1.  We have audited the attached Balance Sheet of TATA COMMUNICATIONS
 LIMITED (the Company) as at 31 March, 2011, the Profit and Loss
 Account 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.  The financial statements for the year ended 31 March, 2011 were
 audited by us and our report dated 29 May, 2011 expressed an
 unqualified opinion on those financial statements. Consequent to order
 dated 20 August, 2011 of the Honourable High Court of Bombay
 sanctioning the merger of Tata Communications Internet Services Limited
 with the Company, the audited financial statements for year ended 31
 March, 2011 were revised by the Company to give effect to the said
 merger, effective from 01 April, 2010. We have accordingly carried out
 audit procedures and amended the date of our audit report in respect of
 this subsequent event. (Refer Note B 9 of Schedule 19 to the financial
 statements.)
 
 4.  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.
 
 5.  Further to our comments in paragraph 3 and in the Annexure referred
 to in paragraph 4 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 Profit and Loss Account 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 Profit and Loss Account 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, 2011;
 
 (b) in the case of the Profit and Loss Account, 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.
 
 6. On the basis of the written representations received from the
 Directors as on 31 March, 2011 taken on record by the Board of
 Directors, we report that none of the Directors is disqualified as on
 31 March, 2011 from being appointed as a director in terms of Section
 274(1)(g) of the Companies Act, 1956.
 
 
 ANNEXURE TO THE AUDITORS'' REPORT
 (Referred to in paragraph 4 of our report of even date)
 
 (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.
 The differences identified pursuant to the physical verification have
 been duly adjusted in the books of account. Having regard to the size
 of the Company and on the basis of the explanations received, in our
 opinion, the net unadjusted differences were not significant.
 
 (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 for 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. 577.17 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. 840.63 crores. The maximum balance outstanding during the
 year was Rs. 1,666.75 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 taken an interest- bearing loan
 aggregating Rs. 20 crores 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 loans have been 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 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, 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 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,
 2011 for a period of more than six months from the date they became
 payable.
 
 (c) As at 31 March, 2011, the Company has an arrears for provident fund
 dues of Rs. 1.19 lakhs outstanding for a period of more than six months
 from the date they became payable.
 
 (d) 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, 2011 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         2005-06,
                               2006-07,    Joint Commissioner of 119.43
                telecommunica
                -tions service 2007-08     Commercial Taxes
 
 Central Sales 
 Tax            Levy of CST on 
                interstate     2005-06,
                               2006-07,    Joint Commissioner of   2.87
                purchase       2007-08     Commercial Taxes
 
 Sales Tax      Levy due to 
                movement       2005-06     Deputy commissioner of  0.01
                of material 
                without road               Commercial tax
                permit(UP)
 
 Cess           Cess           2005-06 to 
                               2008-09     Navi Mumbai Municipal   1.00
                                           Corporation
 
 Income Tax Act Penalty on 
                Disallowance
                on             2004-05     Income Tax Apellate 
                                           Tribunal                1.37
                Depreciation 
                of Iridium
                assets and 
                House property
 
 Income Tax Act Tax deducted 
                at Source-     2004-05     Income Tax Apellate 
                                           Tribunal                1.37
                Penalty 
                Kolkata
 
 Income Tax Act Tax deducted 
                at Source-     2004-05     Income Tax Appellate 
                                           Tribunal                0.10
                Penalty 
                Kolkata
 
 Income Tax Act Tax deducted 
                at Source      2008-09, 
                               AY 2009-10  Commissioner of 
                                           Income-tax             24.85
                                           (Appeals)
 
 Income Tax Act Section 80IA 
                Deduction      2005-06 and 
                               2006-07     Commissioner of
                                           Income Tax              4.08
                                           (Appeals)
 
 Income Tax Act Tax Deducted 
                at Source      2008-09     Commissioner of 
                                           Income Tax              1.79
                                           (Appeals)
 
 Income Tax Act Tax Deducted 
                at Source      2009-10     Income Tax Officer      0.76
 
 (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) According to the information and explanations given to us, and on
 an overall examination of the Balance Sheet of the Company, funds
 raised on short term basis have prima facie 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)
 
                                                        Saira Nainar
 
                                                             Partner
 
                                              (Membership No. 040081)
 
 MUMBAI, 29 May, 2011 (30 August, 2011 as to effect the amendment
 discussed in paragraph 3 above)