Mar 31, 2023
To The Members of BHARTI AIRTEL LIMITED
Report on the Audit of the Standalone Financial
Statements
Opinion
We have audited the accompanying standalone financial statements of BHARTI AIRTEL LIMITED (âthe Companyâ), which comprise the Standalone Balance Sheet as at March 31, 2023, and the Standalone Statement of Profit and Loss (including Other Comprehensive Loss), the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows for the year then ended, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as âthe Standalone Financial Statementsâ).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 (âthe Actâ) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (âInd ASâ) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, and its loss, total comprehensive loss, its changes in equity and its cash flows for the year ended on that date.
We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditing specified under section 143(10) of the Act (âSAsâ). Our responsibilities under those Standards are further described in the Auditorâs Responsibility for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (âICAIâ) together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIâs Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Financial Statements.
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Standalone Financial Statements of the current period. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.
Sr. No |
Key Audit Matter |
Auditor''s Response |
2 |
Assessment of recoverability relating to Deferred tax assets (âDTAâ) recognized on carry forward losses: The DTA balance as at March 31, 2023 of H1,46,439 Mn primarily relates to DTA on carry forward losses. The Company exercises significant judgement in assessing the recoverability of DTA relating to carry forward losses. In estimating the recoverability of DTA on carry forward losses, management uses inputs such as internal business and tax projections over a 10 year period. Recoverability of DTA on carry forward losses is considered a key audit matter as it is sensitive to the assumptions used by management in projecting the future taxable income, the reversal of deferred tax liabilities which can be scheduled, and tax planning strategies. Refer note 2.11 âTaxesâ for accounting policies, note 3.1.c âTaxesâ under the head âKey sources of estimation uncertaintiesâ, and note 11 âIncome taxesâ for disclosures related to taxes in the standalone financial statements. |
Principal Audit Procedures We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Companyâs process for determining the recoverability of the DTA relating to carry forward losses which included amongst others controls over the assumptions and judgments used in the projections of future taxable income and related tax projections. To assess the Companyâs ability to estimate future taxable income, we compared the Companyâs previous forecasts to actual results to determine its reasonableness and examined the consistency of projections used for assessing DTA recoverability with business projections used for goodwill impairment assessment. We involved our tax specialist in evaluating tax planning strategies, opinion obtained by the Company from its tax advisors, if any and interpretation of tax laws used by the Company in the tax projections used for supporting the recoverability of DTA. |
3 |
Provisions and contingencies relating to regulatory and tax matters: The Company has recognised provisions for probable outflows relating to legal, tax and regulatory matters and have disclosed contingencies for legal, tax and regulatory matters where the obligations are considered possible. The Company in consultation with the legal, tax and other advisers assess a likelihood that a pending matter relating to tax, legal or regulatory will succeed. In performing this assessment, the Company applies judgement and has recognised provisions based on whether additional amounts will be payable and has disclosed contingent liabilities where economic outflows are considered possible. We have considered the provisions recorded and the contingencies relating to tax, legal and regulatory matters as a key audit matter as there is significant judgement to determine the possible outcome of matters under dispute and determining the amounts involved, which may vary depending on the outcome of the matters. Refer note 2.17 âContingenciesâ for accounting policies, note 3.1.e âContingent liabilities and provisionsâ under the head âKey sources of estimation uncertaintiesâ, note 19 âProvisionsâ for disclosure related to provisions for subjudice matters, note 4(viii) for AGR matter and Note 22(I) in respect of details of Contingent liabilities in the standalone financial statements. |
Principal Audit Procedures: We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls relating to: (1) identification, evaluation, recognition of provisions, disclosure of contingencies for matters under review or appeal with relevant adjudicating authorities by considering the assumptions and information used by management in performing this assessment; (2) completeness and accuracy of the underlying data / information used in the assessment. For tax matters, with the help of our tax specialist, we evaluated the reasonableness of the managementâs positions by considering tax regulations and past decisions from tax authorities, new information and opinions obtained by the Company from its external tax advisors, where applicable. For regulatory matters, we evaluated the reasonableness of the managementâs positions by considering relevant assessment orders, court judgements, statutes, interpretations and amendments, circulars and external legal opinion obtained by the Company, where applicable. We also evaluated the disclosures provided in the notes to the standalone financial statements concerning these matters. |
Sr. No |
Key Audit Matter |
Auditor''s Response |
1 |
Revenue from operations: We considered accuracy of revenues relating to prepaid and postpaid mobile services as a key audit matter because of the complexity of the IT systems, significance of volumes of data processed by the IT systems and the impact of changing pricing models (tariff structures, incentive arrangements and discounts, etc.). Refer note 2.18 âRevenue recognitionâ for accounting policies, note 3.2.d âRevenue recognition and presentationâ under the head âCritical judgements in applying the Companyâs accounting policiesâ and note 23 on disclosures related to Revenue from operations in the standalone financial statements |
Principal Audit Procedures We obtained an understanding, evaluated the design and tested the operating effectiveness of (i) the general IT controls, automated controls, interfaces, control over plan configuration and system generated reports relevant for revenue recognition by involving our IT specialist; and (ii) controls over recording of revenue relating to prepaid and postpaid mobile services; and (iii) control over reconciliations. We tested inter se reconciliations between relevant IT systems (such as billing system, prepaid application systems, active customer database) and with general ledger, and performed verification of revenue recognised, deferred and unbilled revenue. We made test calls to determine the accuracy of revenue recorded. We verified the appropriateness of the accounting policies and the disclosures related to Revenue from operations in notes 2.18, 3.2.d and 23 respectively in the standalone financial statements. |
Sr. No |
Key Audit Matter |
Auditor''s Response |
4 |
Impairment of investment in a Joint venture (JV), Indus Towers Limited (ITL) Investments in JV ITL as at March 31, 2023 amounts to H 244,176 Mn (net of impairment). During the year ended March 31, 2023, the Company assessed that there are indicators of impairment in respect of its investment in ITL mainly arising from the financial condition of one of the largest customer of ITL and its inability to pay outstanding dues to ITL and determined the recoverable amount for its investment in ITL. The Company, considering the amount of recoverable value so determined recorded an impairment charge for investment of H 42,764 Mn which is disclosed as an exceptional item. We have considered the impairment evaluation as a key audit matter as the determination of recoverable amount of investment based on value-in-use is complex and subjective as it involves significant estimates and judgements in determining the assumptions such as the revenue growth, EBITDA margins, discount rates applied to estimated future cash flows and growth rate, especially when there is uncertainty about the going concern of one of the largest customer of ITL. Refer Note 2.9.a for accounting policy and Note 7 for disclosure relating to investments in joint ventures. |
Principal Audit Procedures We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over Companyâs forecasting process and investment impairment review including controls related to the review of revenue growth, EBITDA margins and the assumptions used to develop the discount rates applied to estimated future cashflows and long term growth rates. We evaluated reasonableness of managementâs basis of determining value in use and assumptions related to revenue growth, EBITDA margins, discount rates and long term growth rates by considering (i) the current and past performance and (ii) the consistency with external sources of information, where available. We involved our internal valuation specialists to assist in the evaluation of the appropriateness of significant assumptions like discount rate and long term growth rates. We also evaluated the impairment disclosures against the requirements of Ind AS 36 - Impairment of Assets. We tested the appropriateness of the accounting policies and disclosures related to Investments in notes 2.9.a and 7 respectively in the standalone financial statements. |
Information Other than the Financial Statements and Auditorâs Report Thereon
The Companyâs Board of Directors is responsible for the other information. The other information comprises the Management Discussion and Analysis, Boardâs Report including Annexures to the Boardâs Report, Business Responsibility & Sustainability Report and Corporate Governance Report, but does not include the Consolidated Financial Statements, Standalone Financial Statements and our auditorâs reports thereon.
Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance including other comprehensive income/
(loss), changes in equity and cash flows of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the Standalone Financial Statements, Board of Directors is responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Companyâs Board of Directors are also responsible for overseeing the Companyâs financial reporting process.
Auditorâs Responsibility for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠I dentify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to standalone financial statements in place and the operating effectiveness of Companyâs internal financial controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.
⢠Conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Standalone Financial Statements may be influenced. We consider quantitative
materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Standalone Financial Statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditorâs report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act, based on our audit, we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b) I n 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 Standalone Balance Sheet, the Standalone Statement of Profit and Loss including Other Comprehensive loss, the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid Standalone Financial Statements comply with Ind AS specified under Section 133 of the Act.
e) On the basis of the written representations received from the directors as on March 31, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2023 from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls with reference to Standalone Financial Statements of the Company and the operating effectiveness of such controls, refer to our separate
Report in âAnnexure Aâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companyâs internal financial controls with reference to Standalone Financial Statements.
g) With respect to the other matters to be included in the Auditorâs Report in accordance with the requirements of section 197(16) of the Act, as amended,
In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.
h) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statements (Refer Note 22(I) to the Standalone Financial Statements).
ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts (Refer Note 19 to the Standalone Financial Statements).
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company (Refer Note 18 to the Standalone Financial Statements).
iv. (a) The Management has represented that, to the
best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(b) The Management has represented, that, to the best of its knowledge and belief, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (âFunding Partiesâ), with
the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(c) Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.
v. The final dividend proposed in the previous year, declared and paid by the Company during the year is in accordance with section 123 of the Act, as applicable.
As stated in note 15(h) to the Standalone Financial Statements, the Board of Directors of the Company has proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend proposed is in accordance with section 123 of the Act, as applicable.
vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company w.e.f. April 1, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014, as amended, is not applicable for the financial year ended March 31, 2023.
2. As required by the Companies (Auditorâs Report) Order, 2020 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
For Deloitte Haskins & Sells LLP
Chartered Accountants
(Firm''s Registration No. 117366W/W-100018)
Vijay Agarwal
Partner
(Membership No. 094468)
(UDIN: 23094468BGYIOH1932)
Place: New Delhi
Date: May 16, 2023
Mar 31, 2022
Sr. No |
Key Audit Matter |
Auditorâs Response |
1 |
Revenue from operations: We considered accuracy of revenues relating to Mobile services and Airtel Business segments as a key audit matter because of the complexity of the IT systems, significance of volumes of data processed by the IT systems and the impact of changing pricing models (tariff structures, incentive arrangements and discounts, etc.). In addition, for Airtel Business, we also considered occurrence of revenue as a key audit matter due to the risk that revenue may be recorded without active service links being provided to customers or for contracts that are cancelled / not renewed. Refer note 2.18 âRevenue recognitionâ for accounting policies, note 3.2.d âRevenue recognition and presentationâ under the head âCritical judgements in applying the Companyâs accounting policiesâ and note 23 on disclosures related to Revenue from operations in the Standalone Financial Statements |
Principal Audit Procedures We obtained an understanding, evaluated the design and tested the operating effectiveness of (i) the general IT controls, automated controls, interfaces, control over plan configuration and system generated reports relevant for revenue recognition by involving our IT specialist; (ii) controls over recording of revenue relating to Mobile Services and Airtel Business segments; and (iii) control over reconciliations performed between the number of links / connection as per the active customer base to the billing system relating to Airtel Business Segment. We tested inter se reconciliations between relevant IT systems (such as billing system, prepaid application systems, active customer database) and with general ledger, and performed verification of revenue recognised, deferred and unbilled revenue. We made test calls to determine the accuracy of revenue recorded and tested the rating validation. We verified the appropriateness of the accounting policies and the disclosures related to Revenue from operations in notes 2.18, 3.2.d and 23 respectively in the Standalone Financial Statements. |
Sr. No |
Key Audit Matter |
Auditorâs Response |
2 |
Assessment of recoverability relating to Deferred tax assets (âDTAâ) recognized on carry forward losses: The DTA balance as at March 31, 2022 of ''164,486 Mn primarily relates to DTA on carry forward losses. The Company exercises significant judgement in assessing the recognition and recoverability of DTA relating to carry forward losses. In estimating the recoverability of DTA on carry forward losses, management uses inputs such as internal business and tax projections over a 10 year period. The recognition and recoverability of DTA on carry forward losses is considered a key audit matter as it is sensitive to the assumptions used by management in projecting the future taxable income, the reversal of deferred tax liabilities which can be scheduled, and tax planning strategies. Refer note 2.11 âTaxesâ for accounting policies, note 3.1.c âTaxesâ under the head âKey sources of estimation uncertaintiesâ, and note 11 ââIncome taxesâ for disclosures related to taxes in the standalone financial statements. |
Principal Audit Procedures We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Companyâs process for determining the recognition and recoverability of the DTA relating to carry forward losses which included amongst others controls over the assumptions and judgments used in the projections of future taxable income and related tax projections and control over evaluating whether the criteria mentioned in para 99 of Ind AS 36 are met so as to consider the most recent projections of future cashflows made in a preceding period for the current year assessment. To assess the Companyâs ability to estimate future taxable income, we compared the Companyâs previous forecasts to actual results to determine its reasonableness and examined the consistency of projections used for assessing DTA recoverability with business projections used for goodwill impairment assessment and tested whether the criteria mentioned in para 99 of Ind AS 36 are met. We involved our tax specialist in evaluating tax planning strategies, opinion obtained by the Company from its tax advisors and interpretation of tax laws used by the Company in the tax projections used for supporting the recoverability of DTA. |
3 |
Provisions and contingencies relating to relating to regulatory and tax matters: The Company has recognised provisions for probable outflows relating to legal, tax and regulatory matters and have disclosed contingencies for legal, tax and regulatory matters where the obligations are considered possible. The Company in consultation with the legal, tax and other advisers assess a likelihood that a pending matter relating to tax, legal or regulatory will succeed. In performing this assessment, the Company applies judgement and has recognised provisions based on whether additional amounts will be payable and has disclosed contingent liabilities where economic outflows are considered possible. We have considered the provisions recorded and the contingencies relating to tax, legal and regulatory matters as a key audit matter as there is significant judgement to determine the possible outcome of matters under dispute and determining the amounts involved, which may vary depending on the outcome of the matters. Refer note 2.17 âContingenciesâ for accounting policies, note 3.1.e âContingent liabilities and provisionsâ under the head âKey sources of estimation uncertaintiesâ, note 19 âProvisionsâ for disclosure related to provisions for subjudice matters, note 4(vi) for AGR matter and Note 22(I) in respect of details of Contingent liabilities in the Standalone Financial Statements. |
Principal Audit Procedures: We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls relating to: (1) identification, evaluation, recognition of provisions, disclosure of contingencies for matters under review or appeal with relevant adjudicating authorities by considering the assumptions and information used by management in performing this assessment; (2) completeness and accuracy of the underlying data / information used in the assessment. For tax matters, with the help of our tax specialist, we evaluated the reasonableness of the managementâs positions by considering tax regulations and past decisions from tax authorities, new information and opinions obtained by the Company from its external tax advisors, where applicable. For regulatory matters, we evaluated the reasonableness of the managementâs positions by considering relevant assessment orders, court judgements, statutes, interpretations and amendments, circulars and external legal opinion obtained by the Company, where applicable. We also evaluated the disclosures provided in the notes to the Standalone Financial Statements concerning these matters. |
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying Standalone Financial Statements of BHARTI AIRTEL LIMITED (âthe Companyâ), which comprise the Standalone Balance Sheet as at March 31, 2022, and the Standalone Statement of Profit and Loss (including Other Comprehensive Loss), the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows for the year then ended, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as âthe Standalone Financial Statementsâ).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 (âthe Actâ) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (âInd ASâ) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2022, and its loss, total comprehensive loss, its changes in equity and its cash flows for the year ended on that date.
