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1.8 (1.39%)
1.95 (1.5%) | Auditor's Report (Idea Cellular) | Year End : Mar '12 |
1. We have audited the attached Balance Sheet of Idea Cellular Limited
(''the Company'') as at March 31, 2012, the Statement of Profit and
Loss and the Cash Flow Statement of the Company for the year ended on
that date, both annexed thereto (together referred to as ''financial
statements''). 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 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 misstatements. 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 the 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. Without qualifying our opinion, we draw attention to Note 30 to the
financial statements, the Hon''ble Supreme Court of India, vide
judgment dated February 2, 2012 has quashed the Press Release dated
January 10, 2008 issued by the Department of Telecommunications (DoT)
and consequent grant of 122 licenses. The company and erstwhile Spice
have been issued 9 and 4 licenses respectively in January, 2008 which
have been cancelled due to the above mentioned order of the Hon''ble
Supreme Court.
Of the 13 licenses, 7 licenses are being operated by the Company and
balance 6 overlapping licenses have been impaired in previous financial
years. Vide a further order dated April 24, 2012 the Supreme Court has
allowed the company to operate these licenses upto September 7, 2012.
The impact, if any, on the operations of the said 7 service areas and
on the carrying values of these licenses as on March 31, 2012 amounting
to Rs 2,778 Mn, is dependent upon the steps taken by DoT and outcome of
the auction.
4. Without qualifying our opinion, we draw attention to Note 32 to the
financial statements, the Hon''ble High Court of Delhi on July 4, 2011
has reaffirmed its order dated February 5, 2010 sanctioning the Scheme
of Amalgamation of Spice Communications Limited (Spice) with the
Company. However the judgment transferred & vested unto the Department
of Telecommunications (DoT), the six telecom licenses granted to
erstwhile Spice along with the spectrum (including two operational
licenses for Punjab & Karnataka service areas) till the time permission
of DoT is granted for transfer thereof upon an application from the
Company to that effect. The Company has filed an appeal before the
Appellate Bench of Hon''ble High Court of Delhi, challenging the above
judgment dated July 4, 2011.The Appellate Bench of Hon''ble High Court
of Delhi through interim order has directed DoT to maintain status quo
in respect of the two operational licenses for Punjab & Karnataka and
not to take any coercive action for remaining four non-operational
licenses. The Appellate Bench of Hon''ble High Court of Delhi has
reserved the judgment on the said matter.
Since the matter is sub-judice, the outcome of which is uncertain at
this stage, we are unable to comment on the consequential impact, if
any, on the financial statements.
5. As required by the Companies (Auditor''s Report) Order, 2003,
(''the said Order''/''CARO'') issued by the Central Government in
terms of Section 227(4A) of the Companies Act, 1956, we enclose in the
annexure a statement on the matters specified in the paragraphs 4 and 5
of the said Order.
6. Further to our comments in paragraph 3 and 4 above and the Annexure
referred to in paragraph 5 above, we report as follows:
(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;
(b) in our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
those books;
(c) the Balance Sheet, the Statement of Profit and Loss and the Cash
Flow Statement dealt with by this report are in agreement with the
books of account;
(d) in our opinion, the Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement dealt with by this report are in compliance
with the Accounting Standards referred to in Section 211(3C) of the
Companies Act, 1956;
(e) in our opinion and to the best of our information and according to
the explanations given to us, the said financial statements read
together with the notes thereon 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:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2012;
(ii) in the case of the Statement of Profit and Loss, of the Profit of
the Company for the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
7. On the basis of the written representations received from the
Directors as on March 31, 2012 and taken on record by the Board of
Directors, none of the Directors is disqualified as on March 31, 2012
from being appointed as a director in terms of Section 274(1)(g) of the
Companies Act, 1956.
Annexure to the Auditors'' Report (Referred to in paragraph 5 of our
report of even date)
1. In respect of its fixed assets:
a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
b) The fixed Assets were physically verified during the year by the
Management in accordance with a regular programme of verification
which, in our opinion, provides for physical verification of all the
fixed assets at reasonable intervals. According to information and
explanation given to us the Management is in the process of reconciling
the results of such physical verification with the fixed assets
register. Management believes that differences if any, arising out of
such reconciliation are not expected to be material.
c) The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in our opinion, not affected the going concern
status of the Company.
2. In respect of its inventory:
a) As explained to us, the inventories, except for those lying with the
third parties, were physically verified during the year by the
Management at reasonable intervals.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
verification.
3. According to the information and explanations given to us, the
Company has neither granted nor taken any loans, secured or unsecured,
to/from companies, firms or other parties listed in the register
maintained under section 301 of the Companies Act, 1956.
4. In our opinion and according to the information and explanations
given to us, having regard to explanation that certain items purchased
are of special nature and suitable alternative sources are not readily
available for obtaining comparable quotations, there are adequate
internal control procedures commensurate with the size of the Company
and the nature of its business with regard to purchase of inventory and
fixed assets and for the sale of goods and services. During the course
of our audit, we have not observed any major weaknesses in such
internal control systems.
