Mr. Manish Sinha (Government Nominee) Mr. Satish Ranade Company Secretary & Chief Legal Officer Mr. Sanjay Baweja Chief Financial Officer REGISTERED OFFICE VSB, Mahatma Gandhi Road,

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TWENTY FOURTH ANNUAL REPORT 2009-10

CONTENTS

Corporate Details .............................................................................................................. 2

Notice .................................................................................................................................... 3

Directors’ Report ................................................................................................................ 7

Report on Corporate Governance .............................................................................. 26

Directors’ Responsibility Statement for the year 2009-10 and

Secretarial Responsibility Statement ......................................................................... 38

Declaration by CEO regarding Company’s Code of Conduct andCEO/CFO Certification ..................................................................................................... 39

Auditors’ Certificate on Corporate Governance ..................................................... 40

Auditors’ Report ................................................................................................................. 41

Balance Sheet ..................................................................................................................... 44

Profit & Loss Account ....................................................................................................... 45

Cash Flow Statement ....................................................................................................... 46

Schedules ............................................................................................................................. 47

Notes to the Accounts ..................................................................................................... 57

Section 212 of the Companies Act, 1956, related to Subsidiary Companies 94

Consolidated Accounts

Auditors’ Report on Consolidated Financial Statements .................................... 97

Consolidated Balance Sheet .......................................................................................... 98

Consolidated Profit & Loss Account ........................................................................... 99

Consolidated Cash Flow Statement ........................................................................... 100

Consolidated Schedules ................................................................................................. 101

Consolidated Notes to the Accounts ......................................................................... 109

Board of Directors ............................................................................................................. 143

Annual General Meeting on Friday, 6 August 2010, at MC Ghia Hall, Kalaghoda Mumbai at 11.00 a.m.As a measure of economy, copies of the Annual Report will not be distributed at the Annual General Meeting.

Shareholders are requested to kindly bring their copies to the meeting.

Tata Communications Limited

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Twenty Fourth Annual Report 2009-2010

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CORPORATE DETAILS

BOARD OF DIRECTORS(As on 30 June 2010)

Mr. Subodh Bhargava (Chairman) (Independent)

Mr. N. Srinath (Managing Director and Chief Executive Officer)

Mr. Kishor A. Chaukar (Panatone Nominee)

Mr. P. V. Kalyanasundaram (Independent)

Dr. V.R.S. Sampath (Independent)

Mr. Amal Ganguli (Independent)

Mr. Vinod Kumar (Panatone Nominee)

Mr. S. Ramadorai (Panatone Nominee)

Mr. A. K. Srivastava (Government Nominee)

Mr. Arun Gandhi (Panatone Nominee)

Dr. Ashok Jhunjhunwala (Panatone Nominee)

Mr. Manish Sinha (Government Nominee)

Mr. Satish Ranade Company Secretary & Chief Legal OfficerMr. Sanjay Baweja Chief Financial Officer

REGISTERED OFFICE VSB, Mahatma Gandhi Road, Fort,Mumbai – 400 001.

CORPORATE OFFICE C21& C36, ‘G’ Block, Bandra Kurla Complex,Mumbai – 400 098.

BANKERS Bank of AmericaHDFC Bank Ltd.Hongkong & Shanghai Banking CorporationCitibank Inc.Indian Overseas BankRoyal Bank of ScotlandDevelopment Bank of SingaporeDeustche BankKotak Mahindra Bank Ltd.ICICI Bank Ltd.State Bank of IndiaVijaya Bank

LEGAL ADVISORS Messrs ANS Law AssociatesMessrs Mulla & Mulla and Craigie Blunt & Caroe

STATUTORY AUDITORS Messrs S.B. Billimoria & Co., Chartered Accountants

REGISTRARS & Messrs Sharepro Services (India) Pvt. Ltd.TRANSFER AGENTS 13 AB, Samhita Warehousing Complex, 2nd Floor,

Near Sakinaka Telephone Exchange, Andheri Kurla RoadAndheri (East), Mumbai - 400 072.

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NOTICE

NOTICE is hereby given that the Twenty Fourth Annual General Meeting of Tata Communications Limited will be held at1100 hours on Friday, 6 August 2010, at MC Ghia Hall, Bhogilal Hargovindas Building, Second Floor, 18/20 KaikhushruDubash Road, Kalaghoda, Mumbai – 400001 to transact the following business:

Ordinary Business

1. To receive, consider and adopt the Balance Sheet of the Company as on 31 March 2010, the audited Profit and LossAccount for the year ended on that date, the Auditors’ Report thereon and the Report of the Board of Directors.

2. To appoint a Director in place of Mr. PV Kalyanasundaram who retires by rotation at this Annual General Meetingand being eligible offers himself for reappointment.

3. To appoint a Director in place of Dr. VRS Sampath who retires by rotation at this Annual General Meeting and beingeligible offers himself for reappointment.

4. To appoint a Director in place of Mr. Amal Ganguli who retires by rotation at this Annual General Meeting and beingeligible offers himself for reappointment.

Special Business

5. To consider and, if thought fit, to pass with or without modification the following Resolution as a Special Resolution:

“RESOLVED THAT pursuant to Section 224 A and other applicable provisions, if any, of the Companies Act, 1956, M/s. S.B.Billimoria & Co., Chartered Accountants be and are hereby appointed Statutory Auditors of the Company to hold officefrom the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting and toexamine and audit the accounts of the Company for the financial year 2010-2011 on such remuneration as may bemutually agreed upon between the Board of Directors and the Auditors, plus reimbursement of service tax, travelling andout of pocket expenses.”

“RESOLVED FURTHER THAT the Auditors of the Company be and are hereby authorized to carry out (either themselves orthrough qualified associates) the audit of the Company’s accounts maintained at all its branches and establishments(whether now existing or acquired during the financial year ending 31 March 2011) wherever in India or abroad.”

By Order of the Board of Directors

Satish RanadeCompany Secretary

Dated : 5 July, 2010Registered Office :VSB, Fort,M.G. Road, Mumbai - 400 001.

NOTES :

1. A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OFHIMSELF AND THE PROXY NEED NOT BE A MEMBER. THE INSTRUMENT APPOINTING A PROXY SHOULD, HOWEVER, BEDEPOSITED AT THE REGISTERED OFFICE OF THE COMPANY NOT LESS THAN 48 HOURS BEFORE THE COMMENCEMENTOF THE MEETING.

2. Members who hold shares in dematerialized form are requested to bring their DP ID and Client ID numbers for easyidentification of attendance at the meeting.

3. The statement of material facts pursuant to Section 173 (2) of the Companies Act, 1956, setting out the material factsin respect of the business under Item No. 5 is annexed hereto.

