BHARTI INFOTEL LIMITED - Airtel

AUDITORS’ REPORT
To The Members of Bharti Infotel Limited (Formerly, Bharti
Telenet Limited)
1. We have audited the attached Balance Sheet of Bharti Infotel
Limited (Formerly, Bharti Telenet Limited), as at March 31,
2003, and the related Profit and Loss Account and Cash Flow
Statement for the year ended on that date annexed thereto,
which we have signed under reference to this report. These
financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We have conducted our audit in accordance with the auditing
standards generally accepted in India. Those Standards require
that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
3. As required by the Manufacturing and Other Companies
(Auditor’s Report) Order, 1988 issued by the Central
Government of India in terms of sub-section (4A) of Section
227 of ‘The Companies Act, 1956’ of India (the ‘Act’) and on
the basis of such checks as we considered appropriate and
according to the information and explanations given to us, we
further report that:
3.1 (a) The Company has maintained proper records to
show full particulars including quantitative details
and situation of its fixed assets.
(b) The fixed assets of the Company are physically
verified by the management according to a phased
programme designed to cover all the items over a
period of three years, which is considered reasonable
by us. Pursuant to the programme, a physical
verification was carried out during the year at various
locations and this revealed no material
discrepancies.
3.2 The fixed assets of the Company have not been revalued
during the year.
3.3 The stocks of traded goods of the Company have been
physically verified by the management at the year-end.
3.4 In our opinion, the procedures of physical verification
of stocks followed by the management are reasonable
and adequate in relation to the size of the Company and
nature of its business.
3.5 The discrepancies between the physical stocks and the
book stocks, which have been properly dealt with in
the books of account were not material.
3.6 In our opinion, the valuation of traded stock has been
fair and proper in accordance with the normally accepted
accounting principles in India, and is on the same basis
as in the preceding year.
3.7 In our opinion, the terms and conditions of interest free
unsecured loans taken by the Company from the holding
company and a fellow subsidiary are prima facie not
prejudicial to the interests of the Company. The
Company has not taken any other loans, secured or
unsecured, from companies, firms or other parties listed
in the register maintained under Section 301 of the
Act. In terms of sub-section (6) of Section 370 of the
Act, provisions of this section are not applicable to a
Company on or after October 31, 1998.
3.8 In our opinion, the terms and conditions of interest
free unsecured loans granted by the Company to its
subsidiary companies are prima facie not prejudicial to
the interests of the Company. The Company has not
granted any other loans, secured or unsecured, to
companies, firms or other parties listed in the register
maintained under Section 301 of the Act, other than
an interest free security deposit to a wholly owned
subsidiary towards lease of premises. In terms of subsection
(6) of Section 370 of the Act, provisions of
this section are not applicable to a Company on or
after October 31, 1998.
3.9 The parties to whom loans or advances in the nature of
loans have been given by the Company are repaying the
principal amounts as stipulated and are also regular in
payment of interest (as applicable) in most cases. In
those cases where principal amounts and/or interests
are not being paid as stipulated, reasonable steps are
being taken by the Company for recovery of the principal
and/or interest.
3.10 In our opinion there is, an adequate internal control
procedure commensurate with the size of the Company
and the nature of its business, for purchase of plant and
machinery, equipment and similar assets and for the sale
of goods.
3.11 In our opinion, purchase of goods and materials and sale
of goods, materials and services, made in pursuance of
contracts or arrangements entered in the register
maintained under Section 301 of the Act and aggregating
during the year Rs. 50,000/- or more in value in respect
of each party, have been made at prices which are
reasonable having regard to the prevailing market prices
for such goods, materials or services or the prices at
which the transactions for similar goods or services have
been made with other parties.
ANNUAL REPORT 2002-2003 193