5. In our opinion and according to the information and explanations
given to us, there were no contracts, particulars of which needed to be
entered in the register maintained under section 301 of the Companies
Act, 1956 and hence provisions of paragraph 4(v)(b) of the said Order
relating to reasonableness of price having regard to prevailing market
price is not applicable to the Company.
6. According to the information and explanations given to us, the
Company has not accepted any deposits from the public to which the
directives issued by the Reserve Bank of India and the provisions of
sections 58A and 58AA of the Companies Act, 1956 and the rules framed
there under are applicable.
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8. We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956 in respect of telecommunication activities and are of the
opinion that prima facie, the prescribed accounts and records have been
made and maintained. We have, however, not made a detailed examination
of the records with a view to determining whether they are accurate or
complete.
9. According to information and explanations given to us in respect of
statutory dues:
a) The Company has generally been regular in depositing undisputed
dues, including Provident Fund, Employees'' State Insurance, Income
Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Cess and other
material statutory dues applicable to it with the appropriate
authorities. As explained to us, the Company did not have any dues on
account of Excise duty and Investor Education and Protection Fund.
b) There were no undisputed amount payable in respect of Income Tax,
Wealth Tax, Customs Duty, Cess and other material statutory dues in
arrears, as at March 31, 2012 for a period of more than six months from
the date they became payable.
c) There are no dues of Wealth Tax and Cess which have not been
deposited on account of any dispute. Details of dues of Income Tax,
Sales Tax, Service Tax, Customs duty and Entry Tax which have not been
deposited as on March 31, 2012 by the Company on account of disputes.
Name of the
Statute Nature of Period to which Amount Forum where the
Dues the amount
pertains (Rs Mn) dispute is pending
Customs
Act, 1962 Custom
Duty 2003-04 7.12 Customs Excise &
Service Tax
Appellate Tribunal
Haryana Land
Development Entry Tax 2002-03 9.52 Appellate Tribunal
Tax Act,
2001
Himachal
Pradesh
Entry Entry Tax 2010-11,
2011-12 25.45 Asst. Excise &
Taxation
Tax Act,
2010 Commissioner,
Shimla
Karnataka
Tax on
Entry of Entry tax 2004-05 8.92 Karnataka High
Court
Goods
Act, 1979
MP Entry
Tax Act,
1976 Entry Tax 1998-99 to
2000-01 0.13 Asst.Commissioner,
Entry Tax
MP Entry
Tax Act,
1976 Entry Tax 1998-99 to
2006-07 14.85 Commercial Tax
Tribunal -
Madhya Pradesh
MP Entry
Tax Act,
1976 Entry Tax 2007-08 21.51 Deputy Commissioner
(Appeals)
Orissa
Entry
Tax
Act, 1999 Entry Tax 2009-10 5.20 Orissa High Court
The Bihar
Value Added
Tax
Act, 2005 Entry Tax 2007-08,
2009-10 1.77 Commercial Tax
Officer
The Jammu
& Kashmir
Entry Tax Entry Tax 2009-10 to
2011-12 81.30 Srinagar High Court
on Goods
Act, 2000
The Uttar
Pradesh
Tax on
Entry Entry Tax 1999-00,
2001-02, 9.13 Allahabad High
Court
of Goods
Act, 2000 2002-03,
2003-04,
2006-07
The Uttar
Pradesh
Tax on
Entry Entry tax 2007-08 8.29 Assessing Officer,
of Goods
Act, 2000 Joint Commissioner
The Uttar
Pradesh
Tax on
Entry Entry Tax 2007-08 2.03 Commercial Tax
Tribunal
of Goods
Act, 2000
The Uttar
Pradesh
Tax on
Entry Entry Tax 2004-05 2.08 Joint Commissioner
(Appeals)
of Goods
Act, 2000
Uttar
Pradesh
Trade
Tax Act,
1948 Entry Tax 2005-06 0.30 Joint Commissioner
(Appeals)
Uttar
Pradesh
Trade
Tax
Act, 1948 Entry Tax 2001-02 to
2003-04 0.57 Uttarakhand High
Court
(Uttrakhand
Amendment)
Income
Tax
Act, 1961 Income Tax 2008-09,
2011-12 29.15 Assistant
Commissioner
of Income Tax
(TDS)
Income
Tax
Act, 1961 Income Tax 2002-03 to
2011-12 682.91 Commissioner of
Income Tax
(Appeals)
Income
Tax
Act, 1961 Income Tax 2003-04 to
2009-10 60.47 Income Tax
Appellate Tribunal
Income
Tax
Act, 1961 Income Tax 2007-08,
2008-09 0.28 Income Tax
Officer - TDS
Income
Tax
Act, 1961 Income Tax 2002-03 to
2004-05 4.15 Karnataka High
Court
Central
Sales
Tax Act,
1956 Sales Tax 2009-10 0.63 Commercial Tax
Officer
Delhi
Sales
Tax
Act, 1975 Sales Tax 2003-04,
2004-05 92.74 Additional
Commissioner
(Appeals)
Delhi
Value
Added
Tax
Act, 2004 Sales Tax 2007-08 14.05 Delhi Value
Added Tax
