schemes of amalgamation Additions during the period Network Operating Expenses Insurance Premium Repairs and Maintenance Power & .uel Rent Leased Line Others Sub-Total Personnel Expenses Salaries Contribution to Provident & Other .unds Staff Welfare Recruitment & Training Sub-Total Selling Expenses Advertisement & Marketing Other Selling & Distribution Sub-Total Administrative & Other Expenses Legal & Professional Rates and Taxes Power and .uel Travelling and Conveyance Rent Repairs and Maintenance Buildings Plant and Machinery Others Insurance Miscellaneous Collection and Recovery Sub-Total .inance Expenses Other Bank/.inance Charges Depreciation Total Less : Allocated to .ixed Assets Less : Transferred to Profit & Loss Account Total amount carried to Balance Sheet As at March 31, 2005 (Rs. 000) As at March 31, 2004 (Rs. 000)

5,891 1,007 26,388 19,454 25,999 12,914 29,343 115,105 161,053 5,172 11,056 29,282 206,563 94,306 15,143 109,449 19,224 10,392 4,614 56,009 13,982 94 86 13,610 576 32,175 1,245 152,007 4,814 2,541 596,370 140,418 455,952

130

Schedules Annexed to and forming part of Accounts

Particulars SCHEDULE : 7 INVESTMENTS (Refer Note 6 on Schedule 22 and Note 24 on Schedule 23) Current Other than Trade (Quoted) Government securities Mutual .unds and Bonds Other than Trade (Unquoted) Government securities Trade, Unquoted - in Subsidiary Debentures Long Term Investments : Trade, (Unquoted) Investment in Subsidiaries Bharti Cellular Limited: Nil (Previous year 105,745,500) Equity shares of Rs.10/- each fully paid up. Bharti Infotel Limited: Nil (Previous year 277,200,000) Equity shares of Rs.10/- each fully paid up. Bharti Hexacom Limited (.ormerly Hexacom India Limited) 122,751,980 (Previous year Nil) Equity shares of Rs.10/- each fully paid up. Bharti Comtel Limited *: 100,000 (Previous syear 100,000) Equity shares of Rs.10/- each fully paid up. Satcom Broadband Equipment Limited : (.ormerly CMax Infocom Private Limited) 1,2678,192 (Previous year Nil) Equity shares of Rs.10/- each fully paid up. Bharti Aquanet Limited * 1,275,000 (Previous year 1,275,000) Equity shares of Rs.10/- each fully paid up. Investment in Joint Ventures Bridge Mobile PTE Limited : 1,000,000 (Previous year Nil) Equity shares of USD 1 each fully paid up. Acquired under the scheme of amalgamation As at March 31, 2005 (Rs. 000) As at March 31, 2004 (Rs. 000)

1,035,840 3,674,826 1,800 4,712,466

3,280,377 51,060 3,331,437

4,332,748 1,000 126,976 102,000

9,161,896 5,133,323

43,763 4,606,487 9,318,953

14,295,219 17,626,656 3,342,397 3,280,377 14,346,279

Aggregate Market Value of Quoted Investments Aggregate amount of Quoted Investments Aggregate amount of Unquoted Investments SCHEDULE : 8 INVENTORY (Refer Note 23 on Schedule 23) Stock-In-Trade

4,727,055 4,710,666 4,608,287

315,838 315,838

131

BHARTI TELE-VENTURES LIMITED

Schedules Annexed to and forming part of Accounts

Particulars SCHEDULE : 9 SUNDRY DEBTORS (Refer Note 4 on Schedule 22 and Note 14 on Schedule 23) (Unsecured, considered good unless otherwise stated) Billing Debtors : Debts outstanding for a period exceeding six months Considered good 509,516 Considered doubtful 3,165,131 Less : Provision (3,165,131) Other debts Considered good Considered doubtful Less : Provision Other Debtors : Debts outstanding for a period exceeding six months Considered good Considered doubtful Less : Provision Other debts Considered good Considered doubtful Less : Provision 4,079,245 809,006 (809,006) As at March 31, 2005 (Rs. 000) As at March 31, 2004 (Rs. 000)

509,516

4,079,245

324,143 125,843 (125,843) 2,244,539 65,416 (65,416)

324,143

2,244,539 7,157,443

SCHEDULE : 10 CASH AND BANK BALANCES Cash in Hand Cheques in Hand Balances with Scheduled Banks in Current Account in .ixed deposits * in Deposit Account as Margin Money * [Includes Rs.55,112 thousand pledged with various authorities (Previous year Rs. Nil)]

41,260 699,470 1,008,879 2,090,973 770 3,841,352

26 1,307 1,333

132

Schedules Annexed to and forming part of Accounts

Particulars SCHEDULE : 11 OTHER CURRENT ASSETS, LOANS AND ADVANCES (Unsecured, considered good unless otherwise stated) Advances and Loans to Subsidiary Companies : (Refer Note 16 on Schedule 23) Bharti Cellular Limited Bharti Infotel Limited Bharti Comtel Limited 182,718 Bharti Aquanet Limited Bharti Mobile Limited Bharti Hexacom Limited (formerly Hexacom India Limited) 23,435 Bharti Broadband Limited (formerly Comsat Max Limited) 129,905 Advances Recoverable in cash or in kind or for value to be received Considered good 6,702,289 Considered doubtful 407,374 Less: Provision (407,374) Accrued Billing Revenue Advance to ESOP Trust Advance Tax [Net of provision for tax Rs. 1,380,311 thousand, (Previous Year Rs. 47,774 thousand] Balance with Custom Authorities Interest Accrued on Investment SCHEDULE : 12 CURRENT LIABILITIES AND PROVISIONS Current Liabilities Sundry Creditors : Total outstanding dues of Small Scale Industrial Undertaking(s)* (Refer Note 22 on Schedule 23) 4,186 Total outstanding dues of Creditors other than Small Scale Industrial Undertaking(s)* 29,019,526 Advance Billing and Prepaid Card Revenue Premium on Redemption of Bonds (Refer Note 11 on Schedule 23 ) Interest accrued but not due Other Liabilities Advance Received from customers Security Deposits (Refer Note 14 on Schedule 23) * 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 9 and Note 19 on Schedule 22 and Note 25 (c) on Schedule 23) Gratuity Leave Encashment Provision for Wealth Tax Other Provisions As at March 31, 2005 (Rs. 000) As at March 31, 2004 (Rs. 000)

336,058

17,726,221 18,053,329 305 925,832 155,026

36,705,687

6,702,289 2,675,433 251,519 671,754 5,416 33,626 10,676,095

155,026 3,096 16,674 1,763 36,882,246

29,023,712 7,648,023 595,564 403,957 1,138,226 684,479 2,585,873 76,827 76,827 51,670 7,030

42,079,834 77,017 129,227 149 913,517 1,119,910 43,199,744

135,527 12,237 9,789 127 22,153 157,680

133

BHARTI TELE-VENTURES LIMITED

Schedules Annexed to and forming part of Accounts

Particulars SCHEDULE : 13 MISCELLANEOUS EXPENDITURE (To the extent not written off or adjusted) (Refer Note 13 on Schedule 22) Deferred Employee Compensation Expense Opening Balance Acquired under the scheme of amalgamation Add : Addition/(Adjustments) during the year Less : Amortisation for the year # # Net of write back Premium on Redemption of Debentures Opening Balance Add : Addition during the year Less : Amortisation for the year 693,027 122,916 570,111 583,483 13,035 As at March 31, 2005 (Rs. 000) As at March 31, 2004 (Rs. 000)

13,035 62,137 (14,720) 47,080 13,372

47,430 (15,307) 19,088 13,035

134

Schedules Annexed to and forming part of Accounts

.or the year ended March 31, 2005 (Rs. 000) .or the year ended March 31, 2004 (Rs. 000)

Particulars SCHEDULE : 14 OTHER INCOME Liabilities/Provisions no longer required written back Lease rentals Profit on Sale of Assets (Net) Income from services rendered Miscellaneous

222,313 189,338 411,651

1,531 7,329 149 291,667 104 300,780

SCHEDULE : 15 NETWORK OPERATING EXPENDITURE Interconnect charges and PSTN Rentals Power and .uel Rent Insurance Repairs and Maintenance Building Plant and Machinery Others Leased Line and Gateway charges Other Network Operating Expenses

640,248 1,440,779 968,576 36,262 138,796 1,908,587 144,436 712,486 810,302 6,800,472

SCHEDULE : 16 COST O. SALES Opening Stock Acquired under the schemes of amalgamation Add : Purchases Less : Simcard Utilisation Less : Internal issues / capitalised Less : Closing Stock

200,167 1,089,152 252,144 300 315,838 721,037

SCHEDULE : 17 PERSONNEL EXPENDITURE Salaries, Wages and Bonus * Contribution to Provident and Other .unds Staff Welfare Recruitment and Training * Excluding amortisation of Deferred ESOP cost SCHEDULE : 18 SALES AND MARKETING EXPENDITURE Advertisement and Marketing Sales Commission and Incentive Simcard Utilisation Other Selling and Distribution Expenses

4,291,854 188,074 278,655 282,386 5,040,969

224,148 15,706 5,261 8,784 253,899

3,255,973 1,890,965 252,144 964,342 6,363,424

1,071 3,349 4,420

135

BHARTI TELE-VENTURES LIMITED

Schedules Annexed to and forming part of Accounts

Particulars SCHEDULE : 19 ADMINISTRATIVE AND OTHER EXPENDITURE Legal and Professional Rates and Taxes Electricity and Water Travelling and Conveyance Rent Repairs and Maintenance Building Plant and Machinery Others Insurance Bad debts written off Provision for doubtful debts / advances Less : Provision for doubtful debts written back Collection and Recovery Loss on sale of assets (net) Miscellaneous .or the year ended March 31, 2005 (Rs. 000) .or the year ended March 31, 2004 (Rs. 000)

1,681,613 97,726

931,053 27,740 166,946 458,245 219,086 68,660 22,890 39,507 11,892 168,297 1,583,887 915,966 3,896 1,494,648 6,112,713

17,105 216 3,809 22,616 11,022 6,539 6,400 4,174 27,422 99,303

SCHEDULE : 20 .INANCE EXPENSES Interest : On Term Loan On Debentures On Others Amortisation of Premium on Redemption of .oreign Currency Convertible Bonds Other .inance Charges Less : Income Profit on sale of Current Investments (Refer Note 12 on Schedule 23) Interest Income : from Current Investments Other than Trade [Gross of TDS Rs.184 thousand (Previous year Nil)] from .ixed deposit, loans and advances etc. [Gross of TDS Rs.647 thousand (Previous year Nil)] Exchange .luctuation Gain (Net) Gains from swap arrangements Other .inance Income

1,849,100 664,911 143,643 122,916 389,427 3,169,997 398,280 72,275 2,214 23,918 211,415 2,711 710,813 2,459,184

212,265 630 758 213,653 133,059 5,289 192,412 330,760 (117,107)

SCHEDULE : 21 AMORTISATION (Refer Note 3 and 13 on Schedule 22) Amortisation of Licence .ee Personnel Deferred ESOP Cost

1,110,400 47,080 1,157,480

19,088 19,088

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SCHEDULE: 22 STATEMENT O. SIGNI.ICANT ACCOUNTING POLICIES 1. BASIS O. 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. .IXED ASSETS .ixed 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 .ee, 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 Building on Leased Land Office Equipment Computer / Software Vehicles .urniture and .ixtures Plant & Machinery Leasehold Land Leasehold Improvements 5% 5% 20.00% / 50.00% 33.33% 20.00% 20.00% 6.67% / 10.00% / 50.00 % Period of lease 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 .ee 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 lease. 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. 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

137

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Schedules Annexed to and forming part of Accounts

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 .irst in .irst 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 .EES 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 O. ITEMS IN .OREIGN CURRENCY Transactions in .oreign 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.

138

Schedules Annexed to and forming part of Accounts

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. 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 BENE.ITS 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 straightline basis over the lease term. b) As Lessee .inance Lease Assets acquired on .inance 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 .inance Lease .inance leases as a dealer lessor are recognized as a sale transaction in the Profit and loss account and are treated like other outright sales. .inance 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 and deferred tax is included in determining the net profit/ (loss) for the year.

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Schedules Annexed to and forming part of Accounts

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 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) b) Premium on redemption of debentures is recognised as an expense to the Profit and Loss Account over the period of the related contract. Employee Stock Option Plan (ESOP) - The aggregate amount of liability on account of ESOP as ascertained at yearend 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 O. 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. .or 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 Companys 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.

140

Schedules Annexed to and forming part of Accounts

SCHEDULE: 23 NOTES TO ACCOUNTS 1. 2. Bharti Tele-Ventures Limited (BTVL or the Company) incorporated in India on July7,1995, is a company promoted by Bharti Telecom Limited (BTL), a company incorporated under the laws of India. New Operations The Company has migrated its Cellular Mobile Licenses in Chennai, Delhi, Kolkata, Mumbai, Gujarat, Haryana, Himachal Pradesh, Kerala, Madhya Pradesh, Maharashtra, Tamil Nadu, Uttar Pradesh (West), Andhra Pradesh, Karnataka and Punjab to Unified Access Service Licenses (UASL) after obtaining the necessary approvals from DoT vide letter dated April 27, 2004. In view of the said letters, all the above licenses now stand converted to UASL w.e.f. April 27, 2004. The Company had acquired UASL in Bihar, Orissa, Uttar Pradesh (East) and Jammu & Kashmir on .ebruary 10, 2004 and in West Bengal on .ebruary 11, 2004. During the period the Company has also acquired a UASL in Assam on September 17, 2004. The effective date of this license is July 8, 2004. During the year, the Company has commenced commercial services in the telecom circles of Uttar Pradesh (East), West Bengal, Jammu and Kashmir, Bihar, Orissa and Assam. The Company has surrendered its Basic Service Licenses in Delhi, Haryana, Karnataka and Tamil Nadu with effect from October 1, 2004 and in Madhya Pradesh its UASL, which was originally a Basic License and had been converted to UASL, with effect from December 12, 2004. On May 7, 2004, BTVL acquired majority shareholding (67.5%) in Bharti Hexacom Limited (BHL) (erstwhile Hexacom India Limited) which provides cellular mobile telephone services in Rajasthan and North East Circle, at a consideration of Rs. 4,310,750 thousand (inclusive of Rs. 10,750 thousand towards legal costs)..urther, BTVL has also acquired 1% shareholding from certain shareholders of BHL in October 04 for an aggregate consideration of Rs. 21,998 thousand (inclusive of Rs.1,833 thousand towards legal cost). The Company has now submitted a request for migration of this license to UASL vide letter dated July 26, 2004. On January 31, 2005, erstwhile Bharti Infotel Limited (BIL) acquired 51% shareholding in Satcom Broadband Equipment Limited (SBEL) (formerly CMax Infocom Limited) which provides enterprise services in Mumbai, at a consideration of Rs.126,976 thousand. Bharti Broadband Limited (BBL) (formerly Comsat Max Limited) is a 100% subsidiary of SBEL for which SBEL paid Rs.248,492 thousand as purchase consideration to Max India Limited. 3. Guarantees a) Total Guarantees outstanding as at March 31, 2005 amounting to Rs.5,263,869 thousand (March 31, 2004 Rs. Nil thousand) have been taken from the banks. b) 4. Corporate Guarantees outstanding as at March 31, 2005 amounting to Rs. 95,252 thousand (Previous year Rs. 48,575,187 thousand) have been given to banks and financial institutions on behalf of group companies.

Contingent liabilities a) Claims against the Company not acknowledged as debt: As at March 31, 2005

(Rs. 000) As at March 31, 2004

Particulars (i) Taxes and Duties (under adjudication/appeal/dispute) Sales Tax (see 4 b below) Service Tax (including 4 e below) Income Tax Excise Duty, Customs Duty, Stamp duty and Entry Tax (including 4 d below) Access Charges/Port Charges DoT demands (including 4 c(v) below) Other miscellaneous demands Claims under legal cases including arbitration matters (including 4 f below)

5,127,954 461,382 163,309 1,512,770 263,500 2,561,838 80,527 414,232 10,585,512

174,694 174,694

(ii)

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BHARTI TELE-VENTURES LIMITED

Schedules Annexed to and forming part of Accounts

Of the above, details of unpaid amounts together with forum where dispute is pending as at March 31, 2005 is set out below: Name of the Statute Nature of the Dues Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Amounts (Rs. 000) 1,268 1,488 47,784 67,491 876,047 7,245 277,706 21,556 1,085 416 233 75,046 3,750 10,026 1,136 4,100 406 140 494 53 143 183 15,698 104 168,135 3,160 1,169 5,986 87,825 99,849 161,490 281,955 485,717 683,302 4,178 3,396,364 26,354 4,828 9,805 1997-98 to AC/DC 1999-00 1999-00 AC/DC 1999-00 & AC/DC 2000-01 Period to which it Relates 1995-96 1997-98 1998-99 1999-00 2000-01 1997-98 to 2002-03 1996-97 to 2004-05 2002-03 2003-04 1996-97 & 1997-98 2000-01 1999-00 .orum when the dispute is pending Appellate Tribunal Delhi Appellate Tribunal Delhi Appellate Tribunal Delhi Appellate Tribunal Delhi High Court of Delhi High Court of Delhi High Court of Karnataka & Karnataka Appellate Tribunal Supreme Court Supreme Court DCCT - Appellate Stage

CST / Delhi Sales Tax ,1975 CST / Delhi Sales Tax ,1975 CST / Delhi Sales Tax ,1975 CST / Delhi Sales Tax ,1975 CST / Delhi Sales Tax ,1975 CST / Delhi Sales Tax ,1975 Karnataka Sales Tax Act ,1957 Kerala General Sales Tax Act,1963 Kerala General Sales Tax Act,1963 West Bengal Sales Tax Act,1994 West Bengal Sales Tax Act,1994 West Bengal Sales Tax Act,1994 CST / UP Trade Tax Act,1948 CST / UP Trade Tax Act,1948 CST / UP Trade Tax Act,1948 CST / UP Trade Tax Act,1948 CST / UP Trade Tax Act,1948 CST / UP Trade Tax Act,1948 CST / UP Trade Tax Act,1948 CST / UP Trade Tax Act,1948 CST / UP Trade Tax Act,1948 CST / UP Trade Tax Act,1948 Delhi Sales Act,1975 Madhya Pradesh Commercial Tax Act,1991 Andhra Pradesh General Sales tax Act ,1957 Tamil Nadu General Sales Tax Act, 1959 Tamil Nadu General Sales Tax Act, 1959 Tamil Nadu General Sales Tax Act, 1959 Tamil Nadu General Sales Tax Act, 1959 Tamil Nadu General Sales Tax Act, 1959 Tamil Nadu General Sales Tax Act, 1959 Tamil Nadu General Sales Tax Act, 1959 Tamil Nadu General Sales Tax Act, 1959 Tamil Nadu General Sales Tax Act-1959 Tamil Nadu General Sales Tax Act-1959 Sub-Total (A)

ACCT - Appellate Stage West Bengal Appellate & Revisional Board 2003-04 High Court of Allahabad, Lucknow Bench 1997-98 to High Court of Allahabad, 2002-03 Lucknow Bench 2004-05 Deputy Commissioner-Trade Tax 2002-03 Deputy Commissioner-Trade Tax 2003-04 Deputy Commissioner-Trade Tax 2001-02 Before Tribunal, Ghaziabad 2004-05 Asstt.Commissioner.Mobile Squad, Meerut 2003-04 Asst Commissioner Trade Tax, Noida 2003-04 A.C., Kulesra Check Post 2004-05 A.C., Vijaynagar Check Post 1999-00 & Supreme Court 2000-01 1998-99 Appellate Authority, MP Commercial Tax 2000-01 & Supreme Court 2001-02 1996-97 Assistant Appellate Commissioner 1999-00 Assistant Appellate Commissioner 2000-01 Assistant Appellate Commissioner 1997-98 Madras High Court 1998-99 Madras High Court 1999-00 Madras High Court 2000-01 Madras High Court 2001-02 Madras High Court 2002-03 Madras High Court 2002-03 CTO

