You are here » Home » Companies ยป Company Overview » Tata Communications Ltd

Tata Communications Ltd.

BSE: 500483 Sector: Telecom
NSE: TATACOMM ISIN Code: INE151A01013
BSE 00:00 | 06 Feb 1258.45 31.85
(2.60%)
OPEN

1220.05

HIGH

1264.95

LOW

1220.05

NSE 00:00 | 06 Feb 1258.05 31.55
(2.57%)
OPEN

1226.65

HIGH

1265.45

LOW

1226.50

OPEN 1220.05
PREVIOUS CLOSE 1226.60
VOLUME 26159
52-Week high 1429.95
52-Week low 856.00
P/E 31.90
Mkt Cap.(Rs cr) 35,866
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1220.05
CLOSE 1226.60
VOLUME 26159
52-Week high 1429.95
52-Week low 856.00
P/E 31.90
Mkt Cap.(Rs cr) 35,866
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Tata Communications Ltd. (TATACOMM) - Auditors Report

Company auditors report

To

the Members of

Tata Communications Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Tata CommunicationsLimited (the "Company") which comprise the Balance sheet as at March 31 2022the Statement of Profit and Loss including the statement of Other Comprehensive Loss theCash Flow Statement and the Statement of Changes in Equity for the year then ended andnotes to the standalone financial statements including a summary of significantaccounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 as amended (the "Act") in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of affairs of the Company as at March 31 2022 its profitincluding other comprehensive loss its cash flows and the changes in equity for the yearended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) as specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements' section of ourreport. We are independent of the Company in accordance with the ‘Code of Ethics'issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our audit opinion on the standalone financial statements.

Emphasis of Matter

i. As fully discussed in note 48(2) to the standalone financial statements for the yearended March 31 2022 the Company had received demands dated September 12 2019 fromDepartment of

Telecommunications (DoT) towards license fee on its Adjusted Gross Revenue (AGR) for FY2006-07 to 2017-18 for Rs 6633.43 crores. Of this amount the Company has provided Rs337.17 crores with respect to the demand of Rs 5433.70 crores and believes that thelikelihood of the balance demand Rs 5096.53 crores materializing is remote. Further theCompany has disclosed the demand of Rs 1199.73 crores as part of contingent liability.Also pending clarification on the new AGR definition from the DoT the Company hasconsidered its non-licenced services outside the purview of the revised AGR definitioneffective October 1 2021. The Company believes that it has grounds to defend its abovepositions and has also obtained independent legal opinions in this regard.

ii. We draw attention to note 10 of the standalone financial statement regarding theimpact of COVID-19 and its consequential impact on management's assessment of the keyassumptions related to recoverability of the carrying value of investment in TataCommunications Payment Solutions Limited of Rs 1033.04 crores.

Our opinion is not modified in respect of these matters.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements for the financial yearended March 31 2022. These matters were addressed in the context of our audit of thestandalone financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters. For each matter below our description ofhow our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theAuditor's responsibilities for the audit of the standalone financial statements section ofour report including in relation to these matters. Accordingly our audit included theperformance of procedures designed to respond to our assessment of the risks of materialmisstatement of the standalone financial statements. The results of our audit proceduresincluding the procedures performed to address the matters below provide the basis for ouraudit opinion on the accompanying standalone financial statements.

