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Bharti Airtel Ltd.

BSE: 532454 Sector: Telecom
NSE: BHARTIARTL ISIN Code: INE397D01024
BSE LIVE 15:40 | 09 Dec 331.00 -0.70
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335.00

HIGH

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NSE LIVE 15:47 | 09 Dec 332.00 -0.45
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OPEN 335.00
PREVIOUS CLOSE 331.70
VOLUME 183938
52-Week high 384.90
52-Week low 282.30
P/E 22.56
Mkt Cap.(Rs cr) 132313.94
Buy Price 0.00
Buy Qty 0.00
Sell Price 331.00
Sell Qty 898.00
OPEN 335.00
CLOSE 331.70
VOLUME 183938
52-Week high 384.90
52-Week low 282.30
P/E 22.56
Mkt Cap.(Rs cr) 132313.94
Buy Price 0.00
Buy Qty 0.00
Sell Price 331.00
Sell Qty 898.00

Bharti Airtel Ltd. (BHARTIARTL) - Auditors Report

Company auditors report

To the Members of Bharti Airtel Limited

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Bharti AirtelLimited ("the Company") which comprises the Balance Sheet as at March 31 2016the Statement of Profit and Loss and Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance withaccounting principles generally accepted in India including the Accounting Standardsspecified under section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgements and estimates that arereasonable and prudent; and the design implementation and maintenance of adequateinternal financial control that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit. We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made thereunder. We conducted our audit inaccordance with the Standards on Auditing issued by the Institute of Chartered Accountantsof India as specified under Section 143(10) of the Act. Those Standards require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether the standalone financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the standalone financial statements. The procedures selected depend on theauditor’s judgement including the assessment of the risks of material misstatementof the standalone financial statements whether due to fraud or error. In making thoserisk assessments the auditor considers internal financial control relevant to theCompany’s preparation of the standalone financial statements that give a true andfair 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 thereasonableness of the accounting estimates made by the Company’s Directors as wellas evaluating the overall presentation of the standalone financial statements. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the standalone financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2016 its profit and its cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to Note 26 (ii) (g) (vi) to the standalone financial statementswhich describes the uncertainties related to the legal outcome of Department ofTelecommunications Rs. demand with respect to One Time Spectrum Charge. Our opinion is notqualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the Annexure 1 a statement on the matters specified inparagraphs 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 bestof 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 theCompany 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 withby this Report are in agreement with the books of account;

(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014;

(e) On the basis of written representations received from the directors as on March 312016 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2016 from being appointed as a director in terms of section 164 (2) ofthe Act;

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report dated April 27 2016 in Annexure 2 to this report;

(g) With respect to the other matters to be included in the Auditor’s Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand 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 financialposition in its standalone financial statements - Refer Note 52(b) to the standalonefinancial statements;

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts - Refer Note 50 to the standalone financial statements;

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

For S.R. Batliboi & Associates LLP

Chartered Accountants

ICAI Firm Registration Number: 101049W

per Nilangshu Katriar

Partner

Membership Number: 58814

Place: Gurgaon

Date: April 27 2016

Annexure 1

Annexure referred to in paragraph 1 of ‘Report on other

Legal and Regulatory Requirements’

Re: [BHARTI AIRTEL LIMITED] (‘the Company’)

(i) (a) The Company has maintained proper records showing full particulars with respectto most of its fixed assets and is in the process of updating quantitative and situationdetails with respect to certain fixed assets in the records maintained by the Company.

(b) The capitalised fixed assets are physically verified by the management according toa regular programme designed to cover all the items over a period of three years. Pursuantto the planned programme during the year a substantial portion of fixed assets andcapital work in progress has been physically verified by the management during the yearwhich in our opinion is reasonable having regard to the size of the Company and nature ofits assets. No material discrepancies were noted on such verification.

(c) Based on our audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to information and explanations givenby the management the title deeds of immovable properties included in property plant andequipment are held in the name of the Company.

(ii) The management has conducted physical verification of inventory (other thaninventory with third parties) at reasonable intervals during the year and no materialdiscrepancies were noticed on such physical verification.

(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms limited liabilitypartnership firm or other parties covered in the register maintained under section 189 ofthe Companies Act 2013. Accordingly the provision of clause 3(iii)(a) (b) and (c) ofthe 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 usthere are no loans investments guarantees and securities granted in respect of whichprovisions of section 185 and 186 of the Companies Act 2013 are applicable and hence notcommented upon.

(v) The Company has not accepted any deposits from the public.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records undersection 148(1) of the Companies Act 2013 related to service of telecommunication and areof the opinion that prima facie the prescribed accounts and records have been made andmaintained. We have not however made a detailed examination of records with a view todetermine whether they are accurate or complete.

