To The Members of BHARTI AIRTEL LIMITED
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying Standalone Financial Statements of BHARTIAIRTEL LIMITED ("the Company") which comprise the Standalone Balance Sheetas at March 31 2022 and the Standalone Statement of Profit and Loss (including OtherComprehensive Loss) 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 2022and its loss total comprehensive loss its 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 underthe 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 |
|We considered accuracy of revenues relating to Mobile services and Airtel Business segments as a key audit matter because of the complexity of the IT systems significance of volumes of data processed by the IT systems and the impact of changing pricing models (tariff structures incentive arrangements and discounts etc.). In addition for Airtel Business we also considered occurrence of revenue as a key audit matter due to the risk that revenue may be recorded without active service links being provided to customers or for contracts that are cancelled / not renewed. Refer note 2.18 "Revenue recognition" for accounting 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 obtained an understanding evaluated the design and tested the operating effectiveness of (i) the general IT controls automated controls interfaces control over plan configuration and system generated reports relevant for revenue recognition by involving our IT specialist; (ii) controls over recording of revenue relating to Mobile Services and Airtel Business segments; and (iii) control over reconciliations performed between the number of links / connection as per the active customer base to the billing system relating to Airtel Business Segment. |
| ||We tested inter se reconciliations between relevant IT systems (such as billing system prepaid application systems active customer database) and with general ledger and performed verification of revenue recognised deferred and unbilled revenue. |
| ||We made test calls to determine the accuracy of revenue recorded and tested the rating validation. |
| ||We verified the appropriateness of the accounting policies and the disclosures related to Revenue from operations in notes 2.18 3.2.d and 23 respectively in the Standalone Financial Statements. |
|2 Assessment of recoverability relating to Deferred tax assets (DTA') recognized on carry forward losses: ||Principal Audit Procedures |
| ||We obtained an understanding evaluated the design and tested the operating effectiveness of controls over the Company's process for determining the recognition and recoverability of the DTA relating to carry forward losses which included amongst others controls overthe assumptions andjudgments used in the projections of future taxable income and related tax projections and control over evaluating whether the criteria mentioned in para 99 of Ind AS 36 are met so as to consider the most recent projections of future cashflows made in a preceding period for the current year assessment. |
|The DTA balance as at March 31 2022 of Rs. 164486 Mn primarily relates to DTA on carry forward losses. || |
|The Company exercises significantjudgement in assessing the recognition and recoverability of DTA relating to carry forward losses. In estimating the recoverability of DTA on carry forward losses management uses inputs such as internal business and tax projections over a 10 year period. || |
|The recognition and recoverability of DTA on carry forward losses is considered a key audit matter as it is sensitive to the assumptions used by management in projecting the future taxable income the reversal of deferred tax liabilities which can be scheduled and tax planning strategies. ||To assess the Company's ability to estimate future taxable income we compared the Company's previous forecasts to actual results to determine its reasonableness and examined the consistency of projections used for assessing DTA recoverability with business projections used for goodwill impairment assessment and tested whether the criteria mentioned in para 99 of Ind AS 36 are met. |
|Refer note 2.11 "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. ||We involved our tax specialist in evaluating tax planning strategies opinion obtained by the Company from its tax advisors and interpretation of tax laws used by the Company in the tax projections used for supporting the recoverability of DTA. |
|3 Provisions and contingencies relating to relating to regulatory and tax matters: ||Principal Audit Procedures: |
| ||We obtained an understanding evaluated the design and tested the operating effectiveness of internal controls relating to: |
|The Company has recognised provisions for probable outflows relating to legal tax and regulatory matters and have disclosed contingencies for legal tax and regulatory matters where the obligations are considered possible. ||(1) identification evaluation recognition of provisions disclosure of contingencies for matters under review or appeal with relevant adjudicating authorities by considering the assumptions and information used by management in performing this assessment; |
|The Company in consultation with the legal tax and other advisers assess a likelihood that a pending matter relating to tax legal or regulatory will succeed. In performing this assessment the Company applies judgement and has recognised provisions based on whether additional amounts will be payable and has disclosed contingent liabilities where economic outflows are considered possible. ||(2) completeness and accuracy of the underlying data / information used in the assessment. For tax matters with the help of our tax specialist we evaluated the reasonableness of the management's positions by considering tax regulations and past decisions from tax authorities new information and opinions obtained by the Company from its external tax advisors where applicable. For regulatory matters we evaluated the reasonableness of the management's positions by considering relevant assessment orders court judgements statutes interpretations and amendments circulars and external legal opinion obtained by the Company where applicable. We also evaluated the disclosures provided in the notes to the Standalone Financial Statements concerning these matters. |
|We have considered the provisions recorded and the contingencies relating to tax legal and regulatory matters as a key audit matter as there is significantjudgement to determine the possible outcome of matters under dispute and determining the amounts involved which may vary depending on the outcome of the matters. || |
|Refer note 2.17 "Contingencies" for accounting policies note 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 note 4(vi) for AGR matter and Note 22(1) in respect of details of Contingent liabilities in the Standalone Financial Statements. || |
Information Otherthan 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/(loss) changes in equity and cash flowsof the Company in accordance with the Ind AS and other accounting principles generallyaccepted in India. This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls 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.
