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Bharti Airtel Ltd.

BSE: 532454 Sector: Telecom
NSE: BHARTIARTL ISIN Code: INE397D01024
BSE 00:00 | 02 Mar 541.25 8.95
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NSE 00:00 | 02 Mar 541.20 9.00
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OPEN 542.95
PREVIOUS CLOSE 532.30
VOLUME 1775295
52-Week high 623.00
52-Week low 381.05
P/E
Mkt Cap.(Rs cr) 295,282
Buy Price 541.25
Buy Qty 9307.00
Sell Price 541.25
Sell Qty 9.00
OPEN 542.95
CLOSE 532.30
VOLUME 1775295
52-Week high 623.00
52-Week low 381.05
P/E
Mkt Cap.(Rs cr) 295,282
Buy Price 541.25
Buy Qty 9307.00
Sell Price 541.25
Sell Qty 9.00

Bharti Airtel Ltd. (BHARTIARTL) - Auditors Report

Company auditors report

TO

THE MEMBERS OF BHARTI AIRTEL LIMITED

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying Standalone Financial Statements of BHARTIAIRTEL LIMITED ("the Company") which comprise the Standalone Balance Sheetas at March 31 2020 and the Standalone Statement of Profit and Loss (including OtherComprehensive Income) the Standalone Statement of Changes in Equity and the StandaloneStatement of Cash Flows for the year then ended and a summary of significant accountingpolicies and other explanatory information (hereinafter referred to as "theStandalone Financial Statements").

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid Standalone Financial Statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2020and its loss total comprehensive loss the changes in equity and its cash flows for theyear ended on that date.

Basis for Opinion

We conducted our audit of the Standalone Financial Statements inaccordance with the Standards on Auditing specified under section 143(10) of the Act("SAs"). Our responsibilities under those Standards are further described in theAuditor's Responsibility for the Audit of the Standalone Financial Statements sectionof our report. We are independent of the Company in accordance with the Code of Ethicsissued by the Institute of Chartered Accountants of India ("ICAI") together withthe ethical requirements that are relevant to our audit of the Standalone FinancialStatements under the provisions of the Act and the Rules made thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theICAI's Code of Ethics. We believe that the audit evidence obtained by us issufficient and appropriate to provide a basis for our audit opinion on the StandaloneFinancial Statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the Standalone Financial Statements of thecurrent period. These matters were addressed in the context of our audit of the StandaloneFinancial Statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Sr. No.

Key Audit Matter

Auditor's Response

1

Revenue from operations:

Principal Audit Procedures

There is an inherent risk around accuracy of revenue recorded in respect of Mobile Services and Airtel Business segments because of the complexity of the IT systems and other support systems significance of volumes of data processed by the systems and the impact of changing pricing models (tariff structures incentive arrangements and discounts etc.). In addition for Airtel Business we considered occurrence of revenue as a risk due to the possibility that revenue may be recorded without active service links being provided to customers or for contracts that are cancelled/not renewed. We evaluated the design and tested the operating effectiveness of the general IT controls and application specific controls within the IT system including testing of system generated reports used in our audit of revenues by involving our IT specialist. We also tested the controls within the billing systems prepaid charging systems capturing and recording of revenue authorisation and input of changes to the IT systems and over reconciliations performed between the active customers base with billing system.
We performed substantive procedures which included testing the accuracy of customer invoices and tracing receipts to customer invoices comparing the number of links/connection as per the active customer base to the billing system testing reconciliations between billing system and the general ledger (including validation of relevant journal entries) making test calls and testing whether they are rated correctly and analytical procedures for relevant segment revenue.
Refernote2.19"Revenuerecognition"foraccounting policies note 3.2.d ‘Revenue recognition and presentation' under the head ‘Critical judgements in applying the Company's accounting policies' and note 23 on disclosures related to Revenue from operations in the Standalone Financial Statements.
We verified the appropriateness of the accounting policies and the disclosures related to Revenue from operations in notes 2.19 3.2.d and 23 respectively in the Standalone Financial Statements.
2

