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Tata Communications Ltd.

BSE: 500483 Sector: Telecom
NSE: TATACOMM ISIN Code: INE151A01013
BSE 00:00 | 24 Apr Tata Communications Ltd
NSE 05:30 | 01 Jan Tata Communications Ltd
OPEN 375.95
PREVIOUS CLOSE 372.10
VOLUME 4539
52-Week high 584.00
52-Week low 205.70
P/E 32.76
Mkt Cap.(Rs cr) 10,531
Buy Price 369.65
Buy Qty 11.00
Sell Price 369.50
Sell Qty 14.00
OPEN 375.95
CLOSE 372.10
VOLUME 4539
52-Week high 584.00
52-Week low 205.70
P/E 32.76
Mkt Cap.(Rs cr) 10,531
Buy Price 369.65
Buy Qty 11.00
Sell Price 369.50
Sell Qty 14.00

Tata Communications Ltd. (TATACOMM) - Auditors Report


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Company auditors report

To the Members of Tata Communications Limited

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Tata CommunicationsLimited (the ‘Company‘) which comprise the Balance Sheet as at March 31 2018the Statement of Profit and Loss including the Statement of Other Comprehensive Incomethe Cash Flow Statement and the Statement of Changes in Equity for the year then endedand a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 (the ‘Act‘) with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income cash flows andchanges in equity of the Company in accordance with accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) specified undersection 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015as amended. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and the design implementation and maintenance of adequateinternal financial control that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit. We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made thereunder. We conducted our audit ofthe standalone financial statements in accordance with the Standards on Auditing issuedby the Institute of Chartered Accountants of India as specified under Section 143(10) ofthe Act. Those Standards require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether the financial statementsare free from material misstatement. An audit involves performing procedures to obtainaudit evidence about the amounts and disclosures in the financial statements. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the standalone financial statements whether due tofraud or error. In making those risk assessments the auditor considers internal financialcontrol relevant to the Company's preparation of the standalone financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone financialstatements. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the standalone financialstatements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the standalone financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2018 its profit including other comprehensive income its cash flows and the changesin equity for the year ended on that date.

Other Matter

The financial statements of the Company for the year ended March 31 2017 included inthese standalone financial statements have been audited by the predecessor auditor whoexpressed an modified opinion on those statements on May 4 2017.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's report) Order 2016 (the ‘Order‘)issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the Annexure 1 a statement on the matters specified in paragraphs 3and 4 of the Order.

2. As required by section 143 (3) of the Act we report that:

a.We have sought and obtained all the information and explanations which to the best ofour knowledge and belief were necessary for the purpose of our audit;

b.In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;

c.The Balance Sheet Statement of Profit and Loss including the Statement of OtherComprehensive Income the Cash Flow Statement and Statement of Changes in Equity dealtwith by this Report are in agreement with the books of account;

d.In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 as amended;

e.On the basis of written representations received from the Directors as on March 312018 and taken on record by the Board of Directors none of the Directors aredisqualified as on March 31 2018 from being appointed as a Director in terms of section164 (2) of the Act; f. With respect to the adequacy of the internal financial controlsover financial reporting of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure 2" to this report;

g.With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements – Refer Note 44(a) to the standalonefinancial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;

iii.There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.

For S.R. Batliboi & Associates LLP

Chartered Accountants

ICAI Firm Registration Number: 101049W/E300004

per Prashant Singhal

Partner

Membership Number: 93283

Place of Signature: Mumbai

Date: May 10 2018

ANNEXURE 1 REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING REPORT ON OTHER LEGAL ANDREGULATORY REQUIREMENTS OF OUR REPORT OF EVEN DATE

Re: Tata Communications Limited (the ‘Company')

i. a. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets. b.All the fixed assets were physicallyverified by the management during the year in accordance with a planned programme ofverifying them once in three years which in our opinion is reasonable having regard tothe size of the Company and the nature of its assets. No material discrepancies werenoticed on such verification. c.According to the information and explanations given by themanagement the title deeds of immovable properties included in property plant andequipment and investment property are held in the name of the Company except threeimmovable properties aggregating to gross block of Rs 34.58 crores and net block of Rs22.69 crores as at March 31 2018 for which title deeds were pending registration or notavailable with the Company and hence we are unable to comment on the same. ii. Themanagement has conducted physical verification of inventory at reasonable intervals duringthe year and no material discrepancies were noticed on such physical verification. iii.TheCompany has granted loan to one company covered in the register maintained under section189 of the Act. In our opinion and according to the information and explanations given tous: a.The terms and conditions of the grant of such loan are not prejudicial to theCompany's interest; b.The schedule of repayment of principal and payment of interest hasbeen stipulated for the loans granted and the repayment / receipts are regular; c.Thereare no amounts of loans granted to companies

firms or other parties listed in the register maintained under section 189 of the Actwhich are overdue for more than ninety days.