(vii) (a) The Company is regular in depositing with appropriate authorities undisputedstatutory dues including provident fund employees Rs. state insurance income-taxsales-tax service tax duty of customs value added tax cess and other materialstatutory dues applicable to it. The provisions relating to duty of excise are notapplicable to the Company. According to the information and explanations given to us noundisputed amounts payable in respect of provident fund employees Rs. state insuranceincome-tax sales-tax service tax duty of customs value added tax cess and othermaterial undisputed statutory dues were outstanding as at the year end for a period ofmore than six months from the date they became payable.

Independent Auditor’s Report

(b) According to the records of the Company the dues outstanding of income-taxsales-tax service tax duty of customs value added tax and cess on account of anydispute are as follows:

Name of Statutes Nature of the Dues Amount Disputed (in Rs. Mn) Period to which it relates Forum where the dispute is pending
Andhra Pradesh VAT Act Sales Tax 41 2005-10 Tribunal
Andhra Pradesh VAT Act Sales Tax 46 2010-13 Deputy Commissioner Commercial Taxes Punjagutta
Bihar Value Added Sales Tax Act Sales Tax 0 2007-08 Assistant Commissioner Appeal
Bihar Value Added Sales Tax Act Sales Tax 69 2006-13 Joint Commissioner Appeal
Bihar Value Added Sales Tax Act Sales Tax 42 2005-08 Tribunal
Chhattisgarh VAT Act Sales Tax 0 2005-07 Assistant Commissioner
Gujarat Sales Tax Act Sales Tax 1 2006-07 Assistant Commissioner
J&K General Sales Tax Sales Tax 34 2004-07 High Court Jammu & Kashmir
Karnataka Sales Tax Act Sales Tax 291 2005-06 Assistant Commissioner
Kerala Sales Tax Act Sales Tax 1 2011-12 Commercial tax Officer
Kerala Sales Tax Act Sales Tax 1 2005-13 Commercial tax Officer
Kerala Sales Tax Act Sales Tax 11 2005-06 Deputy Commissioner Appeal
Kerala Sales Tax Act Sales Tax 0 2009-13 Intelligence Officer Squad
Kerala Sales Tax Act Sales Tax 2 2002-05 Tribunal
Kerala Value Added Tax Act Sales Tax 5 2005-06 Deputy Commissioner Appeal
Kerala Value Added Tax Act Sales Tax 71 2006-07 High Court of Kerala
Kerala Value Added Tax Act Sales Tax 44 2007-09 Asst. Commissioner Spl Circle III Ernakulam
Kerala Value Added Tax Act Sales Tax 0 2015-16 Intelligence Inspector Squad No. I Tellichery
Kerala Value Added Tax Act Sales Tax 0 2015-16 Intelligence Inspector Squad No. 3 Ernakulam
Kerala Value Added Tax Act Sales Tax 1 2009-10 Asst. Commissioner
Madhya Pradesh Commercial Sales Tax Act Sales Tax 23 2007-11 Appellate authority
Madhya Pradesh Commercial Sales Tax Act Sales Tax 2 2005-07 High Court
Madhya Pradesh Commercial Sales Tax Act Sales Tax 1 2004-08 Tribunal
Madhya Pradesh Commercial Sales Tax Act Sales Tax 0 2004-08 Commercial tax Officer
Madhya Pradesh Commercial Sales Tax Act Sales Tax 1 2008-13 Deputy Commissioner
Madhya Pradesh Commercial Sales Tax Act Sales Tax 22 1997-04 Deputy Commissioner Appeal
Maharashtra Sales Tax Act Sales Tax 0 2003-04 Joint Commissioner Appeal
Punjab Sales Tax Act Sales Tax 1 2009-16 Deputy Excise and Taxation Commissioner
Punjab Sales Tax Act Sales Tax 30 2003-04 High Court
Punjab Sales Tax Act Sales Tax 1 2002-03 Jt. Director (Enforcement)
Punjab Sales Tax Act Sales Tax 1 2008-10 Tribunal
UP VAT Act Sales Tax 20 2005-16 Assessing Officer
UP VAT Act Sales Tax 21 2002-05 Assistant Commissioner
UP VAT Act Sales Tax 1 2005-08 Commercial tax Officer
UP VAT Act Sales Tax 6 2008-11 High Court
UP VAT Act Sales Tax 3 2003-16 Joint Commissioner Appeal
UP VAT Act Sales Tax 7 2005-06 Tribunal
UP VAT Act Sales Tax 7 2009-10 Additional Commissioner
UP VAT Act Sales Tax 6 2003-16 Deputy Commissioner
Uttaranchal VAT Act Sales Tax 0 2013-14 AO
West Bengal Sales Tax Act Sales Tax 0 1996-97 The Deputy Commisssoner of Commercial Taxes
West Bengal Sales Tax Act Sales Tax 0 1995-96 Commercial tax Officer
West Bengal Sales Tax Act Sales Tax 9 2005-06 Revision Board
West Bengal Sales Tax Act Sales Tax 3 1997-12 Tribunal
Sub Total (A) 826
Finance Act 1994 (Service tax provisions) Service Tax 307 1995-08 Supreme Court
Finance Act 1994 (Service tax provisions) Service Tax 7 2000-07 Commissioner Adjudication
Finance Act 1994 (Service tax provisions) Service Tax 16 2003-07 Commissioner Appeal
Finance Act 1994 (Service tax provisions) Service Tax 7 2002-07 High court
Finance Act 1994 (Service tax provisions) Service Tax 10015 1995-12 Tribunal
Finance Act 1994 (Service tax provisions) Service Tax 3 2010-11 Add. Commissioner-Delhi WHO
Finance Act 1994 (Service tax provisions) Service Tax 238 2009-12 Commissioner of Service Tax Gurgaon
Finance Act 1994 (Service tax provisions) Service Tax 8 2009-10 Commissioner of Service Tax
Sub Total (B) 10601
Name of Statutes Nature of Amount Period to which Forum where the dispute is
the Dues Disputed (in Rs. Mn) it relates pending
Income Tax Act 1961 Income Tax 128 2001-03 200408 1996-97 Supreme Court High Court
Income Tax Act 1961 Income Tax 11578 2003-10 2003-11 Income Tax Appellate Tribunal
Income Tax Act 1961 Income Tax 18899 2013-14 1995-2003 Commissioner of Income Tax (Appeals)
Income Tax Act 1961 Income Tax 17919 2004-13 199495 1996-98 Assessing Officer
Income Tax Act 1961 Income Tax 75 2004-16
Sub Total (C) 48599
Custom Act 1962 Custom Act 4128 2001-06 Supreme Court
Custom Act 1962 Custom Act 0 2009-10 Tribunal
Custom Act 1962 Custom Act 126 2006-10 Tribunal
Sub Total (D) 4254

