1. We have audited the attached Balance Sheet of Bharti Airtel Limited
(''Bharti Airtel'' or ''the Company'') as at March 31, 2011 and also the
Profit and Loss account and the Cash Flow statement for the year ended
on that date annexed thereto. These financial statements are the
responsibility of the Company''s management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2. 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 fi
nancial 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 signifi cant 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.
3. As required by the Companies (Auditor''s Report) Order, 2003 (as
amended) issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose
in the Annexure a statement on the matters specifi ed in paragraphs 4
and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, we
report that:
i. 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;
ii. 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;
iii. The balance sheet, Profit and loss account and cash fl ow
statement dealt with by this report are in agreement with the books of
account;
iv. In our opinion, the balance sheet, Profit and loss account and
cash fl ow statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956.
v. On the basis of the written representations received from the
directors, as on March 31, 2011, and taken on record by the Board of
Directors, we report that none of the directors is disqualifi ed as on
March 31, 2011 from being appointed as a director in terms of clause
(g) of sub- section (1) of Section 274 of the Companies Act, 1956.
vi. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India;
a) in the case of the balance sheet, of the state of affairs of the
Company as at March 31, 2011;
b) in the case of the Profit and loss account, of the Profit for the
year ended on that date; and
c) in the case of cash fl ow statement, of the cash flows for the year
ended on that date.
Annexure referred to in paragraph 4 of our report of even date Re:
BHARTI AIRTEL LIMITED (''the Company'')
(i) (a) The Company has maintained proper records showing full
particulars with respect to most of its fixed assets, however, is in
the process of updating quantitative and situation details with respect
to certain fixed assets in the records maintained by the Company.
(b) The capitalised fixed assets are physically verifi ed by the
management according to a regular programme designed to cover all the
items over a period of three years. Pursuant to the programme, a
portion of fixed assets and capital work in progress has been
physically verifi ed by the management during the year, which in our
opinion is reasonable having regard to the size of the Company and
nature of its assets. The Company is in the process of reconciling the
quantitative and situation details of the physical verifi cation
results with the records maintained by the Company.
(c) There was no substantial disposal of fixed assets during the year.
(ii) (a) The inventory (other than inventory with third parties) has
been physically verifi ed by the management during the year. In our
opinion, the frequency of verifi cation is reasonable.
(b) The procedures of physical verifi cation 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) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verifi cation.
(iii) The Company has neither granted nor taken any loans, secured or
unsecured, to companies, fi rms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956.
Accordingly, clause 4(iii) of the Companies (Auditor''s Report) Order,
2003 (as amended) is not applicable to the Company for the current
year.
(iv) 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 is an adequate
internal control system commensurate with the size of the Company and
the nature of its business for the purchase of inventory, fixed assets
and for the sale of goods and services. Further, on the basis of our
examination of the books and records of the Company, and 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 provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in Section 301 of the Act that need to be
entered into the register maintained under Section 301 have been so
entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements exceeding value of Rupees fi ve lakhs have been entered
into during the financial year 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 the size and nature of its business.
(viii) We have broadly reviewed the books of accounts maintained by
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under Section 209(1) (d) of the Companies
Act, 1956 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 records with a view to
determine whether they are accurate or complete.
(ix) (a) The Company is generally regular in depositing with
appropriate authorities undisputed statutory dues including provident
fund, investor education and protection fund, employees'' state
insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty
and cess and other material statutory dues applicable to it. The
provisions relating to excise duty is not applicable to the Company.
Further, since the Central Government has till date not prescribed the
amount of cess payable under Section 441A of the Companies Act, 1956,
we are not in a position to comment upon the regularity or otherwise of
the Company in depositing the same.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees'' state insurance, income-tax,
sales-tax, wealth- tax, service tax, customs duty, cess and other
material undisputed statutory dues were outstanding, at the year end,
for a period of more than six months from the date they became payable.
