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Tata Communications

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« Mar 15
Auditor's Report (Tata Communications) Year End : Mar '16
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.
 
 Auditor''s Responsibility
 
 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
 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 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
 financial statements.
 
 Opinion
 
 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
 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 aforesaid standalone financial statements comply
 with the Accounting Standards prescribed under section 133 of the Act,
 as applicable.
 
 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
 Act.
 
 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
 financial reporting.
 
 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
                                                  Court.
 
 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
 which.
 
 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
 applicable.
 
 (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
                                                         dispute
 Statute      Dues              (Rs. In
                                 crores)  Amount
                                          Relates
 
 Income Tax 
 Laws         Income Tax        827.83    AY 2007-08 
                                          to AY 2011-12  Appellate 
                                                         Authority -
                                                         Tribunal Level
 
 Income Tax 
 Laws         Income Tax          1.02    AY 1997-1998   Appellate 
                                                         Authority - 
                                                         Income Tax 
                                                         Officer
 
 Income Tax 
 Laws         Income Tax - TDS   15.36    AY 2006-07 to 
                                          2014-15        Appellate
                                                         Authority -
                                                         Commissioner
                                                        (Appeal)(TDS)
 
 Income Tax 
 Laws         Income Tax - TDS    1.33    AY 2008-09 to
                                          2010-11        Appellate 
                                                         Authority - 
                                                         Income Tax 
                                                         Officer TDS
 
 Sales Tax 
 laws         Sales Tax           0.02    FY 2006-07     West Bengal 
                                                         Commercial Tax
                                                         Appellate and
                                                         Revision Board
 
 Central 
 Sales Tax    Central sales Tax   1.13    2006-07, 
                                          2007-08,
                                          2011-12        West Bengal 
                                                         Commercial Tax
                                                         Appellate and
 laws                                                    Revision Board
 
 VAT Act      VAT                 0.18    FY 2009-10     Joint 
                                                         Commissioner
                                                         of Commercial 
                                                         Taxes
 
 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
 authority.
 
 (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
 debenture holders.
 
 (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
 raised.
 
 (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
 applicable.
 
 (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.
 
                                              Chartered Accountants
 
                                   (Firm''s Registration No. 101496W)
 
 
 
                                                        R. A. Banga 
 
                                                            Partner 
 
                                              (Membership No.037915) 
 
 Mumbai, 27 May, 2016
Source : Dion Global Solutions Limited
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