4. Details regarding the persons proposed to be appointed as Directors and their brief resume have been given in theannexure attached to the Notice.

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5. Registers of members and transfer books of the Company shall remain closed from 2 August 2010 to 6 August 2010(both days inclusive).

6. Pursuant to the provisions of Section 205A(5) of the Companies Act, 1956, dividends which remain unclaimed in theunpaid dividend account for a period of seven years from the date of transfer of the same, will be transferred to theInvestor Education and Protection Fund established by the Central Government. The Members and Shareholderswho have not encashed their dividend warrant(s) so far for the financial year ended 31 March 2003 or any subsequentfinancial years are requested to make their claim to the R & T Agents of the Company. According to the provisions ofthe Act, no claims shall lie against the said Fund or the Company for the amounts of dividend so transferred nor shallany payment be made in respect of such claims. The summary of the unpaid dividend for the past years and the dateon which the outstanding amount shall be transferred to Investor Education and Protection Fund on the dates aregiven in the table below.

Date of AGM Balance as on Dividend for the year Transfer to Investor30 June 2010(Rs.) Education &

Protection Fund

2 Sept 2003 797,253.50 2002-03 2 Oct 2010

2 Sept 2004 799,137.00 2003-04 2 Oct 2011

14 Sept 2005 1,045,488.00 2004-05 14 Oct 2012

13 Sept 2006 877,041.00 2005-06 13 Oct 2013

2 Aug 2007 736,294.00 2006-07 2 Sept 2014

2 Aug 2008 841,491.00 2007-08 2 Sept 2015

7 Aug 2009 860,791.50 2008-09 7 Sept 2016

Total 5,957,424.00

7. Consequent upon the introduction of Section 109A of the Companies Act, 1956, shareholders are entitled to makenomination in respect of shares held by them in physical form. Shareholders desirous of making nominations arerequested to send their requests in Form No. 2B in duplicate (which will be made available on request) to the R & TAgents of the Company.

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Annexure to the Notice dated 5 July 2010

The Statement of Material Facts pursuant to Section 173 (2) of the Companies Act, 1956.

In respect of Item No. 5

M/s. S B Billimoria & Co., Chartered Accountants were appointed as the statutory auditors of the Company at the TwentyThird Annual General Meeting of the Company held on 7 August 2009 and hold office till the conclusion of the TwentyFourth Annual General Meeting. Since the Government of India continues to hold not less than 25% of the subscribedshare capital of the Company, the appointment of the auditors of the Company is required to be approved by a SpecialResolution pursuant to Section 224A of the Companies Act, 1956.

The Directors recommend the resolutions.

None of the Directors are interested in the resolutions.

By Order of the Board of Directors


Dated : 5 July 2010Registered Office :VSB, Fort,M.G. Road, Mumbai - 400 001.

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Details of Directors Seeking Appointment / Re-Appointment at the24th Annual General Meeting

Particulars Mr. P.V. Kalyanasundaram Dr. V.R.S. Sampath Mr. Amal Ganguli

Date of Birth 25 February 1958 12 August 1956 17 October 1939

Date of Appointment 14 September 2005 14 September 2005 17 July 2006

Qualifications Bachelor of Arts degree in Bachelor of Arts degree in Fellow of the Institute ofHistory from the New history from the Presidency Chartered Accountants inCollege, Chennai, Bachelor College, Bachelor of Law England and Wales, Fellowof Law degree from Madras degree from Madras Law of Institute of CharteredLaw College College, Master of Law Accountants of India, Fellow

Degree and a PHD from of British Institute ofthe University of Madras. Management, member ofMasters of Arts degree in New Delhi Chapter ofhistory from the Madurai Institute of InternalKamraj University. Auditors, Florida, USA,

Alumnus of IMI, Geneva.

Expertise in Specific Eminent Lawyer Eminent Lawyer Accounting and AuditFunctional Area

Directorships held in other NIL 1 13Public Companies (excludingforeign and private companies)

Memberships/Chairmanships NIL NIL 10of Committees in otherPublic Companies

Shareholding In TCL NIL NIL NIL

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Dear Shareholders,

The directors present the 24th annual report andaudited accounts of Tata Communications Limited(TCL) for the financial year ended 31 March 2010.

PERFORMANCE

The year under review saw continued sluggishnessin markets in which your Company operates. Mostcorporates, who are the major customers of thecompany, have remained cautious and focussed onreducing costs and becoming more efficient therebylimiting the growth in our addressable market.Despite this, your Company continued to expand andgrow, and has increased its consolidated revenues toRs.111.94 billion (previous year Rs. 102.07 billion) andEBIDTA was at Rs. 10.12 billion (previous year Rs. 13.66billion). However, consolidated profit/(loss) afterexceptional items and before tax was Rs. (6.81) billion(previous year Rs. (4.23) billion), whereas profit/(loss)after tax was Rs. (5.98) billion (previous year Rs. (3.16)billion).

On standalone basis, during the year under review,your Company earned total revenue of Rs. 33.83billion (previous year Rs. 39.81 billion). Profit beforetax for the year was Rs. 3.09 billion, (previous yearRs.7.13 billion). Profit after tax was Rs. 4.83 billion(previous year Rs. 5.16 billion).

The Company’s profitability has been affectedadversely by the global economic conditions,nascent stage of some of its investments and dueto increases in some specific items of cost. Theconsolidated net loss includes Rs. 4.64 billion inrespect of the Company’s holding in Neotel, SouthAfrica, which is still in the early growth phase andwill continue to need support for some more timebefore it turns profitable. The net loss also includesincreases in other non-cash costs viz. depreciationon account of significant capitalisation done overthe past two years, and the changes in retirementprovisions in India and overseas subsidiaries. Weremain confident that the Company’s strategy issound and the direction that the Company is takingwill prove beneficial to the Company and itsstakeholders in the future.

Dividend

The directors have recommended that no dividendbe paid for the financial year ended 31 March 2010.This was deemed prudent in the light of severalfactors impacting your Company. The Company’srevenue has shown growth but profitability has comeunder pressure over the last couple of years primarilydue to sharp drop in tariffs and the high capitalexpenditure to meet current and future businessrequirements resulting in significantly higherdepreciation and additional interest costs and somelarge investments being still in their gestation phaseand will take a few more years to be profitable.

Your Company has reinvested its cash in the businessto expand its capabilities in key markets around theworld, including India. However, your Company hasalso been increasing its debt funding to supportgrowth and expansion. As a result, interest costs havebeen rising, affecting adversely your Company’sprofitability. Therefore, as a part of its attempts tocontrol the debt burden on the Company, the Boardhas decided to reinvest the amount available intogrowth investments for the business.

The amount available for appropriation is Rs. 25.83billion, out of which the Company proposes to transferRs. 0.48 billion to general reserves and Rs. 3.55 billionto the debenture redemption reserve, leaving Rs.21.79 billion to be carried forward.