(c) According to the records of the Company, the dues outstanding of
income-tax, sales-tax, wealth-tax, service tax, customs duty and cess
on account of any dispute, are as follows:
Name of the Statutes Nature of Amount Disputed
the Dues (in Rs. Mn)
Andhra Pradesh VAT Act Sales Tax 4,661.28
Gujarat Sales Tax Act Sales Tax 0.93
West Bengal Sales Tax Act Sales Tax 0.40
West Bengal Sales Tax Act Sales Tax 0.01
West Bengal Sales Tax Act Sales Tax 0.28
West Bengal Sales Tax Act Sales Tax -
West Bengal Sales Tax Act Sales Tax 324.85
West Bengal Sales Tax Act Sales Tax 1,095.80
UP VAT Act Sales Tax 2.93
UP VAT Act Sales Tax 9.18
UP VAT Act Sales Tax 0.88
UP VAT Act Sales Tax 0.50
UP VAT Act Sales Tax 22.71
UP VAT Act Sales Tax 9.45
UP VAT Act Sales Tax -
UP VAT Act Sales Tax 4.36
UP VAT Act Sales Tax 0.54
Haryana Sales Tax Act Sales Tax 2.80
Haryana Sales Tax Act Sales Tax 1.35
Haryana Sales Tax Act Sales Tax 1.80
Punjab Sales Tax Act Sales Tax 0.61
Madhya Pradesh Commercial
Sales Tax Act Sales Tax 22.08
Madhya Pradesh Commercial
Sales Tax Act Sales Tax 15.44
UP VAT Act Sales Tax 1.13
Karnataka Sales Tax Act Sales Tax 3,449.57
Kerala Sales Tax Act Sales Tax 0.80
Bihar Value Added Sales
Tax Act Sales Tax 11.33
Bihar Value Added Sales
Tax Act Sales Tax 19.87
Delhi Value Added Tax Act Sales Tax 12.75
J&K General Sales Tax Sales Tax 28.85
Karnataka Sales Tax Act Sales Tax 0.15
Tamil Nadu Sales Tax Act Sales Tax 634.28
Sub Total (A) 1 0,336.88
Finance Act, 1994 (Service
tax provisions) Service Tax 1,458.99
Finance Act, 1994 (Service
tax provisions) Service Tax 46.81
Finance Act, 1994 (Service
tax provisions) Service Tax 0.45
Finance Act, 1994 (Service
tax provisions) Service Tax 231.02
Finance Act, 1994 (Service
tax provisions) Service Tax 19.77
Finance Act, 1994 (Service
tax provisions) Service Tax 334.52
Finance Act, 1994 (Service
tax provisions) Service Tax -
Finance Act, 1994 (Service
tax provisions) Service Tax 5.56
Finance Act, 1994 (Service
tax provisions) Service Tax 0.97
Finance Act, 1994 (Service
tax provisions) Service Tax 1.17
Finance Act, 1994 (Service
tax provisions) Service Tax 3.66
Sub Total (B) 2,102.91
Name of the Statue Period to Which Forum where the dispute is
it Relates pending
Andhra Pradesh VAT Act 2000-02; 2005-08; High Court of Andhra Pradesh
2009-10
Gujarat Sales Tax Act 2006-07 Commissioner (Appeals)
West Bengal Sales Tax
Act 1996-97 DCCT - Appellate Stage
West Bengal Sales Tax
Act 1997-98 DC Appeals
West Bengal Sales Tax
Act 1995-96 The Commercial Tax Officer
West Bengal Sales Tax
Act 2004-05 West Bengal Taxation Tribunal
West Bengal Sales Tax
Act 2005-06 DCCT Appeal
West Bengal Sales Tax
Act 2006-08 Appellate Authority
UP VAT Act 2004-05; 2006-08 Assessing Officer
UP VAT Act 2002-10 Reviewing authorities
UP VAT Act 2009-10 Additional Commissioner
Appeals
UP VAT Act 2003-04 Joint Commissioner Appeals
UP VAT Act 2003-07; 2009-10 Joint Commissioner Appeals
UP VAT Act 2006-07; High Court of Judicature at
2010 Allahabad, Lucknow Bench
UP VAT Act 2008-09 Assistant Commissioner of Sales tax
UP VAT Act 2006-07; 2008-09 Commercial Taxes Tribunal
UP VAT Act 2005-06 Appellate Authority
Haryana Sales Tax Act 2002-2004 Joint Commissioner
Haryana Sales Tax Act 2009-10 Assessing Officer
Haryana Sales Tax Act 2007-09 Finance Commissioner (Appeal)
Punjab Sales Tax Act 2001-02 Joint Director (Enforcement)
Madhya Pradesh Commercial
Sales Tax Act 1997-01 & 2003-06Deputy Commissioner Appeals
& 2007-08
Madhya Pradesh Commercial
Sales Tax Act 2007-08 Appellate Authority
UP VAT Act 2002-05 Assistant Commissioner
Karnataka Sales Tax Act 2002-09 Tribunal
Kerala Sales Tax Act 2009-11 Intelligence Offi cer Squad No. V,
Palakkad
Bihar Value Added Sales
Tax Act 2005-07 Joint Commissioner Appeals
Bihar Value Added Sales
Tax Act 2006-07; 2007-08 Assistant Commissioner
Delhi Value Added Tax
Act 2005-06 Sales Tax Department
J&K General Sales Tax 2004-07 High Court
Karnataka Sales Tax Act 2005-06 High Court
Tamil Nadu Sales Tax Act1996-2001 Commercial Tax Officer
Sub Total (A)
Finance Act, 1994
(Service tax provisions)1997-2009; Customs, Excise and Service Tax
2010-11 Appellate Tribunal
Finance Act, 1994
(Service tax provisions)1999-00, 2002-08 Commissioner (Appeals)
Finance Act, 1994
(Service tax provisions)2004-06 Deputy Commissioner Appeals
Finance Act, 1994
