INDEPENDENT AUDITORS
Standalone financial statements with Auditors’ report
To
The Members of Bharti Airtel Limited
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.
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
Annexure referred to in paragraph 3 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 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 the Dues |
Amount Disputed (in Rs Mn) |
Period to Which it Relates |
Forum where the dispute is pending |
| Andhra Pradesh VAT Act |
Sales Tax |
31 |
2000-02; 2005-08; 2009-10 |
Deputy Commissioner, Commercial Taxes, Punjagutta |
| 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 |
Appellate Authority |
| West Bengal Sales Tax Act |
Sales Tax |
1 |
2006-09 |
Sales Tax Tribunal |
| UP VAT Act |
Sales Tax |
16 |
2002-05, 2006-10 |
Assessing Officer |
| UP VAT Act |
Sales Tax |
22 |
2003-04, 2004-05, 2008-10 |
Assistant Commissioner Trade Tax |
| UP VAT Act |
Sales Tax |
11 |
2002-03 |
Commissioner of Trade Tax |
| UP VAT Act |
Sales Tax |
18 |
2006-07, 2008-10 |
High Court of Judicature - Allahabad |
| UP VAT Act |
Sales Tax |
14 |
2005-07, 2008-10 |
Joint Commissioner Appeals |
| 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 Tax Act |
Sales Tax |
22 |
1997-01 & 2003-06 & 2007-08 |
Deputy Commissioner Appeals |
| Madhya Pradesh Commercial Sales Tax Act |
Sales Tax |
15 |
2006-08 |
Appellate Authority |
| 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 Commisioner |
| Bihar Value Added Sales Tax Act |
Sales Tax |
20 |
2006-07; 2007-08 |
Commissioner |
| J&K General Sales Tax |
Sales Tax |
34 |
2004-07 |
High Court |
| Karnataka Sales Tax Act |
Sales Tax |
0 |
2005-06 |
High Court |
| Karnataka Sales Tax Act |
Sales Tax |
291 |
2004-05 |
ACST, Bangalore, Karnataka |
| Tamil Nadu General Sales Tax Act |
Sales Tax |
1 |
2004-05 |
Assistant Commissioner, Sales Tax |
| Sub Total (A) |
|
603 |
|
|
| Finance Act, 1994 (Service tax provisions) |
Service Tax |
1,941 |
1997-2009 |
Customs, Excise and Service Tax Appellate Tribunal |
| Finance Act, 1994 (Service tax provisions) |
Service Tax |
0 |
1997-98; 2000-07 |
Commissioner (Appeals) |
| Finance Act, 1994 (Service tax provisions) |
Service Tax |
0 |
2004-06 |
Deputy Commissioner Appeals |
| Finance Act, 1994 (Service tax provisions) |
Service Tax |
14 |
2004-08 |
Commissioner of Central Excise |
| Finance Act, 1994 (Service tax provisions) |
Service Tax |
2,438 |
2004-09 |
Commissioner, adjudication |
| Finance Act, 1994 (Service tax provisions) |
Service Tax |
255 |
2001-11 |
Commissioner of Service tax |
| Finance Act, 1994 (Service tax provisions) |
Service Tax |
2 |
2002-03 |
High Court of Madaras, chennai |
| Finance Act, 1994 (Service tax provisions) |
Service Tax |
1 |
2000-01; 2008-09 |
Deputy Commissioner of Service Tax |
| Finance Act, 1994 (Service tax provisions) |
Service Tax |
1 |
2006-07 |
Joint Commissioner of Service Tax |
| Finance Act, 1994 (Service tax provisions) |
Service Tax |
5 |
1995-97 |
Commissioner of Service tax |
| Sub Total (B) |
|
4,657 |
|
|
| Income Tax Act, 1961 |
Income Tax |
15,540 |
1994-2011 |
Commissioner of Income Tax (Appeals) |
| Income Tax Act, 1961 |
Income Tax |
192 |
1994-1995; 1996-97; 1999-00; 2003-05 |
High Court |
| Income Tax Act, 1961 |
Income Tax |
4,339 |
2006-07 |
Dispute Resolution Panel |
| Income Tax Act, 1961 |
Income Tax |
7 |
1996-97; 2005-10 |
Assessing Officer |
| Income Tax Act, 1961 |
Income Tax |
2,139 |
1997-98, 2000-01 to 2006-07 |
Income Tax Appellate Tribunal |
| Sub Total (C) |
|
22,217 |
|
|
| Customs Act-1962 |
Custom Act |
2,289 |
2005-07; 2009-10 |
Customs, Excise and Service Tax Appelate Tribunal |
| Sub Total (D) |
|
2,289 |
|
|
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 isRs
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
Secretarial audit report
The Board of Directors Bharti Airtel Limited Bharti Crescent, 1, Nelson Mandela Road
Vasant Kunj, Phase II, New Delhi – 110070
We have examined the registers, records and documents of Bharti Airtel Limited (the
Company) for the financial year ended 31st March 2012 in the light of the
provisions contained in-
• The Companies Act, 1956 and the Rules made thereunder.