Key audit matters How our audit addressed the key audit matter
Impairment of investments in Subsidiaries and Associates (as described in note 10 of the financial statements)
Annually the management assesses the existence of impairment indicators for each non-current investment and in case of occurrence such investments are subjected to an impairment test. Our audit procedures related to this key audit matters included the following:
We assessed the processes and key controls implemented by the Company related to the identification of impairment loss and determination of necessary impact thereof.
As at the reporting date the Company has non-current investments in subsidiaries associates and others amounting to Rs 3856.88 crores out of which the management has identified impairment indicators such as net worth erosion and loss in the current year in respect of certain investments in subsidiaries.
We obtained the business projections specified in the Annual Operating Plan of the Company for the financial year 2022-23. We have understood the reasons for the projected growth basis our discussion with the Management and compared the projections with the past trend.
Accordingly these investments have been tested for impairment as at year end in accordance with Indian Accounting Standard (‘Ind AS') 36 "Impairment of Assets".
We assessed the valuation methodology and evaluated the key assumptions used by the management in the valuations by comparing with those prevailing in the sector using valuation experts who also performed an independent calculation and sensitivity analysis on key assumptions.
In consideration of the judgments required in particular with reference to the forecast of cash flows and the assumptions used in estimating the value-in-use of these subsidiaries we have identified this matter to be a key audit matter.
We assessed the disclosure made in the standalone financial statements.
Receivable on account of Access Facilitation Charges (‘AFC') (as described in note 15(i) of the standalone financial statements)
On November 28 2018 Telecom Regulatory Authority of India (‘TRAl') re-enacted schedules to 2012 Regulation containing AFC and Operation & Maintenance (‘O&M') recovery rates with respect to the use of Cable Landing Stations (‘CLS') pursuant to the High Court judgement dated July 2 2018 and the Hon'ble Supreme Court judgment dated October 8 2018. TRAI specified that these revised rates are applicable prospectively. Our audit procedures related to this key audit matters included the following:
We evaluated the customer correspondences and various judgements pronounced by the Hon'ble High court the Hon'ble Supreme Court and TDSAT.
We tested the underlying computation of necessary adjustments recorded in the books.
The Company was recognizing AFC revenue and recovery of the O&M charges as per the erstwhile rates specified in schedules to 2012 Regulation. In view of above facts during the year ended March 31 2019 the Company recognized the differential AFC revenue and O&M charges of Rs 348.75 crores for the period January 2013 to November 2018 as per the rates specified in the contracts with the customers. We assessed the disclosure made in these standalone financial statements.
The customers contested the revised order in the Hon'ble Supreme Court which in its meeting held on January 28 2019 directed the TDSAT for evaluation. The TDSAT issued an order dated April 16 2020 stating the rates are applicable prospectively from November 28 2018.
The customers have preferred an appeal in Hon'ble Supreme Court against the TDSAT order seeking an interim stay on the order which is pending. The Company as at March 31 2022 has receivable of Rs 164 crores towards the AFC revenue for the period January 2013 to November 2018.
Considering the significance of the amount to the standalone financial statements the fact that the matter is currently litigative and management judgement of considering the receivable towards the AFC revenue as recoverable and good we have considered the matter to be key audit matter.

Information Other than the Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual report but does not includethe standalone financial statements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether such other informationis materially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.

Responsibilities of Management for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting Standards (Ind AS) specified under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and the designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

Those Charged with Governance are also responsible for overseeing the Company'sfinancial reporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsfor the financial year ended March 31 2022 and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2020 (the "Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the "Annexure 1" a statement on the matters specified inparagraphs 3 and 4 of the Order.

2. 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 bestof 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 theCompany so far as it appears from our examination of those books;

(c) The Balance Sheet the Statement of Profit and Loss including the Statement ofOther Comprehensive Income the Cash Flow Statement and Statement of Changes in Equitydealt with by this Report are in agreement with the books of account;

(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 as amended;

(e) On the basis of the written representations received from the directors as on March31 2022 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2022 from being appointed as a director in terms of Section 164 (2) of theAct;

(f) With respect to the adequacy of the internal financial controls with reference tothese standalone financial statements and the operating effectiveness of such controlsrefer to our separate Report in "Annexure 2" to this report;

(g) In our opinion the managerial remuneration for the year ended March 31 2022 hasbeen paid / provided by the Company to its directors in accordance with the provisions ofsection 197 read with Schedule V to the Act;

(h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements - Refer Note 48 to the standalonefinancial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company;

iv. a) The management has represented that to the best of its knowledge and belief nofunds have been advanced or loaned or invested (either from borrowed funds or sharepremium or any other sources or kind of funds) by the Company to or in any other person orentity including foreign entities ("Intermediaries") with the understandingwhether recorded in writing or otherwise that the Intermediary shall whether directlyor indirectly lend or invest in other persons or entities identified in any mannerwhatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provideany guarantee security or the like on behalf of the Ultimate Beneficiaries;

b) The management has represented that to the best of its knowledge and belief nofunds have been received by the Company from any person or entity including foreignentities ("Funding Parties") with the understanding whether recorded inwriting or otherwise that the Company shall whether directly or indirectly lend orinvest in other persons or entities id entified in any manner whatsoever by or on behalfof the Funding Party ("Ultimate Beneficiaries") or provide any guaranteesecurity or the like on behalf of the Ultimate Beneficiaries; and

c) Based on such audit procedures that were considered reasonable and appropriate inthe circumstances nothing has come to our notice that has caused us to believe that therepresentations under sub-clause (a) and (b) contain any material misstatement.

v. The dividend paid during the year by the Company is in compliance with section 123of the Act.