.inance Act, 1994 (Service Tax Provisions) Service Tax .inance Act, 1994 (Service Tax Provisions) Service Tax .inance Act, 1994 (Service Tax Provisions) Service Tax

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Schedules Annexed to and forming part of Accounts

Name of the Statute Nature of the Dues Amounts (Rs. 000) 12,718 14,745 880 5,342 6,133 117 1,053 300 1,424 2,406 2,556 1,547 1,075 26,037 47,821 1,498 3,183 195,443 365,265 Custom Duty 144,847 144,847 Income Tax Income Tax Income Tax Excise Duty Excise Duty Excise Duty Excise Duty Excise Duty 5,216 8,936 13,039 27,191 3,024 11,975 56,968 1,784 30,663 2001-02 & 2002-03 2001-02 & 2002-03 2003-04 2003-04 2003-04 Kolkata IV Commissionerate, Central Excise. Kolkata IV Commissionerate, Central Excise. CESTAT, Mumbai. Bandra, Mumbai V Commissionerate Office of the Central Excise Mumbai-II, Lalbaugh, Parel, Mumbai. Appeal to be filed in CESTAT. Commissioner - Central Excise 2000-01 2001-02 2002-03 Income Tax Appellate Tribunal Income Tax Appellate Tribunal Income Tax Appellate Tribunal 2004-05 Appraiser of Customs, Special Investigation & Intelligence Branch Period to which it Relates 2001-02 & 2002-03 1997-98 to 2002-03 1996-97 1995-96 to 1997-98 1995-96 to 1997-98 1995-96 1996-97 1997-98 1995-96 to 1997-98 2004-05 1997-98 & 1998-99 2003-04 2001-02 to 2003-04 2004-05 1998 -99 to 2002-03 1995-96 to 1999-00 2002-03 & 2003-04 2003-04 .orum when the dispute is pending AC/DC AC/DC CESTAT CESTAT CESTAT Commissioner Appeals Commissioner Appeals Commissioner Appeals Commissioner Appeals, Deputy Commissioner of Central Excise ITAT Commissioner of Service Tax High Court Commissioner of Service Tax CESTAT Assessing Officer Assessing Officer Assessing Officer

.inance Act, 1994 (Service Tax Provisions) Service Tax .inance Act, 1994 (Service Tax Provisions) Service Tax .inance Act, 1994 (Service Tax Provisions) Service Tax .inance Act, 1994 (Service Tax Provisions) Service Tax .inance Act, 1994 (Service Tax Provisions) Service Tax .inance Act, 1994 (Service Tax Provisions) .inance Act, 1994 (Service Tax Provisions) .inance Act, 1994 (Service Tax Provisions) .inance Act, 1994 (Service Tax Provisions) Service Tax Service Tax Service Tax Service Tax

.inance Act, 1994 (Service Tax Provisions) Service Tax .inance Act, 1994 (Service Tax Provisions) Service Tax .inance Act, 1994 (Service Tax Provisions) Service Tax .inance Act, 1994 (Service Tax Provisions) Service Tax .inance Act, 1994 (Service Tax Provisions) Service Tax .inance Act, 1994 (Service Tax Provisions) Service Tax .inance Act, 1994 (Service Tax Provisions) Service Tax .inance Act, 1994 (Service Tax Provisions) Service Tax .inance Act, 1994 (Service Tax Provisions) Service Tax Sub-Total (B) Customs Act,1962 Sub-Total (C) Income Tax Act,1961 Income Tax Act,1961 Income Tax Act,1961 Sub-Total (D) Central Excise Act, 1944 Central Excise Act, 1944 Central Excise Act, 1944 Central Excise Act, 1944 Central Excise Act, 1944

Central Excise Act, 1944 Sub-Total (E) Grand Total (A+B+C+D+E)

Excise Duty

151,194 255,608 4,189,275

2003-04

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Schedules Annexed to and forming part of Accounts

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 Honble Supreme Court, inspite of its own earlier judgment, 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. In so far as the assessments already completed as on September 25, 2003 the Honble Supreme Court directed that the operators should file statutory appeals against the assessment orders. The total disputed amount of Sales Tax is currently estimated by the Company to be Rs.5,127,954 thousand (March 31,2004 Rs.Nil) included in note 4 (a). The amount includes demands actually received amounting to Rs. 3,450,481 thousand (March 31,2004 Rs.Nil). Demands raised have been challenged before the respective high courts and the Supreme Court .The Company has obtained interim stays against enforcement of the demands. Any proceeding initiated now shall be subject to the interim directions passed by the Honble Supreme Court as stated above. c) The Company (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. 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.

(ii)

(iii) In the arbitration proceedings the order was not favorable to BML. BML has subsequently filed objections to the arbitrators award before the Delhi High Court. The Delhi High Court vide orders dated .ebruary 19, 2003 has 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 previous year in accordance with the order of DoT in respect of restoration of Punjab licence 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. Consequently, the Company received refund order of interest from the DoT in the mobility circles of Andhra Pradesh and Karnataka amounting to Rs.770,334 thousand and had taken such amounts as an income in the Profit and Loss Account 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 had been set off against the interest claim of DoT amounting to Rs.2,778,941 thousand in 2002-03. During the year ended March05, the Company received a further refund of Rs.57,338 thousand. The balance amount of Rs. 1,864,959 thousand (included in 4 (a) above) has been included under Loans and Advances. Pending decision of the Delhi High Court, any amount determined

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as due from the Company on account of interest etc. cannot be quantified till the matter is subjudice. In view of the non refund of the complete amount due pursuant to the Order dated March 4, 2003 of the Honble Supreme Court the COAI moved a clarification application of the Order dated March 4, 2003, before the Honble Supreme Court which was dismissed as withdrawn. COAI has thereafter moved execution applications in TDSAT which also stands disposed off. The COAI is moving the Supreme Court against the interpretation advanced by the TDSAT in the execution proceedings. d) The Central Excise department has raised show cause notices to Mobility circles of Mumbai and Kolkata of the Company amounting to approximately Rs. 255,608 thousand (March 31, 2004 Rs. Nil) included in 4 (a) above on an allegation that erection of a cell site amounts to manufacture of telecommunication equipments and hence duty @16% ought to have been paid on the total value of the equipment installed at the cell site. One of these notices issued by Mumbai IV, Churchgate Commissionerate has been confirmed for a demand of approx. Rs.28,434 thousand against which an appeal has been filed with CESTAT and stay obtained. Earlier, similar show cause notices issued to Mobility circles of Himachal Pradesh & Delhi have been quashed by the authorities, who have held that mere placement of equipment at a cell site and connecting them through wires and cables does not amount to manufacture. In the opinion of the Company, other Commissionerates should not overlook the view taken by Commissionerate at Chandigarh and Delhi and hence similar order is expected at CESTAT Mumbai and Kolkata also. e) Service Tax authorities have demanded Rs. 47,880 thousand (included in 4 (a) above) (March 31, 2004 Rs. Nil) on the Company contending that Service Tax is payable on the value/cost of sim cards given to subscribers. Appeal filed against this in the CESTAT has been dismissed and the Company has filed an appeal before the Supreme Court in which interim stay has been given. Show cause notices seeking a demand of Rs. 5,740 thousand (March 31, 2004 Rs. Nil) on the same issue are pending adjudication at the various circles of the Company. The total additional disputed amount of Service Tax estimated by the Company is Rs. 92,882 thousand (included in 4 (a) above) (March 31, 2004 Rs. Nil). BTVL 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 BTVL. The case filed by DSS to enforce the sale of equity shares before the Delhi High Court has been transferred to District Court and was pending consideration of the Ld. Additional District Judge. The suit filed by DSS has been dismissed in default by the Ld. Additional District judge on the ground of non-prosecution. Subsequently, DSS has filed an application for restoration of the suit on which notices has been issued to BTVL and other defendants returnable on August 24, 2005. In respect of the same transaction, Crystal Technologies Private Limited, an intermediary, has initiated arbitration proceedings against the Company demanding Rs.194,843 thousand (March 31, 2004 Rs. Nil) regarding termination of its appointment as a consultant to negotiate with DSS for the sale of DSS stake in erstwhile Bharti Mobinet Limited to BTVL. Matter is fixed for hearing on July 28, 2005. 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 .OB value equivalent to, or more than, five times the CI. 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 .oreign Trade, Ministry of .inance, as applicable. Accordingly the Companies are now required to export goods of .OB value of at least Rs.23,470,852 thousand (March 31, 2004 Rs. Nil). 6. 7. Estimated amount of contracts to be executed on capital account and not provided for (net of advances) Rs.19,491,800 thousand (March 31, 2004 Rs. Nil). The Company has entered into a Joint Venture agreement dated November 3, 2004 with 6 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 seven operators / shareholders. On March 31, 2005 the Company invested USD-1,000 thousand in ordinary shares of US$1 each in Bridge Mobile Pte Ltd amounting to Rs.43,763 thousand. Vide a Supply contract and Construction and maintenance agreement executed on March 27, 2004, Alcatel Submarine Networks of .rance and .ujitsu Ltd. of Japan will provide the SEA-ME-WE-4 Cable Systems (broadly described as a submarine

f)

8.

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Schedules Annexed to and forming part of Accounts

cable system linking South East Asia & Europe via the Indian Sub-Continent & Middle East) and also give 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 US$ 39,055 (approx. Rs.1,710,558 thousand), out of which US$ 8,076 thousand (approx. Rs.355,511thousand) has been disclosed as capital advances. The remaining amount is included in Note 6 above. 9. Amalgamation a) Pursuant to the Scheme of Amalgamation of Bharti Cellular Limited (BCL) and Bharti Infotel Limited (BIL) with Bharti Tele-Ventures Limited, as approved by the Honorable High Court of Delhi by its order dated May 21, 2005 which became effective on June 9, 2005 on receipt of Certificate of Registration of Order of Court from the Registrar of Companies, NCT of Delhi, all the assets, liabilities and reserves of erstwhile BCL and BIL were transferred to and vested in the Company with effect from the appointed date i.e. April 1, 2004. The Scheme of Amalgamation has been accounted for in BTVL books under the Pooling of Interest Method as per Accounting Standard 14 on Accounting for Amalgamations issued by The Institute of Chartered Accountants of India whereby the assets, liabilities and reserves of the erstwhile BCL and BIL have been recorded in books of BTVL at their respective book value to the erstwhile companies. The value of assets acquired effective from April 1, 2004 and the calculation of difference between consideration and value of net identifiable assets acquired is set out below: (Rs. 000) Assets/(Liabilities) acquired Bharti Cellular Limited Bharti Infotel Limited 28,539,758 103,000 920,302 137,947 876,446 318,080 21,284 30,463 25,271,031 196,735 2,772,000 5,133,323 2,361,323 2,361,323

Net .ixed assets (including CWIP & Pre-operatives pending allocation) 52,461,947 Investments 65,423 Deferred Tax Asset 1,520,638 Accumulated Profits / (Losses) (7,148,841) Share Premium 671,574 Debenture Redemption Reserve 566,306 Revaluation Reserve Miscellaneous Expenditure 31,674 Less: Loan .unds 52,439,446 Less: Net Current Liabilities 6,490,112 Net assets as on April 1,2004 Adjustments for Value of investment in BTVL books Difference between investments and value of net identifiable assets acquired Add: Book value of Equity shares to be issued to DSS Enterprises Pvt. Ltd. (Refer Note below) Balance taken to the opening Profit and Loss account 1,061,085 9,161,896 8,100,811 27,221 8,128,032

As per the Scheme of Amalgamation 296,770,700 Equity shares of Rs. 10/- each of BIL held by the company and 105,745,483 Equity Shares of Rs. 10/- each of BCL held by the Company stand cancelled. Pursuant to the Scheme of Amalgamation and after considering the cancellation of shares held in BIL and BCL by the Company 2,722,125 Equity Shares of Rs. 10/- each of the company are to be issued to the Shareholders of BCL in the ratio of 15 fully paid up Equity Shares of the Company for every 2 (Two ) fully paid up Equity Shares of Rs. 10/- each held in BCL, which pending allotment has been disclosed under capital suspense account; an amount of Rs. 27,221,250 has been included in the share capital suspense account as at March 31, 2005 in schedule 1. b) Pursuant to the Scheme of Amalgamation of erstwhile Bharti Mobile Limited (BML 100% subsidiary of the BCL) with the erstwhile BCL, as approved by the Honorable High Court of Delhi by its order dated July 12, 2004, which became effective on August 6, 2004, on receipt of Certificate of Registration of Order of Court from the Registrar of Companies, NCT of Delhi, all the assets, liabilities and reserves of erstwhile BML were transferred to and vested in the Company with effect from the appointed date i.e. April 1, 2003. BML had a license to provide Cellular Mobile Telephony Services (CMTS) in the circles of Andhra Pradesh, Karnataka and Punjab.

146

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The Scheme of Amalgamation has been accounted for in erstwhile BCL books under the Pooling of Interest Method as per Accounting Standard 14 on Accounting for Amalgamations issued by The Institute of Chartered Accountants of India whereby the assets, liabilities and reserves of the erstwhile BML have been recorded in books of the Company at their respective book value to the erstwhile companies. The value of assets acquired effective from April 1,2003 and the calculation of difference between consideration and value of net identifiable assets acquired is set out below: (Rs. 000) Assets/(Liabilities) acquired Net .ixed assets (including CWIP & Pre-operatives pending allocation) Investments Net Current Assets Deferred Tax Asset Accumulated Losses Miscellaneous Expenditure Less: Loan .unds Less: Share Application Money Net assets as on April 1, 2003 Adjustments for Value of Investment in erstwhile BCL books Value of Investments acquired subsequent to April 1, 2003 Difference between investments and value of net identifiable assets acquired taken to the opening Profit and Loss account Bharti Mobile Limited 13,874,339 464,223 2,028,452 289,951 2,308,766 27,175 13,303,906 189,000 5,500,000 3,026,103 2,753,098 279,201

10. The Company has allotted 37,500 OCRDs of Rs 100,000 each aggregating to Rs 3,750,000 thousand that are optionally convertible into equity shares at an Agreed Price on a preferential basis to the erstwhile shareholders of BHL (the Sellers). The tenor of the OCRDs is 364 days from and including the date of allotment. These OCRDs shall be convertible solely and entirely at the option of the Seller and BTVL shall not be entitled to convert the same into equity shares unless the Sellers shall have exercised their option to convert. If the Sellers choose not to convert all or part of the OCRDs, then the outstanding OCRDs will be redeemed at face value at the end of the Tenor. BTVL and the Sellers will share any upside in the BTVL stock price, at the time of Conversion. The difference between the Relevant Price and the Agreed Price shall be shared in the 60:40 ratio (BTVL:Sellers) respectively at the time of conversion of the OCRDs. The upside will 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 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. Subsequent to the Balance Sheet date 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 : Date of Allotment April 24, 2005 May 10, 2005 June 9, 2005 No. of Shares Allotted 5,424,479 14,538,078 125,888 Conversion Price (Rs 000) 1,012,609 2,713,881 23,500

11. During the year ended March 31,2005 the Company has issued U.S.$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 = U.S.$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

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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 = U.S.$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). 12. Profit on sale of investments is net of loss on sale of investments Rs 6,732 thousand (Previous Year 12 thousand) 13. Billing Revenue in the Profit and Loss Account is net of Rebates and Discounts Rs.1,918,625 thousand (March 31, 2004 Rs.Nil). 14. Rs.2,585,873 thousand (March 31,2004 Rs. Nil) 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 31,2005 6,436,266 equity shares (Previous Year 10,882,291 equity shares) of the Company are held by Bharti Tele-Ventures Employees 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 Debentures 75, 9.5% Redeemable Non- Convertible Debentures of Rs. 10000 thousand each amounting to Rs.750,000 thousand repayable in 28 equated installment starting from October,2002 Amount Outstanding (Rs.000) 455,357 Security charges

Secured by way of first ranking pari passu charge on : 1. The whole of movable properties of the Madhya Pradesh (MP) Basic Project including its movable plant and machinery, spares, tools, accessories, and other movables both present and future and the Companys bank accounts, book debts receivables, commissions. 2. Additional security by way of mortgage by deposit of title deeds of immovable properties of the Basic project of the Company situated in the state of Madhya Pradesh. 3 .loating charge on all other assets of the MP Basic . Project and current assets charged / to be charged for working capital facility. The above debentures are further secured by Undertaking for non-disposal of share holdings and undertaking for meeting overrun in the project cost and/or working capital from BTVL

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Particulars 8.5%, 200 Non-Convertible Redeemable Debentures of Rs. 10,000 thousand each 10.55%, 55 Non-Convertible Redeemable Debentures of Rs. 10,000 thousand each 10.90%, 63 Non-Convertible Redeemable Debentures of Rs. 10,000 thousand each 11.45%, 60 Non-Convertible Redeemable Debentures of Rs. 10,000 thousand each 8.65%, 95 Non-Convertible Redeemable Debentures of Rs. 10,000 each Debentures Loans and Advances from Banks Term Loan Rupee Loan Rs.500,000 thousand repayable in 4 half yearly installments beginning March 2005 Rupee Loan Rs.500,000 thousand repayable in three installments on completion of 18, 27 and 36 months Rupee Loan Rs.500,000 thousand repayable in 4 half yearly installments beginning September 2005 Rupee Loan of Rs.900,000 thousand repayable in 4 half yearly installments beginning July 2005 .oreign Currency Loan of USD 15,000 thousand repayable in June 2005 .oreign Currency Term Loan of USD 26,670 thousand convertible into term loan after 3 years Amount Outstanding (Rs. 000) 1,625,000 412,500 630,000 .irst ranking pari passu charge on all present and future tangible movable and freehold immovable assets owned by the company including plant and machinery, office equipment, furniture and fixtures fittings, spares tools and accessories vehicles. All rights, titles, interests in the accounts, and monies deposited and investments made there from and in project documents, book debts and insurance policies. Security charges

600,000

950,000 4,672,857

300,000

170,000

.irst ranking pari passu charge on all present and future tangible movable and freehold immovable assets owned by the company including plant and machinery, office equipment, furniture and fixtures fittings, spares tools and accessories vehicles.

375,000

All rights, titles, interests in the accounts, and monies deposited and investments made there from and in project documents, book debts and insurance policies.

900,000 656,100 1,177,145

Secured by first ranking pari passu charge on the whole of the freehold immovable and movable property in relation to the National Long Distance project including its telecommunication equipment, transmission towers, fibre optic backbone, movable plant and machinery, spares, tools etc.

Term Loan Other Loans and Advances Term loan from .inancial Institution for Rs.3,000,000 thousand repayable in 11 quarterly installments commencing from October, 2006.

3,578,245 3,000,000 Secured by first ranking pari passu charge on the whole of the freehold immovable and movable property in relation to the National Long Distance project including its telecommunication equipment, transmission towers, fibre optic backbone, movable plant and machinery, spares, tools etc.