Funding

During the year, the Company continued to borrowfor financing its projects and operations. TheCompany issued unsecured debentures amountingto Rs. 7.00 billion in 2009-10. All debentures issued bythe Company have been rated ‘AAA’. The trust deedsfor the debentures issued by the Company will beavailable for the inspection by the members at theCompany’s registered office during normal workinghours, 21 days before the date of the 24th AnnualGeneral Meeting.

OVERVIEW

Over the last few years, your Company hasconsistently pursued its strategy of providing a rangeof communication services to enhance the reach and

DIRECTORS’ REPORT

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leadership of its customers in the wholesale,enterprise and retail segments across differentgeographies. It is leveraging its integrated wholesalecapability, strong market position in India, portfolioof managed services and its focus on emergingmarkets to compete with other global serviceproviders. The Company has judiciously invested inkey infrastructure and service delivery capabilities tobe able to meet the demands of its customers.

The Company’s focused strategy has enabled it to beone of the leading players worldwide in its majorbusiness segments, with operations in more than 50countries. Tata Communications remains the largestprovider of international wholesale voice servicesglobally and one of the largest owners and providersof submarine cable capacity in the world. TheCompany is a global Tier-1 Internet Services Provider(ISP) and is a major player in the growing global IPTransit market. Your Company also offerstelecommunication services through its subsidiary inSri Lanka and associates/joint ventures in Nepal andSouth Africa.

In the coming years, your Company will continue tofocus on redefining telecom services for “wholesale”commodity and low-value operations to apartnership-driven, value-enhancing business; onexpanding networks in India to reach the customers’premises; on rapidly growing its global enterprisesegment with catalyst services including Telepresence,media and entertainment solutions, Ethernet andcloud computing; and on achieving globalbenchmarks in customer services and operations.

During the year under review, the enterprisecustomers’ demand for greater global connectivityand services continued to grow, worldwidebroadband penetration increased and demand forrich media and interactive digital content continuedto increase globally. This gave the Company theopportunity to leverage its Tata Global Network (TGN)of optical fibre undersea cables and Internet Protocol(IP) networks to its advantage.

Over the last four years, Tata Communicationsinvested over US$2 billion in building infrastructureand new service capabilities as well as in enteringnew markets. In 2009-10, the Company invested

nearly US$509 million towards capital expenditureand other investments. The Company hascommissioned additional submarine cable systemsand is expanding capacity in the current year,connecting emerging markets in Asia, the Middle Eastand Africa to each other and onwards to Europe andAmerica to meet the increasing bandwidth demandof broadband, enterprise and wholesale customersover the next five to eight years. Investments havealso been made in new data centres and in expandingthe network and service capability in differentmarkets globally. The Company expects to continueinvesting in increasing its capabilities and marketpresence.

Tata Communications has set up extensive operatingframework for servicing the specific needs ofcustomers across various market segments andgeographies. The Company continues to focus onbuilding long lasting relationships with its customersand business associates and to lead the industry inresponsiveness and flexibility. The service fulfilment,service assurance and billing functions are integratedinto a single team called Customer Services andOperations. This provides the right focus andsynergies across all “customer touch points” in allstages of the service life cycle and has led tosignificantly enhanced customer satisfaction acrossour business segments and geographies.

The Department of Telecommunications (DoT ),through a license amendment dated 3 December2009, made it mandatory for all telecom serviceproviders to obtain security clearances before placingpurchase orders for procuring telecom equipmentfrom manufacturers who are not Indian owned/controlled. Further notifications issued by the DoT laydown more conditions relating to the transfer oftechnology requirements to be imposed on foreignvendors, self certification regarding equipment beingfree from malware, etc. Service providers and vendorsare generally finding it difficult to comply with theseconditions. The Company is facing delays in fulfilmentof its customer orders and in expanding its networkinfrastructure in India, which is having an adverseeffect on the Company’s revenues.

The Company continues to work with theGovernment of India to resolve this issue.

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Premature Termination of Monopoly andCompensation

As reported earlier, the Government of India (GOI)had allowed other players into the international longdistance (ILD) business from 1 April 2002, terminatingthe Company’s exclusivity two years ahead ofschedule. The GoI gave the Company a compensationpackage and had given an assurance prior to thedisinvestment of 2002 that it would consideradditional compensation, if found necessary, on adetailed review when undertaken. However, inFebruary 2002, just before the disinvestment of theCompany, the GoI unilaterally granted a furtherdispensation as full and final settlement of every sortof claim against the premature ILD demonopolisation.

The Company filed a claim in the Mumbai High Courtin 2005 which is yet to come up for hearing.

Surplus Land

Under the terms of the share purchase andshareholders’ agreements signed between the GoIand the strategic partner (the parties) at the time ofdisinvestment, it was agreed that certain identifiedlands would be demerged into a separate company.It was further provided that if, for any reason, theCompany cannot hive off or demerge the land into aseparate entity, alternative courses as stipulated inthe share purchase and shareholders’ agreementwould be explored. A draft scheme of demerger waspresented to the Board in April 2005, and the partiesare examining the legality and feasibility ofimplementing the scheme. The land identified fordemerger at different locations measured 773.13acres, and carried a book value of Rs.1.64 million.

As reported earlier, the VSNL Employees CooperativeHousing Society, Chennai (Society) had moved theHon’ble Delhi High Court in respect of their longpending issue of transfer of 32.5 acres of land situatedat Padianallur, Chennai, which was part of theidentified surplus land. According to the order of theHon’ble High Court, the process of transferring thesaid land to the Society was completed during theyear.

HUMAN RESOURCES

Your Company invests in continuous training toenhance employee skills and capabilities and offers

ample avenues to its employees to not onlycontribute but also learn and grow.

The different corporate entities that are part of TataCommunications together employed 6,457 people ason 31 March 2010 (5,825 on 31 March 2009). Of these,1,181 (1,050 in the previous year) were locatedoutside India. With people of about 40 nationalitieson the rolls, the workforce profile is diverse and multi-cultural. The Company seeks to hire, train and retainthe best talent available globally to enable efficientand effective performance in the competitive market.

At Tata Communications, employees are encouragedto live the vision and values adopted by the Company.Integrity is recognized and rewarded. An employeesatisfaction survey is carried out annually through anindependent global agency across all our differentoperating locations. This year, more than 94% of theemployees participated in this survey and the overallemployee satisfaction scores showed a healthyupward trend in respect of all major parameters andacross all geographies.

The compensation and employee benefit practicesof Tata Communications are designed to becompetitive in the respective geographies where weoperate. Employee relations continued to beharmonious at all our locations, through the processof continuous dialogue and openness to find mutuallyacceptable solutions to issues.