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 forthe 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 controls relevant tothe 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 onwhether the Company has adequate internal financial controls system in place and theoperating effectiveness of Company's internal financial 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 the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the Standalone Financial Statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditionsmay 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 loss the 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 2022 taken on record by the Board of Directors none of thedirectors is disqualified as on March 312022 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 longtermcontracts 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.
iv. (a) The Management has represented that to the best of itsknowledge and belief other than as disclosed in the note 42 to the Standalone FinancialStatements no funds have been advanced or loaned or invested (either from borrowed fundsor share premium or any other sources or kind of funds) by the Company to or in any otherperson(s) or entity(ies) including foreign entities ("Intermediaries") withthe understanding whether recorded in writing or otherwise that the Intermediary shalldirectly or indirectly lend or invest in other persons or entities identified in anymanner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") orprovide any guarantee security or the like on behalf of the Ultimate Beneficiaries.
(b) The Management has represented that to the best of its knowledgeand belief no funds have been received by the Company from any person(s) or entity(ies)including foreign entities ("Funding Parties") with the understanding whetherrecorded in writing or otherwise that the Company shall directly or indirectly lend orinvest in other persons or entities identified in any manner whatsoever by or on behalf ofthe Funding Party ("Ultimate Beneficiaries") or provide any guarantee securityor the like on behalf of the Ultimate Beneficiaries.
(c) Based on the audit procedures that has been considered reasonableand appropriate in the circumstances nothing has come to our notice that has caused us tobelieve that the representations undersub-clause(i) and (ii) of Rule 11(e) as providedunder (a) and (b) above contain any material misstatement.
v. As stated in note 15 to the Financial Statements the Board ofDirectors of the Company has proposed final dividend for the year which is subject to theapproval of the members at the ensuing Annual General Meeting. The dividend proposed is inaccordance with section 123 of the Act as applicable.
2. As required by the Companies (Auditor's Report) Order 2020("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 No117366W / W-100018) |
|Vijay Agarwal |
|(Membership No. 094468) |
|(UDIN: 22094468AJCCYQ9101) |
|Place: Gurugram India |
|Date: May 17 2022 |
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 of 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 at March 31 2022 inconjunction with our audit of the Standalone Financial Statements of the Company as at andfor the year 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").
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 Act to the extent applicable to an audit ofinternal financial controls. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.
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 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 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.
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 312022 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 No117366W / W-100018) |
|Vijay Agarwal |
|(Membership No. 094468) |
|(UDIN: 22094468AJCCYQ9101) |
|Place: Gurugram India |
|Date: May 17 2022 |
Annexure "B" to the Independent Auditor's Report
(Referred to in paragraph 2 underReport on Other Legal andRegulatory Requirements' section of our report of even date)
In terms of the information and explanations sought by us and given bythe Company and the books of account and records examined by us in the normal course ofaudit and to the best of our knowledge and belief we state that
(i) In respect of Company's Property Plant and Equipment andIntangible Assets:
(a) (A) The Company has maintained proper records showing fullparticulars including quantitative details and situation of Property Plant andEquipment capital work-in-progress and relevant details of right of use assets except inthe case of certain Plant and Machinery where the Company is in the process of updatingthe records for situation of these assets.
(B) The Company has maintained proper records showing full particularsof intangible assets.