Annexure 1 referred to in paragraph 1 under the heading Report on other legal andregulatory requirements of our Report of even date

Re: Tata Communications Limited (the "Company")

In terms of the information and explanations sought by us and given by the Company andthe books of account and records examined by us in the normal course of audit and to thebest of our knowledge and belief we state that:

(i) (a) (A) The Company has maintained proper records showing full particularsincluding quantitative details and situation of property plant and equipment.

(a) (B) The Company has maintained proper records showing full particulars ofintangibles assets.

(b) All property plant and equipment were physically verified by the management in theprevious year in accordance with a planned programme of verifying them once in three yearswhich is reasonable having regard to the size of the Company and the nature of its assets.No material discrepancies were noticed on such verification.

(c) The title deeds of immovable properties (other than properties where the Company isthe lessee and the lease agreements are duly executed in favour of the lessee) disclosedin note 3(a) to the standalone financial statements are held in the name of the Companyexcept immovable properties as indicated in the below mentioned cases as at March 31 2022for which title deeds were not available with the Company and lease agreements are notduly executed where the Company is the lessee and hence we are unable to comment on thesame:

Description of Property Gross carrying value (Rs. in crores) Held in name of Whether promoter director or their relative or employee Period held - indicate range where appropriate Reason for not being held in the name of Company
Land & Building 32.77 No 26 years Title deeds registration pending resolution pending in Hon'ble High Court Mumbai
- Jogeshwari Mumbai
Land & building 1.39 Various No Land - 70 years Title deeds due for renewal resolution pending in Hon'ble High Court Mumbai
- Marine Lines Mumbai parties
Building - 46 years
Building - Gandhinagar 1.01 No 26 years Agreement execution is pending
ROU Assets 7.01 No Various lease agreements Lease agreements execution is in process

(d) The Company has not revalued its Property Plant and Equipment (including Right ofuse assets) or intangible assets during the year ended March 31 2022.

(e) There are no proceedings initiated or are pending against the Company for holdingany benami property under the Prohibition of Benami Property Transactions Act 1988 andrules made thereunder.

(ii) (a) The management has conducted physical verification of inventory at reasonableintervals during the year. In our opinion the coverage and the procedure of suchverification by the management is appropriate.

(b) The Company has not been sanctioned working capital limits in excess of Rupees fivecrores in aggregate from banks or financial institutions during any point of time of theyear on the basis of security of current assets. Accordingly the requirement to report onclause 3(ii)(b) of the Order is not applicable to the Company.

(iii) (a) During the year the Company has provided loans and stood guarantee tocompanies firms Limited Liability Partnerships or any other parties as follows:

Guarantees (Rs in crores) Loans (Rs in crores)
Aggregate amount granted/ provided during the year
- Subsidiaries 7021.81 1239.15
Balance outstanding as at balance sheet date in respect of above cases
- Subsidiaries 12737.27 1193.61

During the year the Company has not provided any advance in the nature of loan orsecurity to any company firm Limited Liability Partnership or any other party.

(b) During the year the investments made guarantees provided and the terms andconditions of the grant of all loans and guarantees to companies firms Limited LiabilityPartnerships are not prejudicial to the Company's interest.

(c) The Company has granted loans during the year to companies firms LimitedLiability Partnerships where the schedule of repayment of principal and payment ofinterest has been stipulated and the repayment or receipts are regular.

(d) There are no amounts of loans and advances in the nature of loans granted tocompanies firms Limited Liability Partnerships which are overdue for more than ninetydays.

(e) There were no loans granted to companies firms Limited Liability Partnershipswhich had fallen due during the year.

(f) The Company has not granted any loans either repayable on demand or withoutspecifying any terms or period of repayment to companies firms Limited LiabilityPartnerships. Accordingly the requirement to report on clause 3(iii)(f) of the Order isnot applicable to the Company.

(iv) There are no loans investments guarantees and security in respect of whichprovisions of sections 185 and 186 of the Act are applicable and accordingly therequirement to report on clause 3(iv) of the Order is not applicable to the Company.

(v) The Company has neither accepted any deposits from the public nor accepted anyamounts which are deemed to be deposits within the meaning of sections 73 to 76 of the Actand the rules made thereunder to the extent applicable. Accordingly the requirement toreport on clause 3(v) of the Order is not applicable to the Company.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records undersection 148(1) of the Act related to International long distance services National longdistance services Internet service provider services and certain other services and areof the opinion that prima facie the specified accounts and records have been made andmaintained. We have not however made a detailed examination of the same.