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Particulars Rupee Loan from financial institutions Rs. 2,500,000 thousand repayable in 10 half yearly installments beginning March 2007 .oreign Currency Term Loan of USD 86,110 thousand repayable in 20 half yearly installments beginning December 2002 .oreign Currency Term Loan of USD 37,057 thousand repayable in 20 half yearly installments beginning August 2003 .oreign Currency Term Loan of USD 37,009 thousand repayable in 20 half yearly installments beginning .ebruary 2004 .oreign Currency Term Loan of USD 125,000 thousand repayable in 5 half yearly installments beginning January, 2007 Long Term .oreign Currency Loan of USD 30,000 thousand repayable in 10 half yearly installments beginning July, 2006 Long Term .oreign Currency Loan of USD 10,000 thousand repayable in 13 half yearly installments beginning June, 2005 Long Term .oreign Currency Loan of USD 12,000 thousand repayable in 13 half yearly installments beginning June, 2005 Long Term .oreign Currency Loan of USD 46,000 thousand repayable in 20 half yearly installments beginning June, 2004 Long Term .oreign Currency Loan of USD 27,956 thousand repayable in 19 half yearly installments beginning June 2004 .oreign Currency Term Loan of USD 100,000 thousand repayable in 3 half yearly installments beginning .ebruary 2009 .oreign Currency Term Loan of USD 18,996 thousand repayable in 20 half yearly installments beginning May 2005 .oreign Currency Term Loan of USD 43,035 thousand repayable in 20 half yearly installments beginning September 2005 Term Loan of Rs. 2,000,000 from a .inancial Institution repayable in 2 equal instalments starting September 2005 Amount Outstanding (Rs.000) 2,500,000 3,100,745 1,390,238 1,375,745 5,997,500 1,438,500 452,675 543,210 1,673,568 774,119 4,374,000 830,882 1,882,348 Secured by first ranking pari passu charge on all movable property including telecommunication equipment, fibre optic assets and all rights, titles, interest in the accounts, monies deposited and investments made therefrom and in project documents, book debts and insurance policies of the Delhi circle basic telephone services. Secured by Hypothecation of vehicles of the Company. Security charges

.irst ranking pari passu charge on all present and future tangible movable and freehold immovable assets owned by the company including plant and machinery office equipment, furniture and fixtures fittings, spares tools and accessories vehicles. All rights, titles, interests in the accounts, and monies deposited and investments made there from and in project documents, book debts and insurance policies.

2,000,000

Term Loan Vehicle Loans .rom Banks Total

31,333,530 14,128 39,598,760

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Note 1: .ollowing shall be excluded from Securities as mentioned above :a) b) c) Note 2: Intellctual properties of BTVL Investment in subsidiaries of BTVL Licenses issued by DoT to operate various telecom services

As explained in Note 9(a), pursuant to the scheme of amalgamation of erstwhile BCL and BIL with BTVL, all the assets and liabilities of erstwhile BCL and BIL have been taken over by the BTVL and accordingly, the above loans are now secured by the property of BTVL. (Rs. 000)

18. Expenditure / Earnings in .oreign Currency (on accrual basis): Particulars Expenditure On account of : Interest Professional & Consultation .ees Travelling Roaming Charges (Incl. Commission) Membership & Subscription Staff Training & Others Services Annual Maintenance Bandwidth Charges Access Charges Repairs & Maintenance Investment Marketing Upfront .ee Signalling Charges US Point of Presence Charges Board Meeting Expenses Earnings Roaming Revenue Billing Revenue Swap Income Interest Income EKN Premium Refund 19. CI. Value of Imports : Year ended March 31, 2005 Year ended March 31, 2004

1,175,095 106,362 9,173 731,870 5,467 11,353 408,885 8,103 256,760 2,146,771 832 63,378 115,597 145,102 2,292 31,084 615 5,218,739 2,239,362 7,554,242 63,001 5,521 1,390 9,863,516 Year ended March 31, 2005 (Rs. 000)

386 3,198 1,212 1,781 25 346 6,948 Year ended March 31, 2004 (Rs. 000)

Capital Goods Components and spare parts Total

17,307,308 24,307 17,331,615

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20. a) The aggregate managerial remuneration under Section 198 of the Companies Act, 1956 to the Directors (including Managing Director) is : (Rs. 000) Particulars Whole Time Director Salary * Advisory Services Performance Linked Incentive Total Remuneration payable to Whole Time Directors Non-Whole Time Directors Commission Sitting .ees Total amount paid /payable to Non-Whole Time Directors Total Managerial Remuneration * * Year ended March 31, 2005 68,875 56,087 124,962 9,801 800 10,601 135,563 Year ended March 31, 2004 47,709 6,717 30,804 85,230 300 300 85,530

The amount excludes Companys contribution/provision for gratuity cost for the year, which is determined annually on actuarial basis. Excludes expenditure for the year on ESOP granted to Director aggregating to Rs. Nil (Previous Year Rs. 1, 786 thousands) for which the options have not been exercised by the Directors. Computation of Net Profit in accordance with Section 349 of the Companies Act, 1956, and calculation of Remuneration payable to Directors (Rs. 000)

Particulars Net Profit before tax from ordinary activities Add : Whole Time Directors Remuneration Add : Directors Sitting .ees Add : Commission to Non Whole Time Director Add : Provision for Doubtful Loans and Advances Add : Loss of sale of .ixed assets Less : Profit on sale of Investments Net Profit / (Loss) for the year Under Section 349 Maximum Amount paid / payable to Non Whole-time Directors Restricted to 1% Maximum Amount paid / payable to Whole-time Directors b) (i)

Year ended March 31, 2005 15,642,762 124,962 800 9,801 1,583,887 3,896 398,280 16,967,828 169,678 1,866,461

Year ended March 31, 2004 2,466 85,230 300 133,059 (45,063) NA

The Central Governments 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 The Central Governments 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 (Previous year Rs.4,063 thousand).

(ii)

(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 (Previous year 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 (Previous year Rs.3,114 thousand) and is refundable by Directors.

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21. Auditors Remuneration : Year ended March 31, 2005 (Rs.000) Audit .ee* Certification .ee Reimbursement of Expenses Total * Excluding Service Tax (Rs. 000) Name of SSI Creditors Cantech Engineers Print Screen Precision Control Sai Electricals Selvon Instruments Shruti Art G.K.A. Rajendran & Co. 3 GUYS S.P. Projects Solux Galfab Private Limited Soumitra Das Axis Engineers Axis Galvanising Industries Dubas Engineering Pvt. Limited Globe Detective Agency Pvt. Ltd. Jakson Generators (P) Ltd. Kotagi Structurals Shiva .abricators 23. Quantitative Information
` Acquired on Amalgamation April 1, 2004 Qty. Nos. Value (000) 103 152,810 12,011 1,468 33,775 200,167 Purchases (Refer Notes 1 & 3 below) 2004-05 Qty. Nos. 20,381,108 5 Value (000) 1,050,435 21,646 1,072,081

Year ended March 31, 2004 (Rs.000) 5,000 5,000

53,401 3,730 2,352 59,483

22. Details of SSI Creditors having outstanding balance for more than 30 days As at March 31, 2005 137 1 495 117 964 55 1 179 111 63 18 88 370 323 77 357 452 378 4,186 As at March 31, 2004 (Rs. 000)
Sales/Internal Utilisation 2004-05 Qty. Nos. 69 17,468,655 19 Value (000) 689,604 38,876 728,480 As at March 31, 2005 Qty. Nos. 5,363,201 145 70 18 Value (000) 302,202 2,048 11,588 315,838

Particulars

Handsets 69 Simcards (Note 2) 2,450,748 TDMA/PAMA VSATs Assembly sets 145 Broadband Interactive Terminal/Gateways 70 Internet Modem 32

(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 recharge cards purchased and issued during the year of Rs. 17,071 thousand.

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24. 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, 2005
(Rs. 000) Particulars Rate of Interest As at March 31, 2005 (No. of Units) 1,000,000 1,500,000 1,000,000 1,000,000 150 100 500,000 849,750 849,750 1,000,000 As at March 31, 2005 .ace Value 100,000 150,000 100,000 100,000 150,000 100,000 50,000 84,975 84,975 100,000 1,019,950 180 1,800 1,800 5,120,185 4,686,251 9,669,403 6,480,357 16,708,746 6,476,645 10,582,759 3,309,093 21,214,445 21,760,891 4,243,159 1,921,303 5,939,171 3,355,543 20,344,838 5,000,000 10,784,823 24,987,007 2,588,907 4,907,164 6,984,563 15,000,000 20,000,000 20,034,464 7,085,128 200 250 1,000 3,000 55,000 51,000 100,000 64,804 167,087 64,766 105,828 33,091 212,144 217,609 42,432 19,213 59,392 33,555 203,448 50,000 107,848 249,870 25,889 49,072 69,846 150,000 200,000 200,345 70,851 200,000 250,000 100,000 300,000 3,453,090 4,474,840 As at March 31, 2005 Cost 119,208 150,525 100,370 100,270 150,000 100,000 59,388 80,599 80,599 94,881 1,035,840 1,800 1,800 55,000 51,000 100,000 66,360 171,590 67,955 113,031 53,623 303,910 300,000 43,223 20,000 60,621 34,850 203,448 50,000 117,238 250,000 26,734 50,364 71,752 150,000 200,000 205,980 76,370 200,000 250,000 95,444 286,333 3,674,826 4,712,466 8,454,526 19,391,719 20,495,803 86,226 14,799,405 16,335,017 16,081,611 32,117,223 14,125,664 2,015,409 10,824,470 27,262,303 23,003,188 22,932,739 15,166,324 5,553,696 62,196 5 84,545 193,917 204,958 862 147,994 163,350 160,816 321,172 141,257 20,154 108,245 272,623 230,032 229,327 151,663 55,537 62,196 50,000 2,598,648 2,598,648 88,630 330,886 235,000 895 156,766 252,000 182,500 379,176 166,122 35,000 113,519 346,509 358,494 240,000 233,661 63,263 97,956 51,060 3,331,437 3,331,437 As at March 31, 2004 (No. of Units) As at March 31, 2004 .ace Value As at March 31, 2004 Cost

Other than Trade (Quoted) 9.81% GOI 2010 @ 6.67% YTM 6.18% GOI 2005 6.18% GOI 2005 6.18% GOI 2005 7.05% Canara Bank 2014 7.15% Union Bank 2015 11.50% IDBI 2010 364 Days T Bills Maturing on 14/10/2005 364 Days T Bills Maturing on 14/10/2005 364 Days T Bills Maturing on 14/10/2005 Total (A) Other than Trade, Quoted National Saving Certificate Total (B) Mutual .unds and Bonds Kotak Mahindra Mutual .und Kotak Mahindra Mutual .und Prudential ICICI M. ABN AMRO .loating Rate .und ABN AMRO Liquid .und-I Plan Birla Mutual .und-Liquid-I Plan Premium Deutsche .loating Rate fund DSP ML Liquid .und HD.C Mutual .und Cash Mgmt. Saving Plus Plan HD.C Mutual .und Cash Mgmt. Saving Plan HSBC .loating Rate .und HSBC Liquid .und ING ST .loater ING Vysya Liquid J M .ixed Maturity Plan QSA 5 J M Mutual .und Equity & Derivative Kotak .loater ST Growth Prudential ICICI Mutual .und .MP Series 25 Quaterly Prudential ICICI Mutual .und .loating Rate Plan C Principal .loating rate .und Reliance Mutual .und .loater Reliance Mutual .und .MP Quarter Plan 8 Reliance Mutual .und .MP Quarter Plan 7 Tata Mutual .und .loating Rate UTI .loater HD.C (M+55) .loating Rate Bonds 2007 5.87% HD.C NCD 2006 Kotak Mahindra Bank ING Vysya Bank Alliance Mutual .und Liquid I Plan Birla Mutual .und Liquid I Plan Canbank Mutual Liquid .und Deutsche Mutual Income Deutsche Liquid .und DSP ML Liquid .und .irst India Mutual .und Liquid Grindlay Liquid .und I Plan IL & .S Mutual .undLiquid I Plan IL & .S Mutual .und Income J M MUTUAL .UND Liquid I Plan KMM. K Liquid Premiun Prudential ICICI Liquid I Plan Prudential ICICI Mutual .und .loating Rate Reliance Mutual .und Liquid Templeton India .loating Rate ST Templeton India Mutual Liquid .und 10.55% Bharti Mobile Debentures Total (C) TOTAL (A) + (B) + (C)

10.55%

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24(b)Details of Investments purchased and redeemed / sold during the year
Balance as on 1.04.04 Particulars Units INR (Rs. 000) Acquired on Amalgamation Units INR (Rs. 000) Purchased During the Year Units INR (Rs. 000) Sale/Redemption Proceeds Units INR (Rs. 000)

NONTRADE 91 T BILLS @ 4.73% YTM 91 T BILLS @ 4.95% YTM 91 T BILLS @ 4.99% YTM 91 T BILLS @ 4.98% YTM 9.85% GOI 2015 9.81% GOI 2010 @ 6.67% YTM 7.55% GOI 2010 @ 6.33% YTM 7.55% GOI 2010 @ 6.38% YTM 7.38% GOI 2010 @ 6.56% YTM 7.38% GOI 2015 @ 6.56% YTM 7.38% GOI 2015 @ 6.56% YTM National Saving Certificate Mutual .unds / Bonds Investment In Kotak Mahindra Mutual .und Investment in DSP ML Mutual .und Investment in HD.C Mutual .und Liquid Premium Plus Investment in HD.C Mutual .und Liquid Premium Plus Investment in Kotak Mutual .und Investment in Kotak Mahindra Mutual .und .loater Investment in Birla Cash Plus Investment in Deutsche Insta Cash Plus Investment in Prudential ICICI Liquid .und Investment in Reliance Liquid .und Investment in Grindlays Mutual .und Investment in Grindlays Mutual .und Investment in Grindlays Mutual .und .loater I Plan C Investment in Grindlays Mutual .und Liquid I Plan C Investment in Sahara Mutual .und Liquid Investment in HD.C Mutual .und Investment in Deutsche Mutual .und Investment in Grindlays Mutual .und Investment in Birla Mutual .und Investment in Kotak Mahindra Mutual .und .loating Rate .und Investment in Prudential ICICI .loating Rate Plan C Growth Investment in Grindlays Mutual .und Plan A Investment in Grindlays Mutual .und Plan B Investment in DSP ML .loater Investment in Birla .loating Rate .und STP Growth Investment in Kotak .loater Liquid I Premium Plan Investment in HSBC Mutual .und Investment in G SEC Investment in Birla Mutual .und Investment in Grindlays Mutual .und Investment in HD.C Mutual .und Mutual .unds / Bonds BIRLA M.

200,000

2,000,180 1,000,000 1,000,000 2,000,000 24,040 1,000,000 500,000 500,000 500,000 500,000 500,000 180 74,326,603 25,710,907 11,780,598 43,285,955 23,467,935 28,758,220 35,797,031 70,239,846 47,692,631 48,365,878 29,856,383 44,755,634 44,768,547 9,920,832 21,898,130 11,692,624 9,951,140 15,000,000 14,763,634 20,000,000 40,000,000 15,002,669 14,999,853 27,720,587 29,797,619 1,861,599 7,962,021 1,500,000 9,594,719 7,086,093 9,393,999 1,133,445

197,796 98,833 98,825 197,654 119,900 52,725 52,615 53,110 53,105 53,170 1,800 950,035 400,000 150,000 550,000 299,965 300,000 360,000 750,000 750,000 750,000 300,116 449,884 450,000 100,000 250,000 150,000 100,000 150,000 150,000 200,000 400,000 151,743 151,820 298,590 319,213 24,383 80,000 172,600 100,000 73,830 129,508 12,142

2,000,000 1,000,000 1,000,000 2,000,000 200,000 500,000 500,000 500,000 500,000 500,000 74,326,603 25,710,907 11,780,598 43,285,955 23,467,935 28,758,220 35,797,031 70,239,846 47,692,631 48,365,878 29,856,383 44,755,634 44,768,547 9,920,832 21,898,130 11,692,624 9,951,140 15,000,000 14,763,634 20,000,000 40,000,000 15,002,669 14,999,853 27,720,587 29,797,619 1,861,599 7,962,021 1,500,000 9,594,719 7,086,093 9,393,999 1,133,445

200,000 100,000 100,000 200,000 24,160 52,625 52,625 53,160 53,125 53,195 950,489 408,590 151,509 556,673 300,000 304,383 367,161 759,440 759,305 760,545 304,499 450,000 458,539 101,411 250,650 150,378 100,260 151,743 152,052 202,370 406,544 151,820 153,429 301,628 322,724 24,454 81,092 172,600 100,584 74,155 129,508 12,219

155

BHARTI TELE-VENTURES LIMITED

Schedules Annexed to and forming part of Accounts

Balance as on 1.04.04 Particulars DEUTSCHE M. HSBC M. DEUTSCHE M. Templeton India Mutual .und Deutsche Mutual .und (Purchased on 29.06.2004) Deutsche Mutual .und (Purchased on 27.08.04) Deutsche Mutual .und (Purchased on 30.07.04) Deutsche .loating Rate .und Grindlays .loater I Plan C Prudential ICICI .loating Rate .und Plan C Deutsche .loating Rate .und Birla Cash Plus I Premium Plan Kotak Mahindra I Premium Plan Birla Cash Plus I Premium Plan Reliance Liquid .undTreasury Plan Institutional DEUTSCHE INSTA CASH .UNDS UTI LIQ GRINDLAYS CASH .UNDS DSP ML LIQUIDITY .UND TEMPLETON M. PRUDENTIAL ICICI KOTAK MAHINDRA MUTUAL .UNDS REL LIQ HSBC CASH .UND AC NO. 11455069 UTI LIQUID ADV .UNDS DETUSCHE INSTA CASH .UNDS G. TO G. KOTAK MAHINDRA DSP MERILL LYNCH DEUTSCHE INSTA CASH .UNDS PRUDENTIAL ICICI AC NO. 8054681 HSBC CASH .UNDS AC NO. 11455069 STATE BANK O. INDIA MUTUAL .UND DSP ML LIQUIDITY .UND DSP ML .LOATING RATE .UND KMM. COLLECTION AC NO 9077057 TEMPLETON MUTUAL .UND ABN AMRO MUTUAL .UND ABN AMRO MUTUAL .UND KOTAK MUTUAL .UND JM MUTUAL .UND DETUSCHE MUTUAL .UND Deutsche Premier Bond .und I Plan** Deutsche Mutual .und STP** Templeton India Treasury Management Account: Templeton Mutual .und** Templeton India Mutual .und** Deutsche Mutual .und Liquid Deutsche Mutual .und Liquid Templeton India Mutual .und .loater ST Templeton India Mutual .und (Purchased on 27.08.04) Templeton India Mutual .und (Purchased on 30.07.04) KOTAK M. KOTAK M. Alliance Mutual .und Liquid I Plan Units 8,454,526 INR (Rs. 000) 88,630 Acquired on Amalgamation Units 91 975,573 981,756 6,636 6,610 INR (Rs. 000) 183 10,300 10,300 10,300 10,300 Purchased During the Year Units 20,415,356 11,164,400 5,268,762 5,308,036 5,109,306 5,287,897 441,887 24,507,882 26,856,853 19,212,480 24,498,035 11,595,476 25,145,409 9,527,439 49,849,272 9,471,222 14,716,848 9,516,921 148,668 12,543,510 15,434,242 12,723,618 19,772,615 11,639,605 14,859,430 15,418,774 15,844,345 22,968,933 9,921,619 11,331,947 14,437,792 15,807,877 24,316,337 31,114,757 36,003,292 24,917,771 24,917,771 21,474,369 24,592,598 10,456,564 997,832 1,033,998 1,836,871 2,409,970 17,439 5,120,185 4,686,251 INR (Rs. 000) 214,445 111,839 53,669 53,100 53,100 53,100 4,600 250,000 270,000 200,000 250,000 150,500 256,800 150,000 502,700 100,000 150,000 150,000 150,000 200,000 200,000 200,000 200,000 140,000 150,000 200,000 250,000 232,000 100,000 115,000 150,000 250,000 260,000 330,000 420,000 250,000 250,000 280,000 265,000 106,200 10,634 11,019 21,023 28,000 28,000 55,000 51,000 Sale/Redemption Proceeds Units 20,415,356 11,164,400 5,268,762 91 5,308,036 5,109,306 5,287,897 441,887 24,507,882 26,856,853 19,212,480 24,498,035 11,595,476 25,145,409 9,527,439 49,849,272 9,471,222 14,716,848 9,516,921 148,668 12,543,510 15,434,242 12,723,618 19,772,615 11,639,605 14,859,430 15,418,774 15,844,345 22,968,933 9,921,619 11,331,947 14,437,792 15,807,877 24,316,337 31,114,757 36,003,292 24,917,771 24,917,771 21,474,369 24,592,598 10,456,564 975,573 981,756 6,636 6,610 997,832 1,033,998 1,836,871 2,409,970 17,439 8,454,526 INR (Rs. 000) 214,814 112,309 53,765 149 54,069 53,669 53,864 4,635 250,885 273,377 201,516 251,112 150,863 258,030 150,552 505,130 100,626 150,605 150,813 150,627 201,079 200,506 201,057 201,072 140,735 150,627 200,606 251,121 232,831 101,338 115,768 150,445 250,691 263,657 330,535 420,469 250,503 251,969 280,075 265,066 106,513 11,019 10,634 10,533 10,490 10,679 11,066 21,178 28,298 28,388 89,208

