Mar 31, 2023
To The Members of Indus Towers Limited (formerly Bharti Infratel Limited)
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the accompanying standalone financial statements of Indus Towers Limited (formerly Bharti Infratel 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 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 31,2023, its profit, its total comprehensive income, its changes in equity and its cash flows for the year then ended.
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (âSAsâ) specified under section 143(10) of the Act. 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.
Material uncertainty at one of the largest customers of the Company and its consequential impact on Companyâs business operations
We draw attention to note 48 of the standalone financial statements, which describes the impact on business operations, receivables, property, plant and equipment and financial position of the Company on account of one of the largest customerâs financial conditions and its ability to continue as a going concern. The customerâs assumption of going concern is essentially dependent on its ability to raise additional funds as required and successful negotiations with lenders and vendors for continued support and generation of cash flow from its operations that the said customer needs to settle its liabilities as they fall due.
Our opinion is not modified in respect of the above matter.
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.
Sr. No. |
Key Audit Matters |
Auditorâs Response |
1 |
Revenue recognition - accuracy of revenue recorded We identified revenue recognition as a key audit matter because there is a risk around the accuracy of revenue recorded at rates other than the approved contracts / agreements. This is because the Companyâs billing systems are complex and process large volume of data, including combination of different components of revenue. Further, the Company has multiple reconciliation matters with their customers and the Company uses significant estimates and judgements to assess the adequacy of any uncertainty involved with respect to potential reversal of revenue in future. (Refer to notes 4.1(i) and 24 to the standalone financial statements) |
Principal audit procedures performed: Our audit approach consisted evaluation of design and implementation of controls, and testing the operating effectiveness of the internal controls over: ⢠Capturing and recording of revenue transactions; ⢠Authorisation of rate changes and input of the rate changes into the billing systems; ⢠Preparation and validation of the billing schedule; ⢠Calculations of amounts billed to operators, in line with underlying supporting documents; and ⢠Assessment of adequacy of revenue reversals. We tested a sample of invoices issued to operators to ensure that the revenue recorded are agreeing to the relevant underlying supporting documentation. We also performed substantive analytical procedures to test the recorded rental revenue. We involved our internal IT specialists to test IT general controls and application specific controls surrounding billing system, including testing of system generated reports used in our audit. We challenged management estimates around appropriateness of revenue recognition and reversals of revenue in future on account of uncertainty by examining empirical data and historical trend of negotiation patterns with the customers. |
2 |
Recognition of revenue and recoverability of receivables from one of largest customers of the Company (âthe Customerâ) The Customer accounts for substantial part of revenue from operations for the year ended March 31, 2023 and constitutes a significant part of outstanding trade receivables and unbilled revenue as at March 31,2023. The Customer in its published unaudited financial results for the quarter and nine months ended December 31, 2022 had indicated that its ability to continue as a going concern is dependent on its ability to raise additional funds as required, successful negotiations with lenders and vendors for continued support and generation of cash flow from operations that the said customer needs to settle its liabilities as they fall due. The matter has been identified as key audit matter due to the significance of matter and involvement of significant judgements and estimation around appropriateness of revenue to be recognized by the Company for services rendered to the Customer and assessment relating to the adequacy of allowances while evaluating the recoverability of receivables. (Refer to note 48 to the standalone financial statements and emphasis of matter paragraph included above) |
Principal audit procedures performed: We tested the design and implementation and operating effectiveness for internal controls around: ⢠assessment of recognition of revenue (including unbilled revenue) from the Customer; and ⢠evaluation relating to the adequacy of allowances while assessing the recoverability of receivables from the Customer. We challenged management judgements and estimation around the uncertainties involved in ultimate collectability of revenue (including unbilled revenue) from the customer and appropriateness of revenue recognised by the Company. We challenged the adequacy of allowances while assessing the recoverability of receivables from the Customer considering the latest developments, public information on funding plan, financial results, public news related to the Customer and the various correspondences made with the Customer during the year. We obtained the copy of payment plans agreed with the Customer and evaluated the collection patterns over revenue recognised to assess whether collections have been received as per the agreed plan. |
Sr. No. |
Key Audit Matters |
Auditorâs Response |
3 |
Contingent Liabilities and Provisions: Disputed tax matters The Company is subjected to a number of significant income tax litigations and indirect tax litigations (âlitigationsâ) which are in appeal before various judicial forums. The eventual outcome of these litigations is uncertain and the positions taken by the management are based on the application of significant judgement and estimation. The review of these matters requires application and interpretation of tax laws and reference to applicable judicial pronouncements. Given the uncertainty and application of significant judgment in this area in terms of the eventual outcome of litigations, we determined this to be a key audit matter. (Refer to notes 4.1 (p)(ii) and 36(b) to the standalone financial statements) |
Principal audit procedures performed: Our audit procedures included evaluation of design and implementation of controls and testing of operating effectiveness of the companyâs controls over identification of litigations and evaluation of possible outcomes around litigations. We obtained the list of litigations from the management and reviewed their assessment of the likelihood of outflow of economic resources being probable, possible or remote in respect of these litigations. We involved our internal direct and indirect tax specialists, who obtained an understanding of the current status of the litigations, conducted discussions with the management, reviewed independent legal advice obtained by management, if any, and considered relevant legal provisions and available precedents to challenge managementâs underlying assumptions in estimating the possible outcome of these litigations. We also assessed the adequacy and appropriateness of the disclosures made by the management in the notes to 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 information included in the Business Responsibility and Sustainability Report, Management Discussion and Analysis Report, Boardâs Report including Annexures to the Boardâs Report and Report on 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 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 financial statement 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 the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The 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:
⢠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 with reference to standalone financial statements 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 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 financial 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) 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/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 the 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 the 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 36(b) of the standalone financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses. Refer note 44 of 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 45 of 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. Refer note 49 of the standalone financial statements.
(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. Refer note 49 of the standalone financial statements.
(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 subclause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.
v. The Company has not declared or paid any dividend during the year and has not proposed final dividend for the year. Refer note 13b of the standalone financial statements relating to interim dividend for the previous year.
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 (Firmâs Registration No. 117366W/W-100018)
Anup Kumar Sharma
(Partner)
Place: Gurugram (Membership No. 063828)
Date: April 26, 2023 (UDIN: 23063828BGXOWH1922)
Mar 31, 2022
Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the accompanying standalone financial statements of Indus Towers Limited (formerly Bharti Infratel Limited) (âthe Companyâ), which comprise the Balance Sheet as at 31 March 2022, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.
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 31 March 2022, and its profit, total comprehensive income, its cash flows and the changes in equity 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 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 (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 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.
Emphasis of Matter
Material uncertainty arising out of certain developments on one of the largest customer and its consequential impact on business operations of the Company
We draw attention to note 49 of the standalone financial statements, which describes the impact on business operations, receivables and financial position of the Company on account of one of the largest customerâs financial condition and its ability to continue as a going concern.
The customerâs assumption of going concern is essentially dependent on its ability to raise additional funds as required and successful negotiations with lenders for continued support and generation of cash flow from its operations that it needs to settle its liabilities as they fall due.
Our opinion is not modified in respect of above 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.
S. No. |
Key Audit Matter |
Auditorâs Response |
1 |
Revenue recognition - accuracy of revenue recorded We identified revenue recognition as a key audit matter because there is a risk around the accuracy of revenue recorded at rates other than the approved contracts / agreements. This is because the Companyâs billing systems are complex and process large volume of data, including combination of different components of revenue. (Refer to note 4.1 (i) and 24 to the standalone financial statements) |
Principal audit procedures performed: Our audit approach consisted evaluation of design and implementation of controls, and testing the operating effectiveness of the internal controls over: ⢠Capture and recording of revenue transactions; ⢠Authorisation of rates changes and input of the rate changes into the billing systems; ⢠Preparation and validation of the billing schedule; and ⢠Calculations of amounts billed to operators, in line with underlying contracts / agreements; We tested a sample of invoices issued to operators to ensure that the revenue recorded are agreeing to the relevant underlying supporting documentation. We also performed substantive analytical procedures to test the recorded rental revenue; We involved our internal IT specialists to test IT general controls and application specific controls surrounding billing system, including testing of system generated reports used in our audit. |
2 |
Contingent Liabilities and Provisions: Disputed tax matters Company is subjected to a number of significant income tax litigations and indirect tax litigations (âlitigationsâ) which are in appeal before various judicial forums. The eventual outcome of these litigations are uncertain and the positions taken by the management are based on the application of significant judgement and estimation. The review of these matters requires application and interpretation of tax laws and reference to applicable judicial pronouncements. Given the uncertainty and application of significant judgment in this area in terms of the eventual outcome of litigations, we determined this to be a key audit matter. (Refer to note 4.1(p)(ii) and note 36(b) to the standalone financial statements) |
Principal audit procedures performed: Our audit procedures included evaluation of design and implementation of controls and testing of operating effectiveness of the Companyâs controls over identification of litigations and evaluation of possible outcomes around litigations. We obtained the list of litigations from the management and reviewed their assessment of the likelihood of outflow of economic resources being probable, possible or remote in respect of these tax litigations. We involved our internal direct and indirect tax experts, who obtained an understanding of the current status of the litigations, conducted discussions with the management, reviewed independent legal advice obtained by management, if any, and considered relevant legal provisions and available precedents to challenge managementâs underlying assumptions in estimating the possible outcome of these litigations; and We assessed and validated the adequacy and appropriateness of the disclosures made by the management 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 information included in the Management Discussion and Analysis, Boardâs Report, Business Responsibility and sustainability Report and Report on Corporate Governance, but does not include the standalone financial statements and our auditorâs 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.