Determination of additional provision for License fees and Spectrum Usage Charges along with interest penalty and interest on penalty pursuant to Supreme Court judgement on Adjusted Gross Revenue

Principal Audit Procedures
We tested the effectiveness of the controls over determining the additional provision for License fees and SUC.
We also tested the appropriateness of the additional provision for Licenses fees and SUC by (1) Reading the License Agreements the Court Judgement demand orders and the guidelines/clarifications provided by DoT and comparing them to the assumptions used in the management's estimate in determining the provisions for years for which demands from DoT has been received and (2)
Consequent to a Judgement of the Hon'ble Supreme Court of India on October 24 2019 in relation to a long outstanding industry-wise case upholding the view of the Department of Telecommunications (‘DoT') in respect to the definition of Adjusted Gross Revenue (AGR) (the Court Judgement) the Company recorded additional provisions for periods upto September 2019 of Rs. 56530 million towards License fee and Spectrum Usage Charges (SUC) and Rs. 228448 million towards applicable interest penalty and interest on penalty and disclosed the same as an Exceptional Item in the Statement of Profit and Loss.
Testing that the assumptions and methodology used in computing the provisions for the years for which demands are not received is consistent with the methodology adopted in (1) above.
We evaluated the disclosures provided in the notes 4(i) and 30(i) (a) to the Standalone Financial Statements concerning this matter.
The Company computed and recorded the additional provision on the basis of (1) demands received and (2) the periods for which demands have not been received by following the same methodology used in the assessments carried out in earlier years the guidelines/clarifications provided by DoT and the principles set out in the Court Judgement. The additional provision apart from having a significant impact also involves significant management judgment in its computation. Refer notes 4(i) and 30(i)(a) to the Standalone Financial Statements for disclosures related to License fees and SUC.
3

Measurement of the Right-of-use assets and Lease liabilities in leases with tower infrastructure companies under Ind AS 116 -Leases:

Principal Audit Procedures
We evaluated the effectiveness of internal controls relating to the determination of lease term segregation of lease and non-lease components and determination of incremental borrowing rate.
The Company adopted Ind AS 116 "Leases" using the modified retrospective approach with effect from April 1 2019.
For a sample of lease contracts ("contracts") we performed the following substantive audit procedures:
The measurement of Right-of-use assets and lease liabilities in leases with tower infrastructure companies involves significant management estimates (a) in determination of lease term (b) in segregating the lease and non-lease components payable under the contractual arrangements and; (c) in determination of incremental borrowing rate used in discounting lease payments.
• We read the underlying contract and compared relevant terms within the contract to the Company's determination of lease term analysis including the appropriateness of considering lease term as the period until which exit penalties are payable as per the contract.
• We tested the relative standalone selling prices computed by management and used in the allocation of consideration to the lease and non-lease components in a contract by using the same information and details obtained by management from tower infrastructure service providers. We tested the appropriates of the incremental borrowing rate (IBR) by involving our valuation specialist who assisted in:
Refer note 2.11 "Leases" for accounting policies notes 3.2.a 3.2.b and 3.2.c relating to ‘Separating lease and non-lease components' ‘Determining the lease term' and ‘Determining the incremental borrowing rate for lease contracts' respectively under the head ‘Critical judgements in applying the Company's accounting policies' and note 34
• Performing an independent assessment of the methodology used by the Company to estimate the IBR;
‘Leases' on disclosures related to leases in the Standalone Financial Statements.
• Evaluating the Company's assumptions underlying the estimation of the IBR; and
• Developing an independent acceptable range for the IBR and comparing the results to the Company's IBR.
4

Impairment of investment in a subsidiary

Principal Audit Procedures

Bharti Infratel Limited ("BIL")

