1.  We have audited the attached Balance Sheet of TATA COMMUNICATIONS
 LIMITED (the Company) as at 31 March, 2012, the Statement of Profit
 and Loss and the Cash Flow Statement of the Company for the year ended
 on that date, both annexed thereto. 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 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 misstatements. An audit
 includes examining, on a test basis, evidence supporting the amounts
 and the disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and the significant estimates
 made by the 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 Companies (Auditor''s Report) Order, 2003 (CARO)
 issued by the Central Government in terms of Section 227(4A) of the
 Companies Act, 1956, we enclose in the Annexure a statement on the
 matters specified in paragraphs 4 and 5 of the said Order.
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 above, we report that:
 
 (i) 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;
 
 (ii) 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;
 
 (iii) 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;
 
 (iv) in our opinion, the Balance Sheet, the Statement of Profit and
 Loss and the Cash Flow Statement dealt with by this report are in
 compliance with the Accounting Standards referred to in Section 211(3C)
 of the Companies Act, 1956;
 
 (v) in our opinion and to the best of our information and according to
 the explanations given to us, the said accounts give the information
 required by the Companies Act, 1956 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, 2012;
 
 (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 flows of the
 Company for the year ended on that date.
 
 5.  On the basis of the written representations received from the
 Directors as on 31 March, 2012 taken on record by the Board of
 Directors, we report that none of the Directors is disqualified as on
 31 March, 2012 from being appointed as a director in terms of Section
 274(1)(g) of the Companies Act, 1956.
 
 (i) Having regard to the nature of the Company''s business/ activities/
 result for the year, clauses (x), (xiii), (xiv) and (xviii) of CARO 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) According to the information and explanations given to us, the
 fixed assets were physically verified by the management in accordance
 with the programme of verification, which in our opinion, is reasonable
 having regard to the size of the Company and the nature of its assets.
 According to information and explanation 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 and such
 disposal has, in our opinion, not affected the going concern status of
 the Company.
 
 (iii) In respect of its inventory:
 
 (a) As explained to us, the stocks of stores and spares have been
 verified by the Management in accordance with the programme of
 verification.  In our opinion, the frequency of verification is
 reasonable.
 
 (b) In our opinion and according to the information and explanations
 given to us, the procedures of physical verification of stocks followed
 by the Management are 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 is maintaining proper records of inventory.
 The discrepancies noticed on verification between the physical stocks
 and book records were not material having regard to the size of the
 operations of the Company.
 
 (iv) In respect of unsecured loans granted by the Company to companies
 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 773.04 crores to four wholly owned subsidiaries
 listed in the register maintained under Section 301 of the Companies
 Act, 1956. At the year end, the loans granted to the four subsidiaries
 aggregate Rs 880.75 crores. The maximum balance outstanding during the
 year was Rs 1,535.13 crores.
 
 (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 receipts 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 interest-bearing loan
 from a wholly owned subsidiary listed in the register maintained under
 Section 301 of the Companies Act, 1956. The maximum amount of loan
 outstanding during the year was Rs 20 crores.
 
 (f) In our opinion, the rate of interest and other terms and conditions
 on which the loan was taken from companies listed in the register
 maintained under Section 301 of the Companies Act, 1956 are not, prima
 facie, prejudicial to the interest of the Company.
 
 (g) In the case of loans taken from companies, parties listed in the
 register maintained under Section 301, the Company has been regular in
 repaying the principal amounts as stipulated and in the payment of
 interest.
 
 (v) In our opinion and according to the information and explanations
 given to us, 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 the sale of goods and
 services. We have not observed any continuing major weakness in the
 internal control systems.
 
 (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 need 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, 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 deposit from the public during the year.
 In respect of unclaimed deposits, the Company has complied with the
 provisions of Sections 58A & 58AA or any other relevant provisions of
 the Companies Act, 1956.
 
 (viii) In our opinion, the Company has an 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 is generally regular in
 depositing with appropriate authorities undisputed statutory dues
 including Provident Fund, Investor Education and Protection Fund,
 Employees'' State Insurance, Income tax, Wealth tax, Sales tax, Customs
 duty, Excise Duty, Service tax, Cess and other material statutory dues
 applicable to it.
 
 (b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of Provident fund, Investor
 Education and Protection Fund, Employees'' state insurance, Income tax,
 Sales tax, Customs duty, Excise duty and cess were in arrears, as at 31
 March, 2012 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 Sales tax, Service tax, Cess and Income tax which have not
 been deposited as on 31 March, 2012 on account of any dispute are given
 below:
 
 Particulars    Nature of     Period to    Forum where            Amount
                Dues          which the    the dispute           (Rs.in
                              amount       is pending             crores) 
                              relates
 
 Sales Tax      Levy of 
                sales tax 
                on            FY 2006-07, 
                              2007-08,     Joint Commissioner of   74.94
                telecommuni
                cations 
                service       2008-09      Commercial Taxes
 
 Central 
 Sales          Tax Levy 
                of CST on 
                interstate    FY 2005-06, 
                              2006-07,     Joint Commissioner of    2.79
                purchase      2007-08      Commercial Taxes
 
 VAT            Levy of 
                sales tax 
                on            FY 2008-09   Joint Commissioner of    0.11
                telecommuni
                cations 
                service                    Commercial Taxes
 
 Cess           Cess          FY 2005-06 
                              to 2008-09   Navi Mumbai Municipal    1.14
 
                                           Corporation
 
 Income Tax 
 Act            Penalty on 
                Disallowance  AY 2004-05   Income Tax Apellate     
                                           Tribunal                 1.37 
                on Depre
                ciation
 
 Income Tax 
 Act            Demand 
                notice        AY 2007-08   Income Tax Apellate 
                                           Tribunal               197.18
 
 Income Tax 
 Act            Tax deducted 
                at Source     AY 2008-09,  TDS Officer              0.01
 
                              AY 2009-10
 
 Income Tax 
 Act            Tax deducted 
                at Source     AY 2007-08, 
                              AY 2008-09,  Rectification 
                                           Application              1.29
 
                              AY 2009-10, 
                              AY 2010-11,  Before TDS officers 
                              AY 2011-12
 
 Income Tax 
 Act           Tax deducted 
               at Source      AY 2007-08,
                              AY 2008-09,  Commissioner of         52.97
 
                              AY 2009-10, 
                              AY 2010-11,  Income-tax (Appeals)
                              AY 2011-12
 
 (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) In our opinion and according to the information and explanations
 given to us, the terms and conditions on which the Company has given
 guarantee for loans taken by others from banks or financial
 institutions are not prima facie prejudicial to the interest of the
 Company.
 
 (xiv) In our opinion and according to the information and explanations
 given to us, the term loans have been applied 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,
 short-term funds aggregating to Rs 716.38 crores have, prima facie, been
 used for long term purposes.
 
 (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)
 
                                                          Saira Nainar
 
                                                               Partner
 
                                                (Membership No. 040081)
 
 MUMBAI, 21 May, 2012