(Service tax provisions)2000-01 & Suppdt. of Mohali
2005-08
Finance Act, 1994
(Service tax provisions)2004-07 Commissioner of Excise
Finance Act, 1994
(Service tax provisions)2004-08 Commissioner of Service Tax
Finance Act, 1994
(Service tax provisions)2006-07 Joint Commissioner of Central
Excise
Finance Act, 1994
(Service tax provisions)2001-02; Deputy Commissioner of Service
2005-06 Tax (Appeals)
Finance Act, 1994 (Service
tax provisions) 1994-95 Additional Commissioner of
Service Tax
Finance Act, 1994 (Service
tax provisions) 1994-95; Assistant Commissioner of
2003-04 Service Tax
Finance Act, 1994 (Service
tax provisions) 2006-07 Joint Commissioner of Service Tax
Sub Total (B)
Name of the Statutes Nature of Amount Disputed
the Dues (in Rs. Mn)
Income Tax Act, 1961 Income Tax 2,884.73
Income Tax Act, 1961 Income Tax 5.95
Income Tax Act, 1961 Income Tax 7,958.59
Income Tax Act, 1961 Income Tax 1,602.90
Income Tax Act, 1961 Income Tax 1,296.30
Sub Total (C) 13,748.46
Customs Act-1962 Custom Act 2,167.15
Customs Act-1962 Custom Act 31.19
Sub Total (D) 2,198.35
Name of the Statue Period to Which Forum where the dispute is
it Relates pending
Income Tax Act, 1961 1994-2011 Commissioner of Income Tax
(Appeals)
Income Tax Act, 1961 1994-1995; High Court
1996-97;
1999-00; 2003-05
Income Tax Act, 1961 2006-07 Dispute Resolution Panel
Income Tax Act, 1961 1996-97; 2005-10 Assessing Officer
Income Tax Act, 1961 1997-98, 2000-01 Income Tax Appelate Tribunal
to 2006-07
Sub Total (C)
Customs Act-1962 2001-04; 2007-08 Commisioner of Customs
Customs Act-1962 2005-06 Customs, Excise and Service
Tax
Appellate Tribunal, Chennai
Sub Total (D)
The above mentioned figures represent the total disputed cases without
any assessment of Probable, Possible and Remote, as done in case of
Contingent Liabilities. Of the above cases, total amount deposited in
respect of Sales Tax is Rs. 1,024 Mn, Service Tax is Rs. 15 Mn, Income Tax
is Rs. 1,572 Mn and Custom Duty is Rs. 74 Mn.
(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial
institution, bank or debenture holders.
(xii) According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
granted loans and advances on the basis of security by way of pledge of
shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/
mutual benefi t fund/society. Therefore, the provisions of clause
4(xiii) of the Companies (Auditor''s Report) Order, 2003 (as amended)
are not applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order,
2003 (as amended) are not applicable to the Company.
(xv) According to the information and explanations given to us, the
Company has given guarantee for loans taken by others from bank or fi
nancial institutions, the terms and conditions whereof in our opinion
are not prima facie prejudicial to the interest of the Company.
(xvi) Based on information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained.
(xvii) According to the information and explanations given to us and on
overall examination of the balance sheet of the Company, funds
amounting to Rs. 40,796 Mn raised on short- term basis (primarily
represented by capital creditors) have been used for long-term
investment (primarily represented by fixed assets).
(xviii) The Company has not made any preferential allotment of shares
to parties or companies covered in the register maintained under
Section 301 of the Companies Act, 1956.
(xix) The Company has created security or charge in respect of
debentures outstanding at the year end.
(xx) The Company has not raised any money by public issues during the
year.
(xxi) According to the information and explanations furnished by the
management, which have been relied upon by us, there were no frauds on
or by the Company noticed or reported during the course of our audit
except few cases of fraud, primarily in the nature of unauthorized use
of Company''s services, on the Company by employees and external parties
estimated at Rs. 5 Mn and Rs. 63.7 Mn, respectively, as detected by the
management for which appropriate steps were taken to recover the amount
and Rs. 2.8 Mn out of such estimated amounts, has been recovered by the
Company.
For S.R. BATLIBOI & ASSOCIATES
Firm Registration No. 101049W
Chartered Accountants
per Prashant Singhal
Partner
Membership No. 93283
Place: New Delhi
Date: May 5, 2011
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