AWARDS AND RECOGNITION

The Company’s transformational initiatives are beingrecognised in India and abroad. During the year, theCompany earned several prestigious recognitions,including:

• Best Global Wholesale Offering Award fromCapacity magazine, one of the most importantpublications for telecommunications carriers andservice providers.

• Global Telecoms Business Innovation Award forInternational Wholesale InfrastructureTransformation and International NetworkInfrastructure Transformation.

• During the year, your Company’s MD & CEO, Mr.N Srinath, was named as the world’s eighth mostinfluential telecom personality for the second

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consecutive year by the Global Telecoms Businessmagazine.

• European CEO announced Tata Communicationsas Telepresence Managed Service Provider of theYear 2009.

• Frost & Sullivan named the Company #1Enterprise Data Services Provider in India 2009.

• In March 2010, Tata Communications entered theGartner’s Magic Quadrant for Global NetworkService Providers.

• Frost & Sullivan’s 2009 Product Innovation awardfor Managed Telepresence Service.

• “Best service coverage” in the 2009 OpticalTransmission Vision (OTV) APAC NetworkOperator Awards.

CONTINUOUS IMPROVEMENT

In order to be able to respond quickly to thecustomers, your Company continues with variousinternal initiatives to compete effectively, improveorganisational flexibility and efficiency, streamlineinternal processes across all its entities globally andinstitutionalise a culture of continuous improvement.The Company is developing and deploying aContinuous Improvement methodology (QUICK)which is being designed in partnership with TataQuality Management Services to serve as a model forcontinuous improvement. Some important initiativesare:

Business Excellence

Your Company continues to transform itself in tandemwith market and regulatory changes using theframework of the Tata Business Excellence Model(TBEM) which covers areas like leadership, strategy,customer and market focus, knowledge management,human resources, process management, customerservice and social responsibility.

Your Company has received TL 9000 certification forthree years commencing 31 March 2010 for the Indiaregion. Nine out of thirteen key office premises acrossIndia have received ISO 14001 certification forenvironment management. Our Global Managed

Services Operations Centre (MSOC) at Chennai, alleleven data centres in India and six data centres atinternational locations have received ISO 20000 andISO 27001 certifications.

Compliance with SOX

Pursuant to its listing on the New York StockExchange, Tata Communications has been complyingwith section 404 of the Sarbanes Oxley Act, 2002(SOX). SOX sets forth requirements for internal controlover financial reporting and its documentation. Forthe current fiscal year, in addition to themanagement’s own assessment of the effectivenessof such internal control, the Company’s externalauditors are also required to issue an opinion onwhether effective internal control over financialreporting was maintained in respect of all materialaspects by the management.

Revenue Assurance

Revenue assurance aims to prevent revenue leakagesto ensure robust internal controls and IT processesthat keep pace with increasing business complexities,thus moving towards zero tolerance of revenueleakages. Your Company has recently undertaken a‘benchmark’ study to enhance revenue assuranceprocesses and the findings will be implemented thisyear.

Enterprise Risk Management

Your Company has established an enterprise-wide riskmanagement (ERM) framework to optimiseidentification and management of risks globally, aswell as to comply with clause 49 of the listingagreement with Indian stock exchanges. In line withyour Company’s commitment to deliver sustainablevalue, this framework aims to provide an integratedand organised approach for evaluating and managingrisks.

Risk-based Internal Audit

The risk assessments performed under the ERMexercise are a key input for the annual internal auditprogramme, which covers the Company’s variousbusinesses and functions. This approach providesadequate assurance to the management that theright areas are covered under the audit plan.

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STATUTORY INFORMATION AND DISCLOSURES

Fixed Deposits

The Company has not accepted nor does it hold anypublic deposits.

Particulars of Employees

The provisions of Section 217(2A) of the CompaniesAct, 1956, read with the Companies (Particulars ofEmployees) Rules, 1975, require the Company toprovide certain details about the employees whowere in receipt of remuneration of not less than Rs.24 lakhs (Rs 2,400,000) during the year ended 31March 2010 or not less than Rs. 2 lakhs (Rs. 200,000)per month, during any part of the said year. TheCompany had 313 such employees employed duringthe year ended 31 March 2010. According to theprovisions of section 219(1)(b)(iv) of the CompaniesAct, 1956, the Directors’ Report being sent to theshareholders does not include this annexure. TheAnnexure regarding the Particulars of Employeesunder section 217(2A) of the Companies Act, 1956will be available for inspection by any member at theregistered office of the Company during workinghours, 21 days before the date of the AGM.

R & D, Technology Absorption and ForeignExchange Earnings

There are no particulars to be disclosed pertaining tothe year under review, in respect of Research &Development (R&D) and technology absorption asrequired under Companies (Disclosure of Particularsin the Report of the Board of Directors) Rules, 1988.For the purpose of Form ‘C’ under the said rules,foreign exchange earnings were equivalent to Rs. 8.32billion and foreign exchange outgo was equivalentto Rs. 5.86 billion.

The Company has invested in developing newproducts and services adopting latest technologiessuch as content delivery network (CDN), cloudcomputing, Telepresence and Wimax.

Auditors’ Report

There are no qualifications in the report of thestatutory auditors for the year 2009-10.

Subsidiaries

The statement pursuant to section 212 of theCompanies Act, 1956 containing details of the

Company’s subsidiaries, is attached. The consolidatedfinancial statements of the Company and itssubsidiaries, prepared in accordance with accountingstandard 21 (AS 21) prescribed by the Institute ofChartered Accountants of India, form part of theannual report and accounts.

These documents will be provided on request to anyshareholder wishing to have a copy, on receipt of suchrequest by the deputy company secretary at theCompany’s registered office. These documents willalso be available for inspection by any shareholder atthe Company’s registered office.

The Board of Directors

The Board of Directors of the Company consists oftwelve directors. Mr. H.P. Mishra, who was nominatedby the Government of India as a permanent (non-retiring) director, has ceased to be a director on theBoard of Tata Communications Limited with effectfrom 1 April 2010. Mr. Manish Sinha, Dy. DirectorGeneral (LF), Department of Telecommunications, hasbeen appointed in his place on the Board as apermanent (non-retiring) director. In accordance withthe provisions of the Companies Act, 1956 and theCompany’s Articles of Association, Mr. P.V.Kalyanasundaram, Dr. V.R.S. Sampath and Mr. AmalGanguli retire by rotation at the ensuing annualgeneral meeting and being eligible, offer themselvesfor reappointment.

None of the Company’s directors are disqualified frombeing appointed as a director as specified in Section274 of the Companies Act, 1956 as amended by theCompanies (Amendment) Act, 2000.

For details about the directors, please refer to point 2of the Report on Corporate Governance.

