Bharti Telecom

1.  We have audited the attached Balance Sheet of Bharti Telecom
 Limited (the Company) as at March 31, 2009 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 Companys 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
 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.
 
 3.  As required by the Companies (Auditors 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 specified 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 flow 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
 flow 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, 2009, and taken on record by the Board of
 Directors, we report that none of the directors is disqualified as on
 March 31, 2009 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, 2009;
 
 b) in the case of the profit and loss account, of the loss for the year
 ended on that date; and
 
 c) in the case of cash flow statement, of the cash flows for the year
 ended on that date.
 
 Annexure referred to in paragraph 3 of our report of even date Re:
 BHARTI TELECOM LIMITED (the Company)
 
 (i) (a) The Company has maintained proper records showing full
 particulars, including quantitative details and situation of fixed
 assets.
 
 (b) Fixed assets have been physically verified by the management during
 the year and no material discrepancies were identified on such
 verification.
 
 (c) There was no substantial disposal of fixed assets during the year.
 
 (ii) Due to the nature of the business, clause (ii) of the Order,
 relating to the physical verification of inventory is not applicable to
 the Company.
 
 (iii) 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.
 
 (iv) Considering the nature of business of the Company, the Clause
 4(iv) of the Companies (Auditors Report) Order, 2003 (as amended) to
 the extent pertaining to internal control system for purchase of fixed
 assets, inventory & sale of goods and services is not applicable to the
 Company.
 
 (v) As informed, there are no parties that require to be listed in the
 register maintained under Section 301 of the Companies Act, 1956.
 Therefore, the provisions of clause 4(v) of the Companies (Auditors
 Report) Order, 2003 (as amended) are not applicable to the Company.
 
 (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) To the best of our knowledge and as explained, the Central
 Government has not prescribed maintenance of cost records under clause
 (d) of sub-section (1) of section 209 of the Companies Act, 1956 for
 the products of the Company.
 
 (ix) (a) Undisputed statutory dues including income-tax have been
 regularly deposited with the appropriate authorities. The provisions
 relating to provident fund, investor education and protection fund, or
 employees state insurance, sales-tax, wealth-tax, service tax, customs
 duty, excise duty, cess are not applicable to the Company.
 
 (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,
 wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and
 other 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 on account of dispute are as follows:
 
 Name of          Nature of dues    Amount
 the statute                      (in 000)
 
 Income Tax       Income-Tax           438
 Act, 1961
 
 Period to which the             Forum where the dispute
 amount relates                  is pending
 
 FY 1997-98                      Income-Tax Appellate
                                 Tribunal
 
 (x) The Company has no accumulated losses at the end of the financial
 year. However, it has incurred cash losses in the current financial
 year ended as well as in the immediately preceding financial year.
 
 (xi) The Company did not have any dues to any financial institution,
 bank or debenture holders, during the year.
 
 (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 benefit fund / society. Therefore, the provisions of clause
 4(xiii) of the Companies (Auditors Report) Order, 2003 (as amended)
 are not applicable to the Company.
 
 (xiv) In respect of dealing/trading in shares, securities, debentures
 and other investments, in our opinion and according to the information
 and explanations given to us, proper records have been maintained of
 the transactions and contracts and timely entries have been made
 therein. The shares, securities, debentures and other investments have
 been held by the Company, in its own name.
 
 (xv) According to the information and explanations given to us, the
 Company has not given any guarantee for loans taken by others from bank
 or financial institutions.
 
 (xvi) The Company did not have any term loans outstanding during the
 year.
 
 (xvii) According to the information and explanations given to us and on
 an overall examination of the balance sheet of the Company, we report
 that funds amounting to Rs 21,340 thousand raised on short-term basis
 (represented by current liabilities) have been used for long-term
 investment.
 
 (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 did not have any outstanding debentures during the
 year.
 
 (xx) The Company has not raised any money through a public issue during
 the year.
 
 (xxi) Based upon the audit procedures performed for the purpose of
 reporting the true and fair view of the financial statements and as per
 the information and explanations given by the management, we report
 that no fraud on or by the Company has been noticed or reported during
 the course of our audit.
 
                                          For S.R. BATLIBOI & ASSOCIATES
                                                   Chartered Accountants
 
                                                    per Prashant Singhal
 Place : New Delhi                                               Partner
 Date  : April 29, 2009                            Membership No.: 93283