We tested the effectiveness of internal controls related to the Company's evaluation of BIL's financial projection using the income approach and Company's determination of the market approach. These procedures also included among others testing controls related to the review and approval of the key assumptions prepared by the Company testing the completeness accuracy and relevance of the underlying data used in the models and evaluating the significant assumptions used by management including the revenue growth rates EBITDA margins discount rate terminal growth rate and control premium selections.
As at April 01 2019 the carrying value of investment in Bharti Infratel Limited (‘BIL') was Rs. 227516 million. During the year the Company recorded an impairment aggregating to Rs. 62978 million disclosed as an exceptional item resulting in a carrying value of Rs. 164538 million as at March 31 2020.
The recoverable amount of BIL was determined to be higher of Value in use and Fair value less costs to sell.
With the assistance of our fair value specialists who have specialized skill and knowledge we evaluated appropriateness of the models and inputs used in the impairment analysis basis market approach and appropriateness of key assumptions used in the value in use calculations such as projected revenue growth rates EBITDA margins discount rates and terminal growth rates and compared these key assumptions for consistency to internal and external available data and information including historical performance.
The determination of the recoverable amounts includes assumptions relating to cash flow projections discount rates terminal growth rates and control premiums which involves significant management judgement and is based on unobservable inputs.
Refer note 2.10.a for policy on "Recognition classification and presentation" of financial instruments note 3.1.b ‘Impairment reviews' under the head "Key sources of estimation uncertainties" note 7 "Investments" for disclosures related to details of Investments and impairment test for investment in a subsidiary and note 30(i)(d) relating to Exceptional items in the standalone financial statements.
5

Assessment of recoverability relating to Deferred

Principal Audit Procedures

tax assets (‘DTA') recognized on carry forward losses and Minimum Alternate Tax credit (MAT)

The Company has recognised Rs. 269151 as DTA as at March 31 2020 relating to carry forward losses and MAT credit. We tested effectiveness of controls over the Company's process for determining the recoverability of the DTA relating to carry forward losses and MAT credit which included amongst others controls over the over the assumptions and judgments used in the projections of future taxable income.
The Company exercises significant judgement in assessing the recoverability of DTA relating to these items. In estimating the recoverability of DTA management uses inputs such as internal business and tax projections over a 10 year period. To assess the Company's ability to estimate future taxable income we compared the Company's previous forecasts to actual results.
We involved our tax professionals with specialized skills and knowledge to assist in evaluating taxation related matters including the Company's tax planning strategies and interpretation of tax laws.
Recoverability of DTA on carry forward losses and MAT credit is sensitive to the assumptions used by management in projecting the future taxable income the reversal of deferred tax liabilities which can be scheduled and tax planning strategies.
We examined the consistency between the financial plan used for goodwill impairment assessment purposes and the plan used in the evaluation of the recoverability of the DTA.
We performed a sensitivity analysis over the key assumptions to assess their impact on the Company's determination that the DTA relating to carry forward losses and MAT credit were realizable.
Refer note 2.12 "Taxes" for accounting policies note 3.1.c ‘Taxes' under the head "Key sources of estimation uncertainties" and note 11 "Income taxes" for disclosures related to taxes in the standalone financial statements.
6 Contingent liabilities and commitments - Principal Audit Procedures:
Contingencies related to Regulatory Direct and Indirect tax matters
We tested the effectiveness of internal controls related to:
The Company has material contingencies related to Regulatory Direct and Indirect tax matters which are under dispute with various authorities as more fully described in Note 22.a to the Standalone financial statements. The Company exercises significant judgment to determine the possible outcome of these disputes. Thereafter the Company makes a determination for recording/ write back of provisions or alternatively disclosing them as contingencies unless the matters are considered as remote. (1) identification and recognition of liability for matters under review or appeal with relevant regulatory direct and indirect tax authorities;
(2) completeness and accuracy of the underlying data used in the assessment and evaluating the assumptions used by management when determining its uncertain positions the status of past audits and investigations and the potential impact of past claims.
(3) Management's assessment and interpretation of applicable laws including tax laws and its evaluation of which uncertain positions may not be sustained upon audit and controls over measurement of the liability.
For direct and indirect tax matters we involved our tax specialists who assisted in evaluating the reasonableness of management's assessments by comparing the positions taken by management with tax regulations and past decisions from tax authorities recent developments new information and where applicable evaluating opinions from the Company's external tax advisors.
Refer Note 2.18 "Contingencies" for accounting policies 3.1.e ‘Contingent liabilities and provisions' under the head "Key sources of estimation uncertainties" Note 19 "Provisions" for disclosure related to provisions for subjudice matters and Note 22.a in respect of details of Contingent liabilities in the standalone financial statements.
For regulatory matters in progress we assessed relevant regulatory orders regulatory statutes and interpretations recent developments new information external legal opinion obtained by the Company if any and other publicly available information to evaluate the likelihood of matters under dispute and compared that to management's assertion on these matters.
We also evaluated the disclosures provided in the notes to the standalone financial statements concerning these matters.