We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditing specified under section 143(10) of the Act (âSAsâ). Our responsibilities under those Standards are further described in the Auditorâs Responsibility for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (âICAIâ) together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIâs Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Financial Statements.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Financial Statements of the current period. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.
The Companyâs Board of Directors is responsible for the other information. The other information comprises the Management Discussion and Analysis, Boardâs Report including Annexures to the Boardâs Report, Business Responsibility Report and Corporate Governance, but does not include the consolidated financial statements, Standalone Financial Statements and our auditorâs reports thereon.
Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b) I n 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 Standalone Balance Sheet, the Standalone Statement of Profit and Loss including Other Comprehensive loss, the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows dealt with by this Report are in agreement with the books of account.
d) I n our opinion, the aforesaid Standalone Financial Statements comply with Ind AS specified under Section 133 of the Act.
e) On the basis of the written representations received from the directors as on March 31, 2022 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2022 from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Aâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companyâs internal financial controls over financial reporting.
g) With respect to the other matters to be included in the Auditorâs Report in accordance with the requirements of section 197(16) of the Act, as amended,
I n our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.
h) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statements.
ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on longterm contracts including derivative contracts.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. (a) The Management has represented that,
to the best of its knowledge and belief, other than as disclosed in the note 42 to
The Companyâs Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance including other comprehensive income/(loss), changes in equity and cash flows of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the Standalone Financial Statements, management is responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Companyâs financial reporting process.
Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of
the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of Companyâs internal financial controls.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.
- Conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Standalone Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Standalone Financial Statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditorâs report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
1. As required by Section 143(3) of the Act, based on our audit, we report that:
the Standalone Financial Statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(b) The Management has represented, that, to the best of its knowledge and belief, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(c) Based on the audit procedures that has been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.
v. As stated in note 15 to the Financial Statements, the Board of Directors of the Company has proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend proposed is in accordance with section 123 of the Act, as applicable.
2. As required by the Companies (Auditorâs Report) Order, 2020 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firmâs Registration No.117366W / W-100018)
Vijay Agarwal
Partner
(Membership No. 094468)
(UDIN: 22094468AJCCYQ9101)
Place: Gurugram, India
Date: May 17, 2022
Mar 31, 2021
To The Members of BHARTI AIRTEL LIMITED
We have audited the accompanying Standalone Financial Statements of BHARTI AIRTEL LIMITED (âthe Companyâ), which comprise the Standalone Balance Sheet as at March 31, 2021, and the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows for the year then ended, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as âthe Standalone Financial Statementsâ).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 (âthe Actâ) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (âInd ASâ) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2021, and its loss, total comprehensive loss, the changes in equity and its cash flows for the year ended on that date.
We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditing specified under section 143(10) of the Act (âSAsâ). Our responsibilities under those Standards are further described in the Auditorâs Responsibility for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (âICAIâ) together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIâs Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Financial Statements.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Financial Statements of the current period. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our
Sr. No. |
Key Audit Matters |
Auditorâs Response |
1 |
Revenue from operations: We considered accuracy of revenues relating to Mobile services and Airtel Business segments as a key audit matter because of the complexity of the IT systems, significance of volumes of data processed by the IT systems and the impact of changing pricing models (tariff structures, incentive arrangements and discounts, etc.). In addition, for Airtel Business, we also considered occurrence of revenue as a key audit matter due to the risk that revenue may be recorded without active service links being provided to customers or for contracts that are cancelled / not renewed. Refer note 2.19 âRevenue recognitionâ for accounting policies, note 3.2.d âRevenue recognition and presentationâ under the head âCritical judgements in applying the Companyâs accounting policiesâ and note 23 on disclosures related to Revenue from operations in the standalone financial statements. |
Principal Audit Procedures We obtained an understanding, evaluated the design and tested the operating effectiveness of (i) the general IT controls, automated controls, interfaces, control over plan configuration and system generated reports relevant for revenue recognition by involving our IT specialist; (ii) controls over recording of revenue relating to Mobile Services and Airtel Business segments; and (iii) control over reconciliations performed between the number of links / connection as per the active customer base to the billing system relating to Airtel Business Segment. We tested inter se reconciliations between relevant IT systems (such as billing system, prepaid application systems, active customer database) and with general ledger, and performed verification of revenue recognised, deferred and unbilled revenue. We made test calls to determine the accuracy of revenue recorded and tested the rating validation. We verified the appropriateness of the accounting policies and the disclosures related to Revenue from operations in notes 2.19, 3.2.d and 23 respectively in the standalone financial statements. |
Sr. No. |
Key Audit Matters |
Auditorâs Response |
2 |
Assessment of recoverability relating to Deferred tax assets (âDTAâ) recognized on carry forward losses: The DTA balance as at March 31, 2021 of ''158,386 million primarily relates to DTA on carry forward losses. The Company exercises significant judgement in assessing the recoverability of DTA relating to carry forward losses. In estimating the recoverability of DTA on carry forward losses, management uses inputs such as internal business and tax projections over a 10 year period. Recoverability of DTA on carry forward losses is considered a key audit matter as it is sensitive to the assumptions used by management in projecting the future taxable income, the reversal of deferred tax liabilities which can be scheduled, and tax planning strategies. Refer note 2.12 âTaxesâ for accounting policies, note 3.1.c âTaxesâ under the head âKey sources of estimation uncertaintiesâ, and note 11 ââIncome taxesâ for disclosures related to taxes in the standalone financial statements. |
Principal Audit Procedures We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Companyâs process for determining the recoverability of the DTA relating to carry forward losses which included amongst others controls over the assumptions and judgments used in the projections of future taxable income and tax projections. To assess the Companyâs ability to estimate future taxable income, we compared the Companyâs previous forecasts to actual results to determine its reasonableness and examined the consistency of projections used for assessing DTA recoverability with business projections used for goodwill impairment assessment. We involved our tax specialist in evaluating tax planning strategies, opinion obtained by the Company from its tax advisors and interpretation of tax laws used by the Company in the tax projections used for supporting the recoverability of DTA. |
3 |
Provisions and contingencies relating to regulatory and tax matters: The Company has recognised provisions for probable outflows relating to legal, tax and regulatory matters and have disclosed contingencies for legal, tax and regulatory matters where the obligations are considered possible. The Company in consultation with the legal, tax and other advisers assess a likelihood that a pending matter relating to tax, legal or regulatory will succeed. In performing this assessment, the Company applies judgement and has recognised provisions based on whether additional amounts will be payable and has disclosed contingent liabilities where economic outflows are considered possible. We have considered the provisions recorded and the contingencies relating to tax, legal and regulatory matters as a key audit matter as there is significant judgement to determine the possible outcome of matters under dispute and determining the amounts involved, which may vary depending on the outcome of the matters. Refer note 2.18 âContingenciesâ for accounting policies, note 3.1.e âContingent liabilities and provisionsâ under the head âKey sources of estimation uncertaintiesâ, note 19 âProvisionsâ for disclosure related to provisions for subjudice matters, note 4(ii) for AGR matter and Note 22.a in respect of details of Contingent liabilities in the standalone financial |
Principal Audit Procedures: We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls relating to: (1) identification, evaluation, recognition of provisions, disclosure of contingencies for matters under review or appeal with relevant adjudicating authorities by considering the assumptions and information used by management in performing this assessment; (2) completeness and accuracy of the underlying data / information used in the assessment. For tax matters, with the help of our tax specialist, we evaluated the reasonableness of the managementâs positions by considering tax regulations and past decisions from tax authorities, new information and opinions obtained by the Company from its external tax advisors, where applicable. For regulatory matters, we evaluated the reasonableness of the managementâs positions by considering relevant assessment orders, court judgements, statutes, interpretations and amendments, circulars and external legal opinion obtained by the Company, where applicable. We also evaluated the disclosures provided in the notes to the standalone financial statements concerning these matters. |
In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
The Companyâs Board of Directors is responsible for the other information. The other information comprises the Management Discussion and Analysis, Boardâs Report including Annexures to the Boardâs Report, Business Responsibility Report and Corporate Governance, but does not include the Consolidated Financial Statements, Standalone Financial Statements and our auditorâs reports thereon.
Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.
The Companyâs Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance including other comprehensive income changes in equity and cash flows of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the Standalone Financial Statements, management is responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Companyâs financial reporting process.
Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
» Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
» Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
» Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.
» Conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained upto the date of our auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.
» Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Standalone Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Standalone Financial Statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
g. With respect to the other matters to be included in the Auditorâs Report in accordance with the requirements of section 197(16) of the Act, as amended,
I n our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.
h. With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statements;
ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on Long term contracts including derivative contracts;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
2. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firmâs Registration No.117366W / W-100018)
Vijay Agarwal
Partner
(Membership No. 094468)
UDIN: 21094468AAAAEE8042
Place: Gurugram
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditorâs report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
1. As required by Section 143(3) of the Act, based on our
audit we report that:
a. We have sought and 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 Standalone Balance Sheet, the Standalone Statement of Profit and Loss including Other Comprehensive Income, Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows dealt with by this Report are in agreement with the books of account.
d. I n our opinion, the aforesaid Standalone Financial Statements comply with Ind AS specified under Section 133 of the Act.
e. On the basis of the written representations received from the directors as on March 31, 2021 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2021 from being appointed as a director in terms of Section 164(2) of the Act.
f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Aâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companyâs internal financial controls over financial reporting.
Mar 31, 2019
Independent Auditor''s Report
TO
THE MEMBERS OF BHARTI AIRTEL LIMITED
Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the accompanying Standalone Financial Statements of Bharti Airtel Limited ("the Company"), which comprise the Standalone Balance Sheet as at March 31 2019, the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows for the year then ended, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as "Standalone Financial Statements").
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended,("lnd AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31 2019, and its loss, total comprehensive loss, the changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditing specified under section 143(10) of the Act (SAs). Our responsibilities
under those Standards are further described in the Auditor''s Responsibility for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Financial Statements.
Emphasis of Matter
We draw attention to Note 23(l)(f)(vi) of the Standalone Financial Statements, which describes the uncertainties related to the legal outcome of Department of Telecommunications demand with respect to one-time spectrum charges.
Our opinion is not modified in respect of this matter. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Financial Statements of the current period. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.
Key audit matter |
Audit Procedures to address Key Audit Matter |
Revenue recognition: There is an inherent risk around accuracy of revenue recorded in respect of Mobile Services and Airtel Business segments because of the complexity of the IT systems and other support systems, significance of volumes of data processed by the systems and the impact of changing pricing models (tariff structures, incentive arrangements and discounts, etc.). In addition, for Airtel Business, we considered occurrence of revenue as a risk due to the possibility that revenue may be recorded without active service links being provided to customers or for contracts that are cancelled/not renewed. Refer note 2.19 "Revenue recognition" for accounting policies and note 24 on disclosures related to Revenue in the standalone financial statements. |
We involved our IT specialists to evaluate the design and test the operating effectiveness of the general IT controls and application specific controls within the IT system, including testing of system generated reports used in our audit of revenues. We also tested the controls within the billing systems, prepaid charging systems, capturing and recording of revenue, authorisation and input of changes to the IT systems and over reconciliations performed between the active customers base with billing system. We performed substantive procedures, which included verifying the accuracy of customer invoices and tracing receipts to customer invoices, comparing the number of links/connection as per the active customer base to the billing system, testing reconciliations between billing system and the general ledger (including validation of relevant journal entries), making test calls and testing whether they are rated correctly and analytical procedures for relevant segment revenue. We verified the appropriateness of the accounting policies and the disclosures related to Revenue in notes 2.19 and 24 respectively in the standalone financial statements. |
Recoverability of deferred tax assets (DTA) recognized on tax loss carry-forwards and Minimum Alternate Tax (MAT) credit DTA on tax loss carry forwards and MAT credit recognised as at March 31, 2019 amounts to Rs. 126,085 million. Significant judgement is required in assessing the recoverability of DTA on tax loss carryforwards and MAT credit. Recoverability of DTA on tax loss and MAT credit is sensitive to the assumptions used by management in projecting the ten year business plan and tax plan and to expiry of losses and restriction on utilization of MAT credit after the period specified in the Income-tax Act, 1961. Refer note 2.12 "Taxes" for accounting policies, note 3.1.b in "Critical accounting estimates and assumptions" related to taxes and note 12 "Income taxes" for disclosures related to taxes in the standalone financial statements. |
We evaluated the design and tested the operating effectiveness of internal controls related to the assessment of recoverability of DTA on carry forward tax losses and MAT credit. We benchmarked and challenged the key business assumptions like revenue growth rates, amount of future capital expenditure and EBIDTA margins in the ten year business plans against historical data and trends and with market data and external sources, where available, to assess their reasonableness. We verified the tax computation for the ten year forecast period and considered whether the tax losses and MAT credit would expire in accordance with the provisions of In come tax Act, 1961. We also performed sensitivity assessment to evaluate whether it is probable that the tax losses and MAT credit would expire within the period specified in the provisions of Income tax Act, 1961 and tested the mathematical accuracy of the business plans and tax computation for the forecast period. We verified that recognition of DTA is consistent with company''s accounting guidelines for recognition of deferred tax on tax loss carry forward and MAT credit. We verified the appropriateness of accounting policies, critical accounting estimates and assumptions and disclosures related to Income tax in notes 2.12, 3.1.b and 12 respectively in the standalone financial statements. |
Evaluation of impairment assessment for investments in subsidiaries Investments in subsidiaries as at March 31, 2019 amounts to Rs. 357,533 million. The management assessed that there are impairment indicators in respect of its investment in Bharti Infratel limited (BIL). Accordingly, the management estimated the recoverable value of its investment in BIL, the carrying value of which as at March 31, 2019 is Rs.227,516 million. The evaluation of the recoverable amount involves determination of the most appropriate valuation method and the inputs used in the valuation model. Refer note 2.10(a) for policy on "Recognition, classification and presentation" of financial instruments and note 8 "Investments" for disclosures related to details of Investments in the standalone financial statements. |
We evaluated the design and tested the operating effectiveness of internal controls related to evaluation of impairment assessment of investment in Bharti Infratel Limited. We evaluated the management''s valuation method used and the accuracy of the inputs used in the model to determine the recoverable value. We challenged the inputs used to assess their reasonableness, tested the sensitivity of the recoverable value to the change in the inputs used and tested the arithmetical accuracy of the model. We verified the appropriateness of the accounting policies and disclosures related to Investments in notes 2.10(a) and 8 respectively in the standalone financial statements. |
Evaluation of uncertain positions related to tax and regulatory matters The Company has material uncertain positions related to regulatory matters and direct and indirect tax matters under dispute that involves significant judgment to determine the possible outcome of these disputes, provisions required, if any, and/or write back of provision in respect of such matters. Refer Note 2.18 "Contingencies" for accounting policies, Note 20 "Provisions" for disclosure related to provisions for subjudice matters and Note 23(I) in respect of details of Contingent liabilities in the standalone financial statements. |
We evaluated the design and tested the operating effectiveness of internal controls related to the assessment of the likely outcome of uncertain positions related to the regulatory and tax matters, the provision made, if any, and/or write back of the provision. We discussed significant open matters and developments with the Company''s regulatory and tax team. We involved our internal tax experts to understand and evaluate the status of tax matters, review legal precedence and external expert opinions, if any, obtained by the management to evaluate whether the tax and regulatory position is appropriate and has taken into account recent developments, if any. We challenged management''s underlying assumptions in estimating tax and regulatory provisions and/or write back of provisions and assessed management evaluations and conclusions by understanding precedence, if any, set in similar matters and performed substantive procedures on the underlying calculation supporting the provisions required and/or write back of provisions. We verified the appropriateness of the accounting policies, disclosures related to provisions for subjudice matters and details of contingent liabilities in notes 2.18, 20 and 23(I) respectively in the standalone financial statements. |
Information Other than the Financial Statements and Auditor''s Report Thereon The Company''s Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in Management Discussion and Analysis, Board''s Report including Annexures to the Board''s Report, Business Responsibility Report, Corporate Governance and Integrated Report, but does not include the standalone financial statements and our auditor''s report thereon. Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
Management''s Responsibility for the Standalone Financial Statements The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. In preparing the Standalone Financial Statements, management is responsible for assessing the Company''s ability to continue |
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibility for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.
Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Standalone Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Standalone Financial Statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act, based on our audit we report that:
a) We have sought and 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 Standalone Balance Sheet, the Standalone Statement of Profit and Loss including Other
Comprehensive Income, the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows dealt with by this Report are in agreement with the relevant books of account.
d) In our opinion, the aforesaid Standalone Financial Statements comply with the Ind AS specified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.
e) On the basis of the written representations received from the directors as on March 31, 2019 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2019 from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure A". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.
g) With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements of section 197(16) of the Act, as amended,
In our opinion and to the best of our information and according to explanation given to us, the remuneration paid / accrued by the Company to its Chairman and Managing Director & CEO (India and South Asia) for the year ended March 31, 2019 is in excess by Rs. 300.66 Million vis-a-vis the limits specified in section 197 of Companies Act, 2013 (''the Act'') read with Schedule V thereto as the Company does not have profits. The Company has represented to us that it is in the process of complying with the prescribed statutory requirements to regularize such excess payments, including seeking approval of shareholders, as necessary.
h) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statements
ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in "Annexure B" a statement on the matters specified in paragraphs 3 and 4 of the Order.
For DELOITTE HASKINS & SELLS LLP |
|
Chartered Accountants |
|
|
(Firm''s Registration No. 117366W/W-100018) |
Shyamak R Tata |
|
Place: New Delhi |
Partner |
Date: May 06, 2019 |
(Membership No. 38320) |
Annexure "A" to the Independent Auditor''s Report
(Referred to in paragraph 1 (f) under ''Report on Other Legal and Regulatory Requirements'' section of our report to the Members of Bharti Airtel Limited of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of Bharti Airtel Limited ("the Company") as of March 31, 2019 in conjunction with our audit of the Standalone Financial Statements of the Company for the year ended on that date.
Management''s Responsibility for Internal Financial Controls
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditor''s Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
Opinion
In our opinion, to the best of our information and according to the explanations given to us the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2019, based on the criteria for internal financial control over financial reporting established by the Company considering the essential
For DELOITTE HASKINS & SELLS LLP |
|
Chartered Accountants |
|
|
(Firm''s Registration No. 117366W/W-100018) |
Shyamak R Tata |
|
Place: New Delhi |
Partner |
Date: May 06, 2019 |
(Membership No. 38320) |
Annexure "B" to the Independent Auditor''s Report
(Referred to in paragraph 2 under ''Report on Other Legal and Regulatory Requirements'' section of our report to the Members of Bharti Airtel Limited of even date)
i. In respect of Company''s fixed assets:
a) The Company has maintained proper records showing full particulars with respect to most of its fixed assets, and 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 Company has a program of verification of fixed assets to cover all the items in a phased manner 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 program, certain fixed assets were physically verified by the Management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification.
c) According to the information and explanations given to us, the records examined by us and based on examination of property tax receipts, utility bills, lease agreement for land on which building is constructed, registered sale deed / transfer deed / conveyance deed or court orders approving schemes of arrangements / amalgamations provided to us, we report that, the title in respect of self-constructed buildings and the title deeds, comprising all the immovable properties of land and buildings which are freehold, are held in the name of the Company as at the balance sheet date.
In respect of immovable properties that have been taken on lease and disclosed as property, plant and equipment in the financial statements, based on our examination of the lease agreements or court orders approving the schemes of arrangement or amalgamations, we report that the lease agreements are in the name of the Company, where the Company is the lessee in the agreement.
ii. 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 and no material discrepancies were noticed on physical verification.
iii. According to information and explanation given to us, the Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013.
iv. In our opinion and according to the information and explanations given to us, there are no loans, investments, guarantees, and securities granted in respect of which provisions of Section 185 and 186 of the Companies Act, 2013 are applicable.
v. According to the information and explanations given to us, the Company has not accepted deposits during the year and does not have any unclaimed deposits as at March 31, 2019 and therefore, the provisions of the clause 3 (v) of the Order are not applicable.
vi. The maintenance of cost records has been specified by the Central Government under section 148(1) of the Companies Act, 2013. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
vii. According to the information and explanations given to us, in respect of statutory dues:
(a) The Company is regular in depositing undisputed statutory dues, including Provident Fund, Employees'' State Insurance, Income-tax, Goods and Services Tax, Customs Duty, cess and other material statutory dues applicable to it to the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident Fund, Employees'' State Insurance, Income-tax, Goods and Services Tax, Customs Duty, cess and other material statutory dues in arrears as at March 31, 2019 for a period of more than six months from the date they became payable.
(c) Details of dues of Income-tax, Sales Tax, Service Tax, Customs Duty, Value Added Tax and Goods and Service Tax which have not been deposited as on March 31, 2019 on account of disputes are given below:
Name of the Statutes |
Nature of the Dues |
Amount Disputed (in Rs Million) |
Period to Which the amount Relates |
Forum where the dispute is pending |
Income Tax Act, 1961 |
Income Tax |
128 |
1999-05, 2002-08 |
Supreme Court |
Income Tax Act, 1961 |
Income Tax |
10,519 |
1996-08, 2001-10 |
High Court |
Income Tax Act, 1961 |
Income Tax |
25,816 |
1995-13, 2003-15 |
Income Tax Appellate Tribunal |
Income Tax Act, 1961 |
Income Tax |
604 |
1999-00, 2004-18 |
Commissioner of Income Tax |
Income Tax Act, 1961 |
Income Tax |
638 |
2000-06,1996-14 |
Assessing Officer |
Sub Total (A) |
37,705 |
|||
Andhra Pradesh VAT Act, 2005 |
Sales Tax |
87 |
2004-13 |
Tribunal |
Andhra Pradesh VAT Act, 2005 |
Sales Tax |
33 |
2013-15 |
Deputy Commissioner (Appeals) |
Andhra Pradesh VAT Act, 2005 |
Sales Tax |
39 |
2015-18 |
Assistant Commissioner |
Bihar VAT Act, 2005 |
Sales Tax |
0* |
2015-16 |
Assistant Commissioner |
Bihar VAT Act, 2005 |
Sales Tax |
2 |
2006-07 |
Commercial Tax Officer |
Bihar VAT Act, 2005 |
Sales Tax |
1 |
2016-17 |
Deputy Commissioner |
Bihar VAT Act, 2005 |
Sales Tax |
22 |
2015-17 |
Joint Commissioner (Appeal) |
Bihar VAT Act, 2005 |
Sales Tax |
139 |
2005-15 |
Tribunal |
Chhattisgarh VAT Act, 2003 |
Sales Tax |
0* |
2006-07 |
Assistant Commissioner |
Delhi VAT Act, 2004 |
Sales Tax |
0* |
2012-13 |
Add. Commissioner |
Delhi VAT Act, 2004 |
Sales Tax |
6 |
2011-14 |
Add. Commissioner |
The Gujarat VAT Act, 2003 |
Sales Tax |
1 |
2005-07 |
Assistant/Deputy Commissioner |
The Karnataka VAT Act, 2003 |
Sales Tax |
291 |
2005-06 |
Supreme Court |
The Karnataka VAT Act, 2003 |
Sales Tax |
0* |
2012-13 |
Deputy Commissioner |
The Karnataka VAT Act, 2003 |
Sales Tax |
2 |
2016-17 |
Karnataka Appellate Tribunal |
The Kerala VAT Act, 2003 |
Sales Tax |
1 |
2005-17 |
Commercial Tax Officer |
The Kerala VAT Act, 2003 |
Sales Tax |
0* |
2016-17 |
Intelligence Officer Ernakulam |
Kerala Sales Tax Act |
Sales Tax |
16 |
2005-10 |
Deputy Commissioner, Appeal |
Kerala Sales Tax Act |
Sales Tax |
0* |
2008-10 |
Intelligence Officer Squad |
Kerala Sales Tax Act |
Sales Tax |
1 |
2002-05 |
Tribunal |
The Kerala VAT Act, 2003 |
Sales Tax |
71 |
2006-07 |
High Court of Kerala |
The Kerala VAT Act, 2003 |
Sales Tax |
44 |
2007-12 |
Asst. Commissioner, Spl Circle III, |
Ernakulam |
||||
The Kerala VAT Act, 2003 |
Sales Tax |
0* |
2015-16 |
Intelligence Inspector, Squad No. |
I.Tellichery |
||||
The Kerala VAT Act, 2003 |
Sales Tax |
0* |
2015-16 |
Intelligence Inspector, Squad No. |
3, Ernakulam |
||||
The Madhya Pradesh VAT Act, 2002 |
Sales Tax |
7 |
2008-13 |
Tribunal |
The Madhya Pradesh VAT Act, 2002 |
Sales Tax |
0* |
2004-08 |
Commercial Tax Officer |
The Madhya Pradesh VAT Act, 2002 |
Sales Tax |
1 |
2008-10 |
Deputy Commissioner |
The Madhya Pradesh VAT Act, 2002 |
Sales Tax |
22 |
1997-04 |
Deputy Commissioner, Appeal |
The Maharashtra VAT Act, 2002 |
Sales Tax |
0* |
2003-04 |
Joint Commissioner, Appeal |
Punjab VAT Act, 2005 |
Sales Tax |
1 |
2009-17 |
Deputy Commissioner (Appeal) |
Punjab VAT Act, 2005 |
Sales Tax |
30 |
2003-04 |
High Court |
Punjab VAT Act, 2005 |
Sales Tax |
1 |
2002-03 |
Tribunal |
Rajasthan VAT Act |
Sales Tax |
2 |
2015-16 |
Commercial Tax Officer |
Rajasthan VAT Act |
Sales Tax |
0* |
2015-16 |
Assistant Commissioner |
The TN VAT Act |
Sales Tax |
0* |
2010-11 |
Deputy Commercial tax Officer |
Name of the Statutes |
Nature of the Dues |
Amount Disputed (in Rs. Million) |
Period to Which the amount Relates |
Forum where the dispute is pending |
The UP VAT Act |
Sales Tax |
11 |
2005-13 |
Assessing officer |
The UP VAT Act |
Sales Tax |
1 |
2002-19 |
Assistant Commissioner |
The UP VAT Act |
Sales Tax |
1 |
2009-10 |
Joint Commissioner |
The UP VAT Act |
Sales Tax |
6 |
2008-10 |
High court |
The UP VAT Act |
Sales Tax |
3 |
2003-08 |
Joint Commissioner, Appeal |
The UP VAT Act |
Sales Tax |
9 |
2005-10 |
Tribunal |
The UP VAT Act |
Sales Tax |
1 |
2015-16 |
Commissioner (Appeals) |
The UP VAT Act |
Sales Tax |
26 |
2003-17 |
Deputy Commissioner |
The West Bengal VAT Act, 2003 |
Sales Tax |
0* |
1996-97 |
The Deputy Commissoner of |
Commercial Taxes |
||||
The West Bengal VAT Act, 2003 |
Sales Tax |
0* |
1995-98 |
Commercial Tax Officer |
The West Bengal VAT Act, 2003 |
Sales Tax |
9 |
2005-06 |
Commissioner |
The West Bengal VAT Act, 2003 |
Sales Tax |
3 |
1997-12 |
Tribunal |
SubTotal(B) |
890 |
|||
Finance Act, 1994 (Service tax |
Service Tax |
278 |
1995-08 |
Supreme Court |
provisions ) |
||||
Finance Act, 1994 (Service tax |
Service Tax |
51 |
2002-07 |
High court |
provisions ) |
||||
Finance Act, 1994 (Service tax |
Service Tax |
6,083 |
1995-16 |
Tribunal |
provisions ) |
||||
Finance Act, 1994 (Service tax |
Service Tax |
821 |
1999-13 |
Commissioner/Deputy |
provisions) |
Commissioner of Service Tax |
|||
Finance Act, 1994 (Service tax |
Service Tax |
1 |
2003-04 |
Deputy Commissioner |
provisions) |
||||
SubTotal( C) |
7,234 |
|||
Goods and Services Tax Act, 2017 |
UPGST |
14 |
2017-19 |
Assistant Commissioner |
Sub Total (D) |
14 |
|||
Custom Act, 1962 |
Custom Act |
4,128 |
2001-05 |
Supreme Court |
Custom Act, 1962 |
Custom Act |
755 |
2003-15 |
Tribunal |
Sub Total (E) |
4,883 |
|||
Grand Total (A B C D E): |
50,728 |
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 341 Mn, Service Tax is 497 Mn, Goods & Services Tax Act, 2017 is 0* Mn, Custom Duty is 2,142 Mn and Income Tax is 16,774 Mn. * Amount less than million are appearing as ''0''.
viii. In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to financial institutions, banks and government and dues to debenture holders.
ix. During the current year, the Company has not raised moneys by way of initial public offer or further public offer (including debt instruments). In our opinion and according to the information and explanations given to us, the term loans have been applied by the Company during the year for the purposes for which they were raised, other than temporary deployment pending application of proceeds.
x. 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 by its officers or employees has been noticed or reported during the year.
xi. In our opinion and to the best of our information and according to explanation given to us, the remuneration paid / accrued by the Company to its Chairman and Managing Director & CEO (India and South Asia) for the year ended March 31, 2019 is in excess by Rs. 300.66 Million vis-a-vis the limits specified in section 197 of Companies Act, 2013 (''the Act'') read with Schedule V thereto as the Company does
not have profits. The Company has represented to us that it is in the process of complying with the prescribed statutory requirements to regularize such excess payments, including seeking approval of shareholders, as necessary.
xii. The Company is not a Nidhi Company and hence reporting under clause 3 (xii) of the Order is not applicable.
xiii. In our opinion and according to the information and explanations given to us the Company is in compliance with Section 177 and 188 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.
xiv. During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause 3 (xiv) of the Order is not applicable to the Company.
xv. In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or directors of its holding, subsidiary or associate company or persons connected with them and hence provisions of section 192 of the Companies Act, 2013 are not applicable.
xvi. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
For DELOITTE HASKINS & SELLS LLP |
|
Chartered Accountants |
|
|
(Firm''s Registration No. 117366W/W-100018) |
Shyamak R Tata |
|
Place: New Delhi |
Partner |
Date: May 06, 2019 |
(Membership No. 38320) |
Mar 31, 2018
Independent Auditorâs Report
To the members of BHARTI AIRTEL LIMITED
Report on the Standalone Financial Statements
We have audited the accompanying Standalone Financial Statements of BHARTI AIRTEL LIMITED (âthe Companyâ), which comprise the Standalone Balance Sheet as at March 31, 2018, the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone Statement of Cash Flows and the Standalone Statement of Changes in Equity for the year ended on that date and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as âStandalone Financial Statementsâ).
