We have audited the accompanying standalone financial statements of
TATA COMMUNICATIONS LIMITED (the Company), which comprise the Balance
Sheet as at 31 March, 2016, 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 Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 (the Act) with respect
to the preparation of these standalone 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 principles
generally accepted in India, including the Accounting Standards
prescribed under Section 133 of the Act, as applicable.
This responsibility also includes maintenance of adequate accounting
records in accordance with the provisions of the Act for safeguarding
the assets of the Company and for preventing and detecting frauds and
other irregularities; selection and application of appropriate
accounting policies; making judgments and estimates that are reasonable
and prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
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.
Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
thereunder and the Order under section 143(11) of the Act.
We conducted our audit of the standalone financial statements in
accordance with the Standards on Auditing specified under Section
143(10) of the Act. 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
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 auditor''s judgement, 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 financial control relevant
to the Company''s preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company''s directors, 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 on the standalone
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone 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, of the state of affairs of the Company as
at 31 March, 2016, and its profit and its cash flows for the year ended
on that date.
Report on Other Legal and Regulatory Requirements
1. 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 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
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 aforesaid standalone financial statements comply
with the Accounting Standards prescribed under section 133 of the Act,
e) On the basis of the written representations received from the
directors as on 31 March, 2016 taken on record by the Board of
Directors, none of the directors is disqualified as on 31 March, 2016
from being appointed as a director in terms of Section 164(2) of the
f) With respect to the adequacy of the internal financial controls over
financial reporting of the Company and the operating effectiveness of
such controls, refer to our separate Report in Annexure A. Our report
expresses an unmodified opinion on the adequacy and operating
effectiveness of the Company''s internal financial controls over
g) With respect to the other matters to be included in the Auditor''s
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and 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
financial position in its financial statements.
ii. The Company has made provision, as required under the applicable
law or accounting standards, for material foreseeable losses, if any,
on long-term contracts including derivative contracts;
iii. There are no amounts which are required to be transferred 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) of
the Act, we give in Annexure B a statement on the matters specified
in paragraphs 3 and 4 of the Order.
(i) 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 three 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) According to the information and explanations given to us and the
records examined by us and based on the examination of the registered
sale deed, conveyance deed and transfer deed of the Government of India
vide its letter no - G-25015/6/86OC dated 23 October, 2001 provided to
us, we report that, the title deeds, comprising all the immovable
properties of land and buildings which are freehold, are held in the
name of the Company, except the following :
Particulars Carrying Remarks
of land and amount as on
building 31 March, 2016
Rs. in crores
Building located at Nil The title deed is
Gandhinagar GIDC not registered in
admeasuring 840 the name of the
Sq meter Company.
Buildings located 22.61 The title deeds are
at Oshiwara not registered in
Jogeshwari the name of the
Ground floor Plus Company and
7 floor in building matter is pending
31, 32 and 33. in Honorable High
In respect of immovable properties of land and buildings that have been
taken on lease and disclosed as fixed asset in the financial
statements, the lease agreements are in the name of the Company, where
the Company is the lessee in the agreement.
(ii) As explained to us, the inventories were physically verified
during the year by the Management at reasonable intervals and no
material discrepancies were noticed on physical verification.
(iii) According to the information and explanations given to us, the
Company has granted loans, secured or unsecured, to companies, firms,
Limited Liability Partnerships or other parties covered in the register
maintained under section 189 of the Companies Act, 2013, in respect of
a. The terms and conditions of the grant of such loans are, in our
opinion, prima facie, not prejudicial to the Company''s interest.
b. The schedule of repayment of principal and payment of interest has
been stipulated and repayments or receipts of principal amounts and
interest have been regular as per stipulations.
c. There is no overdue amount remaining outstanding as at the year-end
(iv) In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Sections
185 and 186 of the Companies Act, 2013 in respect of grant of loans,
making investments and providing guarantees and securities, as
(v) According to the information and explanations given to us, the
Company has not accepted any deposit during the year and does not have
unclaimed deposits as at 31 March, 2016 and therefore reporting under
clause 3(v) of the Order is not applicable to the Company.
(vi) The maintenance of cost records has been specified by the Central
Government under section 148(1) of the Companies Act, 2013. Specified
activities include International long distance services, Cable landing
station, national long distance services, internet service provider
services and certain other services. We have broadly reviewed the cost
records maintained by the Company pursuant to the Companies (Cost
Records and Audit) Rules, 2014, as amended prescribed by the Central
Government under sub-section (1) of Section 148 of the Companies Act,
2013, and are of the opinion that, prima facie, the prescribed cost
records have been made and maintained. We have, however, not made a
detailed examination of the cost records with a view to determine
whether they are accurate or complete.
(vii) According to the information and explanations given to us in
respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed
statutory dues, including provident fund, employees'' state insurance,
income-tax, sales tax, service tax, customs duty, excise duty, value
added tax, cess and other material statutory dues applicable to it with
the appropriate authorities.
(b) There were no undisputed amounts payable in respect of provident
fund, employees'' state insurance, income-tax, sales tax, service tax,
customs duty, excise duty, value added tax, cess and other material
statutory dues in arrears as at 31 March, 2016 for a period of more
than six months from the date they became payable.
(c) Details of dues of Income-tax, Sales Tax, Service Tax, Customs
Duty, Excise Duty, and Value Added Tax which have not been deposited as
on 31 March, 2016 on account of disputes are given below:
Name of the Nature of
the Amount Period to
which the Forum where
Statute Dues (Rs. In
Laws Income Tax 827.83 AY 2007-08
to AY 2011-12 Appellate
Laws Income Tax 1.02 AY 1997-1998 Appellate
Laws Income Tax - TDS 15.36 AY 2006-07 to
Laws Income Tax - TDS 1.33 AY 2008-09 to
laws Sales Tax 0.02 FY 2006-07 West Bengal
Sales Tax Central sales Tax 1.13 2006-07,
2011-12 West Bengal
laws Revision Board
VAT Act VAT 0.18 FY 2009-10 Joint
Out of the total disputed dues aggregating Rs. 846.87 crores as above,
Rs. 827.83 crores has been stayed for recovery by the respective
(viii) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of loans or
borrowings to financial institutions, banks and government and dues to
(ix) The Company has not raised moneys by way of initial public offer
or further public offer (including debt instruments). The term loans
have been applied by the Company for the purpose for which they were
(x) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no material fraud
on the Company by its officers or employees has been noticed or
reported during the year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has paid/ provided managerial remuneration in
accordance with the requisite approvals mandated by the provisions of
section 197 read with Schedule V to the Companies Act, 2013.
(xii) The Company is not a Nidhi Company and hence reporting under
clause 3(xii) of the Order is not applicable.
(xiii) In our opinion and according to the information and explanations
given to us the Company is in compliance with Section 177 and 188 of
the Companies Act, 2013, where applicable, for all transactions with
the related parties and the details of related party transactions have
been disclosed in the financial statements etc. as required by the
applicable accounting standards.
(xiv) During the year, the Company has not made any preferential
allotment or private placement of shares or fully or partly convertible
debentures and hence reporting under clause 3(xiv) of the Order is not
applicable to the Company.
(xv) In our opinion and according to the information and explanations
given to us, during the year the Company has not entered into any
non-cash transactions with its directors or persons connected with him
and hence provisions of section 192 of the Companies Act, 2013 are not
(xvi) The Company is not required to be registered under section 45-IA
of the Reserve Bank of India Act, 1934.
For S. B. BILLIMORIA & CO.
(Firm''s Registration No. 101496W)
R. A. Banga
Mumbai, 27 May, 2016