Information Other than the Financial Statements and Auditor'sReport Thereon

The Company's Board of Directors is responsible for the otherinformation. The other information comprises the Management Discussion and AnalysisBoard's Report including Annexures to the Board's Report BusinessResponsibility Report and Corporate Governance but does not include the ConsolidatedFinancial Statements Standalone Financial Statements and our auditor's reportsthereon.

Our opinion on the Standalone Financial Statements does not cover theother information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone Financial Statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the Standalone Financial Statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated.

If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.

Management's Responsibility for the Standalone FinancialStatements

The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these StandaloneFinancial Statements that give a true and fair view of the financial position financialperformance including other comprehensive income changes in equity and cash flows of theCompany in accordance with the Ind AS and other accounting principles generally acceptedin India. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the StandaloneFinancial Statement that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the Standalone Financial Statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibility for the Audit of the Standalone FinancialStatements

Our objectives are to obtain reasonable assurance about whether theStandalone Financial Statements as a whole are free from material misstatement whetherdue 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 auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these Standalone Financial Statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of theStandalone Financial Statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal financial control relevantto the audit in order to design audit procedures that are appropriate in thecircumstances. Under section 143(3)(i) of the Act we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls system inplace and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by the management.

• Conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the Standalone Financial Statements or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditor's report. However future events orconditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of theStandalone Financial Statements including the disclosures and whether the StandaloneFinancial Statements represent the underlying transactions and events in a manner thatachieves fair presentation.

Materiality is the magnitude of misstatements in the StandaloneFinancial Statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the Standalone FinancialStatements may be influenced. We consider quantitative materiality and qualitative factorsin (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 FinancialStatements.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the StandaloneFinancial Statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act based on our audit wereport that:

a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books.

c) The Standalone Balance Sheet the Standalone Statement of Profit andLoss including Other Comprehensive Income Standalone Statement of Changes in Equity andthe Standalone Statement of Cash Flows dealt with by this Report are in agreement with thebooks of account.

d) In our opinion the aforesaid Standalone Financial Statements complywith Ind AS specified under Section 133 of the Act.

e) On the basis of the written representations received from thedirectors as on March 31 2020 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2020 from being appointed as a director in termsof Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure A". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internalfinancial controls over financial reporting.

g) With respect to the other matters to be included in theAuditor's Report in accordance with the requirements of section 197(16) of the Actas amended

In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provisions of section 197 of the Act.

h) With respect to the other matters to be included in theAuditor'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 tothe explanations given to us:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its Standalone Financial Statements;

ii. The Company has made provision as required under the applicablelaw or accounting standards for material foreseeable losses if any on long-termcontracts including derivative contracts;

iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.

2. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government in terms of Section 143(11) ofthe Act we give in "Annexure B" a statement on the matters specified inparagraphs 3 and 4 of the Order.

For DELOITTE HASKINS & SELLS LLP
Chartered Accountants

(Firm's Registration No. 117366W/W-100018)

Shyamak R Tata

Partner
Place: Mumbai (Membership No. 38320)
Date: May 18 2020 UDIN: 20038320AAAAAE7099

ANNEXURE "A" TO THE

INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1(f) under ‘Report on Other Legal andRegulatory Requirements' section of our report to the member of Bharti Airtel Limitedof even date)

Report on the Internal Financial Controls Over Financial Reportingunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")

We have audited the internal financial controls over financialreporting of BHARTI AIRTEL LIMITED ("the Company") as of March 31 2020 inconjunction with our audit of the Standalone Financial Statements of the Company for theyear ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India ("theGuidance Note"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013("the Act").