(b) The Company except for customer premises equipment bandwidth andcertain assets which due to their nature or location are not verifiable has a program ofverification of property plant and equipment capital work in-progress and right-of-useassets so to cover all the items once every 3 years which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets. Pursuant to theprogram certain Property Plant and Equipment capital work-in progress and right of useassets were due for verification during the year and were physically verified by theManagement during the year. According to the information and explanations given to us nomaterial discrepancies were noticed on such verification.
(c) With respect to immovable properties (other than properties wherethe Company is the lessee and the lease agreements are duly executed in favour of theCompany) disclosed in the financial statements included in property plant and equipmentand capital work-in progress and according to the information and explanations given to usand based on the examination of the property tax receipts utility billsfor buildingconstructed registered sale deed / transfer deed / conveyance deed or court ordersapproving schemes of arrangements / amalgamations provided to us we report that thetitle deeds of such immovable properties are held in the name of the Company as at thebalance sheet date except for as provided below.
|Description of property ||As at the Balance sheet date (Amount in Rs. Mn) || || || || |
| ||Gross Carrying Value ||Carrying value in the Financial Statement ||- Held in the name of ||Whether promoter director or their relative or employee ||Period held ||Reason for not being in Company's name |
|Land ||2630 ||2630 ||Tata Teleservices Limited ||No ||Held since July 1 2019 ||Ownership of these lands is transferred and vested in the Company through merger scheme. The titles are pending mutation in the name of the Company. |
|Land ||133 ||133 ||Amrit Bottlers Pvt. Limited ||No ||Held since February 12 2010 ||Possession pending the contemplated conveyance of the property to the company due to certain difference in opinion between the parties. |
|Building ||203 ||175 ||Tata Teleservices Limited ||No ||Held since July 1 2019 ||Ownership of these buildings is transferred and vested in the Company through merger scheme. -The titles are pending mutation in the name of the |
|Building ||32 ||28 ||Tata Teleservices (Maharashtra) Limited ||No ||Held since July 1 2019 ||Company. |
|Building ||251 ||136 ||Amrit Bottlers Pvt. Limited ||No ||Held since February 12 2010 ||Possession pending the contemplated conveyance of the property to the company due to certain difference in opinion between the parties. |
In respect of immovable properties that have been taken on lease anddisclosed in the financial statements as right of use assets as at the balance sheet datethe lease agreements are duly executed in favour of the Company except for as providedbelow.
|Description of immovable properties taken on lease ||As at the Balance sheet date (Amount in Rs. Mn) || || || || |
| ||Gross carrying value ||Carrying value in the Financial Statement ||Held in name of ||Whether promoter director or their relative or employee ||Period held ||Reason for not being held in name of Company* |
|Land ||15 ||14 ||Tata Teleservices Limited ||No ||Held since July 1 2019 ||Right to use of land & building is vested in the Company through merger scheme. The duly |
|Building ||235 ||203 ||Tata Teleservices Limited ||No ||Held since July 1 2019 ||executed agreements are pending mutation in the name of the Company. |
(d) The Company has not revalued any of its property plant andequipment right of use assets and intangible assets during the year.
(e) No proceedings have been initiated during the year or are pendingagainst the Company as at March 31 2022 for holding any benami property under the BenamiTransactions (Prohibition) Act 1988 (as amended in 2016) and rules made thereunder.
(ii) (a) The inventories except for those lying with third partieswere physically verified during the year by the Management at reasonable intervals. In ouropinion and according to the information and explanations given to us the coverage andprocedure of such verification by the Management is appropriate having regard to the sizeof the Company and the nature of its operations. No discrepancies of 10% or more in theaggregate for each class of inventories were noticed on such physical verification ofinventories when compared with books of account.
(b) According to the information and explanations given to us at anypoint of time of the year the Company has not been sanctioned any working capitalfacility from banks or financial institutions on the basis of security of current assetsand hence reporting under clause (ii)(b) of the Order is not applicable.