156

Schedules Annexed to and forming part of Accounts

Balance as on 1.04.04 Particulars Birla Mutual .undLiquid - I Plan Canbank MutualLiquid .und Deutsche Mutual Income Deutsche Liquid .und DSP ML Liquid .und .irst India Mutual .und Liquid Grindlay Liquid .und I Plan IL & .S Mutual .und Liquid I Plan IL & .S Mutual .und Income J M MUTUAL .UND Liquid I Plan KMM. K Liquid Premiun Prudential ICICI Liquid I Plan Prudential ICICI Mutual .und .loating Rate Reliance Mutual .und Liquid Templeton India .loating rate ST Templeton India Mutual Liquid .und Alliance Mutual .und Liquid I Plan Birla Mutual .und Liquid I Plan Canbank Mutual liquid .und Canbank Mutual liquid .und Canbank Mutual liquid .und I Plan Deutsche Liquid .und Deutsche Liquid .und Deutsche Liquid .und DSP ML Liquid .und .irst India Mutual .und Liquid .irst India Mutual .und Liquid .irst India Mutual .und Liquid .irst India Mutual .und Liquid .irst India Mutual .und Liquid .irst India Mutual .und Liquid Grindlay Income .und I Plan Grindlay Income .und I Plan Grindlay Liquid .und I Plan Grindlay Liquid .und I Plan C Grindlay Liquid .und I Plan C Grindlay Liquid .und I Plan C Grindlay Liquid .und I Plan C Grindlay Liquid .und I Plan C Grindlay Liquid .und I Plan C Grindlay Liquid .und I Plan C Grindlay Liquid .und I Plan C Grindlay Liquid .und I Plan C Grindlay Liquid .und I Plan C Grindlay Liquid .und I Plan C Grindlay Liquid .und I Plan C Grindlay Liquid .und I Plan C HD.C Mutual .und Liquid HD.C Mutual .und Liquid HD.C Mutual .und Liquid Premium Plus HD.C Mutual .und Liquid Premium Plus HSBC Liquid I Plan HSBC Liquid I Plan HSBC Liquid I Plan HSBC Liquid I Plan HSBC Liquid I Plan HSBC Liquid I Plan HSBC Liquid I Plan HSBC Liquid I Plan J M Mutual .und Liquid I Plan KMM. K Liquid I Plan Units INR (Rs. 000) 330,886 235,000 895 156,766 252,000 182,500 379,176 166,122 35,000 113,519 346,509 358,494 240,000 233,661 63,263 97,956 Acquired on Amalgamation Units INR (Rs. 000) Purchased During the Year Units INR (Rs. 000) 55,226 61,315 63,817 72,677 28,906 25,000 50,000 120,000 26,254 23,155 36,845 200,000 24,165 35,835 50,000 250,000 70,000 20,000 150,056 9,622 100,378 45,305 299,546 5,148 35,000 32,348 52,000 39,652 30,000 79,910 108,692 249,624 376 99,101 99,663 250,000 150,000 150,000 45,000 20,000 60,000 70,000 149,505 43,298 100,000 Sale/Redemption Proceeds Units INR (Rs. 000) 335,236 236,149 958 157,664 253,715 183,247 379,993 166,817 34,551 114,407 347,680 359,975 243,151 235,448 64,164 98,964 55,792 61,764 63,851 73,000 29,000 25,164 50,298 120,393 26,285 23,253 37,087 200,691 24,222 35,933 50,107 250,488 70,060 20,003 150,360 9,640 100,643 45,357 300,000 5,184 35,179 32,456 52,181 39,790 30,093 80,117 109,000 250,000 379 99,621 100,000 250,861 150,370 150,349 45,083 20,032 60,036 70,008 150,000 43,593 100,276

19,391,719 20,495,803 86,226 14,799,405 16,335,017 16,081,611 32,117,223 14,125,664 2,015,409 10,824,470 27,262,303 23,003,188 22,932,739 15,166,324 5,553,696 62,196

5,254,596 3,567,304 5,531,497 6,299,512 2,495,912 2,351,326 4,699,867 11,249,543 1,690,831 2,037,027 3,241,271 17,539,705 2,116,918 3,139,278 4,377,632 20,607,679 5,910,914 1,687,607 14,971,280 959,897 10,013,438 4,512,769 29,837,089 512,783 3,479,679 3,210,386 5,161,393 3,935,306 2,976,250 7,923,772 10,777,673 19,682,715 29,643 7,800,414 7,828,218 23,270,317 13,948,558 13,946,612 4,181,962 1,858,183 5,569,014 6,494,109 14,950,514 4,101,805 7,853,917

19,391,719 20,495,803 86,226 14,799,405 16,335,017 16,081,611 32,117,223 14,125,664 2,015,409 10,824,470 27,262,303 23,003,188 22,932,739 15,166,324 5,553,696 62,196 5,254,596 3,567,304 5,531,497 6,299,512 2,495,912 2,351,326 4,699,867 11,249,543 1,690,831 2,037,027 3,241,271 17,539,705 2,116,918 3,139,278 4,377,632 20,607,679 5,910,914 1,687,607 14,971,280 959,897 10,013,438 4,512,769 29,837,089 512,783 3,479,679 3,210,386 5,161,393 3,935,306 2,976,250 7,923,772 10,777,673 19,682,715 29,643 7,800,414 7,828,218 23,270,317 13,948,558 13,946,612 4,181,962 1,858,183 5,569,014 6,494,109 14,950,514 4,101,805 7,853,917

157

BHARTI TELE-VENTURES LIMITED

Schedules Annexed to and forming part of Accounts

Balance as on 1.04.04 Particulars KMM. K Liquid Premium KMM. K Liquid Premium KMM. K Liquid Premium KMM. K Liquid Premium KMM. K Liquid Premium KMM. K Liquid Premium KMM. K Liquid Premium I Plan KMM. K Liquid Premium I Plan KMM. K Liquid Premium I Plan KMM. K Liquid Premium I Plan KMM. K Liquid Premium I Plan KMM. K Liquid Premium I Plan Prudential ICICI Liquid I Plan Prudential ICICI Liquid I Premium Plus Prudential ICICI Liquid I Premium Plus Prudential ICICI Liquid I Plan Prudential ICICI Liquid I Plus Plan Prudential ICICI Liquid I Plus Plan Prudential ICICI Liquid I Plus Plan Prudential ICICI Liquid I Plus Plan Prudential ICICI Liquid I Plus Plan Prudential ICICI Liquid I Plus Plan Prudential ICICI Liquid I Plus Plan Prudential ICICI Liquid I Plus Plan Prudential ICICI Liquid I Plus Plan Reliance Liquid Treasury I Plan Reliance Liquid Treasury I Plan Reliance Liquid Treasury I Plan Reliance Liquid Treasury I Plan Reliance Mutual .und .MP Templeton India Mutual Liquid .und Templeton India Mutual Liquid .und Templeton India Mutual Liquid .und J M Mutual .und Income .und Deutsche Mutual Income Reliance Mutual .und Income I Plan Prudential ICICI Liquid I Plus Plan J M Mutual .und Liquid I plan Birla Mutual .und Liquid I Plan Birla Mutual .und Liquid I Plan Prudential ICICI Liquid I Plus Plan Birla Mutual .und Liquid I Plan Birla Mutual .und Liquid I Plan Chola Liquid .und I Plan DSP ML Liquid .und DSP ML Liquid .und DSP ML Liquid .und Grindlay Liquid .und I Plan C Grindlay Liquid .und I Plan C HD.C Mutual .und Liquid Premium Plus HD.C Mutual .und Liquid Premium Plus IL & .S Mutual .undLiquid I Plan IL & .S Mutual .undLiquid I Plan IL & .S Mutual .undLiquid I Plan KMM. K Liquid Premium I Plan KMM. K Liquid Premium I Plan Prudential ICICI Liquid I Plus Plan Prudential ICICI Liquid I Premium Plus Prudential ICICI Liquid I Plus Plan Reliance Mutual .und .MP ix Tata Mutual .und Liquid HIP Templeton India .loating Rate ST Prudential ICICI Liquid I Plus Plan KMM. K Liquid Premium I Plan Units INR (Rs. 000) Acquired on Amalgamation Units INR (Rs. 000) Purchased During the Year Units 5,888,172 1,557,050 2,358,231 21,417,638 7,804,452 4,680,370 5,880,093 7,131,773 815,615 3,519,364 5,272,614 6,588,551 4,781,760 4,434,112 5,012,846 3,169,190 22,287,031 12,713,828 34,987,722 7,955,753 6,806,702 13,481,512 7,737,680 3,197,679 4,452 25,103,000 7,746,333 1,201,945 3,910,407 25,000,000 44,808 62,547 63,768 3,711,498 8,886,203 4,637,166 2,589,397 4,699,027 2,250,674 286,460 1,072,887 8,437,209 4,706,729 7,691,716 14,409,635 5,072,101 241,500 7,609,824 6,900,240 70,751 19,466,452 3,348,709 35,500 2,810,903 5,667,966 3,882,168 9,970,341 686,747 638,425 25,206,675 13,364,361 3,707,727 2,460,739 560,775 INR (Rs. 000) 75,000 19,875 30,000 273,388 100,000 60,000 75,000 91,000 10,411 44,923 67,303 84,100 75,000 70,000 79,156 50,000 350,000 199,758 549,930 125,000 107,000 211,979 121,665 50,242 70 251,030 120,000 18,731 60,941 250,000 71,168 99,223 101,283 100,000 100,000 96,000 40,715 49,602 38,685 4,926 16,870 145,074 81,384 99,315 223,746 79,000 3,763 77,000 69,888 899 247,983 39,580 420 33,526 72,875 49,915 156,771 10,844 10,091 252,067 141,765 42,517 38,896 7,210 Sale/Redemption Proceeds Units 5,888,172 1,557,050 2,358,231 21,417,638 7,804,452 4,680,370 5,880,093 7,131,773 815,615 3,519,364 5,272,614 6,588,551 4,781,760 4,434,112 5,012,846 3,169,190 22,287,031 12,713,828 34,987,722 7,955,753 6,806,702 13,481,512 7,737,680 3,197,679 4,452 25,103,000 7,746,333 1,201,945 3,910,407 25,000,000 44,808 62,547 63,768 3,711,498 8,886,203 4,637,166 2,589,397 4,699,027 2,250,674 286,460 1,072,887 8,437,209 4,706,729 7,691,716 14,409,635 5,072,101 241,500 7,609,824 6,900,240 70,751 19,466,452 3,348,709 35,500 2,810,903 5,667,966 3,882,168 9,970,341 686,747 638,425 25,206,675 13,364,361 3,707,727 2,460,739 560,775 INR (Rs. 000) 75,178 20,000 30,310 275,274 100,308 60,155 75,075 91,056 10,414 45,000 67,500 84,400 75,290 70,079 79,226 50,087 350,216 199,784 550,000 125,266 107,174 212,270 122,000 50,538 70 252,067 120,809 18,745 61,000 251,030 71,247 99,789 102,000 98,307 98,956 94,903 41,000 50,000 39,032 4,968 17,000 146,355 81,645 100,000 225,753 79,464 3,784 77,094 69,906 905 249,095 40,000 424 33,576 73,000 50,000 158,000 10,883 10,117 253,052 143,000 42,836 39,000 7,226

158

Schedules Annexed to and forming part of Accounts

Balance as on 1.04.04 Particulars KMM. K Liquid Premium I Plan Grindlay Liquid .und I Plan C HD.C Mutual .und Liquid Premium Plus KMM. K Liquid Premium I Plan DSP ML Liquid .und Birla Mutual .und Liquid I Plan Premium Canbank Mutual Liquid .und I Plan Canbank Mutual Liquid .und I Plan Canbank Mutual Liquid .und I Plan HSBC Liquid I Plan KMM. K Liquid Premium I Plan Templeton India .loating Rate ST Prudential ICICI Mutual .und .loating Rate Deutsche Liquid .und Grindlay Liquid .und I Plan C Prudential ICICI Liquid I Plus Plan Prudential ICICI Liquid I Plus Plan Reliance Liquid Treasury I Plan Reliance Liquid Treasury I Plan Reliance Liquid Treasury I Plan Grindlay Liquid .und I Plan C Grindlay Liquid .und I Plan C Grindlay Liquid .und I Plan C Grindlay Liquid .und I Plan C Birla Mutual .undLiquid I Plan Premium DSP ML Liquid .und Grindlay Liquid .und I Plan C Grindlay Liquid .und I Plan C HSBC Liquid I Plan KMM. K Liquid Premium I Plan KMM. K Liquid Premium I Plan KMM. K Liquid Premium I Plan Templeton India Mutual Liquid .und HSBC Liquid Iplan Templeton India Mutual Liquid .und Templeton India Mutual Liquid .und Templeton India Mutual Liquid .und Templeton India Mutual Liquid .und Grindlay Liquid .und I Plan C Grindlay Liquid .und I Plan C Grindlay Liquid .und I Plan C HSBC Liquid I Plan KMM. K Liquid Premium I Plan KMM. K Liquid Premium I Plan KMM. K Liquid Premium I Plan Grindlay Liquid .und I Plan C Reliance Mutual .und .MP ix Deutsche Liquid .und Deutsche Liquid .und Deutsche Liquid .und KMM. K Liquid Premium I Plan KMM. K Liquid Premium I Plan Birla Mutual .und Liquid I Plan Premium Birla Mutual .und Liquid I Plan Premium J M Mutual .und Liquid I Plan J M Mutual .und Liquid I Plan HSBC Liquid I Plan Templeton India Mutual Liquid .und Templeton India Mutual Liquid .und HSBC Liquid I Plan HSBC Liquid I Plan HSBC Liquid I Plus Plan HSBC Liquid I Plus Plan KMM. K Liquid Premium I Plan Units INR (Rs. 000) Acquired on Amalgamation Units INR (Rs. 000) Purchased During the Year Units 680,902 1,972,698 4,083,277 775,765 2,040,413 4,926,739 1,821,318 4,309,156 2,188,851 9,932,953 2,647,214 8,642,221 23,613,643 5,775,857 2,463,782 64,092 2,140,979 21,208 6,415,932 3,343,108 1,651,611 2,725,849 1,132,659 547,144 10,631,177 1,273,488 5,256,178 3,458,140 12,900,281 3,205,521 5,436,344 652,463 62,242 12,898,745 490 34,465 18,771 8,509 3,939,477 5,321,770 6,481,826 11,581,786 884,494 6,204,581 650,384 3,935,304 25,305,233 4,106,488 5,477,760 1,347,103 2,450,751 5,282,901 13,527,171 477,192 10,146,097 3,884,658 7,330,507 49,542 12,590 5,079,011 5,996,282 4,984,101 3,750,235 4,011,427 INR (Rs. 000) 8,760 19,894 52,017 9,972 31,601 49,547 21,094 50,000 25,456 99,330 34,028 99,102 250,000 57,836 24,847 1,013 33,979 331 100,000 52,188 16,656 27,500 11,431 5,522 106,915 19,844 53,047 35,060 129,003 41,240 70,000 8,405 98,860 128,987 777 55,000 30,000 13,602 39,940 54,000 65,827 115,818 11,395 80,000 8,389 39,834 253,052 41,120 55,000 13,534 31,611 68,208 136,039 4,837 107,100 41,305 73,305 78,688 20,228 50,790 60,000 50,000 37,728 51,792 Sale/Redemption Proceeds Units 680,902 1,972,698 4,083,277 775,765 2,040,413 4,926,739 1,821,318 4,309,156 2,188,851 9,932,953 2,647,214 8,642,221 23,613,643 5,775,857 2,463,782 64,092 2,140,979 21,208 6,415,932 3,343,108 1,651,611 2,725,849 1,132,659 547,144 10,631,177 1,273,488 5,256,178 3,458,140 12,900,281 3,205,521 5,436,344 652,463 62,242 12,898,745 490 34,465 18,771 8,509 3,939,477 5,321,770 6,481,826 11,581,786 884,494 6,204,581 650,384 3,935,304 25,305,233 4,106,488 5,477,760 1,347,103 2,450,751 5,282,901 13,527,171 477,192 10,146,097 3,884,658 7,330,507 49,542 12,590 5,079,011 5,996,282 4,984,101 3,750,235 4,011,427 INR (Rs. 000) 8,774 20,000 52,295 10,000 32,000 50,000 21,236 50,243 25,521 100,000 34,145 100,000 251,771 58,000 25,000 1,017 33,983 332 100,435 52,333 16,769 27,676 11,500 5,555 108,000 20,000 53,380 35,120 130,000 41,387 70,189 8,424 100,000 130,000 787 55,379 30,162 13,672 40,038 54,086 65,876 116,800 11,428 80,168 8,403 40,000 254,085 41,323 55,122 13,556 31,689 68,311 137,644 4,856 108,470 41,530 74,000 79,736 20,264 51,278 60,539 50,320 37,863 51,903