Auditor's Responsibility

Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting of the Company based on our audit. Weconducted our audit in accordance with the Guidance Note and the Standards on Auditingprescribed under Section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls. 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 aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting isa process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlover financial 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 unauthorized 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 FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor 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 theexplanations given to us 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 2020 based on thecriteria for internal financial control over financial reporting established by theCompany considering the essential components of internal control stated in the GuidanceNote.

For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm‘s Registration No.117366W/W-100018)

Shyamak R Tata

Partner
Place: Mumbai (Membership No. 38320)
Date: May 18 2020 UDIN: 20038320AAAAAE7099

ANNEXURE "B" TO THE

INDEPENDENT AUDITOR'S REPORT

(Referredtoinparagraph2under‘ReportonOtherLegalandRegulatoryRequirements'section of our report to the Members of Bharti Airtel Limited of even date) i. Inrespect of Company's fixed assets:

(a) The Company has maintained proper records showing full particularswith respect to most of its fixed assets and is in the process of updating quantitativeand situation details with respect to certain fixed assets in the records maintained bythe Company.

(b) The Company except for customer premises equipment and certainassets which due to their nature or location are not verifiable has a program ofverification of fixed assets to cover all the items in a phased manner over a period ofthree years which in our opinion is reasonable having regard to the size of the Companyand the nature of its assets. Pursuant to the program certain fixed assets werephysically verified by the Management during the year. According to the information andexplanations given to us no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us therecords examined by us and based on examination of property tax receipts utility billslease agreement for land on which building is constructed registered sale deed / transferdeed / conveyance deed or court orders approving schemes of arrangements / amalgamationsprovided to us we report that the title in respect of self-constructed buildings and thetitle deeds comprising all the immovable properties of land and buildings which arefreehold and forming part of fixed assets are held in the name of the Company as at thebalance sheet date except the following:

Nature

Number

Gross Block

Net Block

Remarks

of Asset

of Cases

(Rs. in Million)

(Rs. in Million)

Land 2 2630 2630 The ownership of these properties is transferred and vested in the
Building 3 235 226 Company through merger scheme of relevant consumer mobile
businesses of Tata Teleservices Limited as per the Scheme of
arrangement under section 230 to section 232 of the Companies
Act 2013 approved by National Company Law Tribunal. The titles
are pending mutation in the name of the Company.

ii. As explained to us the inventories except for those lying withthe third parties were physically verified during the year by the Management atreasonable intervals and no material discrepancies were noticed on physical verification.

iii. According to information and explanation given to us the Companyhas not granted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under section 189 of theCompanies Act 2013.

iv. In our opinion and according to the information and explanationsgiven to us there are no loans investments guarantees and securities granted inrespect of which provisions of Section 185 and 186 of the Companies Act 2013 areapplicable.

v. According to the information and explanations given to us theCompany has not accepted deposits during the year and does not have any unclaimed depositsas at March 31 2020 and therefore the provisions of the clause 3 (v) of the Order arenot applicable.

vi. The maintenance of cost records has been specified by the CentralGovernment under section 148(1) of the

Companies Act 2013. We have broadly reviewed the cost recordsmaintained by the Company pursuant to the Companies (Cost Records and Audit) Rules 2014as amended prescribed by the Central Government under sub-section (1) of Section 148 ofthe Companies Act 2013 and are of the opinion that prima facie the prescribedcost records have been made and maintained. We have however not made a detailedexamination of the cost records with a view to determine whether they are accurate orcomplete.

vii. According to the information and explanations given to us inrespect of statutory dues:

(a) The Company is regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income-tax Goods and ServicesTax Customs Duty cess and other material statutory dues applicable to it to theappropriate authorities.

(b) There were no undisputed amounts payable in respect of ProvidentFund Employees' State Insurance Income-tax Goods and Services Tax Customs Dutycess and other material statutory dues in arrears as at March 31 2020 for a period ofmore than six months from the date they became payable.