Managementâs 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 , cash flows and changes in equity 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 statement 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.
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:
⢠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 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) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Cash Flows and 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 Ind AS specified under Section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31 March, 2022 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 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,
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 Refer Note 36(b) to the standalone financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses. Refer Note 44 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 45 to the standalone financial statements.
iv. (a) The Management has represented that,
to the best of it''s knowledge and belief, as disclosed in the notes to the accounts no funds (which are material either individually or in the aggregate) 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 ("Intermediaries"), 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 ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(b) The Management has represented, that, to the best of itâs knowledge and belief, as disclosed in the notes to accounts, no funds (which are material either individually or in the aggregate) 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 mis-statement.
v. The interim dividend declared by the Company subsequent to the year end is in accordance with section 123 of the Companies Act 2013 to the extent it applies to declaration of dividend. However, the said dividend was not due for payment on the date of this audit report.
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
Place: Gurugram (Membership No.094468)
Date: May 05, 2022 UDIN: 22094468AILGLP9297
Mar 31, 2021
Report on the Audit of the Standalone FinancialStatements
We have audited the accompanying standalone financial statements of Indus Towers Limited (formerly Bharti Infratel Limited) (âthe Companyâ), which comprise the Balance Sheet as at 31 March 2021, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.
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 31 March 2021, and its profit, total comprehensive income, its cash flows and the changes in equity 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 (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.
We draw your attention to note 51 of the standalone financial statements, which describes the effect on business operations and financial position of the Company on account of the one of the largest customer''s ability to continue as going concern. The Customer''s assumption of going concern is essentially dependent on successful negotiations with lenders and its ability to generate the cash flow from its operations that it needs to settle/refinance its liabilities and guarantees as they fall due. The Board of Directors of the customer, at their meeting held on 4 September 2020 have approved the fund-raising plan of up to H 250,000 million.
Our opinion is not modified in respect of above matter.
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.
S. No. |
Key Audit Matter |
Auditorâs Response |
1 |
Revenue recognition - accuracy of revenue recorded We identified revenue recognition as a key audit matter because there is a risk around the accuracy of revenue recorded at rates other than the approved contracts / agreements. This is because the Company''s billing systems are complex and process large volume of data, including combination of different components of revenue. |
Principal audit procedures performed: Our audit approach consisted evaluation of design and implementation of controls, and testing the operating effectiveness of the internal controls over: ⢠Capture and recording of revenue transactions; ⢠Authorisation of rates changes and input of the rate changes into the billing systems; |
S. Key Audit Matter No. |
Auditorâs Response |
(Refer to note 4.1 (i) and 26 to the standalone financial |
⢠Preparation and validation of the billing schedule; and |
statements) |
⢠Calculations of amounts billed to operators, in line with underlying contracts / agreements; |
We tested a sample of invoices issued to operators to ensure that the revenue recorded are agreeing to the relevant underlying supporting documentation. We also performed substantive analytical procedures to test the recorded rental revenue; |
|
We involved our internal IT specialists to test IT general controls and application specific controls surrounding billing system, including testing of system generated reports used in our audit; |
2 Contingent Liabilities and Provisions: Disputed tax |
Principal audit procedures performed: |
matters |
Our audit procedures included evaluation of design and |
Company is subjected to a number of significant income tax |
implementation of controls and testing of operating effectiveness |
litigations and indirect tax litigations (âlitigationsâ) which are |
of the Company''s controls over identification of litigations and |
in appeal before various judicial forums. |
evaluation of possible outcomes around litigations. |
The eventual outcome of these litigations are uncertain |
We obtained the list of litigations from the management and |
and the positions taken by the management are based on |
reviewed their assessment of the likelihood of outflow of economic |
the application of significant judgement and estimation. |
resources being probable, possible or remote in respect of these |
The review of these matters requires application and |
tax litigations. |
interpretation of tax laws and reference to applicable judicial pronouncements. |
We involved our internal direct and indirect tax experts, who obtained an understanding of the current status of the litigations, |
Given the uncertainty and application of significant judgment |
conducted discussions with the management, reviewed |
in this area in terms of the eventual outcome of litigations, |
independent legal advice obtained by management, if any, and |
we determined this to be a key audit matter. |
considered relevant legal provisions and available precedents to |
(Refer to note 4.1(p)(ii) and note 38(b) to the standalone financial statements) |
challenge management''s underlying assumptions in estimating the possible outcome of these litigations; and |
We assessed and validated the adequacy and appropriateness of the disclosures made by the management in the standalone financial statements. |
Effective November 19, 2020, erstwhile Indus Towers Limited and Bharti Infratel Limited merged pursuant to scheme of amalgamation and arrangement which resulted into formation of a joint arrangement between existing shareholders of both companies. The Company accounted for the merger under the pooling of interest method. We have determined this to be a key audit matter in view of complexity involved in selection of method of accounting for formation of the joint arrangement.
(Refer to note 3 to the standalone financial statements)
We read and examined the scheme of amalgamation and arrangement pursuant to which merger was carried out along with regulatory approvals required for the scheme to take effect.
We evaluated the appropriateness of pooling of interest method of accounting adopted by the management to account for the merger, with reference to the requirements of the accounting principles generally accepted in India.
We have assessed the adequacy and appropriateness of the disclosures around selection of method of accounting for this transaction in accordance with the accounting standards.
⢠The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, Board''s Report, Business Responsibility Report and Report on Corporate Governance, 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.
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 , cash flows and changes in equity 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 statement 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.
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.
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 Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Cash Flows and 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 Ind AS specified under Section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31 March, 2021 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 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 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,
h) 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.
i) 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. Refer Note 38(b) to the standalone financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses. Refer Note 46 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 47 to the standalone financial statements.
2. As required by the Companies (Auditor''s 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.
Chartered Accountants
(Firm''s Registration No. 117366W/W-100018)
Partner
(Membership No.094468)
UDIN: 21094468AAAADC5493
Place: Gurugram
Date: April 22, 2021
Mar 31, 2019
Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the accompanying standalone financial statements of Bharti Infratel Limited (the Company), which comprise the Balance Sheet as at March. 31, 2019, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.
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, 2019, and its profit, total comprehensive income, its cash flows and the changes in equity 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 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 (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 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
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.
Sr. No. |
Key Audit Matter |
Auditorâs Response |
1 |
Revenue recognition - accuracy of revenue recorded There is an inherent risk around the accuracy of revenue recorded at rates other than the approved contracts / agreements. This is because the Companyâs billing systems are complex and process large volume of data, including combination of different components of revenue. (Refer to Note 3(i) and 25 to the standalone financial statements) |
Principal audit procedures performed: Our audit approach consisted evaluation of design and implementation of controls, and testing the operating effectiveness of the internal controls over: - Capture and recording of revenue transactions; - Authorisation of rates changes and input of the rate changes into the billing systems; - Preparation and validation of the billing schedule; and - Calculations of amounts billed to operators, in line with underlying contracts / agreements; We tested a sample of invoices issued to operators to ensure that the revenue recorded are agreeing to the relevant underlying supporting documentation. We also performed analytical procedures to test the recorded rental revenue; |
Sr. No. |
Key Audit Matter |
Auditorâs Response |
|
We involved our internal IT specialists to test IT general controls and application specific controls surrounding billing system, including testing of system generated reports used in our audit; We examined and assessed the accounting policies applied in the recognition of revenue for compliance with the applicable financial reporting framework; and We challenged management estimates around appropriateness of revenue recognition and reversals for biases that could result in material misstatement. |
|||
2 |
Evaluation of uncertain tax positions The Company has material uncertain tax positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes. (Refer to Note 39(b) to the standalone financial statements) |
Principal audit procedures performed: Our audit procedures included evaluation of design of controls and testing of operating effectiveness of the Companyâs controls over assessment and evaluation of possible outcomes around tax disputes. We involved our internal tax experts, to gain understanding of the current status of the disputed tax cases; and to challenge managementâs underlying assumptions in estimating the possible outcome of these tax disputes. Our internal tax experts considered legal precedence and other ruling in evaluating managementâs position on these uncertain tax positions. We also considered the effect of new information in respect of uncertain tax positions as at April 1, 2018 to evaluate whether any change was required to managementâs position on these uncertainties. Our audit procedures also included; - Reading and evaluating external legal opinions obtained by the management; - Direct communication with the relevant third party legal representatives and discussion with them regarding certain material disputed tax cases; - Inquiry with local management, reading relevant correspondence and assessing management conclusion in similar tax cases. |
Sr. No. |
Key Audit Matter |
Auditorâs Response |
3 |
Valuation and existence of property, plant and equipment including assessment of |
Principal audit procedures performed: |
useful lives and residual values |
Our audit approach consisted evaluation of design and implementation of controls, and testing the operating effectiveness of the internal controls over: |
|
Property, plant and equipment represents a significant proportion of the Companyâs |
- Valuation of property, plant and equipment and review of useful lives; |
|
asset base, being 30 % of the Companyâs |
- Periodic physical verification of property, plant and equipment; |
|
total assets. The estimates and assumptions |
We involved our internal IT specialists to test IT general controls and application |
|
made to determine the carrying amounts, including whether and when to capitalise |
specific controls including testing of system generated reports used in our audit; |
|
or expense certain costs, and the |
We tested a sample items of property, plant and equipment acquired and |
|
determination of depreciation charges are |
capitalised for new rollout, upgrade or expansion of sites during the year and |
|
material to the Companyâs financial position |
inspected relevant underlying documentation to assess whether these items met |
|
and performance. The charges in respect |
the criteria for capitalisation with reference to the requirements of the prevailing |
|
of periodic depreciation are derived after |
accounting standards; |
|
estimating an assetâs expected useful life |
We physically inspected a sample of sites and warehouses at the year-end to |
|
and the expected residual value. Changes |
ensure existence of property, plant and equipment and tested the reconciliation |
|
to assetsâ carrying amounts, expected |
between physical verification reports and fixed assets registers on a sample |
|
useful lives or residual value could result in a material impact on the financial statements. |
basis to determine any adjustments that may be required thereon; We performed a reconciliations between number of sites on which revenue has |
|
(Refer to Note 3(a), 4(c) and 6 to the |
been recognised and network cost have been incurred with number of sites as |
|
standalone financial statements) |
per fixed asset records; and. We performed substantive testing for the determination of asset useful lives and residual values. In performing these procedures we considered managementâs judgments, including the appropriateness of existing asset lives and residual values applied in the calculation of depreciation to determine whether these judgments reflected technological developments within the industry and changes in the anticipated duration of use by the management |
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 information included in the Management Discussion and Analysis, Boardâs Report, Business Responsibility Report and Report on Corporate Governance, but does not include the standalone financial statements and our auditorâs 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 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.
