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« Mar 13
Auditor's Report (Tata Communications) Year End : Mar '14
We have audited the accompanying financial statements of TATA
 COMMUNICATIONS LIMITED (the Company), which comprise the Balance
 Sheet as at 31 March, 2014, and the Statement of Profit and Loss and
 the Cash Flow Statement for the year then ended, and a summary of the
 significant accounting policies and other explanatory information.
 
 Management''s Responsibility for the Financial Statements
 
 The Company''s Management is responsible for the preparation of these
 financial statements that give a true and fair view of the financial
 position, financial performance and cash flows of the Company in
 accordance with the Accounting Standards notified under the Companies
 Act, 1956 (the Act) (which continue to be applicable in respect of
 Section 133 of the Companies Act, 2013 in terms of General Circular
 15/2013 dated 13 September, 2013 of the Ministry of Corporate Affairs)
 and in accordance with the accounting principles generally accepted in
 India. This responsibility includes the design, implementation and
 maintenance of internal control relevant to the preparation and
 presentation of the financial statements that give a true and fair view
 and are free from material misstatement, whether due to fraud or error.
 
 Auditors'' Responsibility
 
 Our responsibility is to express an opinion on these financial
 statements based on our audit. We conducted our audit in accordance
 with the Standards on Auditing issued by the Institute of Chartered
 Accountants of India. Those Standards require that we comply with
 ethical requirements and plan and perform the audit to obtain
 reasonable assurance about whether the financial statements are free
 from material misstatement.
 
 An audit involves performing procedures to obtain audit evidence about
 the amounts and the disclosures in the financial statements. The
 procedures selected depend on the auditors'' judgment, including the
 assessment of the risks of material misstatement of the financial
 statements, whether due to fraud or error. In making those risk
 assessments, the auditor considers internal control relevant to the
 Company''s preparation and fair presentation of the financial statements
 in order to design audit procedures that are appropriate in the
 circumstances, but not for the purpose of expressing an opinion on the
 effectiveness of the Company''s internal control. An audit also includes
 evaluating the appropriateness of the accounting policies used and the
 reasonableness of the accounting estimates made by the Management, as
 well as evaluating the overall presentation of the financial
 statements.
 
 We believe that the audit evidence we have obtained is sufficient and
 appropriate to provide a basis for our audit opinion.
 
 Opinion
 
 In our opinion and to the best of our information and
 
 according to the explanations given to us, the aforesaid financial
 statements give the information required by the Act in the manner so
 required and give a true and fair view in conformity with the
 accounting principles generally accepted in India:
 
 (a) in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31 March, 2014;
 
 (b) in the case of the Statement of Profit and Loss, of the profit of
 the Company for the year ended on that date; and
 
 (c) in the case of the Cash Flow Statement, of the cash fows of the
 Company for the year ended on that date.
 
 Report on Other Legal and Regulatory Requirements
 
 1.  As required by the Companies (Auditor''s Report) Order, 2003 (the
 Order) issued by the Central Government in terms of Section 227(4A) of
 the Act, we give in the Annexure a statement on the matters specified
 in paragraphs 4 and 5 of the Order.
 
 2.  As required by Section 227(3) of the Act, we report that:
 
 (a) We have obtained all the information and explanations which to the
 best of our knowledge and belief were necessary for the purposes of our
 audit.
 
 (b) In our opinion, proper books of account as required by law have
 been kept by the Company so far as it appears from our examination of
 those books.
 
 (c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
 Flow Statement dealt with by this Report are in agreement with the
 books of account.
 
 (d) In our opinion, the Balance Sheet, the Statement of Profit and
 Loss, and the Cash Flow Statement comply with the Accounting Standards
 notified under the Act (which continue to be applicable in respect of
 Section 133 of the Companies Act, 2013 in terms of General Circular
 15/2013 dated 13 September, 2013 of the Ministry of Corporate Affairs).
 
 (e) On the basis of the written representations received from the
 directors as on 31 March, 2014 taken on record by the Board of
 Directors, none of the directors is disqualified as on 31 March, 2014
 from being appointed as a director in terms of Section 274(1)(g) of the
 Act.
 
 ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT (Referred to in paragraph
 1 under ''Report on Other Legal and Regulatory Requirements'' section of
 our report of even date)
 
 (i) Having regard to the nature of the Company''s business/ activities/
 result during the year, clauses (x), (xiii), (xiv) and (xviii) of
 paragraph 4 of the Order are not applicable to the Company.
 