Managementâs Responsibility for the Standalone Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act,2013 (âthe Actâ) with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Indian Accounting Standards (Ind AS) prescribed under section 133 ofthe Companies Act,2013 read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these Standalone Financial Statements based on our audit,
In conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under and the Order issued under section 143(11) of the Act,
We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act, Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Standalone Financial Statements are free from material misstatement,
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Standalone Financial Statements, The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error, In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the Standalone Financial Statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Board of Directors, as well as evaluating the overall presentation of the Standalone Financial Statements,
We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Financial Statements,
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the Ind AS and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, its profit, total comprehensive income, changes in equity and its cash flows for the year ended on that date,
Emphasis of Matter
We draw attention to Note 23(i)(f)(v) to the Standalone Financial Statements which describes the uncertainties related to the legal outcome of Department of Telecommunications demand with respect to one time spectrum charges,
Our opinion is not modified in respect of this matter,
Other Matter
The comparative financial information of the Company for the year ended March 31, 2017 prepared in accordance with Ind AS included in these Standalone Financial Statements have been audited by the predecessor auditor, The report of the predecessor auditor on comparative financial statements for the year ended and as at March 31, 2017 dated May 9, 2017 expressed an unqualified opinion, Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1, As required by Section 143(3) of the Act, based on our audit we report that:
a) We have sought and 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 Standalone Balance Sheet, the Standalone Statement of Profit and Loss including Other Comprehensive Income, the Standalone Statement of Cash Flows and Standalone Statement of Changes in Equity dealt with by this Report are in agreement with the books of account,
d) In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act,
e) On the basis of the written representations received from the directors of the Company as on 31st March, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2018 from being appointed as a director in terms of Section 164(2) of the Act,
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Aâ, Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companyâs internal financial controls over financial reporting,
g) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:
i, The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements,
ii, The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts,
iii, There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
2, As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
We have audited the internal financial controls over financial reporting of Bharti Airtel Limited (âthe Companyâ) as of March 31, 2018 in conjunction with our audit of the Standalone Financial Statements of the Company for the year ended on that date,
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
Managementâs Responsibility for Internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India, These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013,
Auditorâs Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit, We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects,
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness, Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error,
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting,
Meaning of Internal Financial Controls Over Financial Reporting
A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, A companyâs internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements,
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected, Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate,
Opinion
In our opinion, to the best of our information and according to the explanations given to us the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018 , based on the criteria for internal control over financial reporting established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India,
i, In respect of its fixed assets:
a) The Company has maintained proper records showing full particulars with respect to most of its fixed assets, and 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 Company has a program of verification of fixed assets to cover all the items in a phased manner 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 program, certain fixed assets were physically verified by the Management during the year, According to the information and explanations given to us, no material discrepancies were noticed on such verification,
c) According to the information and explanations given to us, the records examined by us and based on examination of property tax receipts, utility bills, lease agreement for land on which building is constructed, registered sale deed / transfer deed / conveyance deed or court orders approving schemes of arrangements / amalgamations provided to us, we report that, the title in respect of self-constructed buildings and the title deeds, comprising all the immovable properties of land and buildings which are freehold, are held in the name of the Company as at the balance sheet date,
In respect of immovable properties that have been taken on lease and disclosed as property, plant and equipment in the financial statements, based on our examination of the lease agreements or court orders approving the schemes of arrangement or amalgamations, we report that the lease agreements are in the name of the Company, where the Company is the lessee in the agreement,
ii, 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 and no material discrepancies were noticed on physical verification,
iii, According to information and explanation given to us, the Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013,
iv, In our opinion and according to the information and explanations given to us, there are no loans, investments, guarantees, and securities granted in respect of which provisions of Section 185 and 186 of the Companies Act, 2013 are applicable,
v, According to the information and explanations given to us, the Company has not accepted deposits during the year and does not have any unclaimed deposits as at March 31, 2018 and therefore, the provisions of the clause 3 (v) of the Order are not applicable,
vi, The maintenance of cost records has been specified by the Central Government under section 148(1) of the Companies Act, 2013, We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained, We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete,
vii, According to the information and explanations given to us, in respect of statutory dues:
(a) The Company is regular in depositing undisputed statutory dues, including Provident Fund, Employeesâ State Insurance, Income-tax, Sales Tax, Service Tax, Goods and Services Tax, Customs Duty, Value Added Tax, cess and other material statutory dues applicable to it to the appropriate authorities, As explained to us, the provisions relating to duty of excise are not applicable to the Company,
(b) There were no undisputed amounts payable in respect of Provident Fund, Employeesâ State Insurance, Income-tax, Sales Tax, Value Added Tax, Service Tax, Goods and Services Tax, Customs Duty, cess and other material statutory dues in arrears as at March 31, 2018 for a period of more than six months from the date they became payable,
(c) There are no dues of Goods and Service Tax, cess which have not been deposited on account of any dispute, Details of dues of Income-tax, Sales Tax, Value Added Tax, Service Tax and Customs Duty which have not been deposited as on March 31, 2018 on account of disputes are given below:
Name of the Statutes |
Nature of the Dues |
Amount Disputed (in J Million) |
Period to Which the amount Relates |
Forum where the dispute is pending |
Andhra Pradesh VAT Act, 2005 |
Sales Tax |
87 |
2004-13 |
Tribunal |
Andhra Pradesh VAT Act, 2005 |
Sales Tax |
52 |
2013-15 |
Deputy Commissioner (Appeals) |
Bihar VAT Act, 2005 |
Sales Tax |
0* |
2015-16 |
Assistant Commissioner |
Bihar VAT Act, 2005 |
Sales Tax |
2 |
2006-07 |
Commercial Tax Officer |
Bihar VAT Act, 2005 |
Sales Tax |
1 |
2016-17 |
Deputy Commissioner |
Bihar VAT Act, 2005 |
Sales Tax |
22 |
2015-17 |
Joint Commissioner (Appeal) |
Bihar VAT Act, 2005 |
Sales Tax |
139 |
2005-15 |
Tribunal |
Chhattisgarh VAT Act, 2003 |
Sales Tax |
0* |
2006-07 |
Assistant Commissioner |
Delhi VAT Act, 2004 |
Sales Tax |
6 |
2011-14 |
Assistant Commissioner |
The Gujarat VAT Act, 2003 |
Sales Tax |
1 |
2005-07 |
Assistant Commissioner |
The Karnataka VAT Act, 2003 |
Sales Tax |
291 |
2005-06 |
Assistant Commissioner |
The Karnataka VAT Act, 2003 |
Sales Tax |
0* |
2012-13 |
Deputy Commissioner |
The Karnataka VAT Act, 2003 |
Sales Tax |
2 |
2016-17 |
Joint Commissioner (Appeal) |
The Kerala VAT Act, 2003 |
Sales Tax |
1 |
2005-17 |
Commercial Tax Officer |
The Kerala VAT Act, 2003 |
Sales Tax |
0* |
2016-17 |
Intelligence Officer Ernakulum |
Kerala Sales Tax Act |
Sales Tax |
0* |
2005-11 |
Commercial tax Officer |
Kerala Sales Tax Act |
Sales Tax |
16 |
2005-10 |
Deputy Commissioner, Appeal |
Kerala Sales Tax Act |
Sales Tax |
0* |
2008-10 |
Intelligence Officer Squad |
Kerala Sales Tax Act |
Sales Tax |
1 |
2002-05 |
Tribunal |
The Kerala VAT Act, 2003 |
Sales Tax |
71 |
2006-07 |
High Court of Kerala |
The Kerala VAT Act, 2003 |
Sales Tax |
44 |
2007-12 |
Asst, Commissioner, Spl Circle III, Ernakulam |
The Kerala VAT Act, 2003 |
Sales Tax |
0* |
2015-16 |
Intelligence Inspector, Squad No, I, Tellichery |
The Kerala VAT Act, 2003 |
Sales Tax |
0* |
2015-16 |
Intelligence Inspector, Squad No, 3, Ernakulam |
The Madhya Pradesh VAT Act, 2002 |
Sales Tax |
7 |
2008-10,2012-13 |
Tribunal |
The Madhya Pradesh VAT Act, 2002 |
Sales Tax |
0* |
2004-08 |
Commercial Tax Officer |
The Madhya Pradesh VAT Act, 2002 |
Sales Tax |
1 |
2008-10 |
Deputy Commissioner |
The Madhya Pradesh VAT Act, 2002 |
Sales Tax |
22 |
1997-04 |
Deputy Commissioner, Appeal |
The Madhya Pradesh VAT Act, 2002 |
Sales Tax |
0* |
2005-06 |
Assistant Commissioner |
The Maharashtra VAT Act, 2002 |
Sales Tax |
0* |
2003-04 |
Joint Commissioner, Appeal |
Punjab VAT Act, 2005 |
Sales Tax |
1 |
2009-17 |
Deputy Excise and Taxation Commissioner |
Punjab VAT Act, 2005 |
Sales Tax |
30 |
2003-04 |
High Court |
Punjab VAT Act, 2005 |
Sales Tax |
1 |
2002-03 |
Jt, Director( Enforcement) |
Punjab VAT Act, 2005 |
Sales Tax |
1 |
2008-10 |
Tribunal |
Rajasthan VAT Act, 2003 |
Sales Tax |
2 |
2015-16 |
Commercial Tax Officer |
The Tamil Nadu VAT Act, 2003 |
Sales Tax |
0* |
2010-11 |
Deputy Commissioner |
Name of the Statutes |
Nature of |
Amount Disputed |
Period to Which |
Forum where the dispute is |
the Dues |
(in J Million) |
the amount Relates |
pending |
|
The Uttar Pradesh VAT Act, |
Sales Tax |
11 |
2005-13 |
Assessing officer |
2008 |
||||
The Uttar Pradesh VAT Act, |
Sales Tax |
21 |
2002-05 |
Assistant Commissioner |
2008 |
||||
The Uttar Pradesh VAT Act, |
Sales Tax |
0* |
2017-18 |
Commercial Tax Officer |
2008 |
||||
The Uttar Pradesh VAT Act, |
Sales Tax |
1 |
2007-08 |
Joint Commissioner |
2008 |
||||
The Uttar Pradesh VAT Act, |
Sales Tax |
6 |
2008-10 |
High court |
2008 |
||||
The Uttar Pradesh VAT Act, |
Sales Tax |
2 |
2003-10 |
Joint Commissioner, Appeal |
2008 |
||||
The Uttar Pradesh VAT Act, |
Sales Tax |
9 |
2005-13 |
Tribunal |
2008 |
||||
The Uttar Pradesh VAT Act, |
Sales Tax |
1 |
2015-16 |
Additional Commissioner |
2008 |
||||
The Uttar Pradesh VAT Act, |
Sales Tax |
9 |
2003-17 |
Deputy Commissioner |
2008 |
||||
The West Bengal VAT Act, |
Sales Tax |
0* |
1996-97 |
The Deputy Commissioner of |
2003 |
Commercial Taxes |
|||
The West Bengal VAT Act, |
Sales Tax |
0* |
1995-98 |
Commercial Tax Officer |
2003 |
||||
The West Bengal VAT Act, |
Sales Tax |
9 |
2005-06 |
Revision Board |
2003 |
||||
The West Bengal VAT Act, |
Sales Tax |
3 |
1997-12 |
Tribunal |
2003 |
||||
Sub Total (A) |
877 |
|||
Finance Act, 1994 (Service |
Service Tax |
278 |
1995-08 |
Supreme Court |
tax provisions ) |
||||
Finance Act, 1994 (Service |
Service Tax |
7 |
2002-07 |
High court |
tax provisions ) |
||||
Finance Act, 1994 (Service |
Service Tax |
7,226 |
1995-16 |
Tribunal |
tax provisions ) |
||||
Finance Act, 1994 (Service |
Service Tax |
571 |
1999-13 |
Commissioner of Service Tax |
tax provisions ) |
||||
Sub Total (B) |
8,082 |
|||
Custom Act, 1962 |
Custom Act |
4,128 |
2001-05 |
Supreme Court |
Custom Act, 1962 |
Custom Act |
755 |
2003-15 |
Tribunal |
Sub Total (C) |
4,883 |
|||
Income Tax Act, 1961 |
Income Tax |
128 |
2001-03, 2004-08 |
Supreme Court |
Income Tax Act, 1961 |
Income Tax |
10,519 |
1996-97, 2003-10 |
High Court |
Income Tax Act, 1961 |
Income Tax |
24,338 |
1995-2015 |
Income Tax Appellate Tribunal |
Income Tax Act, 1961 |
Income Tax |
607 |
1998-2015 |
Commissioner of Income Tax (Appeals) |
Income Tax Act, 1961 |
Income Tax |
638 |
1996-97; 2004-17 |
Assessing Officer |
Sub Total (D) |
36,230 |
|||
Grand Total(A B C D): |
50,071 |
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 327 Mn, Service Tax is 472 Mn, Income Tax is 10,968 Mn and Custom Duty is 2,141 Mn.
viii, In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to financial institutions, banks and government and dues to debenture holders,
ix, During the current year, the Company has not raised moneys by way of initial public offer or further public offer (including debt instruments), In our opinion and according to the information and explanations given to us, the term loans have been applied by the Company during the year for the purposes for which they were raised, other than temporary deployment pending application of proceeds,
x, 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 by its officers or employees has been noticed or reported during the year,
xi, In our opinion and according to the information and explanations given to us, the Company has paid / provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act, 2013, except that the commission of H 67,64 million to non-executive directors is in excess by H 33,12 million, basis the lower limits approved by the Shareholders of the Company, As informed, the Company would be seeking Shareholdersâ approval for the said excess amount at the ensuing Annual General Meeting,
xii, The Company is not a Nidhi Company and hence reporting under clause 3 (xii) of the Order is not applicable,
xiii, In our opinion and according to the information and explanations given to us the Company is in compliance with Section 177 and 188 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc, as required by the applicable accounting standards,
xiv, During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause 3 (xiv) of the Order is not applicable to the Company
xv, In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or directors of its holding company, directors of subsidiary company or directors of associate company or persons connected with them and hence provisions of section 192 of the Companies Act, 2013 are not applicable,
xvi, The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934,
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firmâs Registration No, 117366W/W-100018)
Hemant M. Joshi
Partner
(Membership No, 38019)
Place: New Delhi
Date: April 24, 2018
Mar 31, 2017
Report on the Standalone Ind AS financial statements
We have audited the accompanying standalone Ind AS financial statements of Bharti Airtel Limited (âthe Companyâ), which comprise the standalone Balance Sheet as at March 31, 2017, the standalone Statement of Profit and Loss including other comprehensive income, the standalone Cash Flow Statement and standalone Statement of changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Ind AS financial statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act, read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and the Companies (Indian Accounting Standards) Amendment Rules, 2016 issued by Ministry of Corporate Affairs. This responsibility includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error
Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the rules made thereunder We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether these standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on these standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, these standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2017, its profit including other comprehensive income and its cash flows for the year ended on that date.