Managementâs Responsibility 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, cash flows and changes in equity 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 statement 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.
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:
- 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 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) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Cash Flows and 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 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, 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 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:
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.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There were no amounts which were 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.
Annexure âAâ to the Independent Auditorâs Report
(Referred to in paragrapRs. 1(f) under âReport on Other Legal and Regulatory Requirementsâ section of our report 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 (âthe Actâ)
We have audited the internal financial controls over financial reporting of Bharti Infratel Limited (âthe Companyâ) 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.
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 of the Company 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 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 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 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 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, 2019, based on the criteria for internal financial 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.
Annexure âBâ to the Independent Auditorâs Report
((Referred to in paragrapRs. 2 under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date)
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(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 and capital work in progress 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 title deeds comprising the immovable property of land are held in the name of the Company as at the balance sheet date.
(ii) The Company does not have any inventory and hence reporting under clause (ii) of the Order is not applicable.
(iii) 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, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of grant of loans.
(v) 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 to the Company.
(vi) The maintenance of cost records has not been specified by the Central Government under section 148(1) of the Companies Act, 2013.
(vii) According to the information and explanations given to us, in respect of statutory dues:
(a) The Company has been regular in depositing undisputed statutory dues, including Provident Fund, Employeesâ 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, Employeesâ State Insurance, Income-tax, Goods and Services Tax, 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, Entry Tax, Sales Tax, Service Tax, 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 Statute |
Nature of dues |
Forum where the dispute is pending |
Period to which amount relates |
Amount (Rs. in mn)* |
|
Income Tax Act, 1961 |
Income Tax |
CIT(Appeals) |
FY 2011-12 |
# |
|
Assessing Officer (TDS) |
FY 2008 - 09 to FY 2016-17 |
2 |
|||
Bihar Entry Tax Act, Jammu and Kashmir Entry Tax Act, Madhya Pradesh Entry Tax Act, Himachal Pradesh Entry Tax Act, Mizoram Entry Tax Act, Assam Entry Tax Act, Orissa Entry Tax Act, Rajasthan Entry Tax Act, Chhattisgarh Entry Tax Act, Nagaland Entry Tax Act |
Entry Tax |
Honâble High Court |
FY 2007-08 to FY 2018-19 |
550 |
Name of Statute |
Nature of dues |
Forum where the dispute is pending |
Period to which amount relates |
Amount Rs. in mn)* |
|
Chhattisgarh Entry Tax Act, Madhya Pradesh Entry Tax Act, Orissa Entry Tax Act, Himachal Pradesh Entry Tax Act |
Tribunal |
FY 2007-08 to FY 2013-14 |
66 |
||
Madhya Pradesh Entry Tax Act, Assam Entry Tax Act |
Appellate Authority, Additional Conmissioner |
FY 2014-15 and FY 2016-17 |
1 |
||
Uttar Pradesh Entry Tax Act |
Deputy Commissioner, Appeal |
FY 2008-09 to FY 2009-10 |
# |
||
Bihar Entry Tax Act |
Joint Commissioner, Appeal |
FY 2008-09 to FY 2013-14 |
22 |
||
Uttar Pradesh Value Added Tax Act, 2007, Madhya Pradesh VAT Act, 2002, Tripura VAT Act, Haryana CST Act |
Sales Tax |
Tax Appellate Authority |
FY 2011-12 to FY 2015-16 |
1 |
|
Additional Commissioner Appeals, Lucknow |
FY 2008-09 |
# |
|||
Uttar Pradesh Value Added Tax Act, 2007, Madhya Pradesh VAT Act, 2002 |
Deputy Commissioner, Commercial Tax |
FY 2008-09 and FY 2012-13 |
# |
||
Bihar Value Added Tax Act, 2005 |
Joint Commissioner, Appeal |
FY 2014-15 |
# |
||
Finance Act, 1994 |
Service Tax |
Honâble High Court, Delhi |
FY 2007-08 to FY 2012-13 |
15,317 |
|
CESTAT |
FY 2013-14 to FY 2015-16 |
860 |
|||
Madhya Pradesh Goods and Service Tax Act |
Goods and Service Tax |
Commercial Tax Officer |
2018-19 |
# |
# - Less than RS. 1 millions
* - Of the above mentioned cases, total amount paid under protest; against income tax, entry tax and service tax is Rs. 3 mn, Rs.1,533 mn and Rs.280 mn, respectively.
A - For the period FYâ08 to FYâ13, the Company has received a favourable order form the High Court and the department is yet to file an appeal against the same
(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of borrowings to banks and financial institutions. The Company has not taken any loan or borrowing from government and has not issued any debentures.
(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under clause (ix) of the CARO 2016 Order is not applicable.
(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.
(xii) The Company is not a Nidhi Company and hence reporting under clause (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 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 (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 persons connected to its directors and hence provisions of section 192 of the Companies Act, 2013 are not applicable to the Company.
(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)
Vijay Agarwal
Partner
(Membership No.094468)
Place: New Delhi
Date: April 24, 2019
Mar 31, 2018
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Bharti Infratel Limited (âthe Companyâ), which comprise the Balance Sheet as at March.31, 2018, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the 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 the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act 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 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.
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 thereunder and the Order issued under section 143(11) of the Act.
We conducted our audit of the standalone Ind AS 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 Ind AS 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 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 the 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 obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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 Ind AS and other accounting principles generally accepted in India, of the state of affairs of the Company as at March.31, 2018, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.
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 Balance Sheet, the Statement of Profit and Loss including 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, the aforesaid standalone Ind AS 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 March.31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March.31, 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 Ind AS financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There were no amounts which were 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.
Annexure âBâ to the Independent Auditorâs Report
(Referred to in paragrapRs.2 under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date)
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(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 and capital work in progress 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 title deeds comprising the immovable property of land are held in the name of the Company as at the balance sheet date.
(ii) The Company does not have any inventory and hence reporting under clause (ii) of the Order is not applicable.
(iii) 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, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of grant of loans.
(v) 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 to the Company.
(vi) The maintenance of cost records has not been specified by the Central Government under section 148(1) of the Companies Act, 2013.