(iii) The Company has made investments in provided guarantee andgranted loans or advance in nature of loan (including receivable in the nature of loan)unsecured to companies or any other parties during the year in respect of which:
(a) The Company has provided loans (excluding loans to employees)advance in the nature of loan (including receivable in the nature of loan) and guaranteesduring the year and details of which are given below:
| || ||Amount in Rs. Mn || |
| ||Loan Amounts ||Advance in nature of loan (Including receivable in the nature of loan) ||Guarantees |
|A. Aggregate amount granted / provided during the year to subsidiaries ||121425 || ||32400 |
|B. Balance outstanding as at balance sheet date ||49710* ||15139# ||394894 |
* It includes interest free loans of Rs. 44824 Mn given to whollyowned subsidiaries.
* Interest free receivable in the nature of loan given to whollyowned subsidiary
(b) The investments made guarantees provided and the terms andconditions of the grant of all the above- mentioned loans and advance in the nature ofloan (including receivable in nature of loan) during the year are in our opinion primafacie not prejudicial to the Company's interest.
(c) The Company has granted loans and advance in the nature of loan(including receivable in the nature of loan) which are payable on demand. During the yearthe Company has not demanded such loans. Having regard to the fact that the repayment ofprincipal or payment of interest wherever applicable has not been demanded by theCompany in our opinion the repayments of principal amounts and receipts of interest areregular (Refer reporting under clause (iii)(f) below).
(d) According to information and explanations given to us and based onthe audit procedures performed in respect of loans and advance in the nature of loan(including receivable in the nature of loan) provided by the Company there is no overdueamount remaining outstanding as at the balance sheet date as the Company has not demandedsuch loans and advance in nature of loan (including receivable in nature of loan).
(e) None of the loans granted and advances in the nature of loans(including receivable in the nature of loan) by the Company have fallen due during theyear as the Company has not demanded such loans and advance in nature of loan (includingreceivable in nature of loan).
(f) Above mentioned loans and advance in the nature of loan (includingreceivable in the nature of loan) in clause (iii) (a) granted by the Company are repayableon demand.
(iv) The Company has complied with the provisions of Sections 185 and186 of the Companies Act 2013 in respect of grant of loans making investments andproviding guarantees and securities as applicable.
(v) The Company has not accepted any deposit or amounts which aredeemed to be deposits. Hence reporting under clause (v) of the Order is not 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 thebooks of account maintained by the Company pursuant to the Companies (Cost Records andAudit) Rules 2014 as amended prescribed by the Central Government for maintenance ofcost records under Section 148(1) of the Companies Act 2013 and are of the opinion thatprima facie the prescribed cost records have been made and maintained by the Company. Wehave however not made a detailed examination of the cost records with a view todetermine whether they are accurate or complete.
(vii) In respect of statutory dues:
(a) Undisputed statutory dues including Goods and Service taxProvident Fund Employees' State Insurance Income-tax Duty of custom cess andother material statutory dues applicable to the Company have been regularly deposited byit with the appropriate authorities in all cases during the year.