 (ii) In respect of its fixed assets:
 
 (a) The Company has maintained proper records showing full particulars,
 including quantitative details and situation of fixed assets.
 
 (b) The Company has a program of verification of fixed assets to cover
 all the items in a phased manner over a period of 3 years which, in our
 opinion, is reasonable having regard to the size of the Company and the
 nature of its assets.  Pursuant to the program, certain fixed assets
 were physically verified by the Management during the year. According
 to the information and explanations given to us, no material
 discrepancies were noticed on such verification.
 
 (c) The fixed assets disposed off during the year, in our opinion, do
 not constitute substantial part of fixed assets of the Company.
 
 (iii) In respect of its inventory:
 
 (a) As explained to us, the inventories were physically verified during
 the year by the Management at reasonable intervals.
 
 (b) In our opinion and according to the information and explanations
 given to us, the procedures of physical verification of inventories
 followed by the Management were reasonable and adequate in relation to
 the size of the Company and the nature of its business.
 
 (c) In our opinion and according to the information and explanations
 given to us, the Company has maintained proper records of its
 inventories and no material discrepancies were noticed on physical
 verification.
 
 (iv) In respect of unsecured loans granted by the Company to companies,
 firms or other parties covered in the Register maintained under Section
 301 of the Companies Act, 1956 and according to the information and
 explanations given to us:
 
 (a) During the year, the Company has granted unsecured interest-bearing
 loans aggregating Rs. 217.74 crores to one party. At the year end, the
 outstanding balances of loans granted aggregated Rs. 318.43 crores
 (number of parties 2) and the maximum amount involved during the year
 was Rs. 318.43 crores (number of parties 2).
 
 (b) The rate of interest and other terms and conditions of such loans
 are, in our opinion, prima facie not prejudicial to the interests of
 the Company.
 
 (c) The receipt of principal amounts and interest have been as per
 stipulations.
 
 (d) There are no overdue amounts and hence the provisions of sub-clause
 (d) of clause 4(iii) of CARO are not applicable to the Company.
 
 (e) During the year, the Company has not taken any loans secured or
 unsecured, from companies, frms or other parties covered in the
 Register maintained under Section 301 of the Companies Act, 1956.
 
 (v) In our opinion and according to the information and explanations
 given to us, having regard to the explanation that certain items
 purchased and sold are of special nature and their prices cannot be
 compared with alternative quotation, there is adequate internal control
 system commensurate with the size of the Company and the nature of its
 business for the purchase of inventory and fixed assets and for the
 sale of goods and services. During the course of our audit, we have not
 observed any continuing major weakness in such internal control system.
 
 (vi) In respect of contracts or arrangements entered in the Register
 maintained in pursuance of Section 301 of the Companies Act, 1956, to
 the best of our knowledge and belief and according to the information
 and explanations given to us:
 
 (a) The particulars of contracts or arrangements referred to Section
 301 that needed to be entered in the Register maintained under the said
 Section have been so entered.
 
 (b) Where each of such transaction is in excess of Rs. 5 lakhs in respect
 of any party, having regard to the explanations that some of the items
 purchased and sold, are of special nature and their prices cannot be
 compared with alternative quotations, the transactions have been made
 at prices which are prima facie reasonable having regard to the
 prevailing market prices at the relevant time.
 
 (vii) According to the information and explanations given to us, the
 Company has not accepted any deposits from the public during the year.
 In respect of unclaimed deposits, the Company has complied with the
 provisions of Sections 58A and 58AA or any other relevant provisions of
 the Companies Act, 1956.
 
 (viii) In our opinion, the Company has an adequate internal audit
 system commensurate with the size and nature of its business.
 
 (ix) We have broadly reviewed the books of account and records
 maintained by the Company relating to telecommunication activities
 pursuant to the Rules made by the Central Government for the
 maintenance of cost records under Section 209(1)(d) of the Companies
 Act, 1956 and are of the opinion that prima facie, the prescribed
 accounts and records have been made and maintained. We have, however,
 not made a detailed examination of the records with a view to
 determining whether they are accurate or complete.
 