(vii) According to the information and explanations given to us, in respect of statutory dues:
(a) The Company has been regular in depositing undisputed statutory dues, including Provident Fund, Employeesâ State Insurance, Income-tax, Sales Tax, Service Tax, Goods and Service Tax, Value Added Tax, Customs Duty, Excise 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, Employeesâ State Insurance, Income-tax, Sales Tax, Service Tax, Goods and Service Tax, Value Added Tax, 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) Details of dues of Income-tax, Entry Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty and Value Added Tax which have not been deposited as on March.31, 2018 on account of disputes are given below:
Name of Statute |
Nature of dues |
Forum where the dispute is pending |
Period to which amount relates |
Amount unpaid (Rs. in Mn)* |
Income Tax Act, 1961 |
Income Tax |
CIT(Appeals) |
FY 2011-12 |
|
Income Tax Appellate Tribunal |
FY 2010-11 and FY 2013-14 |
462 |
||
Assessing Officer (TDS) |
FY 2008-09 to FY 2016-17 |
# |
Bihar Entry Tax Act, Jammu and Kashmir Entry Tax Act, Madhya Pradesh Entry Tax Act, Himachal Pradesh Entry Tax Act, Nagaland Entry Tax Act, Mizoram Entry Tax Act, Assam Entry Tax Act, Orissa Entry Tax Act, Rajasthan Entry Tax Act, Chhattisgarh Entry Tax Act |
Entry Tax |
Hon''ble High Court |
FY 2007-08 to FY 2017-18 |
572 |
Chhattisgarh Entry Tax Act, Madhya Pradesh Entry Tax Act, Orissa Entry Tax Act |
Tribunal |
FY 2007-08 to FY 2012-13 |
67 |
|
Uttar Pradesh Entry Tax Act |
Deputy Commissioner, Appeal |
FY 2008-09 to FY 2009-10 |
||
Bihar Entry Tax Act, Rajasthan Entry Tax Act |
Joint Commissioner, Appeal |
FY 2007-08, FY 2013-14 and FY 2014-15 |
||
Uttar Pradesh Value Added Tax Act, 2007 |
Sales Tax |
UP Commercial Tax Appellate Authority Additional Commissioner Appeals, Lucknow |
FY 2009-10 to FY 2014-15 FY 2014-15 |
# # |
Uttar Pradesh Value Added Tax Act, 2007, Madhya Pradesh VAT Act, 2002 |
Deputy Commissioner, Commercial Tax |
FY 2012-13 |
# |
|
Bihar Value Added Tax Act, 2005 |
Joint Commissioner, Appeal |
FY 2014-15 |
# |
|
Finance Act, 1994 |
Service Tax |
Hon''ble High Court, Delhi CESTAT |
FY 2007-08 to FY 2012-13 FY 2013-14 to FY 2015-16 |
15,322 678 |
# - Less than RS.1 Million
* - Of the above mentioned cases, total amount paid under protest; against income tax, entry tax and service tax is RS.936 Mn, RS.1,533 Mn and RS.272 Mn, respectively.
(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of borrowings to banks. The Company has not taken any loan or borrowing from financial institution and government and has not issued any debentures.
(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under clause (ix) of the CARO 2016 Order is not applicable.
(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.
(xii) The Company is not a Nidhi Company and hence reporting under clause (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 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 (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 persons connected to its directors and hence provisions of section 192 of the Companies Act, 2013 are not applicable to the Company.
(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 23, 2018
Mar 31, 2017
INDEPENDENT AUDITORâS REPORT
To
The Members of Bharti Infratel Limited
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Bharti Infratel Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the 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 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 state of affairs (financial position), profit or loss (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 the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also 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 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 there under. We conducted our audit of the standalone Ind AS financial statements 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 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 the standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the 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, its cash flows and the changes in equity for the year ended on that date.
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, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
(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 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, 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 Note 36 to the standalone Ind AS financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
iv. As per books of accounts of the Company and as represented by the management of the Company, the Company did not have cash balance as on November 8, 2016 and December 30, 2016 and has no cash dealings during this period
Re: Bharti Infratel Limited (âthe Companyâ)
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The Company has a physical verification program of covering all fixed assets once in 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, during the year, planned physical verification of certain fixed assets and capital work in progress has been conducted by the management and no material discrepancies were identified on such verification.
(c) According to the information and explanations given by the management, the title deeds of immovable properties included in fixed assets are held in the name of the Company.
(ii) The Companyâs business does not involve inventories and, accordingly, the requirements under paragraph 3(ii) of the Order are not applicable to the Company.
(iii) (a) According to the information and explanations 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. Accordingly, the provisions 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 within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.
(vi) To the best of our knowledge and as explained, the Central Government has not specified the maintenance of cost records under clause 148(1) of the Companies Act, 2013, for the services of the Company.
(vii) (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, income-tax, sales-tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues applicable to it. The provisions relating to employeesâ state insurance 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, income-tax, service tax, sales-tax, customs duty, excise duty, value added tax, cess and other material 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, service tax, custom duty, excise duty, entry tax, value added tax and cess on account of any dispute, are as follows:
Name of the statute |
Nature of dues |
Amount (Rs. in Mn) |
Period to which amount relates |
Forum where the dispute is pending |
Income Tax Act, 1961 |
Income Tax |
2,589 |
FY 2010-11-FY 2013-14 |
CIT(Appeals) |
Income Tax Act, 1961 |
Income Tax |
1 |
FY 2008-09-FY 2014-15 |
Assessing Officer (TDS) |
Bihar Entry Tax Act, Jammu and Kashmir Entry Tax Act, Madhya Pradesh Entry Tax Act, Himachal Pradesh Entry Tax Act, Nagaland Entry Tax Act, Mizoram Entry Tax Act, |
Entry Tax |
1,302 |
FY 2007-08 -FY 2016-17 |
Hon''ble High Court |
Assam Entry Tax Act, Madhya Pradesh Entry Tax Act, Orissa Entry Tax Act, Rajasthan Entry Tax Act, Chhattisgarh Entry Tax Act |
Entry Tax |
603 |
FY 2007-08 -FY 2016-17 |
Hon''ble High Court (fresh petition to be filed) |
Rajasthan Entry Tax Act |
Entry Tax |
26 |
FY 2007-08 -FY 2012-13 |
Assistant Commissioner |
Chhattisgarh Entry Tax Act, Madhya Pradesh Entry Tax Act, Orissa Entry Tax Act |
Entry Tax |
89 |
FY 2007-08 -FY 2012-13 |
Tribunal |
Bihar Entry Tax Act |
Entry Tax |
4 |
FY 2007-08 |
Joint Commissioner, Appeal |
Uttar Pradesh Entry Tax Act, Rajasthan Entry Tax Act |
Entry Tax |
2 |
FY 2008-09 to FY 2014-15 |
Deputy Commissioner, Appeal |
The Madhva Pradesh VAT Act, 2002 |
Sales Tax |
457 |
FY 2008-09 |
MP (Indore) Hiqh Court |
Uttar Pradesh Value Added Tax Act, 2007 |
Sales Tax |
1 |
FY 2009-10-FY 2014-15 |
UP Commercial Tax Appellate Authority |
Finance Act,1994 |
Service Tax |
15,532 |
FY 2007-08 -FY 2012-13 |
High Court, Delhi |
Finance Act,1994 |
Service Tax |
583 |
FY 2013-14 -FY 2014-15 |
CESTAT |
Of the above mentioned cases, total amount deposited against income tax, entry tax and service tax is Rs. 589 mn, Rs 1,474 mn and Rs. 342 mn, respectively.
(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders or government.
(ix) In our opinion and according to information and explanations given by the management, the Company has utilized the monies raised by way of initial public offer (IPO) in earlier year were applied during the year for the purpose for which the monies 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 material fraud on or by the officers and employees of the Company has been noticed or reported during the year.
(xi) According to the information and explanations given by the management, 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(xii) 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, reporting requirements under clause 3(xiv) are not applicable to the Company and hence not commented upon.
(xv) 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 Company has complied with requirements of section 192 for the non-cash transactions with directors in respect of ESOP transactions.
(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.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ) To The Members of Bharti Infratel Limited
We have audited the internal financial controls over financial reporting of Bharti Infratel Limited (âthe Companyâ) as of March 31, 2017 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
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 the 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 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 âGuidance Noteâ) and the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls and, both issued by the Institute of Chartered Accountants of India. 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 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 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 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 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.
Opinion
In our opinion, 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, 2017, 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.
For S.R. Batliboi & Associates LLP
ICAI Firm Registration Number: 101049W/ E300004
Chartered Accountants
per Vineet Kedia Partner
Membership Number: 212230
Place: New Delhi
Date: May 8, 2017
Mar 31, 2016
We have audited the accompanying standalone financial statements of
Bharti Infratel Limited ("the Company"), which comprise the Balance
Sheet as at March 31, 2016, 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
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 also 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 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 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 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. 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, 2016, its profit, and its cash flows for the year ended on
that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s report) Order, 2016 ("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
accounts ;
(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, 2016, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2016, 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 2" to this
report;
(g) 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 financial statements - Refer Note 37 to the
financial statements;
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses;
iii. There were no amounts which were required to be transferred to the
Investor Education and Protection Fund by the Company.
Annexure 1 referred to in paragraph 1 of Report on Other Legal and
Regulatory Requirements of our report of even date
Re: Bharti Infratel Limited ("the Company")
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The Company has a physical verification program of covering all
fixed assets once in 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, during the year, planned physical verification
of certain fixed assets and capital work in progress has been conducted
by the management and material discrepancies were identified on such
verification. These have been properly dealt with in the books of
accounts.
(c) According to the information and explanations given by the
management, the title deeds of immovable properties included in fixed
assets are held in the name of the Company.
(ii) The Company''s business does not involve inventories and,
accordingly, the requirements under paragraph 3(H) of the Order are not
applicable to the Company.
(iii) (a) Accordingtotheinformationandexplanationsgivento 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.
Accordingly, the provisions 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) To the best of our knowledge and as explained, the Central
Government has not specified the maintenance of cost records under
clause 148(1) of the Companies Act, 2013, for the services of the
Company.