Emphasis of Matter
We draw attention to Note 22(i)(f)(v) to the standalone Ind AS financial statements which describes the uncertainties related to the legal outcome of the Department of Telecommunicationsâ demand with respect to One Time Spectrum Charge. Our opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure 1 a statement on the matters specified in paragraphs 3 and 4 of the Order
2. As required by Section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose 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, Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
(d) In our opinion, these standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and the Companies (Indian Accounting Standards) Amendment Rules, 2016 issued by Ministry of Corporate Affairs.;
(e) On the basis of written representations received from the directors as on March 31, 2017, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017, from being appointed as a director in terms of Section 164 (2) of the Act;
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report dated May 9, 2017 in âAnnexure 2â to this report;
(g) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 and Companies (Audit and Auditors) Amendment Rules, 2017, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements - Refer 19 to the standalone Ind AS financial statements;
ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note 9 to the standalone Ind AS financial statements;
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company;
iv. The Company has provided requisite disclosures in Note 15 to these standalone Ind AS financial statements as to the holding of Specified Bank Notes on November 8, 2016 and December 30, 2016 as well as dealings in Specified Bank Notes during the period from November 8, 2016 to December 30, 2016. Based on our audit procedures and relying on the management representation regarding the holding and nature of cash transactions, including Specified Bank Notes, we report that these disclosures are in accordance with the books of accounts maintained by the Company and as produced to us by the Management.
Annexure 1
Annexure referred to in paragraph 1 of âReport on other Legal and Regulatory Requirementsâ
Re: [BHARTI AIRTEL LIMITED] (âthe Companyâ)
(i) (a) The Company has maintained proper records showing full particulars with respect to most of its fixed assets, and 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 verified by the management according to a regular programme designed to cover all the items over a period of three years. Pursuant to the planned programme during the year, a substantial portion of fixed assets and capital work in progress has been physically verified 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. No material discrepancies were noted on such verification.
(c) Based on our audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to information and explanations given by the management, the title deeds of immovable properties included in property, plant and equipment are held in the name of the Company
(ii) The management has conducted physical verification of inventory (other than inventory with third parties) at reasonable intervals during the year and no material discrepancies were noticed on such physical verification.
(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms, limited liability partnership firm or other parties covered in the register maintained under Section 189 of the Companies Act, 2013. Accordingly, the provision of clause 3(iii)(a), (b) and (c) of the Order are not applicable to the Company and hence not commented upon.
(iv) In our opinion and according to the information and explanations given to us, there are no loans, investments, guarantees, and securities granted in respect of which provisions of Section 185 and 186 of the Companies Act, 2013 are applicable and hence not commented upon.
(v) The Company has not accepted any deposits from the public.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 148(1) of the Companies Act, 2013, related to the service of telecommunication 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.
(vii) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, sales-tax, service tax, duty of customs, value added tax, cess and other material statutory dues applicable to it. The provisions relating to duty of excise are not applicable to the Company
According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employeesâ state insurance, income-tax, sales-tax, service tax, duty of customs, value added tax, cess and other material undisputed statutory dues were outstanding, as at the year end, for a period of more than six months from the date they became payable.
(b) According to the records of the Company, the dues outstanding of income-tax, sales-tax, service tax, duty of customs, value added tax and cess on account of any dispute, are as follows:
Name of Statutes |
Nature of the Dues |
Amount Disputed (In Rs.Mn) |
Period to Which It Relates |
Forum where The Dispute Is Pending |
Andhra Pradesh Value Added Tax Act, 2005 |
Sales Tax |
87 |
2004-13 |
Tribunal |
Bihar Value Added Tax Act, 2005 |
Sales Tax |
58 |
2005-10 |
Tribunal |
Bihar Value Added Tax Act, 2005 |
Sales Tax |
0 |
2015-16 |
Assistant Commissioner |
Bihar Value Added Tax Act, 2005 |
Sales Tax |
82 |
2010-15 |
Joint Commissioner, Appeal |
Bihar Value Added Tax Act, 2005 |
Sales Tax |
2 |
2006-07 |
Commercial Tax Officer |
Bihar Value Added Tax Act, 2005 |
Sales Tax |
1 |
2016-17 |
Deputy Commissioner |
Chhattisgarh Value Added Tax Act, 2003 |
Sales Tax |
0 |
2005-07 |
Assistant Commissioner |
Gujarat Value Added Tax Act, 2003 |
Sales Tax |
1 |
2005-07 |
Assistant Commissioner |
J&K General Sales Tax |
Sales Tax |
34 |
2004-07 |
High Court , Jammu & Kashmir |
Karnataka VAT Act, 2003 |
Sales Tax |
291 |
2005-06 |
Assistant Commissioner |
Karnataka VAT Act, 2003 |
Sales Tax |
2 |
2016-17 |
Joint Commissioner |
Kerala Sales Tax Act |
Sales Tax |
1 |
2002-05 |
Tribunal |
Kerala Sales Tax Act |
Sales Tax |
0 |
2005-11 |
Commercial tax Officer |
Kerala Sales Tax Act |
Sales Tax |
16 |
2005-10 |
Deputy Commissioner, Appeal |
Kerala Sales Tax Act |
Sales Tax |
0 |
2008-10 |
Intelligence Officer Squad |
Kerala Value Added Tax Act, 2003 |
Sales Tax |
71 |
2006-07 |
High Court of Kerala |
Kerala Value Added Tax Act, 2003 |
Sales Tax |
44 |
2007-12 |
Asst. Commissioner, Spl Circle III, Ernakulam |
Kerala Value Added Tax Act, 2003 |
Sales Tax |
0 |
2016-17 |
Intelligence Officer, Ernakulam |
Kerala Value Added Tax Act, 2003 |
Sales Tax |
0 |
2015-16 |
Intelligence Inspector, Squad No. I, Tellichery |
Kerala Value Added Tax Act, 2003 |
Sales Tax |
0 |
2015-16 |
Intelligence Inspector, Squad No. 3, Ernakulam |
Kerala Value Added Tax Act, 2003 |
Sales Tax |
1 |
2005-17 |
Commercial tax Officer |
Madhya Pradesh Value Added Tax Act, 2002 |
Sales Tax |
24 |
2006-13 |
Tribunal |
Madhya Pradesh Value Added Tax Act, 2002 |
Sales Tax |
22 |
1997-04 |
Deputy Commissioner, Appeal |
Madhya Pradesh Value Added Tax Act, 2002 |
Sales Tax |
1 |
2008-10 |
Deputy Commissioner |
Madhya Pradesh Value Added Tax Act, 2002 |
Sales Tax |
0 |
2004-08 |
Commercial Tax Officer |
Maharashtra Sales Tax Act |
Sales Tax |
0 |
2003-04 |
Joint Commissioner, Appeal |
Punjab Value Added Tax Act, 2005 |
Sales Tax |
30 |
2003-04 |
High Court |
Punjab Value Added Tax Act, 2005 |
Sales Tax |
1 |
2008-10 |
Tribunal |
Punjab Value Added Tax Act, 2005 |
Sales Tax |
1 |
2002-03 |
Jt. Director( Enforcement) |
Punjab Value Added Tax Act, 2005 |
Sales Tax |
1 |
2009-16 |
Deputy Excise and Taxation Commissioner |
UP Value Added Tax Act |
Sales Tax |
6 |
2008-10 |
High court |
UP Value Added Tax Act |
Sales Tax |
21 |
2002-05 |
Assistant Commissioner |
UP Value Added Tax Act |
Sales Tax |
9 |
2005-10 |
Tribunal |
UP Value Added Tax Act |
Sales Tax |
1 |
2007-08 |
Joint Commissioner |
UP Value Added Tax Act |
Sales Tax |
2 |
2003-10 |
Joint Commissioner, Appeal |
UP Value Added Tax Act |
Sales Tax |
2 |
2014-16 |
Additional Commissioner |
UP Value Added Tax Act |
Sales Tax |
9 |
2003-17 |
Deputy Commissioner |
UP Value Added Tax Act |
Sales Tax |
11 |
2005-13 |
Assessing officer |
Uttarakhand Value Added Tax Act, 2005 |
Sales Tax |
0 |
2013-14 |
AO |
West Bengal Value Added Tax Act, 2003 |
Sales Tax |
3 |
1997-12 |
Tribunal |
West Bengal Value Added Tax Act, 2003 |
Sales Tax |
0 |
1996-97 |
The Deputy Commissioner of Commercial Taxes |
West Bengal Value Added Tax Act, 2003 |
Sales Tax |
0 |
1995-98 |
Commercial Tax Officer |
West Bengal Value Added Tax Act, 2003 |
Sales Tax |
9 |
2005-06 |
Revision Board |
Sub Total (A) |
844 |
Finance Act, 1994 (Service tax provisions ) |
Service Tax |
278 |
1995-08 |
Supreme Court |
Finance Act, 1994 (Service tax provisions ) |
Service Tax |
7 |
2002-07 |
High court |
Finance Act, 1994 (Service tax provisions ) |
Service Tax |
9,966 |
1995-12 |
Tribunal |
Finance Act, 1994 (Service tax provisions ) |
Service Tax |
7 |
1999-16 |
Commissioner Adjudication |
Finance Act, 1994 (Service tax provisions ) |
Service Tax |
19 |
2003-10 |
Commissioner Appeal |
Finance Act, 1994 (Service tax provisions ) |
Service Tax |
382 |
2003-13 |
Commissioner of Service Tax |
Sub Total (B) |
10,659 |
|||
Income Tax Act, 1961 |
Income Tax |
128 |
2001-03, 2004-08 |
Supreme Court |
Income Tax Act, 1961 |
Income Tax |
10,622 |
1996-97, 2003-10 |
High Court |
Income Tax Act, 1961 |
Income Tax |
31,580 |
1995-2011 |
Income Tax Appellate Tribunal |
Income Tax Act, 1961 |
Income Tax |
2,882 |
1998-2015 |
Commissioner of Income Tax (Appeals) |
Income Tax Act, 1961 |
Income Tax |
16 |
1994-95, 199698, 2004-16 |
Assessing Officer |
Sub Total (C) |
45,228 |
|||
Custom Act, 1962 |
Custom Act |
4,128 |
2001-05 |
Supreme Court |
Custom Act, 1962 |
Custom Act |
189 |
2003-12 |
Tribunal |
Sub Total (D) |
4,317 |
|||
Grand Total: |
61,048 |
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.302 Mn, Service Tax is Rs.452 Mn, Income Tax is Rs.11,056 Mn and Custom Duty is Rs.2,141 Mn.
(viii) Based on our audit procedures for the purpose of reporting the true and fair view of the financial statements and according to 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, debenture holders or government.
(ix) In our opinion and according to information and explanations given by the management, monies raised by the company by way of term loans were applied for the purpose for which they were raised.
(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the company or on the company by the officers and employees of the Company has been noticed or reported during the year.
(xi) Based on our audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act, 2013.
(xii) In our opinion, the Company is not a Nidhi Company. Therefore, the provisions of clause 3(xi) of the order are not applicable to the Company and hence not commented upon.
(xiii) Based on our audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, transactions with the related parties are in compliance with Section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence not commented upon.
(xv) Based on our audit procedures performed for the purpose of reporting the true and fair view ofthe financial statements and according to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him.
(xvi) According to the information and explanations given to us, the provisions of Section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company
For S. R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration No: 101049W / E300004
per Nilangshu Katriar
Partner
Membership No: 58814
Place: New Delhi
Date: May 9, 2017
Mar 31, 2015
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of
Bharti Airtel Limited ("the Company"), which comprise the Balance Sheet
as at March 31, 2015, the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation of these standalone financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding of the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgements
and estimates that are reasonable and prudent; and the design,
implementation and maintenance of adequate internal financial control
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made thereunder. We conducted our
audit in accordance with the Standards on Auditing issued by the
Institute of Chartered Accountants of India, as specified under Section
143(10) of the Act. Those Standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor's judgement, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal financial control relevant to the Company's
preparation of the financial statements that give a true and fair view
in order to design audit procedures that are appropriate in the
circumstances but not for the purpose of expressing an opinion on
whether the Company has in place an adequate internal financial
controls system over financial reporting and the effectiveness of such
controls. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by the Company's Directors, as well as evaluating the
overall presentation of the financial statements. We believe that the
audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the standalone financial
statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the standalone financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at March 31, 2015, its profit, and its cash flows for the year ended on
that date.
Emphasis of Matters
We draw attention to Note 26(ii)(g)(vii) to the standalone financial
statements which, describes the uncertainties related to the legal
outcome of Department of Telecommunications' demand with respect to One
Time Spectrum Charge. Our opinion is not qualified in respect of this
matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's report) Order, 2015 ("the
Order") issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in the Annexure 1 a
statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purpose 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, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
(d) In our opinion, the aforesaid standalone financial statements
comply with the Accounting Standards specified under section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;
(e) On the basis of written representations received from the directors
as on March 31, 2015, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2015, from being
appointed as a director in terms of section 164 (2) of the Act;
(f) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its standalone financial statements  Refer Note
26(ii)and Note 53(b) to the standalone financial statements;
ii. The Company has made provision, as required under the applicable
law or accounting standards, for material foreseeable losses, if any,
on long-term contracts including derivative contracts  Refer Note 51
to the standalone financial statements;
iii. There were no amounts which were required to be transferred to the
Investor Education and Protection Fund by the Company.