Corporate Governance

Pursuant to Clause 49 of the Listing Agreement withthe stock exchanges, Management Discussion andAnalysis, Corporate Governance Report and Auditors’Certificate regarding compliance with conditions ofcorporate governance form part of the directors’report.

ACKNOWLEDGMENTS

The directors would like to express their thanks tothe various customers and business associates of the

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Company around the world for their support andconfidence in the Company and the services providedby it. The directors also recognise and commend thededication and commitment of all the employeesglobally. The directors appreciate the support ofvarious Ministries and departments of theGovernment of India, including the Department ofTelecommunications and the Information &Broadcasting Ministry as well as the Governments andregulators of the various countries in which TataCommunications operates. The directors are alsograteful to the Company’s other stakeholders and

partners including its shareholders, bankers, solicitorsand suppliers, for their support.

On behalf of the Board of Directors

Subodh BhargavaDated: 5 July 2010 Chairman

Registered Office:VSB, MG Road, Fort,Mumbai – 400001.

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INDUSTRY ANALYSIS

Indian Telecom Market

Over the last decade the Indian telecom industry haschanged significantly, with all major segments beingopened to competition. There are several newentrants in areas that the Company operates in,resulting in increasing competition. There are now281 circles-based access licenses across 23 serviceareas, 30 licensed national long distance (NLD)operators and 25 licensed international long distance(ILD) operators, several of whom are largeinternational companies who now have a directpresence in the country.

India’s telecom market is growing rapidly and isexpected to be worth Rs. 158.52 billion by 2010,contributing 5.6% to India’s gross domestic product(GDP). According to the latest figures from theTelecom Regulatory Authority of India (TRAI), as ofend-March 2010, India’s mobile subscriber base stoodat 584.32 million, while the fixed-line subscriber basedeclined to 36.96 million, and the broadbandsubscriber base reached 8.75 million. The past yearwitnessed significant regulatory developmentsincluding changes in the access deficit charge (ADC)regime, a review of the Interconnect regime,recommendations on issues like Mobile VirtualNetwork Operators, Internet Telephony and CarrierAccess Code (CAC)/calling cards. Mobile NumberPortability (MNP) is expected to be implementedduring the latter half of 2010.

The auction of spectrum for 3G and BroadbandWireless Access (BWA) services was conducted duringApril and June 2010. The revenue estimates did notenable the Company to acquire spectrum in any ofthe circles in the BWA auction. The winning bids, inour opinion, were in excess of what currentbroadband business cases could support, and seemedto reflect the effects of a perceived scarcity ofspectrum combined with the limited number of slotsbeing auctioned.

In summary, the telecom landscape continues toevolve and operators such as your Company will haveto constantly transform themselves to remaincompetitive.

Global Telecom Market

The global telecom industry has undergone changesin the segments of Tata Communications’ interests.The international wholesale voice market continuesto be a business of scale, with constant pressures onprices and margins. The recent global economicdownturn has further increased this pressure onprices and slowed the growth of traffic volumes on ayear-on-year basis. Alternate services such as portalbased offerings on the Web are growing in popularityand usage. The share of mobile communicationscontinues to grow in relation to fixed voice and thereis an increasing use of Voice over Internet Protocol( VoIP).The need for profitability in a largelycommoditized market is making operators seek bothscale and cost efficiency in their operations. Apartfrom driving consolidation, this could also create newbusiness models based on greater collaborationbetween operators which, we believe, your Companyis well positioned to benefit from.

The data market is also undergoing rapid changes.With the growing need for bandwidth around theworld, the demand for submarine cable capacitycontinues to grow. Several new cable systems havebeen announced or are being constructed in differentmarkets, such as across the Pacific, within Asia,connecting Europe and Asia, and on both the eastand west coasts of Africa. Availability of large capacityin line with market growth and diversity to providecontinuity of services in the event of cable cuts dueto acts of man or nature, continue to be importantdrivers of this growth. The addition of these newcables presents both investment opportunities as wellas downward price challenges.

The growth of the Internet on the back of growingglobal broadband usage, increasing demand formultimedia services, the success of new collaborationand communications applications and the continuedincrease in the use of the web by both individualsand corporations, is driving the demand for IPbandwidth. Growth is seen in the demand for IPTransit services in all the major geographies but pricescontinue to fall, thereby increasing pressures onmargins. New services such as Content DistributionNetworks are fast emerging as growth opportunities,

ANNEXURE 1: MANAGEMENT DISCUSSION AND ANALYSIS

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leveraging the increasing demand for video trafficon the web. Your Company is actively offering theseservices for both volume and margin growth.

The global enterprise market has seen growingdemand for network services, data centre services andvalue added services. The global recession causeddelays in decision-making and deferred procurementby some customer segments, but broadly, Informationand Communications Technology investments byenterprises is showing a steady and solid recovery.This investment is motivated by the need for betterengagement and service levels with their owncustomers, the need for higher velocity and flexibilityin business, and the growth of global supply chainsand markets. Industry leaders are more sharplyfocused on increasing the ratio of IT budgets that areapplied towards competitive advantage andinnovation versus basic services and compliance. Therecession limited their budget growth, and thus hassharpened their focus towards finding the best valuesolutions that will enable their IT to deliver acompetitive edge. The exploration of new approacheslike Ethernet wide area networking, cloud computingservices and Telepresence virtual meetings is arguablynow higher on many CIO agendas than it wouldotherwise have been.

Mobile Market

The mobile industry has shown some resilience tothe economical downturn. There is some concern onrevenue growth as operators face the prospect offewer new subscribers and a flat to declining averagerevenue per user (ARPU). This effect is mostpronounced in the established markets of Europe andNorth America, while developing markets such as theMiddle East, Asia and Africa are just starting to showsigns of this in select areas.

Mobile operators are increasingly focused on cost-cutting measures, which presents an opportunity forproviders of Value Added Services such as Steeringof Roaming and Roaming Hubbing and associatedservices. The sharper focus on costs and price pressureon supplier contracts creates an opportunity for theCompany to displace competitors.

With the increasing penetration of smart devices andthe rolling-out of broadband HSPA/3G+ networks,mobile data is rapidly increasing its share of overall

customer usage and revenue. As operators expandtheir broadband networks and subsequently theirrequirements for core Internet connectivity, it createsnew opportunities for providers of wholesale IP transitand data services. Your Company is leveraging itsstrength in Data Services by extending this offeringto Mobile Operators, notably early adoption of IPX, aframework that allows the integration of multipleservices and applications over a single dataconnection.