159

BHARTI TELE-VENTURES LIMITED

Schedules Annexed to and forming part of Accounts

Balance as on 1.04.04 Particulars KMM. K Liquid Premium I Plan HD.C Mutual .und Liquid Premium Plus IL & .S Mutual .und Liquid I Plan KMM. K Liquid Premium I Plan KMM. K Liquid Premium I Plan Deutsche Liquid .und Deutsche Liquid .und Templeton India Mutual Liquid .und Templeton India Mutual Liquid .und HD.C Mutual .und Liquid Premium Plus Grindlay Liquid .und I Plan C Grindlay Liquid .und I Plan C Canbank Mutual .und Liquid I Plan Alliance Mutual .und Liquid I Plan Birla Mutual .und Liquid I Plan Premium Alliance Mutual .und liquid I Plan Birla Mutual .und Liquid I Plan Premium Birla Mutual .und Liquid I Plan Premium Birla Mutual .und Liquid I Plan Premium Birla Mutual .und Liquid I Plan Premium Chola Liquid .und I plan Chola Liquid .und I plan Canbank Mutual .und Liquid I Plan DSP ML Liquid .und DSP ML Liquid .und Grindlay Liquid .und I Plan C Grindlay Liquid .und I Plan C Grindlay Liquid .und I Plan C HD.C Mutual .und Liquid Premium Plus HSBC Liquid I Plus Plan HSBC Liquid I Plus Plan ING Vysya Liquid I Plan ING Vysya Liquid I Plan ING Vysya Liquid I Plan KMM. K Liquid Premium I Plan KMM. K Liquid Premium I Plan KMM. K Liquid Premium I Plan Prudential ICICI Mutual .und .loating Rate Plan C Tata Mutual .und Liquid SHIP Tata Mutual .und Liquid SHIP Tata Mutual .und Liquid SHIP Tata Mutual .und Liquid SHIP Templeton India Mutual Liquid .und I Plan Templeton India Mutual Liquid .und I Plan Templeton India Mutual Liquid .und Templeton India Mutual Liquid .und Birla Mutual .und Liquid I Plan Premium Birla Mutual .und Liquid I Plan Premium Birla Mutual .und Liquid I Plan Premium Chola Liquid .und I Plan Canbank Mutual .und Liquid Plan Canbank Mutual .und Liquid Plan Canbank Mutual .und Liquid I Plan Canbank Mutual .und Liquid I Plan Deutsche Liquid .und DSP ML Liquid .und DSP ML Liquid .und DSP ML Liquid .und Reliance Mutual .und .MP XI KMM. K Liquid Premium I Plan KMM. K Liquid Premium I Plan Grindlay .loating Rate .und HD.C Mutual .und Liquid Premium Plus Units INR (Rs. 000) Acquired on Amalgamation Units INR (Rs. 000) Purchased During the Year Units 2,326,100 26,502 85,935 852,297 8,883,449 5,819,429 1,623,484 40,500 24,755 12,434,814 2,232,492 2,281,827 57,514,577 4,455,671 2,406,334 151,290 2,519,144 5,414,025 1,867,293 53,018 3,055,838 9,114,496 14,863,405 4,902,426 5,240,397 1,004,334 11,020 21,083,348 15,526,504 9,171,845 708,504 1,092,777 6,963,026 6,386,128 6,529,211 3,937,221 7,096,192 19,896,538 776,310 13,713,894 5,125,358 1,576,158 129,301 74,561 44,186 21,518 2,312,320 1,958,864 4,896,536 1,680,486 8,595,422 4,295,606 2,477,621 11,316,940 564,954 1,762,047 6,600,032 3,040,502 25,408,479 4,120,932 7,047,949 14,538,441 2,325,654 INR (Rs. 000) 30,089 337 1,025 10,969 114,911 58,466 16,357 65,000 39,772 159,923 22,673 23,243 579,471 45,163 24,427 2,616 25,573 55,000 19,034 685 39,515 118,762 149,752 76,393 82,320 10,166 112 214,757 199,685 92,272 7,157 14,866 70,000 64,311 84,031 51,000 92,000 198,965 8,235 160,000 60,000 18,467 130,000 75,000 44,500 34,398 23,570 19,967 49,912 19,544 100,000 50,000 28,913 114,020 5,698 27,680 104,000 47,928 254,085 53,453 91,465 148,404 29,910 Sale/Redemption Proceeds Units 2,326,100 26,502 85,935 852,297 8,883,449 5,819,429 1,623,484 40,500 24,755 12,434,814 2,232,492 2,281,827 57,514,577 4,455,671 2,406,334 151,290 2,519,144 5,414,025 1,867,293 53,018 3,055,838 9,114,496 14,863,405 4,902,426 5,240,397 1,004,334 11,020 21,083,348 15,526,504 9,171,845 708,504 1,092,777 6,963,026 6,386,128 6,529,211 3,937,221 7,096,192 19,896,538 776,310 13,713,894 5,125,358 1,576,158 129,301 74,561 44,186 21,518 2,312,320 1,958,864 4,896,536 1,680,486 8,595,422 4,295,606 2,477,621 11,316,940 564,954 1,762,047 6,600,032 3,040,502 25,408,479 4,120,932 7,047,949 14,538,441 2,325,654 INR (Rs. 000) 30,097 341 1,032 11,030 114,970 58,641 16,359 65,254 39,885 160,000 22,749 23,251 580,000 45,453 24,547 2,642 25,704 55,243 19,053 694 40,000 119,306 150,000 77,334 82,666 10,244 112 215,050 200,000 92,829 7,171 15,000 70,417 64,583 84,670 51,057 92,023 200,000 8,361 162,226 60,629 18,645 130,555 75,284 44,615 34,719 23,600 20,000 50,000 19,713 100,831 50,391 29,064 114,294 5,706 27,816 104,187 47,997 255,088 53,500 91,500 148,500 30,000

160

Schedules Annexed to and forming part of Accounts

Balance as on 1.04.04 Particulars Units INR (Rs. 000) Acquired on Amalgamation Units INR (Rs. 000) Purchased During the Year Units 2,077,501 6,033,869 25,000,000 13,115,132 11,704,183 1,227,823 5,713,837 2,324,500 5,801,199 730,839 8,713,382 4,353,846 2,312,909 16,658,664 1,557,289 3,401,096 807,734 2,477,234 7,429,715 5,652,536 17,812,611 66,353 25,000,000 25,000,000 1,881,465 9,483,797 5,660,698 1,187,955 3,502,515 6,594,131 8,853,392 5,385,166 5,696,527 5,605,842 4,241,452 2,966,625 3,942,518 31,066,291 4,894,234 237,553 4,569,872 6,895,303 5,280,564 24,994,602 2,929,688 6,889,696 2,691,256 256,411 1,858,995 1,158,090 2,257,743 4,813,495 2,956,506 3,682,033 68,432 5,345,647 49,723 33,056 2,704,112 696,985 37,504 2,243,640 504,700 2,028,150 INR (Rs. 000) 20,963 60,886 250,000 131,151 117,758 12,516 58,295 29,895 67,246 8,381 100,000 50,000 23,600 170,000 15,908 34,302 8,151 25,000 75,000 57,153 229,086 79,887 250,000 250,000 19,774 100,000 60,000 18,399 55,000 70,000 94,000 85,000 90,000 75,000 42,843 30,000 40,000 325,000 49,242 2,754 53,000 80,000 52,806 250,488 29,890 69,973 31,533 3,010 19,579 11,815 23,063 48,663 30,027 37,410 689 54,245 60,000 39,903 27,337 7,047 485 29,037 6,547 26,321 Sale/Redemption Proceeds Units 2,077,501 6,033,869 25,000,000 13,115,132 11,704,183 1,227,823 5,713,837 2,324,500 5,801,199 730,839 8,713,382 4,353,846 2,312,909 16,658,664 1,557,289 3,401,096 807,734 2,477,234 7,429,715 5,652,536 17,812,611 66,353 25,000,000 25,000,000 1,881,465 9,483,797 5,660,698 1,187,955 3,502,515 6,594,131 8,853,392 5,385,166 5,696,527 5,605,842 4,241,452 2,966,625 3,942,518 31,066,291 4,894,234 237,553 4,569,872 6,895,303 5,280,564 24,994,602 2,929,688 6,889,696 2,691,256 256,411 1,858,995 1,158,090 2,257,743 4,813,495 2,956,506 3,682,033 68,432 5,345,647 49,723 33,056 2,704,112 696,985 37,504 2,243,640 504,700 2,028,150 INR (Rs. 000) 21,000 61,000 252,885 132,106 117,894 12,558 58,442 30,000 67,634 8,521 101,586 50,760 23,660 170,410 15,930 34,410 8,172 25,063 75,168 57,188 230,000 80,000 250,825 250,825 20,206 101,849 60,792 18,787 55,392 70,507 94,664 85,166 90,090 75,391 43,044 30,106 40,010 329,486 49,329 2,771 53,310 80,438 53,223 249,851 30,000 70,000 31,955 3,045 20,000 11,866 23,134 48,781 30,061 37,439 695 54,305 60,067 39,933 27,411 7,065 493 29,507 6,576 26,424

Deutsche Liquid .und Deutsche Liquid .und Prudential ICICI .MP Quarterly Series 24 Prudential ICICI Mutual .und .loating Rate Plan C Prudential ICICI Mutual .und .loating Rate Plan C Birla Mutual .und Liquid I Plan Premium Birla Mutual .und Liquid I Plan Premium HD.C Mutual .und Liquid Premium Plus Templeton India .loating Rate ST Templeton India .loating Rate ST Templeton India .loating Rate ST Templeton India .loating Rate ST Birla Mutual .und Liquid I Plan Premium Birla Mutual .und Liquid I Plan Premium Birla Mutual .und Liquid I Plan Premium Deutsche Liquid .und Deutsche Liquid .und Deutsche Liquid .und Deutsche Liquid .und Deutsche Liquid .und HD.C Mutual .und Liquid Premium Plus UTI Liquid .und ABN AMRO Liquid .und I Plan ABN AMRO Liquid .und I Plan Alliance Mutual .und Liquid I Plan Alliance Mutual .und Liquid I Plan Alliance Mutual .und Liquid I Plan DSP ML Liquid .und DSP ML Liquid .und DSP .loating Rate .und DSP .loating Rate .und DSP ML Liquid .und DSP ML Liquid .und HD.C Mutual .und Saving Plan Growth HSBC Liquid I Plus Plan HSBC Liquid I Plus Plan HSBC Liquid I Plus Plan KMM.K .loater Prudential ICICI Mutual .und .loating Rate Plan C Templeton India .loating Rate ST Templeton India .loating Rate ST Templeton India .loating Rate ST Prudential ICICI Mutual .und .loating Rate Plan C Grindlay Dynamic Pac C Super I Plan Birla Mutual .und Liquid I Plan Premium HSBC Liquid I Plus plan Tata Mutual .und Liquid SHIP Tata Mutual .und Liquid SHIP J M Mutual .und Liquid I Plan Birla Mutual .und Liquid I Plan Premium Birla Mutual .und Liquid I Plan Premium Deutsche Liquid .und HSBC Liquid I Plus Plan HSBC Liquid I Plus Plan ING Vysya Liquid I Plan ING Vysya Liquid I Plan UTI Liquid .und Advantage UTI Liquid .und Advantage Deutsche Liquid .und Deutsche Liquid .und Chola Liquid .und I Plan Chola Liquid .und I Plan KMM. K Liquid Premium I Plan KMM. K Liquid Premium I Plan

161

BHARTI TELE-VENTURES LIMITED

Schedules Annexed to and forming part of Accounts

Balance as on 1.04.04 Particulars Reliance Mutual .und .MP XII J M Mutual .und Liquid I Plan J M Mutual .und Liquid I Plan J M Mutual .und Liquid I Plan KMM. K Liquid Premium I Plan KMM. K Liquid Premium I Plan KMM. K Liquid Premium I Plan Reliance Mutual .und .MP iv Birla Mutual .und Liquid I Plan Premium Birla Mutual .und Liquid I Plan Premium KMM. K Liquid Premium I Plan Chola Liquid .und I Plan Chola Liquid .und I Plan Tata Mutual .und Liquid SHIP Tata Mutual .und Liquid SHIP J M Mutual .und Liquid I Plan J M Mutual .und Liquid I Plan J M Mutual .und Liquid I Plan Birla Mutual .und Liquid I Plan Premium Birla Mutual .und Liquid I Plan Premium Birla Mutual .und Liquid I Plan Premium DSP ML Liquid .und Birla Mutual .und Liquid I Plan Premium KMM. K Liquid Premium I Plan KMM. K Liquid Premium I Plan KMM. K Liquid Premium I Plan KMM. K Liquid Premium I Plan KMM. K Liquid Premium I Plan Birla Mutual .und Liquid I Plan Premium HSBC Liquid I Plus Plan HSBC Liquid I Plus Plan HSBC Liquid I Plus Plan HSBC Liquid I Plus Plan HSBC Liquid I Plus Plan HSBC Liquid I Plus Plan UTI Liquid .und UTI Liquid .und UTI Liquid .und Advantage UTI Liquid .und Advantage KMM. K Liquid Premium I Plan KMM. K Liquid Premium I Plan KMM. K Liquid Premium I Plan KMM. K Liquid Premium I Plan Prudential ICICI Liquid I Plus Plan Prudential ICICI Liquid I Plus Plan Prudential ICICI Liquid I Plus Plan DSP ML .loating Rate .und DSP ML .loating Rate .und HD.C Mutual .und Liquid Premium Plus J M Mutual .und Liquid I Plan J M Mutual .und Liquid I Plan J M Mutual .und Liquid I Plan Birla Mutual .und Liquid I Plan Premium Birla Mutual .und Liquid I Plan Premium Prudential ICICI Liquid I Plus Plan Birla .loating Rate STP Growth .und J M Mutual .und Liquid I Plan J M Mutual .und Liquid I Plan KMM. K Liquid Premium I Plan KMM. K Liquid Premium I Plan HSBC Liquid I Plus Plan HSBC Liquid I Plus Plan HSBC Liquid I Plus Plan HSBC Liquid I Plus Plan Units INR (Rs. 000) Acquired on Amalgamation Units INR (Rs. 000) Purchased During the Year Units 25,508,842 5,360,873 2,412,859 10,782,070 555,882 4,606,950 969,504 25,000,000 3,037,568 3,780,924 2,299,326 5,483,082 95,021 1,702,937 4,245,888 5,262,159 2,210,246 3,645,912 130,865 1,036,825 3,892,300 3,158,260 272,424 2,104,584 2,876,760 3,835,209 4,598,653 1,893,690 1,459,016 4,684,027 9,240,055 5,786,642 2,945,479 4,907,783 1,838,844 56,547 46,995 94 33,217 3,824,414 1,944,379 4,404,814 3,095,880 1,009,500 8,953,979 127,227 7,914,413 6,031,681 777,621 4,697,928 1,854,187 5,016,924 5,532,653 2,435,176 10,057,748 11,674,169 6,104,072 2,885,856 7,614,280 1,556,807 859,404 981,046 9,810,462 4,014,935 INR (Rs. 000) 255,088 57,002 26,000 116,183 7,214 60,000 12,630 250,000 31,029 38,662 29,954 70,963 1,238 19,990 50,000 55,421 23,817 39,326 1,338 10,629 39,902 50,000 2,793 27,417 37,500 50,000 60,000 24,714 14,957 47,590 94,000 58,930 30,000 50,000 18,741 60,000 50,000 113 40,097 49,911 25,375 57,500 40,468 16,021 143,800 2,000 85,000 64,844 10,001 50,674 20,000 54,135 56,719 25,000 161,800 124,659 65,865 31,181 99,532 20,356 8,759 10,000 100,000 40,971 Sale/Redemption Proceeds Units 25,508,842 5,360,873 2,412,859 10,782,070 555,882 4,606,950 969,504 25,000,000 3,037,568 3,780,924 2,299,326 5,483,082 95,021 1,702,937 4,245,888 5,262,159 2,210,246 3,645,912 130,865 1,036,825 3,892,300 3,158,260 272,424 2,104,584 2,876,760 3,835,209 4,598,653 1,893,690 1,459,016 4,684,027 9,240,055 5,786,642 2,945,479 4,907,783 1,838,844 56,547 46,995 94 33,217 3,824,414 1,944,379 4,404,814 3,095,880 1,009,500 8,953,979 127,227 7,914,413 6,031,681 777,621 4,697,928 1,854,187 5,016,924 5,532,653 2,435,176 10,057,748 11,674,169 6,104,072 2,885,856 7,614,280 1,556,807 859,404 981,046 9,810,462 4,014,935 INR (Rs. 000) 256,139 57,781 26,007 116,212 7,252 60,100 12,648 252,963 31,184 38,816 30,000 72,240 1,252 20,274 50,548 56,794 23,855 39,350 1,345 10,655 40,000 50,174 2,800 27,495 37,583 50,104 60,078 24,740 15,000 47,792 94,277 59,042 30,053 50,075 18,762 60,236 50,062 114 40,267 50,000 25,424 57,596 40,480 16,240 144,044 2,047 85,125 64,875 10,097 50,760 20,034 54,206 56,919 25,053 161,912 125,000 65,998 31,202 99,630 20,370 8,777 10,020 100,197 41,006

162

Schedules Annexed to and forming part of Accounts

Balance as on 1.04.04 Particulars Units INR (Rs. 000) Acquired on Amalgamation Units INR (Rs. 000) Purchased During the Year Units 7,921,029 6,012,240 5,573,308 11,266,654 3,286,107 1,935,131 7,941,368 7,888,267 11,462,194 2,034,578 884,768 1,170,638 1,807,016 4,283,572 1,847,535 1,983,806 768,867 1,552,536 25,613,939 156,348 2,736,267 4,680,728 5,262,159 3,769,882 1,735,253 1,816,556 11,976,225 1,436,655 6,550,811 3,196,966 11,746,424 3,612,879 2,360,546 3,006,836 4,639,984 8,523,679 3,996,012 9,463,565 7,406,676 6,376,300 9,780,429 5,840,010 1,066,076 2,198,817 7,963,606 741,991 2,059,678 2,426,392 12,572,828 902,450 6,408,205 14,792,316 12,656,872 9,502,271 9,721,588 5,608,997 1,149,844 2,642,705 5,769,296 294,137 4,652,937 311,215 7,938,435 10,347,389 INR (Rs. 000) 85,156 64,666 59,945 120,000 35,000 20,654 81,700 103,144 150,000 32,072 9,029 13,506 21,087 50,000 25,134 27,000 10,475 15,755 256,139 1,596 42,715 49,958 56,856 43,432 20,000 19,388 127,879 15,341 70,000 34,173 125,425 38,577 25,389 32,388 50,000 91,980 63,505 94,636 75,000 65,000 100,000 63,020 14,525 30,000 79,636 7,923 21,996 25,912 125,728 9,040 64,194 147,923 130,000 100,000 103,818 60,000 12,300 28,274 61,726 3,148 49,678 3,327 85,000 111,001 Sale/Redemption Proceeds Units 7,921,029 6,012,240 5,573,308 11,266,654 3,286,107 1,935,131 7,941,368 7,888,267 11,462,194 2,034,578 884,768 1,170,638 1,807,016 4,283,572 1,847,535 1,983,806 768,867 1,552,536 25,613,939 156,348 2,736,267 4,680,728 5,262,159 3,769,882 1,735,253 1,816,556 11,976,225 1,436,655 6,550,811 3,196,966 11,746,424 3,612,879 2,360,546 3,006,836 4,639,984 8,523,679 3,996,012 9,463,565 7,406,676 6,376,300 9,780,429 5,840,010 1,066,076 2,198,817 7,963,606 741,991 2,059,678 2,426,392 12,572,828 902,450 6,408,205 14,792,316 12,656,872 9,502,271 9,721,588 5,608,997 1,149,844 2,642,705 5,769,296 294,137 4,652,937 311,215 7,938,435 10,347,389 INR (Rs. 000) 85,275 64,725 60,000 120,266 35,078 20,657 81,767 103,260 150,044 32,388 9,040 13,836 21,375 50,669 25,583 27,470 10,647 15,845 257,184 1,610 43,432 50,000 56,958 43,488 20,017 19,426 128,074 15,414 70,285 34,301 125,653 38,647 25,477 32,452 50,078 91,994 63,522 95,000 75,315 65,085 100,025 63,039 14,791 30,508 80,000 7,945 22,055 26,000 126,465 9,077 64,458 150,000 130,018 100,212 104,215 60,128 12,326 28,330 61,847 3,153 50,000 3,347 85,373 111,280

DSP ML .loating Rate .und DSP ML .loating Rate .und DSP ML .loating Rate .und Kotak .loater ST Growth Kotak .loater ST Growth Kotak .loater ST Growth Birla Mutual .und Liquid I Plan Premium KMM. K Liquid Premium I Plan KMM. K Liquid Premium I Plan DSP ML Liquid .und HSBC Liquid I Plus Plan Canbank Mutual Liquid .und Canbank Mutual .und Liquid I Plan Canbank Mutual .und Liquid Plan ING Vysya Liquid Plan ING Vysya Liquid Plan ING Vysya Liquid Plan ING Vysya Liquid I Plan Reliance Mutual .und .MP XIII Grindlay .loating Rate .und Reliance Liquid Treasury I Plan Kotak .loater ST Growth J M Mutual .und Liquid I Plan Reliance Mutual .und Liquid Reliance Mutual .und Liquid Kotak .loater ST Growth Kotak .loater ST Growth Birla .loating Rate STP Growth .und Birla .loating Rate STP Growth .und Birla .loating Rate STP Growth .und Kotak .loater ST Growth Kotak .loater ST Growth DSP ML .loating Rate .und DSP ML .loating Rate .und DSP ML .loating Rate .und DSP ML .loating Rate .und Reliance Mutual .und Liquid I Plan HSBC .loating Rate .und Prudential ICICI Mutual .und .loating Rate Plan C Deutsche Liquid .und ING Vysya Liquid I Plan DSP ML .loating rate .und ING Vysya Liquid Plan ING Vysya Liquid Plan HSBC .loating Rate .und Kotak .loater ST Growth Kotak .loater ST Growth Kotak .loater ST Growth HSBC .loating Rate .und HSBC .loating Rate .und HSBC .loating Rate .und Reliance Mutual .und .loating Rate .und J M Mutual .und Liquid Super IP Deutsche .loating Rate .und Kotak .loater ST Growth Kotak .loater ST Growth Kotak .loater ST Growth Kotak .loater ST Growth Kotak .loater ST Growth Kotak .loater ST Growth J M .loater ST Birla .loating Rate STP Growth .und Birla .loating Rate STP Growth .und Birla .loating Rate STP Growth .und