(vii)(a) The Company is regular in depositing with appropriate authorities undisputedstatutory dues including goods and services tax provident fund employees' stateinsurance income-tax duty of customs cess and other statutory dues applicable to it.According to the information and explanations given to us and based on audit proceduresperformed by us no undisputed amounts payable in respect of these statutory dues wereoutstanding at the year end for a period of more than six months from the date theybecame payable.

(b) According to the records of the Company the dues outstanding of income tax salestax service tax value added tax and other statutory dues on account of any dispute areas follows:

Sr No Name of Statute Nature of dues Amount (Rs in crores) Period to which the amount relates Forum where dispute is pending
1 Income Tax 1.02 AY 1997-1998 Appellate Authority
2 Income Tax 3.88 AY 2013-2014 Income Tax Officer
3 Income Tax 130.53 AY 2011-2012 to AY 2012-2013
4 Income Tax 164.93 AY 2014-15 Income Tax Appellate
5 Income Tax 123.15 AY 2015-16 Tribunal
6 Income Tax 124.42 AY 2016-17
7 Income Tax 165.11 AY 2017-18
8 Income Tax Act 1961 Income Tax - TDS 224.51 Various Years Commissioner (Appeal) (TDS) - Income Tax
9 Income Tax 144.74 AY 2005-2006 Appellate Authority -CIT(A)
10 Income Tax 224.83 AY 1999-2000 to 2000-2001
11 Income Tax 141.49 AY 2002-2003 High Court
12 Income Tax 366.75 AY 2003-2004 to 2005-2006
13 Income Tax 70.35 AY 2006-2007
14 Income Tax 0.15 AY 2007-2008 Income Tax Appellate
15 Income Tax 33.31 AY 2011-2012 Tribunal
16 Finance Act 1994 Service Tax 97.56 Various Years Various forum
17 Goods and Services Tax Act 2017 Goods and Service Tax 0.12 AY 18-19 The Deputy Commissioner (Appeals)- Gujarat
18 Sales Tax 1.13 AY 2015-16 to 20172018 Commercial Tax Officer
19 Central Sales Tax 1956 and Value Added Tax Sales Tax 1.90 AY 2016-17 Commercial Tax Officer West Bengal
20 Sales Tax 2.48 AY 2017-18 Commercial Tax Appellate
21 Value Added Tax 6.92 AY 2007-2008 to AY 2017-2018 Commercial Tax Officer
22 Employee State Insurance Corporation ESIC 12.04 Various Years High Court

(viii) The Company has not surrendered or disclosed any transaction previouslyunrecorded in the books of account in the tax assessments under the Income Tax Act 1961as income during the year. Accordingly the requirement to report on clause 3(viii) of theOrder is not applicable to the Company.

(ix) (a) The Company has not defaulted in repayment of loans or other borrowings or inthe payment of interest thereon to any lender.

(b) The Company has not been declared wilful defaulter by any bank or financialinstitution or government or any government authority.

(c) Term loans were applied for the purpose for which the loans were obtained.

(d) On an overall examination of the standalone financial statements of the Company nofunds raised on short-term basis have been used for long-term purposes by the Company.

(e) On an overall examination of the standalone financial statements of the Companythe Company has not taken any funds from any entity or person on account of or to meet theobligations of its subsidiaries associates or joint ventures.

(f) The Company has not raised loans during the year on the pledge of securities heldin its subsidiaries joint ventures or associate companies. Hence the requirement toreport on clause (ix)(f) of the Order is not applicable to the Company.

(x) (a) The Company has not raised any money during the year by way of initial publicoffer / further public offer (including debt instruments) hence the requirement to reporton clause 3(x)(a) of the Order is not applicable to the Company.

(b) The Company has not made any preferential allotment or private placement of shares/fully or partially or optionally convertible debentures during the year under audit andhence the requirement to report on clause 3(x)(b) of the Order is not applicable to theCompany.

(xi) (a) No material fraud by or on the Company has been noticed or reported during theyear.

(b) During the year no report under sub-section (12) of section 143 of the Act hasbeen filed by cost auditor or secretarial auditor or by us in Form ADT - 4 as prescribedunder Rule 13 of Companies (Audit and Auditors) Rules 2014 with the Central Government.

(c) We have taken into consideration the whistle blower complaints received by theCompany during the year while determining the nature timing and extent of auditprocedures.