Annexure 1
Annexure referred to in paragraph 1 of 'Report on other Legal and
Regulatory Requirements'
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 verified 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 verified 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 verification results
with the records maintained by the Company and as informed to us, the
impact is not expected to be material.
(ii) (a) The Inventory (other than inventory with third parties) has
been physically verified by the management during the year. In our
opinion, the frequency of verification is reasonable.
(b) The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to 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 verification.
(iii) According to the information and explanations given to us, the
Company has neither granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under Section 189 of the Act. Accordingly, Clause 3(iii) of the Order
is not applicable to the Company for the current year and hence not
commented upon.
(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 proprietary 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. During the course
of our audit, we have neither observed nor have been informed of any
major weakness or continuing failure to correct any major weaknesses in
the aforesaid internal control system.
(v) The Company has not accepted any deposits from the public.
(vi) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under Section 148(1) 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 records with a view to determine whether they are
accurate or complete.
(vii) (a) The Company is generally regular in depositing with
appropriate authorities undisputed statutory dues including provident
fund, employees' state insurance, income-tax, sales-tax, wealth-tax,
service tax, duty of customs, value added tax, cess and other material
statutory dues applicable to it. The provisions relating to duty of
excise 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, employees'
state insurance, income-tax, sales-tax wealth-tax, service tax, duty of
customs, value added tax, cess and other material undisputed statutory
dues were outstanding as 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, duty of customs, value
added tax and cess on account of any dispute, are as follows:
Name of Statutes Nature of the Amount Period to which
Dues Disputed it relates
(in Rs.
Mn)
Andhra Pradesh VAT Act Sales Tax 41 2005-10
Andhra Pradesh VAT Act Sales Tax 46 2010-13
Bihar Value Added
Sales Tax Act Sales Tax 34 2007-08
Bihar Value Added Sales
Tax Act Sales Tax 31 2006-13
Bihar Value Added Sales
Tax Act Sales Tax 29 2005-08
Gujarat Sales Tax Act Sales Tax 1 2006-07
Himachal Pradesh Value
Added Tax Act Sales Tax 1 1999-02
J&K General Sales Tax Sales Tax 34 2004-07
Karnataka Sales Tax Act Sales Tax 291 2005-06
Karnataka Sales Tax Act Sales Tax 1 2001-06
Kerala Sales Tax Act Sales Tax 1 2011-12
Kerala Sales Tax Act Sales Tax 1 2005-13
Kerala Sales Tax Act Sales Tax 11 2005-06
Kerala Sales Tax Act Sales Tax 0 2009-13
Kerala Sales Tax Act Sales Tax 2 2002-05
Kerala Value Added Tax Act Sales Tax 5 2005-06
Kerala Value Added Tax Act Sales Tax 71 2006-07
Kerala Value Added Tax Act Sales Tax 20 2007-09
Madhya Pradesh Commercial
Sales Sales Tax 24 2007-12
Tax Act
Madhya Pradesh Commercial
Sales Sales Tax 0 2005-07
Tax Act
Madhya Pradesh Commercial
Sales Sales Tax 0 2004-08
Tax Act
Madhya Pradesh Commercial
Sales Sales Tax 2 2008-13
Tax Act
Madhya Pradesh Commercial
Sales Sales Tax 22 1997-04
Tax Act
Maharashtra Sales Tax Act Sales Tax 9 2003-04
Maharashtra Sales Tax Act Sales Tax 0 2003-04
Orissa Value Added Tax Act Sales Tax 1 2006-07
Punjab Sales Tax Act Sales Tax 0 2009-10
Punjab Sales Tax Act Sales Tax 30 2003-04
Punjab Sales Tax Act Sales Tax 1 2002-03
Punjab Sales Tax Act Sales Tax 1 2008-10
UP VAT Act Sales Tax 21 2002-12
UP VAT Act Sales Tax 21 2002-05
UP VAT Act Sales Tax 2 2005-10
UP VAT Act Sales Tax 6 2008-11
UP VAT Act Sales Tax 1 2003-04
UP VAT Act Sales Tax 12 2005-07
West Bengal Sales Tax Act Sales Tax 0 1996-97
West Bengal Sales Tax Act Sales Tax 0 1995-96
West Bengal Sales Tax Act Sales Tax 9 2005-06
West Bengal Sales Tax Act Sales Tax 3 1997-12
Sub Total (A) 787
Finance Act, 1994
(Service tax Service Tax 301 2004-08
provisions)
Finance Act, 1994
(Service tax Service Tax 7 2000-07
provisions)
Finance Act, 1994
(Service tax Service Tax 1 2003-06
provisions)
Finance Act, 1994
(Service tax Service Tax 23 2002-07
provisions)
Finance Act, 1994
(Service tax Service Tax 5 1995-97
provisions)
Finance Act, 1994
(Service tax Service Tax 10,230 1995-12
provisions)
Sub Total (B) 10,566
Income Tax Act, 1961 Income Tax 6 2002-04
Income Tax Act, 1961 Income Tax 11,685 1996-97;
2001-02;
2004-10
Income Tax Act, 1961 Income Tax 17,240 2003-11
Income Tax Act, 1961 Income Tax 19,603 1995-2003;
2004-14
Income Tax Act, 1961 Income Tax 1,392 1994-95;
1996-98;
2004-15
Sub Total (C) 49,926
Custom Act, 1962 Custom Act 4,128 2001-06
Custom Act, 1962 Custom Act 126 2006-10
Sub Total (D) 4,254
Name of Statutes Forum where the dispute is pending
Andhra Pradesh VAT Act Tribunal
Andhra Pradesh VAT Act Deputy
Commissioner,Commercial Taxes,
Punjagutta
Bihar Value Added Sales Tax Act Assistant Commissioner
Bihar Value Added Sales Tax Act Joint Commissioner, Appeal
Bihar Value Added Sales Tax Act Tribunal
Gujarat Sales Tax Act Assistant Commissioner
Himachal Pradesh Value Added
Tax Act Additional Commissioner
J & K General Sales Tax High Court , Jammu & Kashmir
Karnataka Sales Tax Act Assistant Commissioner
Karnataka Sales Tax Act Commercial tax Officer
Kerala Sales Tax Act Commercial tax Officer
Kerala Sales Tax Act Commercial tax Officer
Kerala Sales Tax Act Deputy Commissioner, Appeal
Kerala Sales Tax Act Intelligence Officer Squad
Kerala Sales Tax Act Tribunal
Kerala Value Added Tax Act Deputy Commissioner, Appeal
Kerala Value Added Tax Act High Court of Kerala
Kerala Value Added Tax Act Assistant Commissioner, Spl
Circle III, Ernakulam
Madhya Pradesh Commercial
Sales Tax Act Appellate authority
Madhya Pradesh Commercial
Sales Tax Act Assistant Commissioner
Madhya Pradesh Commercial
Sales Tax Act Commercial tax Officer
Madhya Pradesh Commercial
Sales Tax Act Deputy Commissioner
Madhya Pradesh Commercial
Sales Tax Act Deputy Commissioner, Appeal
Maharashtra Sales Tax Act High Court, Mumbai
Maharashtra Sales Tax Act Joint Commissioner, Appeal
Orissa Value Added Tax Act Additional Commissioner
Punjab Sales Tax Act Commissioner
Punjab Sales Tax Act High Court
Punjab Sales Tax Act Jt. Director( Enforcement)
Punjab Sales Tax Act Tribunal
UP VAT Act Assessing officer
UP VAT Act Assistant Commissioner
UP VAT Act Commercial tax Officer
UP VAT Act High court
UP VAT Act Joint Commissioner Appeal
UP VAT Act Tribunal
West Bengal Sales Tax Act The Deputy Commissioner of
Commercial Taxes
West Bengal Sales Tax Act Commercial tax Officer
West Bengal Sales Tax Act Revision Board
West Bengal Sales Tax Act Tribunal
Finance Act, 1994 Supreme Court
Finance Act, 1994 Commissioner Adjudication
Finance Act, 1994 Commissioner Appeal
Finance Act, 1994 High court
Finance Act, 1994 Supreme Court
Finance Act, 1994 Tribunal
Income Tax Act, 1961 Supreme Court
Income Tax Act, 1961 High Court
Income Tax Act, 1961 Income Tax Appellate Tribunal
Income Tax Act, 1961 Commissioner of Income Tax (Appeals)
Income Tax Act, 1961 Assessing Officer
Custom Act, 1962 Supreme Court
Custom Act, 1962 Tribunal
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. 291 Mn, Service tax is Rs. 330 Mn, Income
tax is Rs. 10,115 Mn and Custom Duty is Rs. 2,138 Mn.
d) There were no amounts which were required to be transferred to the
investor education and protection fund by the Company in accordance
with the relevant provisions of the Companies Act, 1956 (1 of 1956) and
rules made thereunder.
(viii) 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.
(ix) 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.
(x) According to the information and explanations given to us, the
Company has given guarantee for loans taken by others from banks or
financial institutions, the terms and conditions whereof, in our
opinion, are not prima- facie prejudicial to the interest of the
Company.
(xi) Based on the information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained.
(xii) 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 by the Company and no material fraud on the Company has
been noticed or reported during the year.
For S. R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration No: 101049W
per Nilangshu Katriar
Partner
Membership No: 58814
Place: New Delhi
Date: April 28, 2015
Mar 31, 2014
We have audited the accompanying financial statements of Bharti Airtel
Limited ("the Company"), which comprise the Balance Sheet as at March
31, 2014, and the Statement of Profit and Loss and Cash Flow Statement
for the year then ended, and a summary of significant accounting
policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
accounting principles generally accepted in India, including the
Accounting Standards notified under the Companies Act, 1956 ("the Act")
read with General Circular 8/2014 dated April 4, 2014 issued by the
Ministry of Corporate Affairs. This responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatement, whether due
to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances but not for the
purpose of expressing an opinion on the effectiveness of the entity''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act 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, 2014;
(b) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Emphasis of Matter
We draw attention to 26(ii)(g)(vii) to the financial statements which
describe the uncertainties related to the legal outcome of Department
of Telecommunications'' demand with respect to One Time Spectrum Charge.
Our opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
Sub-section (4A) of Section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of the Act, 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 purpose of our
audit;
(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, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
(d) In our opinion, the Balance Sheet, Statement of Profit and Loss,
and Cash Flow Statement comply with the Accounting Standards notified
under the Companies Act, 1956, read with General Circular 8/2014 dated
4 April 2014 issued by the Ministry of Corporate Affairs;
(e) On the basis of written representations received from the directors
as on March 31, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2014, from being
appointed as a director in terms of Clause (g) of Sub-section (1) of
Section 274 of the Companies Act, 1956.
Annexure referred to in paragraph 1 of ''Report on Other Legal and
Regulatory Requirements'' our report of even date
(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 Company has physical verification program of covering all fixed
assets over a period of three years. Pursuant to the program, during
the year, a substantial portion of planned physical verification of
fixed assets and capital work in progress has been conducted which, in
our opinion, is reasonable having regard to the size of the Company and
the nature of its assets. No material discrepancies were noticed on
such verification.
(c) There was no substantial disposal of fixed assets during the year.
(ii) (a) The inventory has been physically verified by the management
during the year. In our opinion, the frequency of verification is
reasonable.
(b) 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) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification.
(iii) According to the information and explanations given to us, the
Company has neither granted nor taken any loans, secured or unsecured,
to or from companies, firms or other parties covered in the register
maintained under Section 301 of the Act. Accordingly, Clause (iii) of
the Companies (Auditor''s Report) Order, 2003, (as amended) is not
applicable to the Company for the current year and hence not commented
upon.
(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 proprietary 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. During the course
of our audit, we have neither observed nor have been informed of any
major weakness or continuing failure to correct any major weaknesses in
the aforesaid internal control system.
(v) In our opinion, there are no contracts or arrangements that need to
be entered in the register maintained under Section 301 of the
Companies Act, 1956. Accordingly, the provisions of Clause 4(v)(b) of
the Order is not applicable to the Company and hence not commented
upon.
(vi) The Company has not accepted any deposits from the public.
(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.