 (x) (a) According to the information and explanations given to us in
 respect of statutory dues, the Company has generally been regular in
 depositing undisputed statutory dues including provident fund, investor
 education and protection fund, employees'' state insurance, income-tax,
 sales tax, wealth tax, service tax, customs duty, excise duty, cess and
 other material statutory dues applicable to it with the appropriate
 authorities.
 
 (b) According to the information and explanations given to us, there
 were no undisputed amounts payable in respect of provident fund,
 investor education and protection fund, employees'' state insurance,
 income tax, sales tax, wealth tax, service tax, customs duty, excise
 duty, cess and other material statutory dues were in arrears, as at 31
 March, 2014 for a period of more than six months from the date they
 became payable.
 
 (c) According to the information and explanations given to us, details
 of dues of income-tax, sales tax, wealth tax, service tax, custom duty,
 excise duty and cess which have not been deposited as on 31 March, 2014
 on account of any dispute are given below:
 
 Name of Statute    Nature of Dues   Forum where the dispute is pending
 
 Income Tax Laws    Income Tax       Appellate Authority - Tribunal Level
 
 Income Tax Laws    Income Tax       Appellate Authority -Commissioner
                                     (Appeals)
 
 Income Tax Laws    Income Tax- TDS  Appellate Authority -Commissioner
                                     (Appeals)
 
 Income Tax Laws    Income Tax       Appellate Authority - Income 
                                     Tax Officer
 
 Income Tax Laws    Income Tax -TDS  Appellate Authority - Income 
                                     Tax Officer
 
 ESI Act            ESI              Appellate Authority - ESIC Court
 
 Sales Tax Laws     Sales Tax        West Bengal Commercial Tax Appellate
                                     and Revision Board
 
 Central Sales 
 Tax Laws          Central Sales Tax West Bengal Commercial Tax Appellate
                                     and Revision Board
 
 VAT Act           VAT               Joint Commissioner of Commercial 
                                        Taxes
 
 
 Name of Statue           Period to which the      Amount
                          amount relates          involved
                                                 (Rs. in crores)
 
 Income Tax Laws          AY 2007-08, 2008-09       306.78
 
 Income Tax Laws          AY 2010-11                 15.41
 
 Income Tax Laws          AY 2007-08 to AY           65.54
                          2012-13
 
 Income Tax Laws          AY 1997-98, 2009-10        200.39
 
 Income Tax Laws          AY 2006-07, 2008-09          1.13
                          to 2013-14
 
 ESI Act                  February 2008 to            33.74
                          March 2014
 
 Sales Tax Laws           FY 2006-07                   0.02
 
 Central Sales Tax Laws   FY 2006-07, 2007-08          1.08
 
 VAT Act                  FY 2009-10                   0.18
 
 Out of the above amounts aggregating Rs. 624.27 crores, Rs. 521.84 crores
 have been stayed for recovery by the relevant authorities.
 
 (xi) In our opinion and according to the information and explanations
 given to us, the Company has not defaulted in repayment of dues to
 financial institutions or banks or debenture holders.
 
 (xii) In our opinion and according to the information and explanations
 given to us, the Company has not granted loans and advances on the
 basis of security by way of pledge of shares, debentures and other
 securities.
 
 (xiii) According to the information and explanations given to us, the
 Company has not given any guarantees for loans taken by others from
 banks or financial institutions, the terms and conditions, whereof, in
 our opinion are prejudicial to the interests of the Company.
 
 (xiv) In our opinion and according to the information and explanations
 given to us, the term loans have been applied by the Company during the
 year for the purposes for which they were obtained.
 
 (xv) In our opinion and according to the information and explanations
 given to us and on an overall examination of the Balance Sheet of the
 Company, we report that funds raised on short term basis, have not been
 used during the year for long term investment.
 
 (xvi) According to the information and explanations given to us and the
 records examined by us, security/ charges have been created in respect
 of secured debentures issued.
 
 (xvii) During the year covered by our report, the Company has not
 raised any money by way of public issues.
 
 (xviii)To the best of our knowledge and belief and according to the
 information and explanations given to us, no fraud by the Company and
 no material fraud on the Company was noticed or reported during the
 year.
 
                                   For S. B. BILLIMORIA & CO.
 
                                        Chartered Accountants
                                   (Registration No. 101496W)
 
                                                  R. A. BANGA
 
                                                      Partner
                                      (Membership No. 037915)
 MUMBAI, 13 May, 2014
Source : Dion Global Solutions Limited
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