(xii) The Company is not a Nidhi Company as per the provisions of the Act. Thereforethe requirement to report on clause 3(xii)(a) (b) and (c) of the Order is not applicableto the Company.

(xiii) Transactions with the related parties are in compliance with sections 177 and188 of the Act where applicable and the details have been disclosed in the notes to thestandalone financial statements as required by the applicable accounting standards.

(xiv) (a) The Company has an internal audit system commensurate with the size andnature of its business.

(b) The internal audit reports of the Company issued till the date of the audit reportfor the period under audit have been considered by us.

(xv) The Company has not entered into any non-cash transactions with its directors orpersons connected with its directors and hence requirement to report on clause 3(xv) ofthe Order is not applicable to the Company.

(xvi) (a) The provisions of section 45-IA of the Reserve Bank of India Act 1934 (2 of1934) are not applicable to the Company. Accordingly the requirement to report on clause(xvi)(a) of the Order is not applicable to the Company.

(b) The Company has not conducted any Non-Banking Financial or Housing Financeactivities.

(c) The Company is not a Core Investment Company as defined in the regulations made byReserve Bank of India. Accordingly the requirement to report on clause 3(xvi) of theOrder is not applicable to the Company.

(d) According to the information and explanation given to us by the management theGroup has five CICs which are registered with the Reserve Bank of India and one CIC whichis not required to be registered with the Reserve Bank of India.

(xvii) The Company has not incurred cash losses in the current financial year and inthe immediately preceding financial year.

(xviii) There has been no resignation of the statutory auditors during the year andaccordingly requirement to report on Clause 3(xviii) of the Order is not applicable to theCompany.

(xix) On the basis of the financial ratios disclosed in note 52 to the standalonefinancial statements ageing and expected dates of realization of financial assets andpayment of financial liabilities other information accompanying the standalone financialstatements our knowledge of the Board of Directors and management plans and based on ourexamination of the evidence supporting the assumptions nothing has come to our attentionwhich causes us to believe that any material uncertainty exists as on the date of theaudit report that Company is not capable of meeting its liabilities existing at the dateof balance sheet as and when they fall due within a period of one year from the balancesheet date. We however state that this is not an assurance as to the future viability ofthe Company. We further state that our reporting is based on the facts up to the date ofthe audit report and we neither give any guarantee nor any assurance that all liabilitiesfalling due within a period of one year from the balance sheet date will get dischargedby the Company as and when they fall due.

(xx) (a) In respect of other than ongoing projects there are no unspent amounts thatare required to be transferred to a fund specified in Schedule VII of the Act incompliance with second proviso to sub section 5 of section 135 of the Act. This matter hasbeen disclosed in note 29 to the standalone financial statements.

(b) All amounts that are unspent under section (5) of section 135 of the Act pursuantto any ongoing project has been transferred to special account in compliance of withprovisions of sub section (6) of section 135 of the said Act. This matter has beendisclosed in note 29 to the standalone financial statements.

Annexure 2 to the Independent Auditor's Report of even date on the standalone financialstatements of Tata Communications Limited

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 (the "Act")

We have audited the internal financial controls with reference to standalone financialstatements of Tata Communications Limited (the "Company") as of March 31 2022in conjunction with our audit of the standalone financial statements of the Company forthe year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's Management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India ("ICAI"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to these standalone financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the "Guidance Note") and the Standards onAuditing as specified under section 143(10) of the Act to the extent applicable to anaudit of internal financial controls both issued by ICAI. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlswith reference to these standalone financial statements was established and maintained andif such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to these standalone financial statementsand their operating effectiveness. Our audit of internal financial controls with referenceto standalone financial statements included obtaining an understanding of internalfinancial controls with reference to these standalone financial statements assessing therisk that a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls withreference to these standalone financial statements.

Meaning of Internal Financial Controls With Reference to these Standalone FinancialStatements

A company's internal financial controls with reference to standalone financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles.

A company's internal financial controls with reference to standalone financialstatements includes those policies and procedures that

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Controls With Reference to these StandaloneFinancial Statements

Because of the inherent limitations of internal financial controls with reference tostandalone financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial control with reference to standalone financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to standalone financial statements and such internal financialcontrols with reference to standalone financial statements were operating effectively asat March 31 2022 based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note issued by the ICAI.

For S.R. Batliboi & Associates LLP Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
per Prashant Singhal Partner
Membership Number: 93283 UDIN: 22093283AHNEME9324
Place of Signature: Mumbai Date: April 21 2022

.