(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 Statutes Nature of the Amount
Dues Disputed
(in Rs. Mn)
Andhra Pradesh VAT Act Sales Tax 26
Andhra Pradesh VAT Act Sales Tax 4
Andhra Pradesh VAT Act Sales Tax 1
Bihar Value Added Sales
Tax Act Sales Tax 34
Bihar Value Added Sales
Tax Act Sales Tax 20
Bihar Value Added Sales
Tax Act Sales Tax 16
Bihar Value Added Sales
Tax Act Sales Tax 11
Gujarat Sales Tax Act Sales Tax 1
Himachal Pradesh Value
Added Tax Sales Tax 1
Act
J&K General Sales Tax Sales Tax 34
Karnataka Sales Tax Act Sales Tax 291
Karnataka Sales Tax Act Sales Tax 1
Kerala Sales Tax Act Sales Tax 5
Kerala Sales Tax Act Sales Tax 2
Kerala Sales Tax Act Sales Tax 11
Kerala Sales Tax Act Sales Tax 0
Kerala Sales Tax Act Sales Tax 2
Madhya Pradesh Commercial
Sales Sales Tax 6
Tax Act
Madhya Pradesh
Commercial Sales Sales Tax 0
Tax Act
Madhya Pradesh
Commercial Sales Sales Tax 0
Tax Act
Madhya Pradesh
Commercial Sales Sales Tax 18
Tax Act
Madhya Pradesh
Commercial Sales Sales Tax 22
Tax Act
Maharashtra Sales Tax Act Sales Tax 9
Maharashtra Sales Tax Act Sales Tax 0
Orissa Value Added Tax Act Sales Tax 1
Punjab Sales Tax Act Sales Tax 0
Punjab Sales Tax Act Sales Tax 30
Punjab Sales Tax Act Sales Tax 1
Punjab Sales Tax Act Sales Tax 1
UP VAT Act Sales Tax 21
Name of Statues Period to which Forum where the dispute
it relates is pending
Andhra Pradesh VAT Act 2007-10 Commercial tax Officer
Andhra Pradesh VAT Act 2006-07 Deputy Commissioner
Andhra Pradesh VAT Act 2005-06 Deputy Commissioner,
Commercial Taxes
Bihar Value Added Sales
Tax Act 2007-08 Asst Commissioner
Bihar Value Added Sales
Tax Act 2006-08 Commissioner
Bihar Value Added Sales
Tax Act 2012-13 High court
Bihar Value Added Sales
Tax Act 2005-07 Tribunal
Gujarat Sales Tax Act 2006-07 Assistant Commissioner
Himachal Pradesh Value
Added Tax Act 1999-02 Additional Commissioner
J&K General Sales Tax 2004-07 High Court, Jammu &
Kashmir
Karnataka Sales Tax Act 2005-06 Assistant Commissioner
Karnataka Sales Tax Act 2001-06 Commercial tax Officer
Kerala Sales Tax Act 2005-06 Commissioner (Appeals)
Kerala Sales Tax Act 2005-13 Commercial tax Officer
Kerala Sales Tax Act 2005-06 Deputy Commissioner,
Appeal
Kerala Sales Tax Act 2009-13 Intelligence Officer
Squad
Kerala Sales Tax Act 2002-05 Tribunal
Madhya Pradesh Commercial
Sales Tax Act 2008-11 Appellate authority
Madhya Pradesh Commercial
Sales Tax Act 2005-07 Assistant Commissioner
Madhya Pradesh Commercial
Sales Tax Act 2004-08 Commercial tax Officer
Madhya Pradesh Commercial
Sales Tax Act 2006-10 Deputy Commissioner
Madhya Pradesh Commercial
Sales Tax Act 1997-04 Deputy Commissioner,
Appeal
Maharashtra Sales Tax Act 2003-04 High Court, Mumbai
Maharashtra Sales Tax Act 2003-04 Joint Commissioner,
Appeal
Orissa Value Added Tax Act 2006-07 Additional Commissioner
Punjab Sales Tax Act 2009-10 Commissioner
Punjab Sales Tax Act 2003-04 High Court
Punjab Sales Tax Act 2002-03 Jt. Director
( Enforcement)
Punjab Sales Tax Act 2008-10 Tribunal
UP VAT Act 2002-12 Assessing officer
Name of Statutes Nature of the Amount
Dues Disputed
(in Rs. Mn)
UP VAT Act Sales Tax 21
UP VAT Act Sales Tax 2
UP VAT Act Sales Tax 6
UP VAT Act Sales Tax 1
UP VAT Act Sales Tax 12
West Bengal Sales Tax Act Sales Tax 0
West Bengal Sales Tax Act Sales Tax 0
West Bengal Sales Tax Act Sales Tax 11
West Bengal Sales Tax Act Sales Tax 1
Sub Total (A) 624
Finance Act, 1994 (Service tax Service Tax 301
provisions)
Finance Act, 1994 (Service tax Service Tax 25
provisions)
Finance Act, 1994 (Service tax Service Tax 1
provisions)
Finance Act, 1994 (Service tax Service Tax 22
provisions)
Finance Act, 1994 (Service tax Service Tax 5
provisions)
Finance Act, 1994 (Service tax Service Tax 9,720
provisions)
Sub Total (B) 10,074
Income Tax Act, 1961 Income Tax 6
Income Tax Act, 1961 Income Tax 2,330
Income Tax Act, 1961 Income Tax 17,337
Income Tax Act, 1961 Income Tax 5,491
Income Tax Act, 1961 Income Tax 12,977
Sub Total (C) 38,141
Custom Act, 1962 Custom Act 4,329
Custom Act, 1962 Custom Act 134
Sub Total (D) 4,463
Name of Statues Period to which Forum where the dispute
it relates is pending
UP VAT Act 2002-05 Assistant Commissioner
UP VAT Act 2005-10 Commercial tax Officer
UP VAT Act 2008-11 High court
UP VAT Act 2003-09 Joint Commissioner
Appeal
UP VAT Act 2005-07 Tribunal
West Bengal Sales Tax Act 1996-98 Assistant Commissioner
West Bengal Sales Tax Act 1995-96 Commercial tax Officer
West Bengal Sales Tax Act 2005-08 Revision Board
West Bengal Sales Tax Act 2011-12 Tribunal
Sub Total (A)
Finance Act, 1994
(Service tax provisions) 2004-08 High Court
Finance Act, 1994
(Service tax provisions) 1999-07 Commissioner
Adjudication
Finance Act, 1994
(Service tax provisions) 2003-06 Commissioner Appeal
Finance Act, 1994
(Service tax provisions) 2002-07 High court
Finance Act, 1994
(Service tax provisions) 1995-97 Supreme Court
Finance Act, 1994
(Service tax provisions) 1995-10 Tribunal
Sub Total (B)
Income Tax Act, 1961 2002-04 Supreme Court
Income Tax Act, 1961 1996-97; 2001- High Court
02, 2003-10
Income Tax Act, 1961 2003-04 to Income Tax Appellate
2009-11 Tribunal
Income Tax Act, 1961 1995-2003; Commissioner of Income
2004-13 Tax (Appeals)
Income Tax Act, 1961 1994-95; 1996- Assessing Officer
98; 2005-13
Sub Total (C)
Custom Act, 1962 2001-06 Supreme Court
Custom Act, 1962 2006-10 Tribunal
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. 227 Mn, Service tax is Rs. 54 Mn, Income Tax is
Rs. 11,199 Mn and Custom Duty is Rs. 2,138 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
benefit 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
financial 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, we report that
funds amounting to Rs. 105,265 Mn raised on short-term basis (primarily
represented by capital creditors, network cost payable, deferred
revenue and trade creditors) have been used for long-term investment
(primarily represented by fixed assets and investment in it''s
subsidiaries).
(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 by public issues 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 by the Company and no material fraud on the Company has
been noticed or reported during the year.
For S. R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration No: 101049W
per Nilangshu Katriar
Partner
Membership No: 58814
Place: Gurgaon
Date : April 29, 2014
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of Bharti Airtel
Limited ("the Company"), which comprise the Balance Sheet as at March
31, 2013, and the Statement of Profit and Loss and Cash Flow Statement
for the year then ended, and a summary of significant accounting
policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
accounting principles generally accepted in India, including the
Accounting Standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956 ("the Act"). This responsibility includes the
design, implementation and maintenance of internal control relevant to
the preparation and presentation of the financial statements that give
a true and fair view and are free from material misstatement, whether
due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
statements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act 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, 2013;
(b) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Emphasis of Matter
We draw attention to Note 26(ii)(h)(vi) to the financial statements
which describe the uncertainties related to the legal outcome of
Department of Telecommunications'' demand with respect to One Time
Spectrum Charge. Our opinion is not qualified in respect of this
matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of the Act, 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 purpose of our
audit;
(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, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
(d) In our opinion, the Balance Sheet, Statement of Profit and Loss,
and Cash Flow Statement comply with the Accounting Standards referred
to in subsection (3C) of Section 211 of the Companies Act, 1956;
(e) On the basis of written representations received from the directors
as on March 31, 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2013, from being
appointed as a director in terms of Clause (g) of sub-section (1) of
Section 274 of the Companies Act, 1956.
Annexure referred to in paragraph 1 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 Company has physical verification programme of covering all
fixed assets over a period of three years. Pursuant to the programme,
during the year, a substantial portion of planned physical verification
of fixed assets and capital work in progress has been conducted by the
management which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. No material
discrepancies were noticed on such verification.
(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 verified by the management during the year. In our
opinion, the frequency of verification is reasonable.
(b) 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) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification.
(iii) According to the information and explanations given to us, the
Company has neither granted nor taken any loans, secured or unsecured,
to or from companies, firms or other parties covered in the register
maintained under Section 301 of the Act. Accordingly, Clause (iii) of
the Companies (Auditor''s Report) Order, 2003, (as amended) are not
applicable to the Company for the current year and hence not commented
upon.
(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. During the course of our audit,
we have neither observed nor have been informed of any major weakness
or continuing failure to correct any major weaknesses in the aforesaid
internal control system.
(v) In our opinion, there are no contracts or arrangements that need to
be entered in the register maintained under Section 301 of the
Companies Act, 1956. Accordingly, the provisions of Clause 4(v)(b) of
the Order is not applicable to the Company and hence not commented
upon.
(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.
(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 foUows:
Name of the Statutes Nature of the Amount
Dues Disputed
(in Rs. Mn)
Andhra Pradesh VAT Act Sales Tax 26
Andhra Pradesh VAT Act Sales Tax 5
Bihar Value Added Sales Tax Act Sales Tax 34
Bihar Value Added Sales Tax Act Sales Tax 20
Bihar Value Added Sales Tax Act Sales Tax 16
Bihar Value Added Sales Tax Act Sales Tax 0
Bihar Value Added Sales Tax Act Sales Tax 11
Gujarat Sales Tax Act Sales Tax 1
Himachal Pradesh Value Added Sales Tax 1
Tax Act
J&K General Sales Tax Sales Tax 34
Karnataka Sales Tax Act Sales Tax 291
Karnataka Sales Tax Act Sales Tax 1
UP VAT Act Sales Tax 2
UP VAT Act Sales Tax 12
West Bengal Sales Tax Act Sales Tax 0
West Bengal Sales Tax Act Sales Tax 11
West Bengal Sales Tax Act Sales Tax 1
Sub Total (A) 601
Finance Act, 1994 (Service tax Service Tax 25
provisions)
Finance Act, 1994 (Service tax Service Tax 1,911
provisions)
Finance Act, 1994 (Service tax Service Tax 0
provisions)
Finance Act, 1994 (Service tax Service Tax 1
provisions)
Finance Act, 1994 (Service tax Service Tax 0
provisions)
Finance Act, 1994 (Service tax Service Tax 309
provisions)
Finance Act, 1994 (Service tax Service Tax 1
provisions)
Finance Act, 1994 (Service tax Service Tax 5
provisions)
Finance Act, 1994 (Service tax Service Tax 4,015
provisions)
Sub Total (B) 6,267
Income Tax Act, 1961 Income Tax 6
Income Tax Act, 1961 Income Tax 235
Income Tax Act, 1961 Income Tax 45,677
Income Tax Act, 1961 Income Tax 3,980
Income Tax Act, 1961 Income Tax 527
Income Tax Act, 1961 Income Tax 2,298
Sub Total (C) 52,723
Custom Act, 1962 Custom Act 4,329
Custom Act, 1962 Custom Act 134
Sub Total (D) 4,463
Name of the Statutes Period to Which it Forum where the dispute is
Relates pending
Andhra Pradesh VAT Act 2007 - 10 Commercial tax Officer
Andhra Pradesh VAT Act 2005 - 07 Deputy Commissioner
Bihar Value Added
Sales Tax Act 2007 - 08 Assistant Commissioner
Bihar Value Added
Sales Tax Act 2006 - 08 Commissioner
Bihar Value Added
Sales Tax Act 2012 - 13 High Court, Patna
Bihar Value Added
Sales Tax Act 2007 - 08 Joint Commissioner, Appeal
Bihar Value Added
Sales Tax Act 2005 - 07 Tribunal
Gujarat Sales Tax Act 2006 - 07 Assistant Commissioner
Himachal Pradesh
Value Added Tax Act 1999 - 02 Additional Commissioner
J & K General Sales Tax 2004 - 07 High Court , Jammu &
Kashmir
Karnataka Sales Tax
Act 2005 - 06 Assistant Commissioner
Karnatak Sales Tax Act 2001 - 06 Commercial tax Officer
UP VAT Act 2003 - 04, 2008 - Joint Commissioner, Appeal
09, 2009 - 10
UP VAT Act 2005 - 07 Tribunal
West Bengal Sales Tax
Act 1995 - 98 Assistant Commissioner
West Bengal Sales Tax
Act 2005 - 08 Revision Board
West Bengal Sales Tax
Act 2011 - 12 Tribunal
Finance Act, 1994 1999 - 09 Additional Commissioner
Finance Act, 1994 2002 - 12 Commissioner
Finance Act, 1994 1997 - 07 Commissioner, Appeal
Finance Act, 1994 2000 - 08 Deputy Commissioner
Finance Act, 1994 2004 - 06 Deputy Commissioner,
Appeal
Finance Act, 1994 2002 - 08 High Court, Mumbai
Finance Act, 1994 2006 - 08 Joint Commissioner
Finance Act, 1994 1995 - 97 Supreme Court
Finance Act, 1994 1994 - 09 Custom, Excise, service
tax Appellate Tribunal
Income Tax Act 1961 2002-04 Supreme Court
Income Tax Act 1961 1996-97; 2006-09 High Court
Income Tax Act 1961 2001-02; 2003-04 Income Tax Appellate
Tribunal
to 2009-11
Income Tax Act 1961 1994-2002; 2004-12 Commissioner of Income
Tax (Appeals)
Income Tax Act 1961 2008-09 Dispute Resolution Panel
Income Tax Act 1961 1994-95; 1996-98; Assessing Officer
2004-12
Custom Act, 1962 2001 - 06, 2005-06 Supreme Court
Custom Act 1962 2006 - 07, 2009-10 Tribunal
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. 231 Mn, Service tax is Rs. 54 Mn, Income
Tax is Rs. 9,293 Mn and Custom Duty is Rs. 2,222 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
benefit 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
financial 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, we report that
funds amounting to Rs. 114,045 million raised on short-term basis
(primarily represented by capital creditors, short term borrowings from
one of it''s subsidiary, deferred revenue and trade creditors) have been
used for long-term investment (primarily represented by fixed assets
and investment in it''s subsidiaries).
(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 by public issues 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 by the Company and no material fraud on the Company has
been noticed or reported during the year.
For S. R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration No: 101049W
per Nilangshu Katriar
Partner
Membership No: 58814
Place: New Delhi
Date: May 2, 2013
Mar 31, 2012
1. We have audited the attached balance sheet of Bharti Airtel Limited
('Bharti Airtel' or 'the Company') as at March 31, 2012 and also the
statement of profit and loss 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
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 (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 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, statement of profit and loss and cash flow
statement dealt with by this report are in agreement with the books of
account;
iv. In our opinion, the balance sheet, statement of profit and loss
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, 2012, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
March 31, 2012 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, 2012;
b) in the case of the statement of profit and loss, of the profit 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 AIRTEL LIMITED ('the Company1)
(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 Company has physical verification program of covering all fixed
assets over a period of three years. Pursuant to the program, during
the year, a substantial portion of planned physical verification of
fixed assets and capital work in progress has been conducted by the
management. The Company is in the process of reconciling the
quantitative and situation details of the physical verification 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 verified by the management during the year. In our
opinion, the frequency of verification is reasonable.
(b) 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) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification.
(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 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) In our opinion, there are no contracts or arrangements that need to
be entered in the register maintained under Section 301 of the
Companies Act, 1956. Accordingly, the provisions of clause 4(v)(b) of
the Order is not applicable to the Company and hence not commented
upon.