Carrier Outsourcing & Transformation Services

The new challenges in the global economy arecompelling carriers to find quicker and more cost-effective ways to service their customers. Whilecarriers in developed markets are seeking to reducecosts and focus on core activities, carriers in emergingmarkets are attempting to overcome skills shortagesand expedite time to market for new services orgeographies. This is generating significant demandfor various types of network skills as well as forprocess improvement and deployment capabilitywhich are emerging as good growth opportunitiesfor your Company’s transformation services offering.

Impact of Global Economic Scenario

The economic slowdown triggered by events in theUS and the recent European Union crisis, continuesto impact most markets worldwide. Most of thedeveloped markets are only slowly emerging from arecession and even the high-growth emergingmarkets are seeing a slowdown in growth rates.Sectors like banking, financial services andmanufacturing have been hit the most due to thefinancial crisis and the consequent slowdown indemand. Businesses across the world are battling toreduce costs and conserve cash; at the same time,they are also seeking to access the growthopportunities that are available in emerging marketsin Asia, Middle East and Africa. The biggest impactthis is having on your Company’s business is in termsof severe price pressures from existing customers,delays in orders from some customers and moreintense price-based competition for new customeracquisitions.

REGULATORY DEVELOPMENTS

As reported earlier, in the year 2005, the Companyalong with several other service providers had

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challenged before the Hon’ble Telecom DisputesSettlement And Appellate Tribunal (TDSAT), thedefinition of “gross revenue” and “adjusted grossrevenue” (AGR) as applied by the DoT for levyinglicence fees as being unfair and beyond the scopeand powers of the DoT.

The final verdict was rendered by the TDSAT on 30August 2007 broadly in line with several of thecontentions of the Company. However the industryand your Company are not satisfied on two issues,viz. (i) date of applicability of the TDSAT verdict, whichaccording to the Company should be the date fromwhich the license fee based on revenue sharingregime came into effect, and not from the date offiling the petition in TDSAT (May, 2005 in the case ofthe Company) as ordered by the TDSAT and (ii)deductibility of charges passed on to other serviceproviders for leasing bandwidth, port charges, etc.,which was disallowed by TDSAT. The Company andalso several other telecom operators have challengedTDSAT’s order of 30 August 2007 on the above twoissues in the Hon’ble Supreme Court of India. Asreported earlier, the DoT has also filed an appeal inthe Apex Court against the judgement of the TDSAT.Both the appeals are pending and this matter issubjudice.

The Company had also separately filed a petition inthe TDSAT on the matter of applicability of penalprovisions under the international and national longdistance license agreements towards charging ofpenalty and interest on penalty. The TDSAT by itsjudgment of 11 February 2010 has allowed thepetitions filed by the Company, striking down theclause imposing penalty. As a consequence, theCompany is entitled to a refund of Rs. 115.72 crores(Rs. 1.15 billion) realised by the DoT in January 2008and interest thereon. A claim of Rs. 160.00 crores (Rs.1.60 billion) was raised upon the DoT on 10 March2010, which DoT has refused. The Company isexamining the available options for its future courseof action.

The regulatory scenario in the other geographiesacross the world where your Company operatesthrough its subsidiaries did not see any major policychanges impacting the Company’s business.

Tata Communications continues to implement andcomply with its obligations under the agreement

between the Company (and several of its subsidiaries)and the various U.S. Government Departments(Department of Justice, Federal Bureau ofInvestigation, the Department of Homeland Security,and the Department of Defense). As a part of theserequirements, the Company and its subsidiaries have,over the last year, invested in enhancing security forits North American networks; appointed a ChiefSecurity Officer; hired a Chief Information SecurityOfficer for North America and Europe; rolled outsecurity training for North American and Europeanemployees; and established formal mechanisms toidentify and address network security issues bycreating committees of senior engineers andmanagers to address findings and plans formitigation.

OPERATIONAL REVIEW

Your Company operates under three main businesssegments globally – Global Voice, Global Enterpriseand Carrier Data and Other Services.

Global Voice

International Long Distance (ILD)

Tata Communications remains the leading providerof international wholesale voice communicationservices globally. Your Company has over 1,600 directand bilateral relationships with leading internationalvoice telecommunication providers.

During 2009-10, Tata Communications handled 32.6billion minutes of international voice traffic globally,a growth of 33% over the previous year. Traffic to andfrom India has grown from about 8.4 billion minutesin 2007-08 to about 9.8 billion in the year underreview. Your Company believes that its scale, reach,innovative solutions, expertise and strong businessrelationships give it the required edge to compete inthis space.

Your Company is a “one-stop-shop” for all global voicesolutions, offering flexible service options and a fullrange of complementary services for VoIP, Voice overbroadband, web portal and client-based providers.Tata Communications is constantly upgrading andexpanding its offerings in this segment. In September2009, your Company launched new and innovativeservices like enhanced voice peering and support forhigh quality Mobile Video Telephony.

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As per current regulations, your Company does nothave direct access to the end customer and isdependent on traffic from other access operators forits long distance voice services. Several of theoperators who hand over their long distance voicetraffic to Tata Communications have since takenlicenses and started operations for themselves,thereby shrinking the Company’s addressable marketand hence affecting this business adversely.Nevertheless, your Company continues to strive tobe competitive, leveraging its scale of operations andoperational expertise. In August 2009, the licensoramended the terms of the International LongDistance (ILD) License to permit ILD service providersto access subscribers directly through calling cards.However, the current policy framework does notregulate interconnection charges between operatorsfor the purpose of calling cards. The Company willneed to negotiate these terms with each accessprovider concerned before it can launch a calling cardservice for international calling.

During the year under review, there were furtherreductions in tariff and interconnect rates globally,combined with a slower year-on-year market growth,increasing the downward pressure on revenues. Thispressure was only partially compensated, since theincrease in traffic volumes was also slower. Globally,your Company continues to focus on increasingvolumes, while cutting costs in order to improvemargins.

The Company has also moved to capitalize on thegrowing trend of outsourcing by telecom operatorsto manage their international voice services. TheCompany offers innovative and flexible solutions likeinfrastructure sharing, customised distributionmodels, traffic management, destinationmanagement and traffic aggregation to answervarious challenges faced by telecom operators. TheCompany hopes to see a significant growth in thisspace in coming years.

National Long Distance (NLD)

Increased mobile penetration has resulted insignificant growth in the NLD traffic within India.However, the increased competition through the issueof new NLD licences, along with other regulatoryinitiatives, has reduced the gap between NLD andlocal tariffs. The Company’s NLD traffic has slightly

decreased from 10 billion minutes in 2008-09 to 9.5billion minutes in 2009-10. Continued shrinkage inthe Company’s addressable market and falling tariffsis expected to impact this business further.