(vii) (a) The Company is generally regular in depositing with
appropriate authorities undisputed statutory dues including provident
fund, income-tax, sales- tax, service tax, customs duty, excise duty,
value added tax, cess and other material statutory dues applicable to
it. The provisions relating to employees'' state insurance 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, income-tax,
service tax, sales-tax, customs duty, excise duty, value added tax,
cess and other material 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, service tax, custom duty, excise duty, value
added tax and cess on account of any dispute, are as follows:
Name of the
statute Nature of Amount Period to which amount
dues (Rs. In Mn) relates
Income Tax Act,
1961 Income Tax 1,256 FY 2010-11-FY 2011-12
Income Tax Act,
1961 Income Tax 6 FY 2008-09
Bihar, North
Eastern States,
Himachal Entry Tax 1,180 FY 2007-08 - FY 2015-16
Pradesh, Madhya
Pradesh, Jammu &
Kashmir Entry
Tax Act
Assam, Madhya
Pradesh, Orissa, Entry Tax 576 FY 2007-08 - FY 2015-16
Chhattisgarh,
Rajasthan Entry
Tax
Assam, Uttar
Pradesh,
Rajasthan Entry Entry Tax 8 FY 2007-08 - FY 2015-16
Tax Act
Madhya Pradesh,
Chhattisgarh
Entry Tax Entry Tax 5 FY 2009-10 - FY 2012-13
Act
Bihar Entry
Tax Act Entry Tax 4 FY 2007-08 - FY 2010-11
Orissa Entry
Tax Act Entry Tax 77 FY 2007-08 - FY 2008-09
The Madhya
Pradesh VAT
Act, 2002 Sales Tax 457 FY 2008-09
Uttar Pradesh
Value Added Tax
Act, 2007 Sales Tax 1 FY 2009-10-FY 2014-15
Finance Act, 1994 Service Tax 15,809 FY 2007-08 - FY 2013-14
Name of the Statute Forum where the dispute is pending
Income Tax Act, 1961 CIT(Appeals)
Income Tax Act, 1961 Assessing Officer (TDS)
Bihar, North Eastern States,
Himachal Pradesh, Madhya
Pradesh, Jammu & Kashmir
Entry Tax Act Hon''ble High Court
Assam, Madhya Pradesh,
Orissa, Chhattisgarh,
Rajasthan Entry Tax Act Hon''ble Supreme Court
Asam, Uttar Pradesh,
Rajasthan Entry Tax Act Deputy Commissioner, Appeal
Madhya Pradesh,
Chhattisgarh Entry Tax Act Assistant Deputy Commissioner, Appeal
Bihar Entry Tax Act Joint Commissioner, Appeal
Orissa Entry Tax Act Tribunal
The Madhya Pradesh VAT
Act, 2002 MP (Indore) High Court
Uttar Pradesh Value Added
Tax Act, 2007 UP Commerical Tax Appellate Authority
Finance Act, 1994 High Court, Delhi (Appeal to be filed)
Of the above mentioned cases, total amount deposited against income
tax, entry tax and service tax is Rs. 589 Mn, Rs. 1,327 Mn and Rs. 342
Mn, respectively.
(viii) In our opinion and according to the information and explanations
given by the management, the Company has not defaulted in repayment of
dues to a financial institution, bank or 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 initial
public offer (IPO) in earlier year were applied during the year for the
purpose for which the monies were raised, though idle/surplus funds
which were not required for immediate utilization have been gainfully
invested in liquid investments payable on demand. The maximum amount of
idle/ surplus funds invested during the year was Rs. 16,810 Mn and Rs.
8,912 Mn was outstanding at the end of the year. Variation to the
objects and schedule of deployment of this IPO as disclosed in the
prospectus dated December 19, 2012 issued by the Company was approved
by the shareholders of the Company through postal ballot on March 21,
2016.
(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 material fraud on or by the officers and employees of
the Company has been noticed or reported during the year.
(xi) According to the information and explanations given by the
management, 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,
reporting requirements under clause 3(xiv) are not applicable to the
Company and, not commented upon.
(xv) 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 Company has complied with requirements of section
192 for the non-cash transactions with directors in respect of ESOP
transactions.
(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
Firm Registration Number: 101049W
per Vineet Kedia
Partner
Membership No: 212230
Place: Gurgaon
Date: April 26, 2016
Mar 31, 2016
We have audited the accompanying standalone financial statements of
Bharti Infratel Limited ("the Company"), which comprise the Balance
Sheet as at March 31, 2016, 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
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 also 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 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 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 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. 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, 2016, its profit, and its cash flows for the year ended on
that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s report) Order, 2016 ("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
accounts ;
(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, 2016, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2016, 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 2" to this
report;
(g) 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 financial statements - Refer Note 37 to the
financial statements;
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses;
iii. There were no amounts which were required to be transferred to the
Investor Education and Protection Fund by the Company.
Annexure 1 referred to in paragraph 1 of Report on Other Legal and
Regulatory Requirements of our report of even date
Re: Bharti Infratel Limited ("the Company")
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The Company has a physical verification program of covering all
fixed assets once in 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, during the year, planned physical verification
of certain fixed assets and capital work in progress has been conducted
by the management and material discrepancies were identified on such
verification. These have been properly dealt with in the books of
accounts.
(c) According to the information and explanations given by the
management, the title deeds of immovable properties included in fixed
assets are held in the name of the Company.
(ii) The Company''s business does not involve inventories and,
accordingly, the requirements under paragraph 3(H) of the Order are not
applicable to the Company.
(iii) (a) Accordingtotheinformationandexplanationsgivento 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.
Accordingly, the provisions 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) To the best of our knowledge and as explained, the Central
Government has not specified the maintenance of cost records under
clause 148(1) of the Companies Act, 2013, for the services of the
Company.
(vii) (a) The Company is generally regular in depositing with
appropriate authorities undisputed statutory dues including provident
fund, income-tax, sales- tax, service tax, customs duty, excise duty,
value added tax, cess and other material statutory dues applicable to
it. The provisions relating to employees'' state insurance 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, income-tax,
service tax, sales-tax, customs duty, excise duty, value added tax,
cess and other material 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, service tax, custom duty, excise duty, value
added tax and cess on account of any dispute, are as follows:
Name of the
statute Nature of Amount Period to which amount
dues (Rs. In Mn) relates
Income Tax Act,
1961 Income Tax 1,256 FY 2010-11-FY 2011-12
Income Tax Act,
1961 Income Tax 6 FY 2008-09
Bihar, North
Eastern States,
Himachal Entry Tax 1,180 FY 2007-08 - FY 2015-16
Pradesh, Madhya
Pradesh, Jammu &
Kashmir Entry
Tax Act
Assam, Madhya
Pradesh, Orissa, Entry Tax 576 FY 2007-08 - FY 2015-16
Chhattisgarh,
Rajasthan Entry
Tax
Assam, Uttar
Pradesh,
Rajasthan Entry Entry Tax 8 FY 2007-08 - FY 2015-16
Tax Act
Madhya Pradesh,
Chhattisgarh
Entry Tax Entry Tax 5 FY 2009-10 - FY 2012-13
Act
Bihar Entry
Tax Act Entry Tax 4 FY 2007-08 - FY 2010-11
Orissa Entry
Tax Act Entry Tax 77 FY 2007-08 - FY 2008-09
The Madhya
Pradesh VAT
Act, 2002 Sales Tax 457 FY 2008-09
Uttar Pradesh
Value Added Tax
Act, 2007 Sales Tax 1 FY 2009-10-FY 2014-15
Finance Act, 1994 Service Tax 15,809 FY 2007-08 - FY 2013-14
Name of the Statute Forum where the dispute is pending
Income Tax Act, 1961 CIT(Appeals)
Income Tax Act, 1961 Assessing Officer (TDS)
Bihar, North Eastern States,
Himachal Pradesh, Madhya
Pradesh, Jammu & Kashmir
Entry Tax Act Hon''ble High Court
Assam, Madhya Pradesh,
Orissa, Chhattisgarh,
Rajasthan Entry Tax Act Hon''ble Supreme Court
Asam, Uttar Pradesh,
Rajasthan Entry Tax Act Deputy Commissioner, Appeal
Madhya Pradesh,
Chhattisgarh Entry Tax Act Assistant Deputy Commissioner, Appeal
Bihar Entry Tax Act Joint Commissioner, Appeal
Orissa Entry Tax Act Tribunal
The Madhya Pradesh VAT
Act, 2002 MP (Indore) High Court
Uttar Pradesh Value Added
Tax Act, 2007 UP Commerical Tax Appellate Authority
Finance Act, 1994 High Court, Delhi (Appeal to be filed)
Of the above mentioned cases, total amount deposited against income
tax, entry tax and service tax is Rs. 589 Mn, Rs. 1,327 Mn and Rs. 342
Mn, respectively.
(viii) In our opinion and according to the information and explanations
given by the management, the Company has not defaulted in repayment of
dues to a financial institution, bank or 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 initial
public offer (IPO) in earlier year were applied during the year for the
purpose for which the monies were raised, though idle/surplus funds
which were not required for immediate utilization have been gainfully
invested in liquid investments payable on demand. The maximum amount of
idle/ surplus funds invested during the year was Rs. 16,810 Mn and Rs.
8,912 Mn was outstanding at the end of the year. Variation to the
objects and schedule of deployment of this IPO as disclosed in the
prospectus dated December 19, 2012 issued by the Company was approved
by the shareholders of the Company through postal ballot on March 21,
2016.