163

BHARTI TELE-VENTURES LIMITED

Schedules Annexed to and forming part of Accounts

Balance as on 1.04.04 Particulars Units INR (Rs. 000) Acquired on Amalgamation Units INR (Rs. 000) Purchased During the Year Units 5,554,476 9,978,931 1,107,216 7,549,848 3,220,460 4,233,173 3,989,189 1,715,131 4,952,027 4,321,199 5,207,684 1,452,988 1,110,852 3,252,758 5,806,639 3,894,543 1,866,269 172,946 4,762,650 5,168,921 12,699,405 4,568,514 1,062,227 4,191,037 15,000,000 6,455,876 1,230,704 1,599,142 2,057,602 3,008,197 1,518,165 2,796,905 9,142,494 7,444,317 2,645,010 3,972,116 4,929,314 3,756,886 3,688,574 1,844,287 2,599,756 633,224 1,414,811 929,558 3,689,849 1,844,287 7,375,855 5,509,946 7,435,534 3,359,003 6,586,491 727,742 7,440,615 9,790,580 2,088,111 5,318,121 1,123,424 4,570,975 4,955,598 5,633,194 5,304,989 2,640,329 14,767,673 6,992,478 INR (Rs. 000) 60,000 107,892 11,963 100,000 51,300 42,406 40,000 17,210 80,000 69,838 52,077 15,552 11,903 34,894 60,000 42,108 30,162 2,796 47,790 51,911 130,000 52,844 17,172 44,909 150,000 84,841 13,188 17,150 22,090 39,942 19,951 28,089 92,000 75,000 27,000 40,000 50,000 44,266 39,994 19,997 27,910 6,800 15,198 9,985 40,008 20,000 80,000 59,780 75,000 33,887 70,322 7,817 80,000 100,000 21,337 56,958 12,081 46,113 50,000 56,860 55,000 35,058 160,220 75,893 Sale/Redemption Proceeds Units 5,554,476 9,978,931 1,107,216 7,549,848 3,220,460 4,233,173 3,989,189 1,715,131 4,952,027 4,321,199 5,207,684 1,452,988 1,110,852 3,252,758 5,806,639 3,894,543 1,866,269 172,946 4,762,650 5,168,921 12,699,405 4,568,514 1,062,227 4,191,037 15,000,000 6,455,876 1,230,704 1,599,142 2,057,602 3,008,197 1,518,165 2,796,905 9,142,494 7,444,317 2,645,010 3,972,116 4,929,314 3,756,886 3,688,574 1,844,287 2,599,756 633,224 1,414,811 929,558 3,689,849 1,844,287 7,375,855 5,509,946 7,435,534 3,359,003 6,586,491 727,742 7,440,615 9,790,580 2,088,111 5,318,121 1,123,424 4,570,975 4,955,598 5,633,194 5,304,989 2,640,329 14,767,673 6,992,478 INR (Rs. 000) 60,074 107,926 12,020 100,141 51,321 42,598 40,143 17,259 80,102 69,898 52,844 15,585 11,915 35,000 60,058 42,148 30,201 2,799 47,955 52,045 130,057 52,884 17,200 45,000 151,814 85,000 13,220 17,178 22,102 40,000 20,000 28,203 92,188 75,065 27,016 40,357 50,082 44,400 40,000 20,000 27,968 6,812 15,220 10,000 40,064 20,025 80,086 59,826 75,082 33,918 71,067 7,832 80,077 100,142 21,358 57,381 12,091 46,163 50,047 56,890 55,069 35,163 160,367 75,933

DSP ML .loating Rate .und DSP ML .loating Rate .und J M Mutual .und Liquid I Plan Chola Liquid .und I Plan Reliance Mutual .und Liquid I Plan HSBC .loating Rate .und HSBC .loating Rate .und HSBC .loating Rate .und Prudential ICICI Liquid I Plus Plan Prudential ICICI Liquid I Plus Plan Reliance Mutual .und .loating Rate .und Kotak .loater ST Growth Kotak .loater ST Growth Birla .loating Rate STP Growth .und Grindlay .loating Rate .und DSP ML .loating Rate .und Prudential ICICI Liquid I Plus Plan Prudential ICICI Liquid I Plus Plan HSBC .loating Rate .und HSBC .loating Rate .und Deutsche Liquid .und Reliance Mutual .und Liquid Prudential ICICI Liquid I Plus Plan Kotak .loater ST Growth J M Mutual .und .MP KMM. K Liquid Premiun I Plan Kotak .loater ST Growth Kotak .loater ST Growth Kotak .loater ST Growth Chola Liquid .und I Plan PLUS KMM. K Liquid Premium I Plan HSBC .loating Rate .und HSBC .loating Rate .und HSBC .loating Rate .und Prudential ICICI Mutual .und .loating Rate Plan C Principal .loating Rate .und Principal .loating Rate .und Templeton .loating Rate .und DSP ML .loating Rate .und DSP ML .loating Rate .und Kotak .loater ST Growth Kotak .loater ST Growth Kotak .loater ST Growth Kotak .loater ST Growth DSP ML .loating Rate .und DSP ML .loating Rate .und DSP ML .loating Rate .und DSP ML .loating Rate .und HSBC .loating Rate .und HSBC .loating Rate .und J M .loater ST Kotak .loater ST Growth Kotak .loater ST Growth Prudential ICICI Mutual .und .loating Rate Plan C Prudential ICICI Mutual .und .loating Rate Plan C J M .loater ST Kotak .loater ST Growth HSBC .loating Rate .und HSBC .loating Rate .und HSBC .loating Rate .und Birla Mutual .undLiquid I Plan Premium Chola Liquid .und I Plan PLUS DSP ML .loating Rate .und DSP ML .loating Rate .und

164

Schedules Annexed to and forming part of Accounts

Balance as on 1.04.04 Particulars Units INR (Rs. 000) Acquired on Amalgamation Units INR (Rs. 000) Purchased During the Year Units 17,651,923 1,918,210 2,785,562 5,251,805 17,172,656 9,832,842 3,932,093 2,221,140 4,682,649 1,683,489 5,113,996 2,489,118 7,685,016 3,319,864 5,965,446 8,903,475 380,542 4,502,121 5,132,126 15,000,000 10,000,000 770,044 927,764 4,354,816 525,185 2,369,779 1,841,994 3,678,195 9,923,210 5,043,700 4,195,626 4,222,967 5,168,033 4,875,243 6,953,967 6,020,676 2,152,585 3,963,679 11,538,683 7,728,211 9,714,680 12,667,727 1,123,192 9,269,090 9,711,944 9,366,261 10,374,932 4,460,300 5,824,564 19,412,575 81,464 9,597,574 9,704,969 9,703,651 12,845,215 7,980,041 204,109 19,536,974 4,600,004 13,553,786 11,029,801 4,038,097 5,000,000 5,000,000 INR (Rs. 000) 189,816 25,208 45,032 53,663 175,496 100,000 40,000 24,107 50,838 18,103 55,000 26,781 83,434 35,719 64,192 95,808 4,096 48,459 51,321 150,000 100,000 8,289 9,986 44,504 5,369 25,728 20,000 40,000 101,455 54,106 45,385 43,176 52,853 49,859 70,880 96,500 23,170 42,694 119,777 80,223 100,000 129,120 13,234 110,000 100,000 94,540 104,851 52,950 60,000 200,000 877 100,000 100,000 100,000 140,000 87,000 2,087 200,000 47,099 161,000 110,298 40,381 50,000 50,000 Sale/Redemption Proceeds Units 17,651,923 1,918,210 2,785,562 5,251,805 17,172,656 9,832,842 3,932,093 2,221,140 4,682,649 1,683,489 5,113,996 2,489,118 7,685,016 3,319,864 5,965,446 8,903,475 380,542 4,502,121 5,132,126 15,000,000 10,000,000 770,044 927,764 4,354,816 525,185 2,369,779 1,841,994 3,678,195 9,923,210 5,043,700 4,195,626 4,222,967 5,168,033 4,875,243 6,953,967 6,020,676 2,152,585 3,963,679 11,538,683 7,728,211 9,714,680 12,667,727 1,123,192 9,269,090 9,711,944 9,366,261 10,374,932 4,460,300 5,824,564 19,412,575 81,464 9,597,574 9,704,969 9,703,651 12,845,215 7,980,041 204,109 19,536,974 4,600,004 13,553,786 11,029,801 4,038,097 5,000,000 5,000,000 INR (Rs. 000) 190,000 25,310 45,222 53,725 175,675 100,055 40,011 24,130 50,870 18,128 55,069 26,803 83,500 35,754 64,246 95,901 4,099 48,500 51,552 150,675 100,450 8,300 10,000 44,619 5,381 25,782 20,040 40,018 101,700 54,589 45,411 43,304 52,996 50,000 71,000 96,513 23,228 42,772 120,000 80,395 100,014 129,396 13,331 110,014 100,017 94,891 105,109 52,958 60,008 200,027 880 100,030 100,028 100,015 140,062 87,013 2,096 200,658 47,245 161,061 111,863 40,954 50,710 50,710

Kotak .loater ST Growth KMM. K Liquid Premium I Plan Prudential ICICI Liquid I Plus Plan Prudential ICICI Mutual .und .loating Rate Plan C Prudential ICICI Mutual .und .loating Rate Plan C Principal .loating Rate .und Principal .loating Rate .und DSP ML .loating Rate .und DSP ML .loating Rate .und Kotak .loater ST Growth Kotak .loater ST Growth Kotak .loater ST Growth DSP ML .loating Rate .und Kotak .loater ST Growth Kotak .loater ST Growth Kotak .loater ST Growth Kotak .loater ST Growth Kotak .loater ST Growth Reliance Mutual .und .MP Reliance Mutual .und .MP Reliance Mutual .und .MP Kotak .loater ST Growth Kotak .loater ST Growth Prudential ICICI Mutual .und .loating Rate Plan C Prudential ICICI Mutual .und .loating Rate Plan C DSP ML .loating Rate .und DSP ML .loating Rate .und DSP ML .loating Rate .und Prudential ICICI Mutual .und .loating Rate Plan C Birla .loating Rate STP Growth .und Birla .loating Rate STP Growth .und Prudential ICICI Mutual .und .loating Rate Plan C Prudential ICICI Mutual .und .loating Rate Plan C Prudential ICICI Mutual .und .loating Rate Plan C Principal Liquid .und Reliance Mutual .und Liquid Kotak .loater ST Growth Kotak .loater ST Growth Grindlay Liquid .und I Plan C Grindlay Liquid .und I Plan C Deutsche Liquid .und Principal Liquid .und Templeton .loating Rate .und Templeton .loating Rate .und Deutsche Liquid .und HSBC .loating Rate .und HSBC .loating Rate .und Templeton .loating Rate .und Deutsche Liquid .und Deutsche Liquid .und Kotak .loater ST Growth Birla Mutual .undLiquid Deutsche Liquid .und Deutsche Liquid .und DSP ML .loating Rate .und DSP ML .loating Rate .und Prudential ICICI Mutual .und .loating Rate Plan C Prudential ICICI Mutual .und .loating Rate Plan C Prudential ICICI Mutual .und .loating Rate Plan C Templeton .loating Rate .und UTI .ixed Maturity Plan UTI .MP UTI .MP UTI .ixed Maturity Plan

165

BHARTI TELE-VENTURES LIMITED

Schedules Annexed to and forming part of Accounts

Balance as on 1.04.04 Particulars Units INR (Rs. 000) Acquired on Amalgamation Units INR (Rs. 000) Purchased During the Year Units 4,385,424 5,351,010 7,859,604 5,048,996 4,160,080 5,549,492 8,959,705 4,436,143 9,696,782 8,710,127 2,924,287 6,427,816 8,134,248 4,521,014 5,369,185 7,963,278 2,365,348 8,900,519 82,659 8,973,398 4,890,203 10,000,000 6,250,000 2,460,269 5,839,075 6,282,167 74,007 8,805,373 1,411,171 10,476,026 4,833,533 4,757,759 4,887,920 9,170,442 2,828,161 3,710,541 3,620,709 3,925,147 5,832,664 14,097,877 4,676,706 25,000,000 7,049,552 283,774 3,448,300 6,268,646 24,287,432 10,487 4,874,615 4,425,917 2,997,705 9,797,102 1,833,488 4,197,871 19,777,074 9,229,264 9,320,996 32,339 4,723,154 18,794,696 1,967,013 9,454,297 688,086 INR (Rs. 000) 44,901 54,803 80,171 54,615 45,000 59,775 100,014 49,534 100,000 90,000 29,829 65,598 99,673 50,482 60,008 89,022 23,905 99,785 99,717 96,654 52,695 100,000 100,465 25,197 60,000 64,562 80,000 95,508 14,402 109,200 50,000 76,500 49,893 100,000 30,475 40,000 39,095 40,000 59,447 150,000 49,760 250,000 71,244 2,873 35,438 64,477 253,503 107 49,772 45,523 30,553 100,000 18,715 49,919 227,074 99,655 150,000 35,000 50,254 200,000 19,917 96,513 7,047 Sale/Redemption Proceeds Units 4,385,424 5,351,010 7,859,604 5,048,996 4,160,080 5,549,492 8,959,705 4,436,143 9,696,782 8,710,127 2,924,287 6,427,816 8,134,248 4,521,014 5,369,185 7,963,278 2,365,348 8,900,519 82,659 8,973,398 4,890,203 10,000,000 6,250,000 2,460,269 5,839,075 6,282,167 74,007 8,805,373 1,411,171 10,476,026 4,833,533 4,757,759 4,887,920 9,170,442 2,828,161 3,710,541 3,620,709 3,925,147 5,832,664 14,097,877 4,676,706 25,000,000 7,049,552 283,774 3,448,300 6,268,646 24,287,432 10,487 4,874,615 4,425,917 2,997,705 9,797,102 1,833,488 4,197,871 19,777,074 9,229,264 9,320,996 32,339 4,723,154 18,794,696 1,967,013 9,454,297 688,086 INR (Rs. 000) 45,041 54,959 80,300 54,723 45,089 60,000 100,326 49,674 100,014 90,013 29,893 65,707 100,000 50,646 60,147 89,207 24,000 100,000 100,000 97,089 52,911 100,465 100,479 25,309 60,067 64,625 80,011 95,570 14,439 109,384 50,007 76,511 50,000 100,160 30,622 40,176 39,203 40,226 59,774 150,180 49,820 253,503 71,617 2,883 35,487 64,513 253,573 107 49,893 45,567 30,739 100,460 18,801 50,000 227,610 100,000 150,021 35,005 50,356 200,380 20,000 96,944 7,056

Prudential ICICI Mutual .und .loating Rate Plan C Prudential ICICI Mutual .und .loating Rate Plan C Principal .loating Rate .und Birla .loating Rate STP Growth .und Birla .loating Rate STP Growth .und Kotak .loater ST Growth Deutsche Short Term Debt Deutsche Short Term Debt Deutsche Liquid .und ING Vysya Liquid Principal .loating Rate .und Principal .loating Rate .und Birla Mutual .und ST Debt Plan Deutsche Short Term Debt Deutsche Short Term Debt Deutsche Short Term Debt HSBC .loating Rate .und HSBC Short Term Debt Templeton Short Term Debt Kotak .loater ST Growth Kotak .loater ST Growth Reliance Mutual .und .MP Monthly Plan 16 Reliance Mutual .und Liquid Prudential ICICI Mutual .und .loating Rate Plan C Prudential ICICI Mutual .und .loating Rate Plan C Prudential ICICI Mutual .und .loating Rate Plan C UTI Liquid .und Birla .loating Rate STP Growth .und Principal .loating Rate .und Birla Mutual .und Liquid ING Vysya Liquid Reliance Mutual .und Liquid ABN AMRO .loating Rate .und DSP ML .loating Rate .und Kotak .loater ST Growth Kotak .loater ST Growth Kotak .loater ST Growth Tata Mutual .und .loating Rate Tata Mutual .und .loating Rate Deutsche Short Term .loater Deutsche Short Term .loater Grindlay .ixed Maturity Plan3 HSBC .loating Rate .und HSBC .loating Rate .und Prudential ICICI Mutual .und .loating Rate Plan C Prudential ICICI Mutual .und .loating Rate Plan C Grindlay Liquid .und ABN AMRO .loating Rate .und ABN AMRO .loating Rate .und Prudential ICICI Mutual .und .loating Rate Plan C Tata Mutual .und .loating Rate Tata Mutual .und .loating Rate Tata Mutual .und .loating Rate Templeton .loating Rate .und DSP Short Term Debt Kotak .loater ST Growth Reliance Mutual .und Liquid UTI Liquid .und Deutsche Short Term .loater Deutsche .loating Rate .und HSBC .loating Rate .und Reliance Mutual .und .loater Reliance Mutual .und .loater