Your Company has a strong network infrastructureand interconnect agreements with all basic andcellular mobile service operators in India to carry NLDtraffic to and from their networks. However, it isdependent on these access providers handing overtraffic to the Company, many of whom have acquiredtheir own NLD licences and started their ownoperations. In August 2009, the DoT permitted theNLD operators (NLDOs) also to provide servicesdirectly to the end user through calling cards. TheCompany now needs to negotiate interconnectionterms with each access operator.

While increased competition in the long distancespace affects your Company’s business, it also opensup opportunities to share the Company’s networkinfrastructure with new licensees. The sharing ofactive infrastructure by NLDOs is now permitted anda consultation process for the introduction of InternetTelephony in the NLD sector has been initiated. TheCompany hopes that this may provide new avenuesfor the Company in the NLD business area.

Global Enterprise and Carrier Data Services

Carrier Data

Tata Communications is one of the world’s leadingwholesale providers of data, IP and mobile signallingservices. Your Company leverages its globalsubmarine cable network and global Points ofPresence (POPs) to provide high-speed bandwidthconnectivity to other telecom carriers and InternetService Providers (ISPs) worldwide.

During the past year, the growing demand forbandwidth has resulted in substantial capacityupgrades and new builds on the Company’s globalsubmarine cable system, the Tata Global Network(TGN). The Company announced the new TGN-Gulfcable connecting several countries in the Gulf to theTGN and expects the commissioning of the TGN-Eurasia system connecting India to Europe during2010. The Company has also commenced services tokey markets in East Africa on the capacity that it hasprocured on the Seacom cable system.

Tata Communications operates one of the world’s

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leading IP networks and provides wholesale IP transitservices to tier-2 ISPs and regional carriers. TataCommunications is one of the few Internet serviceproviders that has a strong position in all the majorregions worldwide, including North America, Europe,Asia, Middle East and Africa. The Company also offersother value-added services like Content DeliveryNetworks, leveraging its existing position of strengthin the ISP market segment.

Tata Communications is also a leading provider ofmobile signalling services to mobile operatorsworldwide. Its offerings include signalling conversionand managed roaming services. In addition, theCompany is introducing new, innovative services suchas hubbing for prepaid services and is working withits partners to develop offerings in the emergingmobile-commerce market.

The Company has put in place a converged wholesalestrategy, to combine carrier services with our GlobalVoice Solutions and Carrier Data Services, to bringincreased value to our carrier customers. In January2010 the Company launched an IP Exchange (IPX)solution enabling mobile service providers toseamlessly and efficiently route all communicationtraffic, including voice, IP and signalling, via one IPpipe while supporting end-to-end service quality,security, multilateral connectivity and cascadingpayments.

Enterprise Data

Tata Communications offers a wide range ofcustomised telecommunication solutions to itsEnterprise customers. In addition to international andnational private leased circuits (IPLCs and NPLCs), yourCompany offers Virtual Private Networks andassociated Managed Services, Ethernet Services,Internet Access, Managed Hosting, Messaging,Internet Telephony, etc. The Company also providesother value added offerings such as Collaboration andConferencing services, Managed Security services, andother Professional services.

The Company continues to expand its coverage ofManaged Global MPLS - VPN (Multi Protocol LabelSwitching - Virtual Private Network) and Ethernetservices by directly entering select new markets aswell as through partnerships with regional / localoperators. To further strengthen its customer value

proposition, the Company partners with software andsystems integration companies including TataConsultancy Services, for integrated joint product andservice offerings. Your Company also markets itsservices through indirect channels catering to thesmall and medium enterprise market in India andsome select international markets.

The Indian enterprise segment has been growing ata very healthy rate driven by two factors. Firstly, Indianbusiness are increasingly adopting IT and networkingtechnology to improve productivity and createcompetitive advantage. Secondly, since Indianbusiness is growing globally and internationalcompanies are increasing their Indian presence, thereis an associated need for greater connectivity to andwithin the country. Banking and financial services,information technology and business processoutsourcing/call centres are some examples of highgrowth sectors in the country.

Tata Communications is one of the largest players inthe data centre business in India, with facilities inmany of the major commercial centres. It recentlyopened its largest centre in Pune with nearly 55,000square feet of rack space offering Co-location,Managed Hosting & Storage and a suite ofcomplementary services including Managed Securityand CDN services. Globally, the Company has 42facilities covering over nearly 1 million square feet.Virtualization technology is changing the economicsof data centre computing, with utility computing andcloud computing on the cusp of moving into themainstream. Your Company’s global and Indiamanaged hosting services are aggressivelysupporting this direction.

Tata Communications sees business transformationbeing led by IP technologies that are enablingconverged and cloud-based services as well as a newgeneration of managed services. In line with its IP-enabled business transformation strategy, TataCommunications will complete the deployment of itsglobal voice network core to an IP-based NextGeneration Network (NGN) by September 2010. TheNGN will provide a dramatically simplified networkarchitecture and enable Tata Communications’customers to leverage a single global IP network todeliver their range of services. The NGN completionwill mark the next step in Tata Communications’ IP

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evolution and positions the Company as the rightpartner for convergence in the IP world.

Adoption of new services and service delivery modelsthat enhance competitiveness is accelerating in areassuch as adoption of Ethernet for wide area networks,in which your Company is a major player bothglobally and in India. Managed security services fromspecialist providers enable compliance and businessprotection with lowest costs of ownership, often inthe network cloud. Your Company’s global ManagedSecurity Service suite is young, but well ranked byanalysts.

Your Company is a global leader in collaborationservices like Managed Telepresence for companiesand between companies. This service provides “virtualmeetings” using simple and life-like telepresenceendpoints which provide enhanced collaborationacross global companies and markets, reducing traveland raising productivity. Leveraging its globalnetwork, Tata Communications is continuing to growthe world’s largest public room telepresence network.Tata Communications currently manages 13telepresence public rooms and is targeting another25 by the end of 2010. The Company also provides astandalone global Telepresence Exchange Service thatenables telepresence rooms to be interconnectedregardless of the network or service provider theybelong to.

Tata Communications plans to continue its growthstrategy of partnership, investment and infrastructuredevelopment in emerging markets. TataCommunications and Neotel, South Africa’s firstconverged communications national operator, havelaunched their data centres in South Africa inJohannesburg and Cape Town. Tata Communicationswill also invest US$200 million in the Middle East overthe next two years to develop telecom infrastructureas well as network services and managed and hostedservices that leverage the network includingmanaged security, managed hosting and cloudcomputing solutions.

Your Company is continuously developing newproducts and services to enhance value to customers.In September 2009, Tata Communications combinedits next generation managed security solutions withsuperior Internet leased line products, and launchedits Internet Clean Pipe Solution for the small and

medium business segments in India. The solutionensures clean Internet traffic by eliminating malware,spam and virus without the customer having to incurcapital expenditure on security hardware. Thissolution is the first of its kind by an Internet serviceprovider in India.