(c) Details of dues of Income-tax Sales Tax Service Tax CustomsDuty Value Added Tax and Goods and Service Tax which have not been deposited as on March31 2020 on account of disputes are given below:

Name of the Statutes

Nature of the Dues

Amount Disputed Period to Which Case Pertains

Forum where the dispute is pending

(Rs. in Million)
Income Tax Act 1961 Income Tax 221 1999-00 Supreme Court
2001-02
2002-09
Income Tax Act 1961 Income Tax 23255 2004-05 High Court
2006-09
2001-02
2004-10
Income Tax Act 1961 Income Tax 6429 2003-04 Income Tax Appellate Tribunal
2014-15
2005-15
Income Tax Act 1961 Income Tax 731 2009-12 Commissioner of Income Tax
2003-10
2013-14
Income Tax Act 1961 Income Tax 942 1996-97 Assessing Officer
2005-06
2003-10
2011-14

Sub Total (A)

31578
Andhra Pradesh VAT Act 2005 Sales Tax 158 2004-18 Tribunal
Bihar VAT Act 2005 Sales Tax 0 2015-16 Assistant Commissioner
Bihar VAT Act 2005 Sales Tax 1 2016-17 Deputy Commissioner
Bihar VAT Act 2005 Sales Tax 22 2015-17 Joint Commissioner (Appeal)
Bihar VAT Act 2005 Sales Tax 139 2005-15 Tribunal
Chhattisgarh VAT Act 2003 Sales Tax 0 2006-07 Assistant Commissioner
Delhi VAT Act 2004 Sales Tax 0 2012-13 Additional Commissioner
Delhi VAT Act 2004 Sales Tax 6 2011-14 Assistant Commissioner
The Gujarat VAT Act 2003 Sales Tax 1 2005-07 Deputy Commissioner (Appeals)
The Karnataka VAT Act 2003 Sales Tax 291 2005-06 Supreme Court
The Karnataka VAT Act 2003 Sales Tax 2 2016-17 Karnataka Appellate Tribunal
The Kerala VAT Act 2003 Sales Tax 45 2005-17 Assessing Officer/Commercial Tax
Officer
The Kerala VAT Act 2003 Sales Tax 71 2006-07 High Court
Kerala Sales Tax Act Sales Tax 16 2005-10 Deputy Commissioner (Appeals)
Kerala Sales Tax Act Sales Tax 0 2008-10 Intelligence Officer Squad
Kerala Sales Tax Act Sales Tax 1 2002-05 Tribunal
The Madhya Pradesh VAT Act 2002 Sales Tax 1 2008-09 Tribunal
The Madhya Pradesh VAT Act 2002 Sales Tax 0 2004-08 Commercial Tax Officer
The Madhya Pradesh VAT Act 2002 Sales Tax 1 2008-10 Deputy Commissioner
The Madhya Pradesh VAT Act 2002 Sales Tax 22 1997-04 Deputy Commissioner Appeal
The Maharashtra VAT Act 2002 Sales Tax 0 2003-04 Joint Commissioner Appeal
Punjab VAT Act 2005 Sales Tax 1 2009-17 Deputy Commissioner/ DC(Appeal)
Punjab VAT Act 2005 Sales Tax 30 2003-04 High Court
Punjab VAT Act 2005 Sales Tax 1 2002-03 Tribunal
Rajasthan VAT Act Sales Tax 2 2015-16 Commercial Tax Officer
Rajasthan VAT Act Sales Tax 6 2017-18 Assistant Commissioner
The UP VAT Act Sales Tax 11 2005-13 Assessing officer
The UP VAT Act Sales Tax 1 2002-05 Assistant Commissioner
The UP VAT Act Sales Tax 1 2009-10 Joint Commissioner
The UP VAT Act Sales Tax 6 2008-10 High court
The UP VAT Act Sales Tax 3 2003-08 Joint Commissioner Appeal
The UP VAT Act Sales Tax 9 2005-10 Tribunal
The UP VAT Act Sales Tax 1 2015-16 Commissioner (Appeals)
The UP VAT Act Sales Tax 26 2003-16 Deputy Commissioner
The UK VAT Act 2005 Sales Tax 0 2016-17 Deputy Commissioner (Appeal)
The West Bengal VAT Act 2003 Sales Tax 39 2001-02 High Court
The West Bengal VAT Act 2003 Sales Tax 0 1996-97 The Deputy Commissoner of Commercial Taxes
The West Bengal VAT Act 2003 Sales Tax 0 1995-98 Commercial Tax Officer
2016-17
The West Bengal VAT Act 2003 Sales Tax 9 2005-06 Commissioner
The West Bengal VAT Act 2003 Sales Tax 3 1997-12 Tribunal