Appellate Tribunal
Gujarat
Sales Tax
Act, 1969 Sales Tax 1998-99 to
2001-02 7.04 Sales Tax
Appellate Tribunal
Gujarat
Sales Tax
Act, 1969 Sales Tax 2006-07 0.83 Sales Tax Officer
Kerala
Sales
Tax
Act, 1963 Sales Tax 1998-99 0.06 Deputy
Commissioner,
Sales Tax
Kerala
Sales
Tax
Act, 1963 Sales Tax 1997-98,
2000-01 0.20 Sales Tax
Appellate Tribunal
Madhya
Pradesh
Commercial
Tax Sales Tax 2000-01 0.31 CG Appellate Board
Act, 1994
Madhya
Pradesh
Commercial
Tax Sales Tax 2003-04 to
2007-08 26.77 Commercial Tax
Tribunal -
Act, 1994 Madhya Pradesh
Punjab VAT
Act, 2005 Sales Tax 2006-07,
2007-08 61.56 Asst. Excise &
Taxation
Commissioner,
Chandigarh
The Bihar
Value
Added
Tax Act,
2005 Sales Tax 2008-09 3.40 Joint
Commissioner,
Commerial
Tax (Appeals)
Department, Patna
The Jammu
& Kashmir
General Sales Tax 2009-10 to
2011-12 56.59 Srinagar High Court
Sales
Tax
Act, 1962
Uttar
Pradesh
Trade
Tax
Act, 1948 Sales Tax 2007-08 2.54 Allahabad High
Court
Uttar
Pradesh
Trade
Tax
Act, 1948 Sales Tax 2004-05 0.05 Joint Commissioner
(Appeals)
Uttar
Pradesh
Trade
Tax
Act, 1948 Sales Tax 1999-00,
2000-01,
2006-07, 5.18 Trade Tax Tribunal
2007-08,
2008-09
Uttar
Pradesh
Trade
Tax
Act, 1948 Sales Tax 2007-08,
2009-10 1.75 Deputy
Commissioner,
Sales Tax
(Uttrakhand
Amendment)
Uttar
Pradesh
Trade
Tax
Act, 1948 Sales Tax 2006-07 1.04 Joint Commissioner
(Appeals)
(Uttrakhand
Amendment)
Uttar
Pradesh
Value
Added Sales Tax 2007-08 0.22 Additional
Commissioner
(Appeals)
Tax
Act,
2008
Uttar
Pradesh
Value
Added Sales Tax 2006-07,
2007-08,
2009-10 34.13 Commercial Tax
Tribunal
Tax
Act, 2008 Bench II Lucknow
Uttar
Pradesh
Value
Added Sales Tax 2009-10 5.48 Deputy Commissioner
(Appeals)
Tax Act,
2008
Uttar
Pradesh
Value
Added Sales Tax 2011-12 0.32 Joint Commissioner
(Appeals)
Tax Act,
2008
Finance
Act, 1994 Service
tax 2005-06,
2006-07,
2007-08 8.19 Commissioner of
Central Excise
(Service
Tax
provisions) (Appeals)
Finance
Act, 1994 Service
tax 2004-05,
2005-06 7.36 Commissioner of
Service Tax
(Service
Tax
provisions)
Finance
Act, 1994 Service
Tax 2004-05 to
2009-10 1,186.93 Customs Excise
& Service Tax
(Service
Tax
provisions) Appellate Tribunal
Finance
Act, 1994 Service
Tax 1998-99,
2002-03 2.98 Punjab & Haryana
High Court
(Service
Tax
provisions)
10. The Company does not have accumulated losses at the end of the
financial year and the Company has not incurred cash losses in the
financial year and in the immediately preceding financial year.
11. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of dues to
banks and financial institutions.
12. According to the information and explanations given 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.
13. The Company is not a chit fund or a nidhi/mutual benefit
fund/society. Therefore, the provisions of paragraph 4 (xiii) of the
said Order are not applicable to the Company.
14. In our opinion and according to the information and explanations
given to us, the Company is not dealing in or trading in shares,
securities, debentures and other investments.
15. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions. Therefore, the provisions of
paragraph 4 (xv) of the said Order are not applicable to the Company.
16. In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purposes for
which they were obtained, other than temporary deployment pending
application.
17. In our opinion and according to the information and explanations
given to us and on an overall examination of the Balance Sheet, we
report that funds raised on the short term basis have not been used
during the year for long term investment.
18. According to information and explanations given to us, the Company
has not made preferential allotment of shares to parties and companies
covered in the register maintained under section 301 of the Companies
Act, 1956.
19. According to information and explanations given to us, the Company
has not issued any debentures during the year.
20. According to information and explanations given to us, during the
year covered by our audit report, the Company has not raised any money
by public issue.
21. To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no material fraud
on the Company has been noticed or reported during the year.
For Deloitte Haskins & Sells
Chartered Accountants
(Registration No. 117 366W)
Hemant M. Joshi
Partner
(Membership No.: 38019)
Place : Mumbai
Date : April 26, 2012 |
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