The above mentioned figures represent the total disputed cases without any assessmentof Probable Possible and Remote as done in case of contingent liabilities of the abovecases total amount deposited in respect of sales tax is Rs. 292 Mn Service tax is Rs.463 Mn Income tax is Rs. 11056 Mn and Custom Duty is Rs. 2138 Mn.

(viii) Based on our audit procedures for the purpose of reporting the true and fairview of the financial statements and according to information and explanations given bythe management we are of the opinion that the Company has not defaulted in repayment ofdues to a financial institution bank debenture holders or government.

(ix) Based on our audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to information and explanations givenby the management and on an overall examination of the balance sheet we report thatmonies raised by the Company by way of debt instruments / term loans were applied for thepurpose for which the loans were obtained though idle/surplus funds which were notrequired for immediate utilisation have been gainfully invested in liquid investmentspayable on demand. The maximum amount of idle/ surplus funds invested during the year wasRs. 63215 Mn of which no amount was outstanding at the end of the year.

(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and as per the information and explanations given bythe management we report that no fraud by the Company or on the Company by the officerand employees of the Company has been noticed or reported during the year.

(xi) Based on our audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management we report that the managerial remuneration has been paid /provided in accordance with the requisite approvals mandated by the provisions of section197 read with Schedule V to the Companies Act 2013.

(xii) I n our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 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 trueand fair view of the financial statements and according to the information andexplanations given by the management transactions with the related parties are incompliance with section 177 and 188 of Companies Act 2013 where applicable and thedetails have been disclosed in the notes to the financial statements as required by theapplicable accounting standards.

(xiv) According to the information and explanations given to us and on an overallexamination of the balance sheet the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence not commented upon.

(xv) Based on our audit procedures performed for the purpose of reporting the true andfair view ofthe financial statements and according to the information and explanationsgiven by the management the Company has not entered into any non-cash transactions withdirectors or persons connected with him.

(xvi) According to the information and explanations given to us the provisions ofsection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.

For S.R. Batliboi & Associates LLP

Chartered Accountants

ICAI Firm Registration Number: 101049W

per Nilangshu Katriar

Partner

Membership Number: 58814

Place: Gurgaon

Date: April 27 2016

Independent Auditor’s Report

ANNEXURE2

Annexure referred to in paragraph 2 of ‘Report on other Legal and RegulatoryRequirements'

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

To the Members of Bharti Airtel Limited

We have audited the internal financial controls over financial reporting of BhartiAirtel Limited ("the Company") as of March 31 2016 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

Management’s Responsibility for Internal Financial Controls

The Company's Management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to the Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing as specified under section143(10) of the Act to the extent applicable to an audit of internal financial controlsboth applicable to an audit of Internal Financial Controls and both issued by theInstitute of Chartered Accountants of India. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the internal financial controls system overfinancial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company’s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company’s internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany’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 financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For S.R. Batliboi & Associates LLP

Chartered Accountants

ICAI Firm Registration Number: 101049W

per Nilangshu Katriar

Partner

Membership Number: 58814

Place: Gurgaon

Date: April 27 2016

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