• The Depositories Act, 1996 and the Rules made thereunder and the bye-laws of the
Depositories who have been given the requisite Certificates of Registration under the
Securities and Exchange Board of India Act, 1992.
• The Securities Contracts (Regulation) Act, 1956 and the rules made thereunder.
• The Securities and Exchange Board of India Act, 1992 and the Rules, Guidelines
and Regulations made thereunder including:
– The Securities and Exchange Board of India (Substantial Acquisition of Shares
and Takeovers) Regulations, 2011;
– The Securities and Exchange Board of India (Prohibition of Insider Trading
Regulations), 1992;
– The Securities and Exchange Board of India(Employee Stock Option Scheme and
Employee Stock Purchase Scheme) Guidelines, 1999.
• The listing agreement with the National Stock Exchange and with the Bombay Stock
Exchange
A. Based on our examination and verification of the records made available to us and
according to the clarifications and explanations given to us by the Company, we report
that the Company has, in our opinion, complied with the applicable provisions of the
Companies Act, 1956 and the rules made thereunder and of the various Acts and the Rules,
Regulations and Guidelines made thereunder, listing agreement as mentioned above and of
the Memorandum and Articles of Association of the Company, with regard to:
1. Maintenance of various statutory and non-statutory registers and documents and
making necessary changes therein as and when the occasion demands.
2. Filling with the Registrar of Companies the forms, returns and resolutions.
3. Service of the requisite documents by the Company on its members, registrar and
stock exchanges.
4. Composition of the Board, appointment, retirement and resignation of directors.
5. Remuneration to directors.
6. Service of notice and agenda of Board meetings and meetings of the committee of
directors.
7. Meeting of the Board and its committees.
8. Holding Annual General Meeting and production of the various registers thereat.
9. Recording the minutes of proceedings of board meetings, committee meetings and
general meetings.
10. Appointment and remuneration of auditors.
11. The Company has declared dividend and paid to the eligible shareholders in
compliance with the provisions of Section 205 of the Act during the year.
12. Registration of transfer of shares held in physical mode. 13. Dematerialisation and
Rematerialisation of shares.
14. Execution of contracts, affixation of common seal, registered office and the name
of the Company.
15. Conferment of options and transfer of shares under the Employee Stock Option Scheme
of the Company.
16. Requirement of the Securities and Exchange Board of India (Substantial Acquisition
of Shares and Takeovers) Regulations, 2011.
17. Requirement of the Securities and Exchange Board of India (Prohibition of Insider
Trading regulations), 1992 18. Requirements set out in the listing agreement with the
aforementioned stock exchanges.
B. We further report that during the period -
(i) the directors of the Company have complied with the various requirements relating
to making of disclosures, declarations in regard to their other directorships, memberships
of committees of the board of companies of which they are directors, their shareholding
and interest or concern in the contracts entered into by the Company in the pursuing its
normal business, and (ii) there was no prosecution initiated against or show cause notice
received by the Company and no fine or penalties were imposed on the company under the
aforementioned Acts, Rules, Regulations and Guidelines made thereunder or on its directors
and officers.
|
For Chandrasekaran Associates |
|
Company Secretaries |
|
Dr. S Chandrasekaran |
|
Senior Partner |
| Place: New Delhi |
FCS: 1644 |
| Date: April 23, 2012 |
CP: 715 |