Sub Total (B)

927
Finance Act 1994 (Service tax) Service Tax 273 2004-08 Supreme Court
Finance Act 1994 (Service tax) Service Tax 289 2003-09 High court
Finance Act 1994 (Service tax) Service Tax 5906 1995-16 Tribunal
Finance Act 1994 (Service tax) Service Tax 816 2004-12 Commissioner
Finance Act 1994 (Service tax) Service Tax 1 1999-06 Deputy Commissioner/ Deputy
Commissioner (Appeals)

Sub Total (C)

7285
Goods and Services Tax Act 2017 UPGST 14 2018-20 Assistant Commissioner

Sub Total (D)

14
Custom Act 1962 Custom Act 4128 2001-05 Supreme Court
Custom Act 1962 Custom Act 889 2003-15 Tribunal

Sub Total (E)

5017

Grand Total (A+B+C+D+E):

44821

The above mentioned figures represent the total disputed cases withoutany assessment of Probable Possible and Remote as done in case of ContingentLiabilities. Of the above cases total amount deposited in respect of Sales Tax is Rs. 355Million Service Tax is Rs. 501 Million Goods and Services Tax Act 2017 is Rs. 0*Million Custom Duty is Rs. 2142 Million and Income Tax is Rs. 11491 Million.

*Amount less than half million are appearing as ‘0'.

viii. In our opinion and according to the information and explanationsgiven to us the Company has not defaulted in the repayment of loans or borrowings tofinancial institutions banks and government and dues to debenture holders.

ix. In our opinion and according to the information and explanationsgiven to us money raised by way of further public offer and the term loans have beenapplied by the Company during the year for the purposes for which they were raised otherthan temporary deployment pending application of proceeds.

x. To the best of our knowledge and according to the information andexplanations given to us no fraud by the Company and no material fraud on the Company byits officers or employees has been noticed or reported during the year.

xi. In our opinion and to the best of our information and according toexplanation given to us the Company has paid / provided managerial remuneration for theyear ended March 31 2020 in accordance with the requisite approvals mandated by theprovisions of section 197 read with Schedule V to the Companies Act 2013.

xii. The Company is not a Nidhi Company and hence reporting underclause 3 (xii) of the Order is not applicable.

xiii. In our opinion and according to the information and explanationsgiven to us the Company is in compliance with Section 177 and 188 of the Companies Act2013 where applicable for all transactions with the related parties and the details ofrelated party transactions have been disclosed in the financial statements etc. asrequired by the applicable accounting standards.

xiv. According to the information and explanations given to us theCompany has made private placement of equity shares during the year.

In respect of the above issue we further report that:

(a) The requirement of Section 42 of the Companies Act 2013 asapplicable have been complied with; and

(b) The amounts raised have been applied by the Company during the yearfor the purposes for which the funds were raised other than temporary deployment pendingapplication.

xv. In our opinion and according to the information and explanationsgiven to us during the year the Company has not entered into any non-cash transactionswith its directors or directors of its holding subsidiary or associate company or personsconnected with them and hence provisions of section 192 of the Companies Act 2013 are notapplicable.

xvi. The Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934.

For DELOITTE HASKINS & SELLS LLP
Chartered Accountants

(Firm's Registration No. 117366W/W-100018)

Shyamak R Tata

Partner
Place: Mumbai (Membership No.38320)
Date: May 18 2020 UDIN: 20038320AAAAAE7099

.