(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 material fraud on or by the officers and employees of
the Company has been noticed or reported during the year.
(xi) According to the information and explanations given by the
management, 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,
reporting requirements under clause 3(xiv) are not applicable to the
Company and, not commented upon.
(xv) 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 Company has complied with requirements of section
192 for the non-cash transactions with directors in respect of ESOP
transactions.
(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
Firm Registration Number: 101049W
per Vineet Kedia
Partner
Membership No: 212230
Place: Gurgaon
Date: April 26, 2016
Mar 31, 2016
We have audited the accompanying standalone financial statements of
Bharti Infratel Limited ("the Company"), which comprise the Balance
Sheet as at March 31, 2016, 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
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 also 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 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 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 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. 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, 2016, its profit, and its cash flows for the year ended on
that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s report) Order, 2016 ("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
accounts ;
(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, 2016, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2016, 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 2" to this
report;
(g) 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 financial statements - Refer Note 37 to the
financial statements;
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses;
iii. There were no amounts which were required to be transferred to the
Investor Education and Protection Fund by the Company.
Annexure 1 referred to in paragraph 1 of Report on Other Legal and
Regulatory Requirements of our report of even date
Re: Bharti Infratel Limited ("the Company")
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The Company has a physical verification program of covering all
fixed assets once in 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, during the year, planned physical verification
of certain fixed assets and capital work in progress has been conducted
by the management and material discrepancies were identified on such
verification. These have been properly dealt with in the books of
accounts.
(c) According to the information and explanations given by the
management, the title deeds of immovable properties included in fixed
assets are held in the name of the Company.
(ii) The Company''s business does not involve inventories and,
accordingly, the requirements under paragraph 3(H) of the Order are not
applicable to the Company.
(iii) (a) Accordingtotheinformationandexplanationsgivento 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.
Accordingly, the provisions 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) To the best of our knowledge and as explained, the Central
Government has not specified the maintenance of cost records under
clause 148(1) of the Companies Act, 2013, for the services of the
Company.
(vii) (a) The Company is generally regular in depositing with
appropriate authorities undisputed statutory dues including provident
fund, income-tax, sales- tax, service tax, customs duty, excise duty,
value added tax, cess and other material statutory dues applicable to
it. The provisions relating to employees'' state insurance 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, income-tax,
service tax, sales-tax, customs duty, excise duty, value added tax,
cess and other material 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, service tax, custom duty, excise duty, value
added tax and cess on account of any dispute, are as follows:
Name of the
statute Nature of Amount Period to which amount
dues (Rs. In Mn) relates
Income Tax Act,
1961 Income Tax 1,256 FY 2010-11-FY 2011-12
Income Tax Act,
1961 Income Tax 6 FY 2008-09
Bihar, North
Eastern States,
Himachal Entry Tax 1,180 FY 2007-08 - FY 2015-16
Pradesh, Madhya
Pradesh, Jammu &
Kashmir Entry
Tax Act
Assam, Madhya
Pradesh, Orissa, Entry Tax 576 FY 2007-08 - FY 2015-16
Chhattisgarh,
Rajasthan Entry
Tax
Assam, Uttar
Pradesh,
Rajasthan Entry Entry Tax 8 FY 2007-08 - FY 2015-16
Tax Act
Madhya Pradesh,
Chhattisgarh
Entry Tax Entry Tax 5 FY 2009-10 - FY 2012-13
Act
Bihar Entry
Tax Act Entry Tax 4 FY 2007-08 - FY 2010-11
Orissa Entry
Tax Act Entry Tax 77 FY 2007-08 - FY 2008-09
The Madhya
Pradesh VAT
Act, 2002 Sales Tax 457 FY 2008-09
Uttar Pradesh
Value Added Tax
Act, 2007 Sales Tax 1 FY 2009-10-FY 2014-15
Finance Act, 1994 Service Tax 15,809 FY 2007-08 - FY 2013-14
Name of the Statute Forum where the dispute is pending
Income Tax Act, 1961 CIT(Appeals)
Income Tax Act, 1961 Assessing Officer (TDS)
Bihar, North Eastern States,
Himachal Pradesh, Madhya
Pradesh, Jammu & Kashmir
Entry Tax Act Hon''ble High Court
Assam, Madhya Pradesh,
Orissa, Chhattisgarh,
Rajasthan Entry Tax Act Hon''ble Supreme Court
Asam, Uttar Pradesh,
Rajasthan Entry Tax Act Deputy Commissioner, Appeal
Madhya Pradesh,
Chhattisgarh Entry Tax Act Assistant Deputy Commissioner, Appeal
Bihar Entry Tax Act Joint Commissioner, Appeal
Orissa Entry Tax Act Tribunal
The Madhya Pradesh VAT
Act, 2002 MP (Indore) High Court
Uttar Pradesh Value Added
Tax Act, 2007 UP Commerical Tax Appellate Authority
Finance Act, 1994 High Court, Delhi (Appeal to be filed)
Of the above mentioned cases, total amount deposited against income
tax, entry tax and service tax is Rs. 589 Mn, Rs. 1,327 Mn and Rs. 342
Mn, respectively.
(viii) In our opinion and according to the information and explanations
given by the management, the Company has not defaulted in repayment of
dues to a financial institution, bank or 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 initial
public offer (IPO) in earlier year were applied during the year for the
purpose for which the monies were raised, though idle/surplus funds
which were not required for immediate utilization have been gainfully
invested in liquid investments payable on demand. The maximum amount of
idle/ surplus funds invested during the year was Rs. 16,810 Mn and Rs.
8,912 Mn was outstanding at the end of the year. Variation to the
objects and schedule of deployment of this IPO as disclosed in the
prospectus dated December 19, 2012 issued by the Company was approved
by the shareholders of the Company through postal ballot on March 21,
2016.
(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 material fraud on or by the officers and employees of
the Company has been noticed or reported during the year.
(xi) According to the information and explanations given by the
management, 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,
reporting requirements under clause 3(xiv) are not applicable to the
Company and, not commented upon.
(xv) 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 Company has complied with requirements of section
192 for the non-cash transactions with directors in respect of ESOP
transactions.
(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
Firm Registration Number: 101049W
per Vineet Kedia
Partner
Membership No: 212230
Place: Gurgaon
Date: April 26, 2016
Mar 31, 2016
We have audited the accompanying standalone financial statements of
Bharti Infratel Limited ("the Company"), which comprise the Balance
Sheet as at March 31, 2016, 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
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 also 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 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 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 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. 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, 2016, its profit, and its cash flows for the year ended on
that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s report) Order, 2016 ("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
accounts ;
(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, 2016, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2016, 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 2" to this
report;
(g) 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 financial statements - Refer Note 37 to the
financial statements;
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses;
iii. There were no amounts which were required to be transferred to the
Investor Education and Protection Fund by the Company.
Annexure 1 referred to in paragraph 1 of Report on Other Legal and
Regulatory Requirements of our report of even date
Re: Bharti Infratel Limited ("the Company")
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The Company has a physical verification program of covering all
fixed assets once in 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, during the year, planned physical verification
of certain fixed assets and capital work in progress has been conducted
by the management and material discrepancies were identified on such
verification. These have been properly dealt with in the books of
accounts.
(c) According to the information and explanations given by the
management, the title deeds of immovable properties included in fixed
assets are held in the name of the Company.
(ii) The Company''s business does not involve inventories and,
accordingly, the requirements under paragraph 3(H) of the Order are not
applicable to the Company.
(iii) (a) Accordingtotheinformationandexplanationsgivento 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.
Accordingly, the provisions 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) To the best of our knowledge and as explained, the Central
Government has not specified the maintenance of cost records under
clause 148(1) of the Companies Act, 2013, for the services of the
Company.