iv.In our opinion and according to the information and explanations given to usprovisions of sections 185 and 186 of the Act in respect of loans and advances giveninvestments made and guarantees and securities given have been complied with by theCompany to the extent these sections are applicable on the Company. v. The Company hasnot accepted any deposits within the meaning of Sections 73 to 76 of the Act and theCompanies (Acceptance of Deposits) Rules 2014 (as amended). Accordingly the provisionsof clause 3(v) of the Order are not applicable. vi.We have broadly reviewed the books ofaccount maintained by the Company pursuant to the rules made by the Central Government forthe maintenance of cost records under section 148(1) of the Act related to Internationallong distance services National long distance services Internet service providerservices and certain other services and are of the opinion that prima facie the specifiedaccounts and records have been made and maintained. We have not however made a detailedexamination of the same. vii. a. The Company is regular in depositing with appropriateauthorities undisputed statutory dues including provident fund employees' stateinsurance income-tax sales-tax service tax duty of custom value added tax goods andservice tax cess and other statutory dues applicable to it. b.According to theinformation and explanations given to us no undisputed amounts payable in respect ofprovident fund employees' state insurance income-tax service tax value added taxgoods and service tax sales tax duty of custom cess and other material statutory dueswere outstanding at the year end for a period of more than six months from the date theybecame payable. c.According to the records of the Company the dues outstanding of incometax sales tax service tax value added tax and other statutory dues on account of anydispute are as follows:

Name of the statute Nature of dues Amount (Rs crores) Period to which amount relates Forum where dispute is pending
Income Tax Act 1961 Income Tax 672.78 FY 2006-07 to FY 2010-11 Income Tax Appellate Tribunal
Income Tax Act 1961 Income Tax 1.02 FY 1996-97 Assessing officer Income Tax
Income Tax Act 1961 Income Tax 48.40 FY 2012-13 Assessing officer Income Tax
Income Tax Act 1961 Income Tax 203.89 FY 2002-03 to 2004-05 Income Tax Appellate Tribunal
Income Tax Act 1961 Income Tax 0.15 FY 2006-07 Income Tax Appellate Tribunal
Income Tax Act 1961 Income Tax 74.42 FY 2008-09 to 2010-11 Income Tax Appellate Tribunal
Income Tax Act 1961 Income Tax 242.09 FY 1998-99 to 2000-01 High Court
Income Tax Act 1961 Income Tax 0.80 FY 2003-04 High Court
Income Tax Act 1961 Income Tax 0.35 FY 2005-06 High Court
Income Tax Act 1961 Income Tax 3.74 FY 2005-06 Supreme Court
Income Tax Act 1961 Income Tax – TDS 5.78 FY 2005-06 to 2016-17 Commissioner (Appeal) (TDS) – Income Tax
Income Tax Act 1961 Income Tax – TDS 1.33 FY 2007-08 to 2009-10 Assessing Officer TDS - Income Tax
Sales Tax Act Sales Tax 1.86 FY 2006-07 to 2007-08 High Court of West Bengal
Central Sales Tax Act Central Sales Tax 0.06 FY 2011-12 West Bengal Commercial Tax Appellate and Revision Board
Central Sales Tax Act Central Sales Tax 0.03 FY 2011-12 to FY 2014-15 Assistant Commissioner Commercial Tax Bihar
Finance Act 1994 Service Tax 24.11 Various years Central Excise and Service Tax Appellate Tribunal

viii.In our opinion and according to the information and explanations given by themanagement the Company has not defaulted in repayment of loans or borrowing to afinancial institution bank or government or dues to debenture holders. ix.In our opinionand according to the information and explanations given by the management the Company hasutilized the monies raised by way of debentures for the purposes for which they wereraised.

According to the information and explanations given by the management the Company hasnot raised any money way of initial public offer / further public offer and term loanshence reporting under clause (ix) is not applicable to the Company and not commentedupon. x.Based upon the audit procedures performed for the purpose of reporting the trueand fair view of the financial statements and according to the information andexplanations given by the management we report that no fraud by the Company or no fraudon the Company by the officers and employees of the Company has been noticed or reportedduring the year.

xi.According to the information and explanations given by the management themanagerial remuneration has been paid / provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.xii.In our opinion the Company is not a nidhi Company.

Therefore the provisions of clause 3(xii) of the Order are not applicable to theCompany and hence not commented upon. xiii.According to the information and explanationsgiven by the management transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 where applicable and the details have beendisclosed in the notes to the financial statements as required by the applicableaccounting standards. xiv.According to the information and explanations given to us and onan overall examination of the balance sheet the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year under review and hence reporting requirements under clause 3(xiv) are notapplicable to the Company and not commented upon.

xv.According to the information and explanations given by the management the Companyhas not entered into any non-cash transactions with directors or persons connected withhim as referred to in section 192 of the Act. xvi.According to the information andexplanations given to us the provisions of section 45-IA of the Reserve Bank of IndiaAct 1934 are not applicable to the Company.

For S.R. Batliboi & Associates LLP

Chartered Accountants

ICAI Firm Registration Number: 101049W/E300004

per Prashant Singhal

Partner

Membership Number: 93283

Place of Signature: Mumbai

Date: May 10 2018

ANNEXURE 2 TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONE FINANCIALSTATEMENTS OF TATA COMMUNICATIONS LIMITED

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

We have audited the internal financial controls over financial reporting of TataCommunications Limited (the ‘Company') as of March 31 2018 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

Management's Responsibility for Internal Financial Controls

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

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the ‘Guidance Note') and the Standards on Auditing as specified under section143(10) of the Act to the extent applicable to an audit of internal financial controlsand both issued by the Institute of Chartered Accountants of India. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over

financial reporting included obtaining an understanding of internal financial controlsover financial reporting assessing the risk that a material weakness exists and testingand evaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the financial statements whether dueto fraud or error. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the internal financial controlssystem over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A Company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2018 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For S.R. Batliboi & Associates LLP

Chartered Accountants

ICAI Firm Registration Number: 101049W/E300004

per Prashant Singhal

Partner

Membership Number: 93283

Place of Signature: Mumbai

Date: May 10 2018