166

Schedules Annexed to and forming part of Accounts

Balance as on 1.04.04 Particulars Templeton .loating Rate .und Templeton .loating Rate .und UTI Liquid .und UTI Liquid .und Birla Mutual .und ST Debt Plan Birla .loating Rate HD.C Mutual fund Saving Plan Growth Reliance Mutual .und Liquid ING Vysya Liquid Reliance Mutual .und Liquid ING Vysya Liquid UTI Liquid .und Kotak .loater ST Growth Kotak .loater ST Growth HD.C Mutual .und Cash Mgmt. Saving Plan UTI Short Term Birla Mutual .und ST Debt Plan Birla Mutual .und ST Debt Plan Birla Mutual .und ST Debt Plan Birla Mutual .und ST Debt Plan Deutsche Short Term Debt Deutsche Short Term Debt Grindlays Short Term Debt HD.C Mutual .und Cash Mgmt. Saving Plan HSBC .loating Rate .und Kotak .loater ST Growth Prudential ICICI Mutual .und STIP Prudential ICICI Mutual .und Short Term Plan Principal Short Term Debt Reliance Mutual .und Short Term Reliance Mutual .und Liquid Templeton Short Term Debt Templeton Short Term Debt Templeton Short Term Debt Kotak .loater ST Growth Kotak .loater ST Growth Kotak .loater ST Growth HD.C Mutual .und Cash Mgmt. Saving Plan Tata Mutual .und .loating Rate Tata Mutual .und .loating Rate Tata Mutual .und .loating Rate Kotak .loater ST Growth Kotak .loater ST Growth Kotak .loater ST Growth Kotak .loater ST Growth UTI Liquid .und HD.C .loating Rate .und HD.C Mutual .und Cash Mgmt. Saving Plan Kotak .loater ST Growth Kotak .loater ST Growth Kotak .loater ST Growth ABN AMRO .loating Rate .und ABN AMRO .loating Rate .und DSP ML .loating Rate .und Tata Mutual .und .loating Rate Tata Mutual .und .loating Rate UTI Short Term .loater UTI .loater UTI .loater Birla .loating Rate Canbank Mutual .und Liquid Plan Deutsche .loating Rate .und DSP ML .loating Rate .und HSBC .loating Rate .und Units INR (Rs. 000) Acquired on Amalgamation Units INR (Rs. 000) Purchased During the Year Units 3,791,096 8,408,307 110,844 46,152 414,106 4,597,363 4,397,811 3,103,470 1,928,994 9,309,080 9,646,532 92,279 2,894,120 6,321,960 6,035,135 7,395,027 26,686 8,143,756 8,886,103 4,419,126 9,929,681 17,876,597 6,124,076 6,652,272 8,938,785 2,763,245 4,002,914 11,960,673 11,790,477 4,366,292 6,201,627 19,586 43,885 133,274 172,083 8,514,025 2,222,497 8,358,409 3,065,063 7,830,624 1,167,978 7,029,138 3,605,569 7,394,946 4,983,824 92,147 5,478,902 6,719,307 99,496 9,237,107 1,706,612 402,357 4,272,178 11,399,805 4,896,659 3,851,907 23,723,137 3,256,512 5,481,861 8,955,114 10,308,936 18,703,300 9,118,596 7,625,463 INR (Rs. 000) 45,081 100,000 120,000 50,000 4,492 50,000 60,440 50,000 19,997 150,000 100,003 100,000 31,250 68,292 83,000 80,011 327 100,030 109,384 54,511 111,005 200,043 80,395 91,500 100,215 29,849 50,000 150,000 129,396 50,007 100,000 23,628 52,958 161,061 1,859 92,000 24,023 115,000 31,285 80,000 11,940 75,977 39,000 80,000 53,923 100,000 60,000 92,500 1,077 100,000 18,481 4,108 43,640 124,641 50,060 39,386 254,236 35,005 58,946 97,493 124,000 199,764 99,699 77,210 Sale/Redemption Proceeds Units 3,791,096 8,408,307 110,844 46,152 414,106 4,597,363 4,397,811 3,103,470 1,928,994 9,309,080 9,646,532 92,279 2,894,120 6,321,960 6,035,135 7,395,027 26,686 8,143,756 8,886,103 4,419,126 9,929,681 17,876,597 6,124,076 6,652,272 8,938,785 2,763,245 4,002,914 11,960,673 11,790,477 4,366,292 6,201,627 19,586 43,885 133,274 172,083 8,514,025 2,222,497 8,358,409 3,065,063 7,830,624 1,167,978 7,029,138 3,605,569 7,394,946 4,983,824 92,147 5,478,902 6,719,307 99,496 9,237,107 1,706,612 402,357 4,272,178 11,399,805 4,896,659 3,851,907 23,723,137 3,256,512 5,481,861 8,955,114 10,308,936 18,703,300 9,118,596 7,625,463 INR (Rs. 000) 45,174 100,191 120,018 50,007 4,504 50,007 60,448 50,007 20,000 150,021 100,016 100,014 31,403 68,597 83,011 80,283 329 100,537 109,702 54,555 111,700 201,096 80,933 91,513 100,821 30,000 50,379 150,533 130,274 50,059 100,014 23,797 53,320 161,931 1,869 92,449 24,133 115,016 31,505 80,489 12,005 76,359 39,168 80,333 54,140 100,014 60,891 92,513 1,081 100,374 18,545 4,132 43,868 125,000 50,374 39,626 255,783 35,112 59,105 97,600 124,135 200,000 100,000 77,764

167

BHARTI TELE-VENTURES LIMITED

Schedules Annexed to and forming part of Accounts

Balance as on 1.04.04 Particulars Units INR (Rs. 000) Acquired on Amalgamation Units INR (Rs. 000) Purchased During the Year Units 1,837,177 15,000,000 2,506,600 311,716 4,616,592 9,065,418 165,209 5,353,910 6,216,248 92,259 3,371,286 7,786,040 9,123,586 7,468,927 14,632,669 7,667,164 9,719,212 8,368,691 5,679,570 4,647,359 694,270 3,856,907 5,336,044 2,452,261 16,895,151 1,098,807 15,941,320 2,386,967 15,397,420 299,114 9,596,754 4,595,757 8,598,035 383,274 7,734,973 8,706,883 4,086,117 9,854,450 5,654,405 2,575,608 7,095,104 3,096,857 7,388,873 8,808,766 3,465,610 11,657,958 7,071,840 2,193,596 9,529,346 3,393,595 4,225,976 5,798,834 3,912,861 8,835,118 920,218 9,604,948 14,720,341 6,946,545 7,623,918 3,942,808 9,255,290 1,365,150 6,480,357 16,708,746 INR (Rs. 000) 18,610 150,000 27,144 3,378 50,000 98,210 1,790 58,126 64,000 950 34,734 79,910 93,433 76,511 150,021 78,710 99,379 99,893 61,072 50,007 7,473 41,874 57,958 25,266 174,336 11,235 163,000 24,417 167,630 3,270 105,000 49,917 92,542 4,127 80,933 120,000 41,390 100,000 57,598 26,577 73,266 50,000 75,583 90,200 35,552 139,155 76,156 23,645 99,985 54,992 60,448 83,011 56,022 90,013 9,386 100,000 159,886 71,312 78,321 40,448 95,000 14,020 66,360 171,590 Sale/Redemption Proceeds Units 1,837,177 15,000,000 2,506,600 311,716 4,616,592 9,065,418 165,209 5,353,910 6,216,248 92,259 3,371,286 7,786,040 9,123,586 7,468,927 14,632,669 7,667,164 9,719,212 8,368,691 5,679,570 4,647,359 694,270 3,856,907 5,336,044 2,452,261 16,895,151 1,098,807 15,941,320 2,386,967 15,397,420 299,114 9,596,754 4,595,757 8,598,035 383,274 7,734,973 8,706,883 4,086,117 9,854,450 5,654,405 2,575,608 7,095,104 3,096,857 7,388,873 8,808,766 3,465,610 11,657,958 7,071,840 2,193,596 9,529,346 3,393,595 4,225,976 5,798,834 3,912,861 8,835,118 920,218 9,604,948 14,720,341 6,946,545 7,623,918 3,942,808 9,255,290 1,365,150 INR (Rs. 000) 18,736 150,740 27,250 3,389 50,188 98,553 1,796 58,204 64,219 953 34,828 80,000 93,834 76,816 150,494 78,855 100,000 100,000 61,273 50,137 7,490 41,955 58,045 25,350 174,650 11,312 164,114 24,574 167,940 3,283 105,332 50,000 92,784 4,136 81,097 120,017 41,706 100,581 57,713 26,633 73,367 50,043 76,094 90,716 35,690 139,426 76,325 23,675 100,000 55,000 60,641 83,211 56,148 90,567 9,433 100,134 160,200 71,513 78,487 40,611 95,329 14,061

HSBC .loating Rate .und Kotak .MP Kotak .loater ST Growth Kotak .loater ST Growth Kotak .loater ST Growth Kotak .loater ST Growth Kotak .loater ST Growth Kotak .loater ST Growth Prudential ICICI Mutual .und .loating Rate Plan C Prudential ICICI Mutual .und .loating Rate Plan C Prudential ICICI Mutual .und .loating Rate Plan C Principal .loating rate .und Reliance Mutual .und .loater Reliance Mutual .und .loater Reliance Mutual .und .loater Reliance Mutual .und .loater Tata Mutual .und .loating Rate Templeton .loating Rate .und UTI .loater UTI .loater UTI .loater Kotak .loater ST Growth Kotak .loater ST Growth Prudential ICICI Mutual .und .loating Rate Plan C Prudential ICICI Mutual .und .loating Rate Plan C Tata Mutual .und .loating Rate Tata Mutual .und .loating Rate Tata Mutual .und .loating Rate Birla .loating Rate DSP ML .loating Rate .und DSP ML .loating Rate .und Kotak .loater ST Growth UTI .loater UTI .loater Grindlay Liquid .und I Plan C HD.C Mutual .und Cash Mgmt. Saving Plan HSBC .loating Rate .und HSBC .loating Rate .und HSBC .loating Rate .und Prudential ICICI Mutual .und .loating Rate Plan C Prudential ICICI Mutual .und .loating Rate Plan C Reliance Mutual .und Liquid Tata Mutual .und .loating Rate Tata Mutual .und .loating Rate Tata Mutual .und .loating Rate Templeton .loating Rate .und UTI .loater UTI .loater Birla Mutual .und Liquid I Plan Premium DSP ML Liquid .und HD.C Mutual .und Saving Plus Plan HD.C Mutual .und Cash Mgmt. Saving Plus Plan HD.C Mutual .und Cash Mgmt. Saving Plus Plan ING ST .loater ING ST .loater J M Mutual .und Liquid Super IP Kotak .loater ST Growth Reliance Mutual .und .loater Reliance Mutual .und .loater Tata Mutual .und .loating Rate Tata Mutual .und .loating Rate Tata Mutual .und .loating Rate ABN AMRO .loating Rate .und ABN AMRO Liquid .und I Plan

168

Schedules Annexed to and forming part of Accounts

Balance as on 1.04.04 Particulars Units INR (Rs. 000) 3,280,377 Acquired on Amalgamation Units INR (Rs. 000) 65,423 Purchased During the Year Units 6,476,645 10,582,759 3,309,093 21,214,445 21,760,891 4,243,159 1,921,303 5,939,171 3,355,543 20,344,838 5,000,000 10,784,823 24,987,007 2,588,907 4,907,164 6,984,563 15,000,000 20,000,000 20,034,464 7,085,128 INR (Rs. 000) 67,955 113,031 53,623 303,910 300,000 43,223 20,000 60,621 34,850 203,448 50,000 117,238 250,000 26,734 50,364 71,752 150,000 200,000 205,980 76,370 71,632,274 Sale/Redemption Proceeds Units INR (Rs. 000) 72,455,877

Birla Mutual .und Liquid I Plan Premium Deutsche .loating Rate .und DSP ML Liquid .und HD.C Mutual .und Cash Mgmt. Saving Plus Plan HD.C Mutual .und Cash Mgmt. Saving Plan HSBC .loating Rate .und HSBC Liquid .und ING ST .loater ING Vysya Liquid J M .ixed Maturity Plan QSA 5 J M Mutual .und Equity & Derivative Kotak .loater ST Growth Prudential ICICI Mutual .und .MP Series 25 Quaterly Prudential ICICI Mutual .und .loating Rate Plan C Principal .loating Rate .und Reliance Mutual .und .loater Reliance Mutual .und .MP Quarter Plan 8 Reliance Mutual .und .MP Quarter Plan 7 Tata Mutual .und .loating Rate UTI .loater Total Trade Investments Govt. Securities/Bonds /T.Bills/ Bank CDS/Debentures 10.90% IDBI Bond 2008 9.39% GOI 2014 9.39% GOI 2014 7.37% GOI 2014 9.81% GOI 2013 9.81% GOI 2013 10.50% GOI 2014 10.50% GOI 2014 10.50% GOI 2014 11.83% GOI 2014 7.38% GOI 2015 8.35% GOI 2022 91 Days T Bill Maturing on 20/11/2004 91 Days T Bill Maturing on 26/11/2004 91 Days T Bill Maturing on 29/10/2004 11.83% GOI 2014 7.36% Tamil Nadu State Bonds 2014 7.36% Tamil Nadu State Bonds 2014 7.32% KK State Bonds 2014 7.55% GOI 2010 7.36% KK State Bonds 2014 91 Days T Bills Maturing on 17/12/2004 91 Days T Bills Maturing on 24/12/2004 91 Days T Bills Maturing on 24/12/2004 91 Days T Bills Maturing on 24/12/2004 91 Days T Bills Maturing on 24/12/2004 364 Days T Bills Maturing on 24/12/2004 91 Days T Bills Maturing on 31/12/2004 91 Days T Bills Maturing on 31/12/2004 9.39% PCT 2011 9.39% PCT 2011 7.25 Andhra Bank 2014 7.55% GOI 2010 7.38% GOI 2015 7.38% GOI 2015 7.38% GOI 2015 9.39% GOI 2011 7.38% GOI 2015 7.38% GOI 2015 7.55% GOI 2010 9.39% GOI 2011

500 1,000,000 1,000,000 500,000 500,000 1,000,000 200,000 300,000 500,000 191,300 100,000,000 50,000,000 1,517,250 1,000,000 2,500,000 139,300 205,000 95,000 260,000 1,000,000 270,000 1,500,000 1,000,000 1,000,000 2,000,000 1,500,000 2,500,000 1,000,000 1,000,000 500,000 500,000 1,500,000 500,000 1,000,000 500,000 1,000,000 500,000 1,000,000 500,000 500,000 500,000

56,196 115,050 115,140 53,100 58,790 117,720 25,090 37,635 63,250 25,900 103,020 55,625 149,889 98,839 248,815 18,325 20,582 9,538 26,013 102,520 27,197 148,305 98,800 98,810 197,620 148,233 248,614 98,823 98,810 57,235 57,235 150,165 51,265 104,900 52,875 105,810 57,250 105,980 52,990 51,265 57,325

500 1,000,000 1,000,000 500,000 500,000 1,000,000 200,000 300,000 500,000 191,300 100,000,000 50,000,000 1,517,250 1,000,000 2,500,000 139,300 205,000 95,000 260,000 1,000,000 270,000 1,500,000 1,000,000 1,000,000 2,000,000 1,500,000 2,500,000 1,000,000 1,000,000 500,000 500,000 1,500,000 500,000 1,000,000 500,000 1,000,000 500,000 1,000,000 500,000 500,000 500,000

56,350 117,550 117,570 53,550 62,375 124,680 25,220 37,980 63,800 26,132 104,380 55,700 151,725 100,000 250,000 18,673 20,719 9,605 26,104 105,530 27,419 150,000 100,000 100,000 200,000 150,000 250,000 100,000 100,000 57,765 57,650 150,195 52,625 105,580 53,000 105,580 57,375 106,000 53,005 52,730 57,445

169

BHARTI TELE-VENTURES LIMITED

Schedules Annexed to and forming part of Accounts

Balance as on 1.04.04 Particulars 7.37% GOI 2014 9.39% GOI 2011 9.39% GOI 2011 7.50% J P Indus 2011 91 Days T Bills Maturing on 07/01/2005 91 Days T Bills Maturing on 07/01/2005 91 Days T Bills Maturing on 07/01/2005 91 Days T Bills Maturing on 07/01/2005 91 Days T Bills Maturing on 07/01/2005 91 Days T Bills Maturing on 07/01/2005 91 Days T Bills Maturing on 07/01/2005 91 Days T Bills Maturing on 07/01/2005 91 Days T Bills Maturing on 07/01/2005 91 Days T Bills Maturing on 14/01/2005 91 Days T Bills Maturing on 14/01/2005 91 Days T Bills Maturing on 14/01/2005 91 Days T Bills Maturing on 22/01/2005 91 Days T Bills Maturing on 22/01/2005 91 Days T Bills Maturing on 22/01/2005 91 Days T Bills Maturing on 28/01/2005 91 Days T Bills Maturing on 04/02/2005 91 Days T Bills Maturing on 04/02/2005 91 Days T Bills Maturing on 04/02/2005 91 Days T Bills Maturing on 04/02/2005 91 Days T Bills Maturing on 04/02/2005 91 Days T Bills Maturing on 12/02/2005 91 Days T Bills Maturing on 12/02/2005 91 Days T Bills Maturing on 12/02/2005 7.5% Gsec 2034 7.25 Andhra Bank 2014 7.55% GOI 2010 364 Days T Bills Maturing on 30/09/2005 364 Days T Bills Maturing on 30/09/2005 91 Days T Bills Maturing on 18/03/2005 91 Days T Bills Maturing on 18/03/2005 91 Days T Bills Maturing on 25/03/2005 91 Days T Bills Maturing on 25/03/2005 6.18% GOI 2005 6.18% GOI 2005 6.18% GOI 2005 7.05% Canara Bank 2014 7.15% Union Bank 2015 11.50% IDBI 2010 HD.C (M+55) .loating Rate Bonds 2007 5.87% HD.C NCD 2006 Kotak Mahindra Bank ING Vysya Bank 364 Days T Bills Maturing on 14/10/2005 364 Days T Bills Maturing on 14/10/2005 364 Days T Bills Maturing on 14/10/2005 Prudential ICICI M. Total Trade Others 10.55% BCL Debentures (Refer Note below) 10.90% BCL Debentures (Refer Note below) Total Investments Units 5 INR (Rs. 000) 51,060 3,331,437 Acquired on Amalgamation Units INR (Rs. 000) 65,423 27 Purchased During the Year Units 500,000 500,000 500,000 1,000,000 500,000 1,000,000 2,000,000 1,500,000 1,500,000 500,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 799,000 613,500 1,886,500 1,046,750 2,500,000 383,250 380,000 500,000 383,000 383,250 1,000,000 2,000,000 92,250 500,000 1,000,000 1,000,000 1,000,000 2,000,000 1,000,000 1,500,000 1,000,000 1,500,000 1,500,000 1,000,000 1,000,000 150 100 500,000 200 250 1,000 3,000 849,750 849,750 1,000,000 9,669,403 INR (Rs. 000) 53,500 57,325 57,325 99,480 49,403 98,807 197,620 148,203 148,201 49,403 98,807 98,800 98,800 98,791 98,791 78,929 60,590 186,324 103,379 247,900 37,811 37,491 49,330 37,787 37,834 98,684 197,369 9,103 50,100 100,110 102,530 94,980 189,949 98,680 148,020 98,670 147,990 150,525 100,370 100,270 150,000 100,000 59,388 200,000 250,000 95,444 286,333 80,599 80,599 94,881 100,000 9,085,769 300,471 81,018,513 Sale/Redemption Proceeds Units 500,000 500,000 500,000 1,000,000 500,000 1,000,000 2,000,000 1,500,000 1,500,000 500,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 799,000 613,500 1,886,500 1,046,750 2,500,000 383,250 380,000 500,000 383,000 383,250 1,000,000 2,000,000 92,250 500,000 1,000,000 1,000,000 1,000,000 2,000,000 1,000,000 1,500,000 1,000,000 1,500,000 INR (Rs. 000) 52,710 57,440 57,435 99,510 49,973 99,946 199,893 150,000 150,000 50,000 100,000 100,000 100,000 100,000 100,000 79,900 61,286 188,454 104,675 250,000 38,325 38,000 50,000 38,300 38,325 100,000 200,000 9,225 51,500 100,160 104,760 97,161 194,321 100,000 150,000 100,000 150,000 7,325,310 19,529 300,471 80,101,187

Note : Adjusted pursuant to amalgamation of BCL with BTVL

170

Schedules Annexed to and forming part of Accounts

25. a) During the year ended March 31, 2005, on a conservative basis, the Company has included the treasury income of the head office of erstwhile BCL and BIL in the Adjusted Gross Revenue (AGR) of the respective companies for the computation of Revenue share License fees and WPC charges for the period April, 2003 to March, 2005, while such inclusion is being contested by the Company, resulting in a higher charge to the Profit and Loss Account which amounts to Rs. 180,064 thousand, with a consequential impact on the net assets of the Company is as follows: (Rs. 000) Period 2003-04 2004-05 Total b) License fees 50,835 83,971 134,806 WPC 15,682 29,576 45,258 Total 66,517 113,547 180,064

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. The Company has adopted AS-29 Provisions, Contingent Liabilities and Contingent Assets issued by the ICAI during the period ended March 31, 2005, which necessitated change in its Accounting policy relating to capitalization of site restoration costs. As a result of the change in accounting policy, the profit for the period is lower by Rs. 51,548 thousand on account of depreciation, fixed assets and provisions are higher by 913,517 thousand with a consequential impact on the net assets of the Company. The movement of Provision made for Site Restoration Cost and leave encashment are given below : (i) Site Restoration Cost : (Rs. 000) Year ended March 31, 2005 Opening Balance as on April 1, 2004 Addition during the year Less : Utilised during the year Closing Balance as on March 31, 2005 (ii) Leave Encashment : (Rs. 000) Year ended March 31, 2005 Opening Balance as on April 1, 2004 Acquired under the scheme of amalgamation Addition during the year Less : Utilised during the year Closing Balance as on March 31, 2005 9,789 71,624 88,493 40,679 129,227 913,517 913,517

c)

d)

The Company has adopted AS-11(revised) issued by the Institute of Chartered Accountants of India during the period ended March 31, 2005, which necessitated change in its accounting policy relating to accounting for forward exchange contracts. As a result of this change in the accounting policy the profit for the period is higher by Rs.18,537 thousands, current liabilities are higher by Rs. 122,845 thousands and secured loan are lower by Rs. 122,845 thousands, with consequential impact on the net assets of the Company.