(vii) (a) The Company is generally regular in depositing with
appropriate authorities undisputed statutory dues including provident
fund, income-tax, sales- tax, service tax, customs duty, excise duty,
value added tax, cess and other material statutory dues applicable to
it. The provisions relating to employees'' state insurance 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, income-tax,
service tax, sales-tax, customs duty, excise duty, value added tax,
cess and other material 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, service tax, custom duty, excise duty, value
added tax and cess on account of any dispute, are as follows:
Name of the
statute Nature of Amount Period to which amount
dues (Rs. In Mn) relates
Income Tax Act,
1961 Income Tax 1,256 FY 2010-11-FY 2011-12
Income Tax Act,
1961 Income Tax 6 FY 2008-09
Bihar, North
Eastern States,
Himachal Entry Tax 1,180 FY 2007-08 - FY 2015-16
Pradesh, Madhya
Pradesh, Jammu &
Kashmir Entry
Tax Act
Assam, Madhya
Pradesh, Orissa, Entry Tax 576 FY 2007-08 - FY 2015-16
Chhattisgarh,
Rajasthan Entry
Tax
Assam, Uttar
Pradesh,
Rajasthan Entry Entry Tax 8 FY 2007-08 - FY 2015-16
Tax Act
Madhya Pradesh,
Chhattisgarh
Entry Tax Entry Tax 5 FY 2009-10 - FY 2012-13
Act
Bihar Entry
Tax Act Entry Tax 4 FY 2007-08 - FY 2010-11
Orissa Entry
Tax Act Entry Tax 77 FY 2007-08 - FY 2008-09
The Madhya
Pradesh VAT
Act, 2002 Sales Tax 457 FY 2008-09
Uttar Pradesh
Value Added Tax
Act, 2007 Sales Tax 1 FY 2009-10-FY 2014-15
Finance Act, 1994 Service Tax 15,809 FY 2007-08 - FY 2013-14
Name of the Statute Forum where the dispute is pending
Income Tax Act, 1961 CIT(Appeals)
Income Tax Act, 1961 Assessing Officer (TDS)
Bihar, North Eastern States,
Himachal Pradesh, Madhya
Pradesh, Jammu & Kashmir
Entry Tax Act Hon''ble High Court
Assam, Madhya Pradesh,
Orissa, Chhattisgarh,
Rajasthan Entry Tax Act Hon''ble Supreme Court
Asam, Uttar Pradesh,
Rajasthan Entry Tax Act Deputy Commissioner, Appeal
Madhya Pradesh,
Chhattisgarh Entry Tax Act Assistant Deputy Commissioner, Appeal
Bihar Entry Tax Act Joint Commissioner, Appeal
Orissa Entry Tax Act Tribunal
The Madhya Pradesh VAT
Act, 2002 MP (Indore) High Court
Uttar Pradesh Value Added
Tax Act, 2007 UP Commerical Tax Appellate Authority
Finance Act, 1994 High Court, Delhi (Appeal to be filed)
Of the above mentioned cases, total amount deposited against income
tax, entry tax and service tax is Rs. 589 Mn, Rs. 1,327 Mn and Rs. 342
Mn, respectively.
(viii) In our opinion and according to the information and explanations
given by the management, the Company has not defaulted in repayment of
dues to a financial institution, bank or 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 initial
public offer (IPO) in earlier year were applied during the year for the
purpose for which the monies were raised, though idle/surplus funds
which were not required for immediate utilization have been gainfully
invested in liquid investments payable on demand. The maximum amount of
idle/ surplus funds invested during the year was Rs. 16,810 Mn and Rs.
8,912 Mn was outstanding at the end of the year. Variation to the
objects and schedule of deployment of this IPO as disclosed in the
prospectus dated December 19, 2012 issued by the Company was approved
by the shareholders of the Company through postal ballot on March 21,
2016.
(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 material fraud on or by the officers and employees of
the Company has been noticed or reported during the year.
(xi) According to the information and explanations given by the
management, 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,
reporting requirements under clause 3(xiv) are not applicable to the
Company and, not commented upon.
(xv) 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 Company has complied with requirements of section
192 for the non-cash transactions with directors in respect of ESOP
transactions.
(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
Firm Registration Number: 101049W
per Vineet Kedia
Partner
Membership No: 212230
Place: Gurgaon
Date: April 26, 2016
Mar 31, 2016
We have audited the accompanying standalone financial statements of
Bharti Infratel Limited ("the Company"), which comprise the Balance
Sheet as at March 31, 2016, 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
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 also 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 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 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 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. 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, 2016, its profit, and its cash flows for the year ended on
that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s report) Order, 2016 ("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
accounts ;
(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, 2016, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2016, 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 2" to this
report;
(g) 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 financial statements - Refer Note 37 to the
financial statements;
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses;
iii. There were no amounts which were required to be transferred to the
Investor Education and Protection Fund by the Company.
Annexure 1 referred to in paragraph 1 of Report on Other Legal and
Regulatory Requirements of our report of even date
Re: Bharti Infratel Limited ("the Company")
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The Company has a physical verification program of covering all
fixed assets once in 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, during the year, planned physical verification
of certain fixed assets and capital work in progress has been conducted
by the management and material discrepancies were identified on such
verification. These have been properly dealt with in the books of
accounts.
(c) According to the information and explanations given by the
management, the title deeds of immovable properties included in fixed
assets are held in the name of the Company.
(ii) The Company''s business does not involve inventories and,
accordingly, the requirements under paragraph 3(H) of the Order are not
applicable to the Company.
(iii) (a) Accordingtotheinformationandexplanationsgivento 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.
Accordingly, the provisions 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) To the best of our knowledge and as explained, the Central
Government has not specified the maintenance of cost records under
clause 148(1) of the Companies Act, 2013, for the services of the
Company.
(vii) (a) The Company is generally regular in depositing with
appropriate authorities undisputed statutory dues including provident
fund, income-tax, sales- tax, service tax, customs duty, excise duty,
value added tax, cess and other material statutory dues applicable to
it. The provisions relating to employees'' state insurance 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, income-tax,
service tax, sales-tax, customs duty, excise duty, value added tax,
cess and other material 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, service tax, custom duty, excise duty, value
added tax and cess on account of any dispute, are as follows:
Name of the
statute Nature of Amount Period to which amount
dues (Rs. In Mn) relates
Income Tax Act,
1961 Income Tax 1,256 FY 2010-11-FY 2011-12
Income Tax Act,
1961 Income Tax 6 FY 2008-09
Bihar, North
Eastern States,
Himachal Entry Tax 1,180 FY 2007-08 - FY 2015-16
Pradesh, Madhya
Pradesh, Jammu &
Kashmir Entry
Tax Act
Assam, Madhya
Pradesh, Orissa, Entry Tax 576 FY 2007-08 - FY 2015-16
Chhattisgarh,
Rajasthan Entry
Tax
Assam, Uttar
Pradesh,
Rajasthan Entry Entry Tax 8 FY 2007-08 - FY 2015-16
Tax Act
Madhya Pradesh,
Chhattisgarh
Entry Tax Entry Tax 5 FY 2009-10 - FY 2012-13
Act
Bihar Entry
Tax Act Entry Tax 4 FY 2007-08 - FY 2010-11
Orissa Entry
Tax Act Entry Tax 77 FY 2007-08 - FY 2008-09
The Madhya
Pradesh VAT
Act, 2002 Sales Tax 457 FY 2008-09
Uttar Pradesh
Value Added Tax
Act, 2007 Sales Tax 1 FY 2009-10-FY 2014-15
Finance Act, 1994 Service Tax 15,809 FY 2007-08 - FY 2013-14
Name of the Statute Forum where the dispute is pending
Income Tax Act, 1961 CIT(Appeals)
Income Tax Act, 1961 Assessing Officer (TDS)
Bihar, North Eastern States,
Himachal Pradesh, Madhya
Pradesh, Jammu & Kashmir
Entry Tax Act Hon''ble High Court
Assam, Madhya Pradesh,
Orissa, Chhattisgarh,
Rajasthan Entry Tax Act Hon''ble Supreme Court
Asam, Uttar Pradesh,
Rajasthan Entry Tax Act Deputy Commissioner, Appeal
Madhya Pradesh,
Chhattisgarh Entry Tax Act Assistant Deputy Commissioner, Appeal
Bihar Entry Tax Act Joint Commissioner, Appeal
Orissa Entry Tax Act Tribunal
The Madhya Pradesh VAT
Act, 2002 MP (Indore) High Court
Uttar Pradesh Value Added
Tax Act, 2007 UP Commerical Tax Appellate Authority
Finance Act, 1994 High Court, Delhi (Appeal to be filed)
Of the above mentioned cases, total amount deposited against income
tax, entry tax and service tax is Rs. 589 Mn, Rs. 1,327 Mn and Rs. 342
Mn, respectively.
(viii) In our opinion and according to the information and explanations
given by the management, the Company has not defaulted in repayment of
dues to a financial institution, bank or 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 initial
public offer (IPO) in earlier year were applied during the year for the
purpose for which the monies were raised, though idle/surplus funds
which were not required for immediate utilization have been gainfully
invested in liquid investments payable on demand. The maximum amount of
idle/ surplus funds invested during the year was Rs. 16,810 Mn and Rs.
8,912 Mn was outstanding at the end of the year. Variation to the
objects and schedule of deployment of this IPO as disclosed in the
prospectus dated December 19, 2012 issued by the Company was approved
by the shareholders of the Company through postal ballot on March 21,
2016.
(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 material fraud on or by the officers and employees of
the Company has been noticed or reported during the year.
(xi) According to the information and explanations given by the
management, 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,
reporting requirements under clause 3(xiv) are not applicable to the
Company and, not commented upon.
(xv) 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 Company has complied with requirements of section
192 for the non-cash transactions with directors in respect of ESOP
transactions.
(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
Firm Registration Number: 101049W
per Vineet Kedia
Partner
Membership No: 212230
Place: Gurgaon
Date: April 26, 2016
Mar 31, 2013
We have audited the accompanying financial statements of Bharti
Infratel 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.
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 our report of even date
Re: [Bharti Infratel 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, however is in the process of updating the
location of certain category of assets.
(b) The Company has a physical verification program of covering all
fixed assets once in 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, during the year, a substantial portion of
planned physical verification of fixed assets and capital work in
progress has been conducted by the management. As informed, no material
discrepancies were noticed on such verification.