There were no undisputed amounts payable in respect of Goods andService tax Provident Fund Employees' State Insurance Income-tax Duty of customcess and other material statutory dues in arrears as at March 31 2022 for a period ofmore than six months from the date they became payable.
(b) Details of statutory dues referred to in sub-clause (a) above whichhave not been deposited as on March 31 2022 on account of disputes are given below:
|Name of Statue ||Nature of Dispute ||Period to which the amount relates ||Forum where dispute is pending ||Disputed amount (Rs. In Mn)* |
|Income Tax Act 1961 ||Income Tax ||1999-05; 2002-08 ||Supreme Court ||139 |
|Income Tax Act 1961 ||Income Tax ||1996-982002-05 2006-092013-14; 2004-10 ||High Court ||23336 |
|Income Tax Act 1961 ||Income Tax ||1995-972000-04 2006-082014-16; 2003-10 ||Income Tax Appellate Tribuna ||965 |
|Income Tax Act 1961 ||Income Tax ||1999-002003-04 2010-112012-13 2015-16; 2004-07 2008-10 ||Commissioner of Income Tax (Appeals) ||1575 |
|Income Tax Act 1961 ||Income Tax ||2000-022005-06; 1996-972003-14 ||Assessing Officer ||5441 |
|Sub Total (A) || || || ||31456 |
|Custom Act 1962 ||Custom Act ||2004-2006 ||Assessing Officer ||6 |
|Custom Act 1962 ||Custom Act ||2001-2005 ||Supreme Court ||4128 |
|Custom Act 1962 ||Custom Act ||2003-2019 ||Tribuna ||1184 |
|Sub Total (B) || || || ||5318 |
|Finance Act 1994 (Service tax) ||Service Tax ||2003-2009 ||Commissioner ||155 |
|Finance Act 1994 (Service tax) ||Service Tax ||2004-2009 ||High Court ||463 |
|Finance Act 1994 (Service tax) ||Service Tax ||2004-2008 ||Supreme Court ||273 |
|Finance Act 1994 (Service tax) ||Service Tax ||1999-2017 ||Tribuna ||13405 |
|Finance Act 1994 (Service tax) ||Service Tax ||1997-2006 ||DC/Commissioner Appeals ||3 |
|Sub Total (C) || || || ||14299 |
|Goods and Services Tax Act 2017 ||AP GST ||2017-2019 ||Joint Commissioner Appeals ||128 |
|Goods and Services Tax Act 2017 ||UP GST ||2018-2019 ||1st Appea ||0 |
|Goods and Services Tax Act 2017 ||UP GST ||2018-2019 ||High Court ||13 |
|Goods and Services Tax Act 2017 ||Haryana GST ||2017-2019 ||Assessing Officer ||376 |
|Goods and Services Tax Act 2017 ||WB GST ||2020-2021 ||Assessing Officer ||6 |
|Goods and Services Tax Act 2017 ||Bihar GST ||2017-2019 ||Assessing Officer ||1387 |
|Sub Total (D) || || || ||1910 |
|Bihar VAT Act 2005 ||Sales Tax ||2005-2018 ||Tribuna ||168 |
|Delhi VAT Act 2004 ||VAT ||2013-2017 ||Special Commissioner ||4 |
|Delhi VAT Act 2004 ||VAT ||2015-2018 ||Assessing Officer ||3 |
|Delhi VAT Act 2004 ||VAT ||2013-2014 ||Tribuna ||6 |
|Delhi VAT Act 2004 ||VAT ||2011-2012 ||Assistant Commissioner ||0 |
|The Gujarat VAT Act 2003 ||VAT ||2006-2007 ||Deputy Commissioner (Appeals) ||4 |
|The Madhya Pradesh VAT Act 2002 ||VAT ||2008-2009 ||Assistant Commissioner ||1 |
|Punjab VAT Act 2005 ||VAT ||2003-2004 ||High Court ||30 |
|Punjab VAT Act 2005 ||VAT ||2002-2017 ||Tribuna ||1 |
|Punjab VAT Act 2005 ||VAT ||2009-2016 ||1st Appeal/Commissioner Appea ||1 |
|UPVAT Act 2008 ||VAT ||2003-2012 ||Assessing Officer ||2 |
|UPVAT Act 2008 ||VAT ||2002-2005 ||Assistant Commissioner ||1 |
|UPVAT Act 2008 ||VAT ||2003-2009 ||Deputy Commissioner ||24 |
|UPVAT Act 2008 ||VAT ||2008-2010 ||High Court ||6 |
|UPVAT Act 2008 ||VAT ||2009-2010 ||Joint Commissioner ||1 |
|UPVAT Act 2008 ||VAT ||2009-2016 ||Tribuna ||2 |
|UPVAT Act 2008 ||VAT ||2003-2009 ||DC/JC/lst Appeals ||10 |
|The West Bengal VAT Act 2003 ||VAT ||1995-2002 ||Assessing Officer ||39 |