(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 account 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 Period to Forum where the
dispute is pending
the Dues Disputed Which it
(in Rs. Mn) Relates
Andhra
Pradesh
VAT Act Sales Tax 31 2000-02; Deputy Commissioner,
Commercial
2005-08; Taxes, Punjagutta
2009-10
Gujarat
Sales Tax
Act Sales Tax 1 2006-07 Assistant
Commissioner of
Sales tax
West Bengal
Sales Tax
Act Sales Tax 0 1996-97 The Deputy
Commissioner of
Commercial Taxes
West Bengal
Sales Tax
Act Sales Tax 0 1997-98 The Deputy
Commissioner of
Commercial Taxes
West Bengal
Sales Tax
Act Sales Tax 9 2005-06 Revision Board,
Sales Tax
West Bengal
Sales Tax
Act Sales Tax 12 2006-09 Appelate Authority
West Bengal
Sales Tax
Act Sales Tax 1 2006-09 Sales Tax Tribunal
UP VAT Act Sales Tax 16 2002-05, Assessing Officer
2006-10
UP VAT Act Sales Tax 22 2003-04, Assistant
Commissioner Trade
Tax
2004-05,
2008-10
UP VAT Act Sales Tax 11 2002-03 Commissioner of
Trade Tax
UP VAT Act Sales Tax 18 2006-07, High Court of
Judicature -
Allahabad
2008-10
UP VAT Act Sales Tax 14 2005-07, Joint Commissioner
Appeals
2008-10
UP VAT Act Sales Tax 1 2006-07 Sales Tax Tribunal
Haryana
Sales Tax
Act Sales Tax 3 2002-2004 Sales tax Officer
Himachal
Pradesh
Value Added
Tax Act Sales Tax 2 2007-09 Sales Tax Tribunal
Himachal
Pradesh
Value Added
Tax Act Sales Tax 0 2004-05 Assessing Officer
Punjab Sales
Tax Act Sales Tax 1 2001-02 Jt. Director
(Enforcement)
Punjab Sales
Tax Act Sales Tax 30 2003-04 Punjab & Haryana
High Court
Punjab Sales
Tax Act Sales Tax 1 2008-10 Deputy Excise &
Taxation
Commissioner
Appeals Patiala
Madhya
Pradesh
Commercial
Sales Sales Tax 22 1997-01 & Deputy Commissioner
Appeals
Tax Act 2003-06 &
2007-08
Madhya
Pradesh
Commercial
Sales Sales Tax 15 2006-08 Appellate Authority
Tax Act
Maharashtra
Sales Tax
Act Sales Tax 0 2003-04 Bombay High Court
Kerela Sales
Tax Act Sales Tax 2 2009-11 Intelligence Officer
Squad No. V, Palakkad
Bihar Value
Added Sales
Tax Act Sales Tax 45 2005-08 Assistant
Commissioner
Bihar Value
Added Sales
Tax Act Sales Tax 20 2006-07; Commissioner
2007-08
J&K General
Sales Tax Sales Tax 34 2004-07 High Court
Karnataka
Sales Tax
Act Sales Tax 0 2005-06 High Court
Name of the Statutes Nature of Amount
the Dues Disputed
(in Rs. Mn)
Karnataka Sales Tax Act Sales Tax 291
Tamil Nadu General Sales
Tax Act Sales Tax 1
Sub Total (A) 603
Finance Act, 1994 (Service
tax provisions) Service Tax 1,941
Finance Act, 1994 (Service
tax provisions) Service Tax 0
Finance Act, 1994 (Service
tax provisions) Service Tax 0
Finance Act, 1994 (Service
tax provisions) Service Tax 14
Finance Act, 1994 (Service
tax provisions) Service Tax 2,438
Finance Act, 1994 (Service
tax provisions) Service Tax 255
Finance Act, 1994 (Service
tax provisions) Service Tax 2
Finance Act, 1994 (Service
tax provisions) Service Tax 1
Finance Act, 1994 (Service
tax provisions) Service Tax 1
Finance Act, 1994 (Service
tax provisions) Service Tax 5
Sub Total (B) 4,657
Income Tax Act, 1961 Income Tax 15,540
Income Tax Act, 1961 Income Tax 192
Income Tax Act, 1961 Income Tax 4,339
Income Tax Act, 1961 Income Tax 7
Income Tax Act, 1961 Income Tax 2,139
Sub Total (C) 22,217
Customs Act-1962 Custom Act 2,289
Sub Total (D) 2,289
Name of the Statutes Period to Forum where the dispute is
pending
Which it
Relates
Karnataka Sales Tax Act 2004-05 ACST, Bangalore, Karnataka
Tamil Nadu General Sales
Tax Act 2004-05 Assistant Commissioner,
Sales Tax
Finance Act,1994
(Service tax provisions) 1997-2009 Customs, Excise and
Service Tax Appellate
Tribunal
Finance Act,1994
(Service tax provisions) 1997-98; Commissioner (Appeals)
2000-07
Finance Act,1994
(Service tax provisions) 2004-06 Deputy Commissioner Appeals
Finance Act,1994
(Service tax provisions) 2004-08 Commissioner of Central
Excise
Finance Act,1994
(Service tax provisions) 2004-09 Commissioner, adjudication
Finance Act,1994
(Service tax provisions) 2001-11 Commissioner of Service tax
Finance Act,1994
(Service tax provisions) 2002-03 High Court of Madras,
Chennai
Finance Act,1994
(Service tax provisions) 2000-01; Deputy Commissioner of
Service Tax
2008-09
Finance Act,1994
(Service tax provisions) 2006-07 Joint Commissioner of
Service Tax
Finance Act,1994
(Service tax provisions) 1995-97 Commissioner of Service tax
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; Assessing Officer
2005-10
Income Tax Act,1961 1997-98, Income Tax Appellate
Tribunal
2000-01 to
2006-07
Customs Act-1962 2005-07; Customs, Excise and
Service Tax Appelate
2009-10 Tribunal
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. 228 Mn, Service Tax is Rs. 25 Mn, Income Tax
is Rs. 3,316 Mn and Custom Duty is Rs. 83 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
benefit 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
financial 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. 39,491 million 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 had created security or charge in respect of
debentures outstanding at the beginning of the year and has released
such security on repayment of debentures during the year.
(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/assets, on the Company by employees and
external parties estimated at Rs.16.2 million and Rs.55.4 million,
respectively, as detected by the management for which appropriate steps
were taken to recover the amount and Rs. 0.7 million 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 2, 2012
Mar 31, 2011
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
Mar 31, 2010
1. We have audited the attached Balance Sheet of Bharti Airtel Limited
(Bharti Airtel or the Company) as at March 31, 2010 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 31,2010, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
March 31, 2010 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, 2010;
b) in the case of the profit and loss account, of the profit for
theyear ended on that date; and
c) in the case of cash flow statement, of the cash flows for the year
ended on thatdate.
Annexure referred to in paragraph 4 of our report of even date Re:
BHARTIAIRTEL LIMITED (the Company)
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation with respect
to most of its fixed assets and is in the process of updating
quantitative and situation details with respect to certain fixed assets
i.e. office equipments, in the records maintained by the Company.
(b)The capitalized fixed assets are physically verified 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 at warehouses has
been physically verified 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. As informed, no material discrepancies were
noticed on such verification.
(c) There was no substantial disposal of fixed assets during theyear.
(ii) (a) The inventory (other than inventory with third parties) has
been physically verified by the management during the year. In our
opinion, the frequency of verification is reasonable.
(b)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) The Company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification.
(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 Companies Act, 1956. Accordingly,
clauses (iii) of the Companies (Auditors Report) Order, 2003 (as
amended) are not applicable to the Company for the currentyear.
(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 theaforesaid internal control system.
(v) According to the information and explanations provided by the
management, there are no transactions pursuant to the contracts or
arrangements referred to in section 301 that are required to be entered
in the register maintained under section 301 of the Companies Act,
1956.
(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 applicableto the Company.
Further, since the Central Government has till date not prescribed the
amount of cess payable under section 441 A 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
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 Statues Nature of Amount Disputed Period to
the dues (in Rs000) which it
Relates
Andhra Pradesh Value
Added Tax Act Sales Tax 3,063,609 2000-02;
2005-08
Gujarat Sales Tax Act Sales Tax 928 2006-07
West Bengal SalesTaxAct Sales Tax 402 1996-97
West Bengal SalesTaxAct Sales Tax 14 1997-98
West Bengal Sales
TaxAct Sales Tax 280 1995-96
West Bengal Sales
Tax Act Sales Tax 48,268 2004-05
West Bengal Sales
Tax Act Sales Tax 324,846 2005-06
UP VAT Act Sales Tax 15,356 2003-10
UP VAT Act Sales Tax 500 2003-04
2003-04;
UP VAT Act Sales Tax 20,290 2005-07;
2009-10
UP VAT Act Sales Tax 7,600 2006-07
UP VAT Act Sales Tax 33 2008-09
UP VAT Act Sales Tax 170 2006-07
Haryana SalesTaxAct Sales Tax 2,797 2002-2004
Punjab Sales Tax Act Sales Tax 611 2001-02
Madhya Pradesh
Commercial
Sales TaxAct Sales Tax 21,720 1997-01;
2003-05
UP VAT Act Sales Tax 1,125 2002-05
Karnataka Sales Tax
Act Sales Tax 290,920 2005-06
Kerela Sales Tax
Act Sales Tax 541 2009-10
Bihar Value Added
Sales Tax Act Sales Tax 11,330 2005-07
Delhi Value Added
Tax Act Sales Tax 12,755 2005-06
J&KGeneral Sales Tax Sales Tax 18,434 2004-05
Karnataka SalesTaxAct Sales Tax 153 2005-06
Tamil Nadu SalesTaxAct Sales Tax 634,279 1996-2001
Sub Total (A) 4,476,961
FinanceAct, 1994 (Service
tax provisions) Service Tax 1,419,854 1997-2009
FinanceAct, 1994 (Service
tax provisions) Service Tax 46,844 1999-00;
2002-07
FinanceAct, 1994 (Service
tax provisions) Service Tax 445 2004-06
FinanceAct, 1994 (Service
tax provisions) Service Tax 231,020 2000-01;
2005-08
FinanceAct, 1994 (Service
tax provisions) Service Tax 19,773 2004-07
FinanceAct, 1994 (Service
tax provisions) Service Tax 334,519 2004-08
FinanceAct, 1994 (Service
tax provisions) Service Tax 5,564 2002-03
FinanceAct, 1994 (Service
tax provisions) Service Tax 966 1995-96
FinanceAct, 1994 (Service
tax provisions) Service Tax 1,166 2004-05
FinanceAct, 1994 (Service
tax provisions) Service Tax 3,657 2007-08
Sub Total (B) 2,063,807
Name of the Statue Forum where the dispute is
pending
Andhra Pradesh Value Added TaxAct High Court of Andhra Pradesh
Gujarat Sales TaxAct Commissioner (Appeals)
West Bengal SalesTaxAct DCCT-Appellate Stage
West Bengal SalesTaxAct DCAppeals
West Bengal SalesTaxAct The Commercial Tax Officer
West Bengal SalesTaxAct West Bengal Taxation Tribunal
West Bengal SalesTaxAct DCCT Appeal
UP VAT Act Assessing Officer
UP VAT Act Joint Commissioner Appeals
UP VAT Act Joint Commissioner Appeals
UP VAT Act High Court of Judicatureat
Allahabad, Lucknow Bench
UP VAT Act Assistant Commissioner of Sales tax
UP VAT Act Commercial Taxes Tribunal
Haryana SalesTaxAct Joint Commissioner
Punjab SalesTaxAct Jt. Director (Enforcement)
Madhya Pradesh Commercial
Sales TaxAct Deputy Commissioner Appeals
UP VAT Act Assistant Commissioner
Karnataka SalesTaxAct Tribunal
Kerela SalesTaxAct Intelligence Officer Squad No.
V, Palakkad
Bihar Value Added SalesTaxAct Asst. Commissioner
Delhi Value Added TaxAct Sales Tax Department
J&KGeneral SalesTax High Court
Karnataka SalesTaxAct High Court
Tamil Nadu SalesTaxAct Commercial Tax Officer
Sub Total (A)
FinanceAct, 1994 (Servicetax
provisions) Customs, Excise and Service
Tax Appelate Tribunal
FinanceAct, 1994 (Servicetax
provisions) Commissioner (Appeals)
FinanceAct, 1994 (Servicetax
provisions) Deputy Commissioner Appeals
FinanceAct, 1994 (Servicetax
provisions) Suppdt. Of Central Excise, Mohali
FinanceAct, 1994 (Servicetax
provisions) Commissioner of Excise
FinanceAct, 1994 (Servicetax
provisions) Commissioner of Service Tax
FinanceAct, 1994 (Servicetax
provisions) Deputy Commissioner of Service Tax
(Appeals)
FinanceAct, 1994 (Servicetax
provisions) Additional Commissioner of Service Tax
FinanceAct, 1994 (Servicetax
provisions) Assistant Commissioner of Service Tax
FinanceAct, 1994 (Servicetax
provisions) Joint Commissioner of Service Tax
Name of the Statues Nature of Amount Disputed Period to
the dues (in Rs000) which it
Relates
Income TaxAct, 1961 IncomeTax 1,987,175 2001-10
Income TaxAct, 1961 IncomeTax 5,950 2002-04
6,420 1997-98
Income TaxAct, 1961 IncomeTax 3,622,088 2005-06
Income TaxAct, 1961 IncomeTax 102,786 2001-05;
2006-07
Sub Total (C) 5,724,420
Customs Act-1962 CustomAct 2,167,154 2001-04;
2007-08
Customs Act-1962 CustomAct 31,194 2005-06
Sub Total (D) 2,198,348
Name of the Statue Forum where the dispute is
pending
Income TaxAct, 1961 Commissioner of Income Tax (Appeals)
Income TaxAct, 1961 High Court
Assessing Officer
Income TaxAct, 1961 Dispute Resolution Panel
Income TaxAct, 1961 Income Tax Appelate Tribunal
Sub Total (C)
Customs Act-1962 Customs, Excise and Service Tax Appelate
Tribunal, Bangalore
Customs Act-1962 Customs, Excise and Service Tax Appelate
Tribunal, Chennai
Of the above cases, total amount deposited in respect of Sales Tax is
Rs 914,162 thousand, Service Tax is Rs 5,484 thousand, Income Tax is Rs
847,803 thousand and Custom Duty is Rs 57,725 thousand.
(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 years.
(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 ouropinion, theCompany is nota chitfund ora 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 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 (Auditors Report) Order,
2003 (as amended) are not applicable to the Com pany.
(xv) According to the information and explanations given to us,
theCompany has given guarantee for loans taken by others from bank or
financial institutions, the terms and conditions whereof in our opinion
are not prima-facie prejudicial to the interest of theCompany.
(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 6,449,385 thousand 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 attheyear end.
(xx) The Company has not raised any money by public issues during
theyear.
(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 by employees estimated at Rs 115,105 thousand
and by external parties Rs 20,255 thousand detected by the management
for which appropriate steps were taken to strengthen controls and Rs
12,519 thousand out of the such estimated amounts, has been recovered
by the Com pany.
ForS.R. BATLIBOI & ASSOCIATES
Firm Registration No. 101049W
Chartered Accountants
perPrashantSinghal
Partner
Membership No.93283
Place: Gurgaon
Date: April 28,2010
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