171

BHARTI TELE-VENTURES LIMITED

Schedules Annexed to and forming part of Accounts

26. Information about Business Segments - Primary .or the year ended March 31, 2005
(Rs. 000) Reportable Segments Mobile Service Broadband & Telephone Services Long Distance Services Enterprise Services Others Eliminations Total

Revenue Billing Revenue / Sale of Goods and Other Income Inter Segment Revenue Total Revenue Results Segment Result, Profit / (Loss) Operating Profit/(Loss) before .inance Expenses Net .inance Expense / (Income ) net Net Profit /(Loss) Provision for Tax Deferred Tax Expense Net Profit /(Loss) after tax Other Information Segment Assets Inter Segment Assets Advance Tax (Net of provision for tax) Total Assets Segmental Liabilities Inter Segment Liabilities Deferred Tax Liability Total Liabilities Capital Expenditure Depreciation Non Cash Expenses other than Depreciation (Amortisation)

52,774,090 794,866 53,568,956 9,931,452 9,931,452 9,931,452 9,931,452 85,630,271 920,746 86,551,017 64,213,131 22,180,852 86,393,983 24,408,708 6,877,832 974,295

10,642,645 664,544 11,307,189 1,437,465 1,437,465 1,437,465 1,437,465 17,905,094 7,821,542 25,726,636 3,679,996 23,741,405 27,421,401 4,371,934 1,673,535 102,179

11,091,243 7,596,963 18,688,206 4,686,201 4,686,201 4,686,201 4,686,201 20,273,214 13,073,257 33,346,471 12,739,284 12,835,337 25,574,621 3,247,497 1,407,680 69,130

4,921,654 48,576 4,970,230 2,362,204 2,362,204 2,362,204 2,362,204 3,346,207 1,324,688 4,670,895 890,107 1,960,336 2,850,443 802,275 192,232 4,087

12,308 367,329 379,637 (315,376) (315,376) 2,459,184 (2,774,560) 86,072 3,449,951 (6,310,583) 11,661,083 37,582,615 671,754 49,915,452 11,620,135 4,918 1,009,011 12,634,064 27,540 44,888 130,705

(9,472,278) (9,472,278) (60,722,848) (60,722,848) (60,722,848) (60,722,848)

79,441,940 79,441,940 18,101,946 18,101,946 2,459,184 15,642,762 86,072 3,449,951 12,106,739 138,815,869 671,754 139,487,623 93,142,653 1,009,011 94,151,664 32,857,954 10,196,167 1,280,396

* Includes Rs.50,000 thousand for license fee paid towards Unified Access License. Notes : 1. 2. 3. 4. 5. 6. 7. 8. Others represents the unallocated revenue, profit/(loss), assets & liabilities of the Corporate office of the Company. Segment results represents Profit/(loss) before .inance expenses and tax. Capital expenditure pertains to gross additions made to fixed assets during the year. Segment Assets include .ixed Assets, Capital Work-in-Progress, Pre-operative expenses pending allocation, Current Assets and Miscellaneous Expenditure to the extent not written off. Segment Liabilities include Secured and Unsecured loans, current liabilities and provisions. Inter segment assets / liabilities represent the inter segment account balances. 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. The accounting policies used to derive reportable segment results are consistent with those described in the Significant Accounting Policies note to the financial statements.

172

Schedules Annexed to and forming part of Accounts

9. a) The Company has accounted for Site Restoration Cost during the year, resulting in a higher charge of depreciation by Rs. 51,548 thousand in Mobile Services and Rs. Nil in Broadband and Telephone Services, Long Distance, Enterprise Services and Others, increase in .ixed assets and Provisions by Rs.913,517 thousand in Mobile Services and Rs. Nil in Broadband and Telephone Services, Long Distance, Enterprise Services and Others with corresponding impact on profit and loss for the year and net assets of the Company. The Company has adopted AS-11(revised) issued by the Institute of Chartered Accountants of India during the period ended March 31, 2005, which necessitated change in its accounting policy relating to accounting for forward exchange contracts. As a result of this change in the accounting policy the profit for the period is higher by Rs.5,128 thousands in Mobile Services, Rs. 13,409 thousand in Long Distance and Rs. Nil in Broadband and Telephone services, Enterprise Services and Others, current liabilities are higher by Rs. 122,845 thousands in Mobile Services and Rs. Nil in Broadband and Telephone Services, Long Distance, Enterprise Services and Others and secured loan are lower by Rs. 122,845 thousands in Mobile Services and Rs. Nil in Broadband and Telephone Services, Long Distance, Enterprise Services and Others, with consequential impact on the net assets of the Group.

b)

10. The Company was operating only in one primary and secondary segment. Therefore, the segment information for the year ended March 31, 2004 as required by AS-17 on segment reporting is not disclosed. 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 Segment Revenue from external customers based on geographical location of customers (including Other Income) Within India Others Carrying amount of Segment Assets by geographical location Within India Others Cost incurred during the year to acquire segment assets by geographical location Within India Others Notes: 1. 2. 3. Others represents the unallocated revenue, assets and acquisition of segment assets of the Company. Assets include .ixed Assets, Capital Work in Progress, Investments, Current Assets, Deferred Tax Asset and Miscellaneous Expenditure to the extent not written off. Cost incurred to acquire segment assets pertain to gross additions made to .ixed Assets during the year. As at March 31, 2005 As at March 31, 2004

71,888,881 7,553,059 79,441,940 135,553,034 3,934,589 139,487,623

631,540 631,540 54,669,835 29,710 54,699,545

32,151,849 706,105 32,857,954

20,103 20,103

173

BHARTI TELE-VENTURES LIMITED

Schedules Annexed to and forming part of Accounts

27. 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 Other Related Parties Name of the Related Party Bharti Comtel Limited Bharti Aquanet Limited Bharti Hexacom Limited Bharti Teletech Limited Bharti Broadband Limited (formerly Comsat Max Limited) Bharti Telesoft Limited Satcom Broadband Equipment Limited (formerly CMax Infocom Private Limited) Bharti Telesoft International Limited Bharti Enterprise Private Limited Tulip Projects Private Limited Mulberry Projects Private Limited Ambience Realty Private Limited Network i2i Limited Bharti Global Limited Singapore Telecommunications Limited Bharti Telecom Limited Bharti Overseas Trading Company Bharti Mobile Limited* Bharti Cellular Limited# Bharti Infotel Limited# Lily Projects Private Limited (formerly Bharti Infotrac Limited) Bharti Systel Limited** Teletech Services (India) Limited * # ** Relationship Subsidiary Company Subsidiary Company Subsidiary Company Associate Company Subsidiary Company Associate Company Subsidiary Company Associate Company Associate Company Associate Company Associate Company Associate Company Associate Company Associate Company Entity having significant influence Entity having significant influence Associate Partnership .irm Subsidiary Company Subsidiary Company Subsidiary Company Associate Company Associate Company Associate Company

Amalgamated with Bharti Cellular Limited with effect from August 6, 2004 (Refer Note 9 of Schedule 23). Amalgamated with Bharti Tele-Ventures Limited with effect from June 9, 2005 (Refer Note 9 of Schedule 23). Bharti Systel Limited merged with Bharti Teletech Limited with effect from 2nd November 2004 (appointed date April 1, 2003).

174

Related Party Transaction for 200405

Nature of Transaction Bharti Hexacom Limited Bharti Broadband Limited Satcom Broadband Equipment Limited 15 Bharti Aquanet Limited Bharti Comtel Limited Network i2i Limited Bharti Enterprise Private Limited Bharti Telecom Limited Bharti Telesoft Limited Bharti Teletech Limited Bharti Telesoft Intl. Limited Ambience Realty Pvt. Limited Tulip Mulberry Projects Projects Pvt. Pvt. Limited Limited

Schedules Annexed to and forming part of Accounts

(Rs. 000) Singapore Telecommunications Limited

Opening Balance .und transferred .und received Payment made for expenses incurred on our behalf Sale / transfer of assets Purchase of assets Expenses incurred on behalf of Group Companies Expenses incurred by Group Companies Sale of services to Group Companies Payment received against sale of services Purchase of Services from Group Companies Payment made to Group Companies for purchase of assets / service rendered Employee related transaction incurred on behalf of Group Companies Employee related transaction incurred by Group Companies on behalf of us Closing Balance Unsecured Loan Creditors Loan and Advances Debtors Closing Balance

(1,881) 16,172 (4,635) 27,208 (2,774) 13,250 (28,330) 215,038 (193,707) (85,951)

222,529 (92,624) 8,991

(8,218)

264,507

572 689 36 (689) 1,926 (118)

(1,389) 102,982 180 (2,982) 62 (5,179) 61 (275)

(3,475) (8)

95,625 (23,360)

828 (2,929)

7,920

175,198 1,326,818

75,986 109,420 (13,629) (156,900) 6,449 182 (20,282) 113 (113) (46,992)

(674,534) 35,294 (16,139) 784 (11,426) (67,591)

(1,179,193) (6,835) (267,882)

(1,425) (368,216) (107,722)

175

76,537

11,361

742,125

3,267

248,627

86,752

23,360

6,214

6,835

299

771

247

360

31,226 23,435 7,791 31,226

138,896 129,905 8,991 138,896

15 15 15

(554) (6,287) (3,660) (2,627) (6,287)

236,901 182,718 54,183 236,901

(247)

(360)

4,258 2,450 1,808 4,258

(26,129) (26,129) (26,129)

(13) (24,466) (24,466) (24,466)

95,625 95,625 95,625

4,113 4,113 4,113

7,920 7,920 7,920

54,941 54,941 54,941

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 Management Remuneration paid to Key Management personnel.

Related Party Transactions for 2003-04 Bharti Cellular Limited 17,832,136 Bharti Mobile Limited 827,570 981,620 (883,984) (2,645) 4,578 (1,307) Bharti Infotel Limited 14,665,292 8,486,588 (5,134,357) 2,246 (217) 23,926 (5,716) 160,554 (160,554) (747) 2 16,310 Bharti Comtel Limited (7) (677) 14 (670) (670) (670) Bharti Aquanet Limited (200) 42 463 305 305 305 Bharti Telecom Limited (519) 519

(Rs. 000) Bharti Bharti Ambience Teletech Overseas Trading Realty Private Limited Limited Limited 247 (855) 608 335 (345) 10 95,625 95,625 95,625 95,625

BHARTI TELE-VENTURES LIMITED

Schedules Annexed to and forming part of Accounts

Nature of Transaction Opening Balance

.unds transferred 27,275,506 .unds Received (27,611,592) Payment made for expenses incurred on our behalf Payment received for expenses incurred on behalf of Group Companies (56) Sale / transfer of assets Purchase of assets (1,925) Expenses incurred on behalf of Group Companies 247,631 Expenses incurred by Group Companies on behalf of us (5,583) Sale of Services to Group Companies 161,775 Payment recieved against sale of services rendered (161,775) Purchase of Services from Group Company Payment made to Group Company for purchase of service rendered by them Employee Related Transaction incurred on behalf of Group Companies 348 Employee related transaction incurred by Group Company on behalf of us (10,245) Closing Balance Loans and Advances Creditors Closing Balance 17,726,220 17,726,220 17,726,220

176

925,832 18,053,327 925,832 18,053,327

925,832 18,053,327

Schedules Annexed to and forming part of Accounts

28. Leases a) Operating Lease - As a Lessee The lease rentals charged during the year for cancellable/non-cancellable leases relating to rent ofbuilding premises and cell sites as per the agreements and maximum obligation on long-termnon-cancelable operating leases are as follows : Year ended March 31, 2005 (Rs. 000) Lease Rentals Obligations on non Cancellable leases : Not later than one year Later than one year and not later than five years Later than five years Total b) Operating Lease As a Lessor i) The Company has entered into a non cancellable lease arrangement to provide approximately 100,000 .iber 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, 2005 and accordingly, disclosures required by AS-19 is not provided. The future minimum lease payments receivable are: Year ended March 31, 2005 (Rs. 000) Not later than one year Later than one year and not later than five years Later than five years Total iii) 280,000 1,120,000 2,567,699 3,967,699 Year ended March 31, 2004 (Rs. 000) 2,445 58,362 60,807 1,227,643 Year ended March 31, 2004 (Rs. 000) 11,022

ii)

During the year, the Company has entered into a non-cancellable operating lease to take approximately 1,062 .iber pair kilometers of dark fiber against consideration in cash and exchange of approximately 373 fiber pair kilometers of dark fiber and bandwidth on IRU basis for a period of 15 years. This transaction has not commenced as at the Balance Sheet date.

c)

.inance Lease As a Lessee During the year the Group has taken certain vehicles on .inance lease. The reconciliation between the total of minimum lease payments at Balance Sheet date and their present value is as below : Minimum Lease Payments (Rs. 000) Not later than one year Later than one year but not later than five years 1,681 1,442 3,123 .uture .inance Charges (Rs. 000) 96 32 128 Present Value (Rs. 000) 1,585 1,410 2,995

177

BHARTI TELE-VENTURES LIMITED

Schedules Annexed to and forming part of Accounts

d) During the year, the Company entered into a composite IT outsourcing agreement, whereby the vendor supplied fixed assets and IT related services. 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 Companys 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. Under the IT Outsourcing Agreement, the Company has commitments to pay 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. 29. Earnings per Share (Basic and Diluted) : As at March 31, 2005 Basic and Diluted Earnings per Share : Nominal value of equity shares (Rs.) Profit attributable to equity shareholders (Rs. 000) (A) Weighted average number of equity shares outstanding during the year (B) Basic earnings per Share (Rs.) (A / B) * Dilutive effect on profit (Rs.000) (C) Profit attributable to equity shareholders for computing Diluted EPS (Rs.000) (D) = (A+C) Dilutive effect on weighted average number of equity shares outstanding during the year (E) Weighted Average number of equity shares and Equity Equivalent shares for computing Diluted EPS (.)=(B+E) Diluted earnings per share (Rs.) (D / .) * 30. a) 10/12,106,739 1,853,366,767 6.5323 75,652 12,182,391 37,018,694 1,890,385,461 6.4444 As at March 31, 2004 10/3,663 1,853,366,767 0.0020 0.0020

Diluted effect on weighted average number of equity shares and profit attributable is on account of .oreign Currency Convertible Bonds and Optionally Convertible Redeemable Debentures. Refer notes 10 and 11 above. The break-up of net Deferred Tax Asset/(Liability) as on March 31, 2005 is as follows : (Rs. 000) As at March 31, 2005 Deferred Tax Assets/(Liabilities) arising from: (i) Expenses charged in the financial statements but allowable as deductions in future years under the Income Tax Act (to the extent considered realizable) Unabsorbed depreciation allowance and business loss carried forward (to the extent considered realizable based on future profit projections) 361,670 9,940 As at March 31, 2004

(ii)

1,137,463

(iii) Difference between depreciation as per financial statement and depreciation as per Income Tax Return. Net Deferred Tax Asset/(Liability)

(2,508,144) (1,009,011)

(9,940)

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.

178

Schedules Annexed to and forming part of Accounts

b) The Company was, under its income tax assessments, being allowed Licence fee (Revenue Share) on a straight line basis over the licence period and was thus recognizing deferred tax accordingly. Subsequent to the year end, a decision by the Appellate authorities ruled that Licence fee (Revenue Share) would be deductible in the year of incurrence, resulting in a reversal of deferred tax asset recognized earlier to the extent of Rs. 511,672 thousand in these financial statements and in non-recognition of deferred tax asset on Licence fee (Revenue Share) from April 1, 2004.

31. There have been no cases of fraud noticed or reported during the year other than in respect of subscriber frauds aggregating Rs.53,400 thousand. The Company has initiated necessary action for recovery of these amounts, however on a conservative basis, the amount as above has been charged to the Profit and Loss Account under provision for doubtful debts. 32. The Company has undertaken to provide financial support, to its subsidiaries Bharti Comtel Limited and Satcom Broadband Equipment Limited (formerly CMax Infocom Limited). 33. Pursuant to the amalgamation as explained in Note 9 above, to that extent previous years figures are not comparable with the current year. 34. Previous year figures have been regrouped or reclassified, wherever necessary, to conform to current year classifications.

179

BHARTI TELE-VENTURES LIMITED

Balance Sheet Abstract and Companys General Business Profile

I. Registration Details Registration No. Balance Sheet Date II. %  $  ' 3 1 - 0 3 - 0 5 Date Month Year Rights Issue N I L Private Placement N I L State Code 5 5

Capital raised during the year (Amount in thousands) Public Issue N I L Bonus Issue N I L

III. Position of mobilisation and deployment of funds (Amount in thousands) Total Liabilities Total Assets 1 0 4 1 5 2 2 1 2 1 0 4 1 5 2 2 1 2 Sources of funds Paid up Capital* Reserves and Surplus 1 8 5 6 0 8 8 9 3 4 6 3 9 4 0 3 * includes Capital Suspense Account Secured Loans 3 9 5 9 8 7 6 0 Net .ixed Assets 1 0 7 5 9 4 4 5 9 Net Current Assets (2 1 2 0 9 0 1 6) Unsecured Loans 1 0 3 4 4 1 4 9 Investments 9 3 1 8 9 5 3 Miscellaneous Expenditure 5 8 3 4 8 3

Application of funds

IV.

Performance of the Company (Amount in thousands) Turnover 7 9 4 4 1 9 4 0 Profit/(Loss) Before Tax 1 5 6 4 2 7 6 2 Earning per Share in Rs. 6 . 5 3

Total Expenditure 6 3 7 9 9 1 7 8 Profit/(Loss) After Tax 1 2 1 0 6 7 3 9 Dividend Rate N I L

V.

Generic names of three principal products/services of the Company (as per monetary terms) Item Code No. (ITC Code) Product Description NO T A P P L I C A B L E

BASIC AND CELLULAR TELEPHONE SERVICES, BROADBAND & LONG DISTANCE COMMUNICATION SERVICES On behalf of the Board SUNIL BHARTI MITTAL Chairman & Managing Director AKHIL GUPTA Joint Managing Director

Place : New Delhi Date : July 26, 2005

DEVEN KHANNA Group .inancial Controller

NARENDER GUPTA SARVJIT SINGH DHILLON Group Company Secretary Group Chief .inancial Officer

180

STATEMENT PURSUANT TO SECTION 212 O. THE COMPANIES ACT 1956, RELATING TO SUBSIDIARY COMPANIES

1.

Name of Subsidiary

Bharti Hexacom Limited 31-03-2005

Bharti Aquanet Limited 31-03-2005

Satcom Broadband Equipment Limited 31-03-2005

Bharti Comtel Limited 31-03-2005

2. 3.

.inancial Year of the Subsidiary ended on : Shares of the Subsidiary held by the company on the above dates: (a) Nos. (b) .ace Value (c) Extent of Holding

122,752,000 1,227,520,000 68.5%

1,275,000 12,750,000 51%

1,275,000 12,750,000 51%

100,000 1,000,000 100%

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 31-03-2005 (b) Not dealt with in the Accounts of the Company for the year ended 31-03-2005 (Rs. In Thousands) Nil 322,581 Nil 7,171 Nil (9,097) Nil (19,950)

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 the year ended 31-3-2004 (b) Not dealt with in the Accounts of the Company for the year ended 31-03-2004 (Rs. in Thousands) Nil Nil Nil 12,735 Nil Nil Nil 3,037

On behalf of the Board SUNIL BHARTI MITTAL Chairman & Managing Director AKHIL GUPTA Joint Managing Director

Place : New Delhi Date : July 26, 2005

DEVEN KHANNA Group .inancial Controller

NARENDER GUPTA SARVJIT SINGH DHILLON Group Company Secretary Group Chief .inancial Officer

181