|The West Bengal VAT Act 2003 ||VAT ||1996-1997 ||Deputy Commissioner ||0 |
|The West Bengal VAT Act 2003 ||VAT ||2005-2006 ||Revisional Authority ||9 |
|The West Bengal VAT Act 2003 ||VAT ||1997-1998 ||Tribuna ||0 |
|The Kerala VAT Act 2003 ||VAT ||2003-2018 ||Assessing Officer ||33 |
|The Kerala VAT Act 2003 ||VAT ||2004-2010 ||High Court ||106 |
|The Karnataka VAT Act 2003 ||VAT ||2002-2009 ||Supreme Court ||3162 |
|The Karnataka VAT Act 2003 ||VAT ||2005-2006 ||Tribuna ||256 |
|Telangana VAT Act 2005 ||VAT ||2006-2010 ||Supreme Court ||3336 |
|Telangana VAT Act 2005 ||VAT ||2005-2018 ||Tribuna ||158 |
|Sub Total (E) || || || ||7363 |
|Chhattisgarh Sthaniya Kshetra Me Mai Ke Pravesh Par Kar Adhiniyam 1976 ||Entry Tax ||2015-2016 ||High Court ||0 |
|Haryana Local Area Development Tax Act 2000 ||Entry Tax ||2000-2003 ||Tribuna ||46 |
|HP Tax on Entry of Goods into Local Areas Act 2010 ||Entry Tax ||2010-2011 ||Tribuna ||33 |
|Jammu and Kashmir Entry Tax on Goods Act 2000 ||Entry Tax ||2005-2006 ||Assessing Officer ||12 |
|Karnataka Special Tax on Entry of Certain Goods Act 2004 ||Entry Tax ||2005-2006 ||High Court ||172 |
|Madhya Pradesh Sthaniya Kshetra Me Ma Ke Pravesh Par Kar Adhiniyam 1976 ||Entry Tax ||1999-2012 ||Assessing Officer ||34 |
|Madhya Pradesh Sthaniya Kshetra Me Ma Ke Pravesh Par Kar Adhiniyam 1976 ||Entry Tax ||1998-2008 ||Commissioner ||34 |
|Madhya Pradesh Sthaniya Kshetra Me Ma Ke Pravesh Par Kar Adhiniyam 1976 ||Entry Tax ||2000-2011 ||High Court ||29 |
|Madhya Pradesh Sthaniya Kshetra Me Ma Ke Pravesh Par Kar Adhiniyam 1976 ||Entry Tax ||2001-2003 ||Tribuna ||3 |
|Madhya Pradesh Sthaniya Kshetra Me Ma Ke Pravesh Par Kar Adhiniyam 1976 ||Entry Tax ||2006-2016 ||1st/2nd Appeal ||18 |
|Telangana tax on entry of goods into loca areas act 2001 ||Entry Tax ||2006-2007 ||High Court ||6 |
|The Assam Entry Tax Act 2008 ||Entry Tax ||2008-2018 ||High Court ||647 |
|The Assam Entry Tax Act 2008 ||Entry Tax ||2006-2008 ||Revisional Authority ||73 |
|UP Tax on Entry of Goods into Local Areas Act 2007 ||Entry Tax ||2004-2005 ||Assessing Officer ||0 |
|UP Tax on Entry of Goods into Local Areas Act 2007 ||Entry Tax ||2002-2003 ||High Court ||4 |
|UP Tax on Entry of Goods into Local Areas Act 2007 ||Entry Tax ||2001-2007 ||Tribuna ||403 |
|Bombay Provincial Municipal Corporations Act1949 ||Local Body Tax ||2002-2006 ||High Court ||5 |
|Bombay Provincial Municipal Corporations Act1949 ||Local Body Tax ||2013-2018 ||High Court ||147 |
|Sub Total (F) || || || ||1666 |
|U.P Entertainments and Betting Tax Act 1979 ||Entertainment Tax ||2009-2010 ||High Court ||5 |
|Madhya Pradesh Entertainment duty and Advertisement tax Act 1936 ||Entertainment Tax ||2016-2018 ||High Court ||165 |
|Sub Total (G) || || || ||170 |
|Grand Total (A+B+C+D+E+F+G): || || || ||62201 |
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 Income Tax is Rs.8611 Mn Duty of custom is Rs. 2667 Mn Service Tax is Rs. 561 Mn Goods and ServicesTax Act 2017 is Rs. 84 Mn Sales Tax is Rs. 344 Mn Entry Tax and other Local Area/BodyTaxes is Rs. 993 Mn and Entertainment Tax is Rs. nil.
* Amount less than half million are appearing as 'O'
(viii) There were no transactions relating to previously unrecordedincome that were surrendered or disclosed as income in the tax assessments under theIncome Tax Act 1961 (43 of 1961) during the year.
(ix) (a) In our opinion the Company has not defaulted in the repaymentof loans or other borrowings or in the payment of interest thereon to any lender duringthe year.
(b) The Company has not been declared wilful defaulter by any bank orfinancial institution or government or any government authority.