(c ) Fixed assets disposed-off during the year were not substantial
and, therefore, do not affect the going concern assumption.
ii. Considering the nature of business of the Company, provisions of
Clause 4 (ii) of the Companies (Auditor''s Report) Order, 2003 (as
amended) pertaining to physical verification of inventory and records
maintained for inventory are not applicable to the Company.
iii. As informed, 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 Companies
Act, 1956. Accordingly, Clauses (iii) (b), (iii) (c), (iii) (d),(iii)
(e), (iii) (f) and (iii) (g) of the Companies (Auditor''s Report) Order,
2003, as amended by (the Companies (Auditor''s Report) (Amendment)
Order, 2004 are not applicable to the Company.
iv. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of fixed assets and for the sale of services. During the
course of our audit, no major weakness has been noticed in the internal
control system in respect of these areas. During the course of our
audit, we have not observed any continuing failure to correct major
weakness in internal control system of the Company.
Considering the nature of business of the Company, provision of Clause
4 (iv) of the Companies (Auditor''s Report) Order, 2003 (as amended) to
the extent pertaining to internal control system for purchase of
inventory is not applicable to the Company.
v. As informed, there are no parties that require to be listed in the
register maintained under section 301 of the Companies Act, 1956.
Therefore, the provisions of clause 4(v) of the Order are 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 Section 58A and 58AA of the Companies Act, 1956 and
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 the
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, related to the provision of telecommunication services, and
are of the opinion that prima facie, the prescribed accounts and
records have been made and maintained.
ix. (a) According to the information and explanations given to us and
on the basis of our examination of the records of the Company, amounts
deducted and accrued in respect of undisputed statutory dues including
provident fund, employees'' state insurance, income- tax, sales-tax,
wealth-tax, service tax, customs duty, cess and other material
statutory dues applicable to it are regularly deposited with
appropriate authorities.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees'' state insurance, income-tax,
wealth-tax, service tax, sales- tax, customs duty, excise duty, cess
and other undisputed statutory dues were outstanding, at the year end,
for a period of more than six months from the date they became payable.
(c) According to the records of the Company, the dues outstanding of
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty and cess on account of any dispute, are as follows:
Name of the statute Nature of dues Amount
(Rs. ''000)
Income Tax Act, 1961 Income Tax 1,053,884
Assam, Bihar, Orissa,
Rajasthan, U.P., Entry Tax 1,257,211
Himachal Pradesh, M.P.,
Chattisgarh,
JK Entry Tax Act
Karnataka VAT Act Sales Tax 227,606
MP VAT Act Sales Tax 83,316
UP Trade Act Sales Tax 21,154
Andhra Pradesh CST Rules Sales Tax 3,153
UP VAT Act Sales Tax 2,346
Building & Labor Welfare
Cess Building & 14,995
Labour Welfare Cess
Name of the Statute Period to which amount Forum where dispute
is pending
relates
Income Tax Act, 1961 FY 2008-09 to 2012-13 ITAT, CIT Appeals,
Assessing Authority.
Assam Bihar Orissa
Rajasthan UP
Himachal Pradesh MP
Chattisgarh JK
Entry Tax Act FY 2007-08 Onwards Supreme Court, High
Court Appellate
Authority.
Karnatak VAT Act FY 2009-10 to FY 2010-11 JCCT Appeals
MP VAT Act FY 2009-10 M.P High Court
UP Trade Act FY 2007-08, 2008-09 Additional
Commissioner Appeals
Andhra Pradesh CST Rules FY 2008-09 D.C. Appeals
UP VAT Act FY 2008-09 Onwards D.C. Appeals
Building & Labor Welfare
Cess FY 2007-08 Building & Labor
Welfare Cess
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 mentioned cases, total amount deposited in respect of
Entry Tax, Income Tax, Karnataka VAT, UP Trade Act, UP VAT and Building
& Labor Welfare Cess is Rs. 833 Mn, Rs. 13 Mn, Rs. 114 Mn, Rs. 4 Mn,
Rs. 1 Mn and 15 Mn respectively.,
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 not given any guarantee for loans taken by others from bank
or financial institutions.
xvi. The Company did not have any term loans outstanding during the
year.
xvii. According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment.
xviii. The Company has not made any preferential allotment of shares
to parties or companies covered in the register maintained under
section 301 of the Companies Act, 1956.
xix. The Company did not have any outstanding debentures during the
year.
xx. We have verified that the end use of money raised by public issue
is as disclosed in the notes to the financial statements.
xxi. According to information and explanations furnished by 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 as
identified by the management pertaining to few cases of fraud on
Company amounting to Rs. 10.6 miLLion pertaining to electricity
payments and asset pilferage for which appropriate provision for loss
was recognized. The Company has initiated recovery proceedings and
taken steps to strengthen controls.
For S.R. Batliboi & Associates LLP
Chartered Accountants
Firm''s Registration Number: 101049W
per Nilangshu Katriar
Partner
Membership Number: 58814
Place of Signature: Gurgaon
Date: April 30, 2013
Mar 31, 2009
1. We have audited the attached Balance Sheet of Bharti infratel
Limited ('the Company') as at March 31,2009 and also the Profit and
Loss account and the cash flow statement for. the year ended on that
date annexed thereto. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
2. We conducted out 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, profit and loss account and cash flow statement
dealt with by this report are in agreement with the books of account;
iv. In our opinion, the balance sheet, profit and loss account and cash
flow statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956.
v. On the basis of the written representations received from the
directors, as on March 31, 2009, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
March 31, 2009 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of die Companies Act, 1956.
vi. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India;
a) in the case of the balance sheet, of the state of affairs of the
Company as at March 31, 2009;
b) in the case of the profit and loss account, of the 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 4 of our report of even date Re:
BHARTH INFRATEL LIMITED ('the Company')
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation affixed
assets,
(b) All fixed assets have not been physically verified by the
management during the year, since this is the first year of operations,
but there is a regular programmed of verification to cover all the items
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.
As informed, no material discrepancies were noticed on such
verification
(c) There was no substantial disposal-of fixed assets during the year.
(ii) Considering the nature of business of the Company, Clause 4 (ii)
of the Companies (Auditor's Report) Order 2003 (as amended) pertaining
to physical verification of inventory and records maintained tor
inventory are not applicable to the Company.
(iii) (a) The Company has neither granted nor taken any loans, secured
or unsecured, to companies, firms or other parties covered in the
register maintained under section 301 of the Act. Accordingly, clauses
4 (iii) (b), (c). (d), (f) and (g) of the Companies (Auditor's Report)
Order, 2003 (as amended) are not applicable to the Company for the
current year.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal Control system commensurate
with the size of the Company and the nature of its business, for the
purchase of fixed assets and for the sale of services. During the
course of our audit, no major weakness, has been noticed in the
internal control system in respect of these areas.
Considering the nature of business of the Company, the Clause 4 (iv) of
the Companies (Auditor's Report) Order, 2003 (as amended) to the extent
pertaining to internal control system for purchase of inventory is not
applicable to the Company
(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) None of the transactions made in pursuance of such contracts or
arrangements exceed the value of Rupees five lakh in respect of any one
such party in the financial year.
(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) hi our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) To die best of our knowledge and as explained, the Central
Government has not prescribed maintenance, of cost records under clause
(d) of sub-section (1) of section 209 of the Companies Act, 1956 for
the products of the Company.
(ix) (a) The Company is generally regular in depositing with
appropriate authorities undisputed statutory dues including provident
fund, income-tax, sales-tax, wealth-tax, service tax, customs duty,
cess and other material statutory dues applicable to it though there
has been delays in few cases. The provisions relating to excise duty,
investor education protection fund and employees' state insurance arc
not applicable to the Company.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, income-tax.
wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and
other undisputed statutory dues were outstanding, at the year end, for
a period of more than six months from the date they became payable.
(c) According to the records of the Company, the due:; outstanding of
income-tax, sales-tax, wealth- tax, service tax, customs duty, excise
duty and cess on account of any dispute, are as follows:
Name of the Amount Period to Forum where
status Nature of dues (Rs.000) which the dispute the
pending
Central sales
Tax Sales Tax 2,861 2001-02 Applitate
Tribunal
Building &
labour
wellfare cess Building & 16,074 2007-08 Building & labour
labour welfare cess
wellfare cess Tribunal
(x.) The Company has been registered for a period of less than five
years and hence we are not. required to comment on whether or not the
accumulated losses at the end of the financial year is fifty per cent
or more of its net worth and whether it has incurred cash losses in
such financial æ year and in the 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) arc
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.
20(0 (as amended) are not applicable to the Company.
(xv) According to the information and explanations given to us, the
Company loss not given any guarantee for loans taken by others from
bank or financial institutions.
(xvi) 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.
(xvii) According to the information and explanations giver) to us and
on overall examination of the balance sheet of the Company, we report
that the Company has funded fixed assets purchases amounting to list.
4,252,350 thousands from Capex creditors.
(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) According to the information's and explanations given to us,
during the period covered by our audit report, the Company had issued
3,025,575 interest free unsecured convertible debentures of Rs 10,000
each on which no security charge is required to be created.
(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 arid Lair view of the financial statements and as
per the information and explanations givers by the management, we
report that no fraud on or by the Company has been noticed or reported
during the course of our audit.
For S.R. BATLIBOI & ASSOCIATES
Chartered Accountants
per Prashant Siaghal
Partner
Membership No.:93283
Place: New Delhi
Date; April 28, 2008