(c) To the best of our knowledge and belief in our opinion term loansavailed by the Company were applied by the Company during the year for the purposes forwhich the loans were obtained.
(d) To the best of our knowledge and belief and according to theinformation and explanations given to us the management of the Company is of the viewthat the Company is able to generate sufficient funds from long term sources eitherthrough its operations or other means to meet the working capital requirements arisingfrom the event of short-term sources falling due for payment. On an overall examination ofthe financial statements of the Company funds raised on short-term basis have been usedduring the year for long-term purposes by the Company. Refer Note 17 to the financialstatements.
(e) On an overall examination of the financial statements of theCompany the Company has not taken any funds from any entity or person on account of or tomeet the obligations of its subsidiaries associates or joint ventures.
(f) The Company has not raised loans during the year on the pledge ofsecurities held in its subsidiary or joint ventures or associate companies.
(x) (a) The Company has not raised moneys by way of initial publicoffer or further public offer (including debt instruments) during the year and hencereporting under clause (x)(a) of the Order is not applicable. Further the Company hasraised moneys through commercial papers from Qualified Institutional Buyers (QIBs) forgeneral purpose use.
(b) During the year the Company has not made any preferential allotmentor private placement of shares or convertible debentures (fully or partly or optionally)and hence reporting under clause (x)(b) of the Order is not applicable to the Company.
(xi) (a) To the best of our knowledge no fraud by the Company and nomaterial fraud on the Company has been noticed or reported during the year.
(b) To the best of our knowledge no report under subsection (12) ofsection 143 of the Companies Act has been filed in Form ADT-4 as prescribed under rule 13of Companies (Audit and Auditors) Rules 2014 with the Central Government during the yearand upto the date of this report.
(c) We have taken into consideration the whistle blower complaintsreceived by the Company during the year (and upto the date of this report) and provided tous when performing our audit.
(xii) The Company is not a Nidhi Company and hence reporting underclause (xii) of the Order is not applicable.
(xiii) In our opinion the Company is in compliance with Section 177and 188 of the Companies Act where applicable for all transactions with the relatedparties and the details of related party transactions have been disclosed in the financialstatements etc. as required by the applicable accounting standards.
(xiv) (a) In our opinion the Company has an adequate internal auditsystem commensurate with the size and the nature of its business.
(b) We have considered the internal audit reports issued to theCompany during the year and covering the period upto March 31 2022.
(xv) In our opinion during the year the Company has not entered intoany non-cash transactions with its directors or persons connected with its directors andhence provisions of section 192 of the Companies Act 2013 are not applicable to theCompany.
(xvi) (a) The Company is not required to be registered under section45-IA of the Reserve Bank of India Act 1934. Hence reporting under clause (xvi)(a) (b)and (c) of the Order is not applicable.
(b) The Parent Group has more than one CIC as part of the Parent Group.There are 2 CIC forming part of the Parent Group.
(xvii) The Company has not incurred cash losses during the financialyear covered by our audit and the immediately preceding financial year.
(xviii) There has been no resignation of the statutory auditors of theCompany during the year.
(xix) On the basis of the financial ratios ageing and expected datesof realization of financial assets and payment of financial liabilities other informationaccompanying the financial statements and our knowledge of the Board of Directors andManagement plans and based on our examination of the evidence supporting the assumptionsnothing has come to our attention which causes us to believe that any materialuncertainty exists as on the date of the audit report indicating that Company is notcapable of meeting its liabilities existing at the date of balance sheet as and when theyfall due within a period of one year from the balance sheet date. We however state thatthis is not an assurance as to the future viability of the Company. We further state thatour reporting is based on the facts up to the date of the audit report and we neither giveany guarantee nor any assurance that all liabilities falling due within a period of oneyear from the balance sheet date will get discharged by the Company as and when they falldue.
(xx) The Company has incurred losses during the three immediatelypreceding financial years and hence it is not required to spend any money undersub-section (5) of section 135 of the Act. Accordingly reporting under clause (xx) of theOrder is not applicable for the year.
|For DELOITTE HASKINS & SELLS LLP |
|Chartered Accountants |
|(Firm's Registration No117366W / W-100018) |
|Vijay Agarwal |
|(Membership No. 094468) |
|(UDIN: 22094468AJCCYQ9101) |
|Place: Gurugram India |
|Date: May 17 2022 |