Your Company has launched the world’s leadingdedicated global video network called Video Connectwhich is designed to help broadcasters, studios andproduction houses deliver video content flexibly andcost-effectively to media hotspots worldwide. Byleveraging Tata Communications’ global networkinfrastructure, Video Connect also enables permanentavailability of bandwidth and seamless transmissionof video at constant bit rates. A dedicated videonetwork operations centre ensures round-the-clocksystem availability along with analytics to providereports on video quality.

In January 2010, Tata Communications unveiled itsmedia management platform, Mosaic. This platform,with its cloud-based media management, helps mediacustomers improve cross-enterprise collaboration forcontent creation, management and multiformatdelivery. Mosaic enables enterprises to deliverinnovative services that meet rapidly changingconsumer demands, maintain and expand audiencenumbers, provides flexibility of an open operatingenvironment and lower production costs. One ofMosaic’s unique capabilities is that it providescomplete digital asset management, ensuring secure,efficient access to content and workflow throughoutthe value chain, which is delivered as an online serviceover the web. The new service is targeted at the entirespectrum of media customers encompassing contentcreators, producers, post-production houses, digitalmedia publishers, content service providers and TVchannels.

As part of its Global Media and EntertainmentServices (GMES) portfolio, Video Connect and Mosaicwill complement Tata Communications’ existingMedia and Entertainment services, offeringcompanies an integrated end-to-end solution thatenables global collaboration across the mediaecosystem. Other services in Tata Communications’GMES portfolio include Satellite Broadcasting with TVuplinking and Playout Room capabilities.The Company intends to invest in the range of

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US$50 million over the next two years to strengthenits product offerings addressing the media andentertainment segment requirements.

Other Services

In the retail and small business space, TataCommunications remains a premier Internet ServiceProvider, offering connectivity, messaging, Internettelephony and a wide variety of content services.

Retail Services

India has among the lowest penetration of broadbandin the world. The growth in broadband subscribershas been slower than anticipated, the primary issuebeing the limited availability of quality last milenetworks capable of delivering the bandwidth thatbroadband needs.

Tata Communications Internet Services Ltd (TCISL), a100% subsidiary, was set up to be the vehicle forexpansion in retail services like broadband in India.Its current offerings include wireline, wireless, dial upand wi-fi broadband/Internet access as well as a rangeof content and value added services like movies,music, gaming, online back-up, PC security, webhosting, domain name registering, etc.

Further growth in this business was linked to theCompany being able to successfully acquire spectrumfor creating access networks in the recently concludedauctions for Broadband Wireless Access.Unfortunately, the Company was not able to acquirespectrum in any of the circles. The auction closed atprices that were seen to be in excess of what thecurrent Broadband business cases would be able tosupport and seemed to reflect the effects of aperceived scarcity of spectrum combined with thelimited number of slots being auctioned. In theimmediate term, the Company will step up its focuson small and medium businesses (SMBs) and willapproach the market led by a portfolio of businessapplications.

The small business segment in India has beengrowing at a frantic pace and the Internet is provingto be a decisive edge for small businesses toovercome the various other infrastructural challengesin the country. TCISL has been pursuing a focussedstrategy for the small business segment with a specific

range of highly customised Internet Leased lineservices along with VOIP and Value Added Serviceslike Security, Web hosting, etc. These existingcapabilities that your Company has developed, itsexisting customer base of SMBs, its businessapplications portfolio and current network areparticularly suited to growing its SMB business. Thisfocus on SMBs will also allow the Company to betterleverage and align with the overall enterpriseconnectivity, managed and cloud services strategy ofthe rest of its Global Enterprise Business.

Wi-Fi

Wi-fi services are an important supplement to theCompany’s Internet access services. Wi-Fi enablescomputers, PDAs and other computing devices to usehighspeed Internet without any wires or cables, atplaces that are Wi-Fi enabled, called hotspots. Withover 500 hotspots, TCISL is India’s leading Wi-Fihotspot provider spread across segments such asairports, hotels, coffee shops, restaurant chains,hospitals, educational institutes, railway stations,shopping malls and even stores. TCISL now offers itscustomers a Global Internet Roaming service in over160 countries.

New Growth Opportunities

Tata Communications Transformation ServicesLimited

With the increasing need for reducing costs, severalcarriers around the world are looking to low costeconomies to relocate some of their businessprocesses. Leveraging its operating expertise acrossa wide variety of technology platforms as well asglobal experience in different developed andemerging markets and its relationships with thesecarriers, your Company is seeking to cater to this need.This initiative is implemented through TataCommunications Transformation Services Limited, awholly owned subsidiary (TCTS) in India.

By leveraging its global technical expertise and theavailability of highly skilled resources in India, TCTS isuniquely positioned to take advantage of thisemerging opportunity with international carriers.TCTS has about 1,000 highly skilled telecomprofessionals working in its world-class deliverycentres in Pune and Chennai. They have experience

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in a range of telecom services including NetworkEngineering, Service Fulfilment and Service Assuranceacross multiple technologies and vendors. With anend-to-end process capability coupled with domainexpertise, they are well positioned to cater to variedtransformational requirements of global telecomservice providers across North America, Europe,Middle-East and Africa. Some significant workcompleted by them for customers include networkengineering and provisioning for a leading Europeantelco, operations, administration and maintenance fora submarine cable company, vendor evaluation andproof-of-concept for Wi-Max roll-out for a directbroadcast satellite service provider and processframework development, design and outsourcing fora West African service provider.

Tata Communications Banking InfraSolutions Limited

In order to capture emerging opportunities inbanking and financial services, your Company hasformed Tata Communications Banking InfraSolutionsLtd. (earlier known as Banking ATM InfraSolutionsLimited) in February 2008, as its 100% ownedsubsidiary. TCBIL aims at providing infrastructuresolutions to the banking industry including servicesrelating to establishing and operating AutomatedTeller Machines, Electronic Transaction ProcessingSolutions, Cheque Truncation Services, Core BankingSolutions, etc. With a highly experienced team ofprofessionals from the Banking and Financial Servicesindustry, TCBIL commenced its commercial operationsin April 2009. The Company has already receivedorders for its services from some of the leading banksin the country.

Joint Ventures & Associates

Neotel (Proprietary) Ltd.

Neotel was set up as South Africa’s (SA) SecondNational Operator (SNO) in 2005. During the year, twoof the shareholders in the company, Eskom andTransnet, sold their entire 30% stake in Neotel to theCompany and Tata Africa thereby increasing ourcombined stake to an effective 56% (earlier effective26%).

Neotel today employs around 1,100 people, and offerstelecommunication services to the Wholesale,Enterprise and Consumer segments. Neotel runs thefirst Next Generation Network and the first CDMA

network of SA. It has also been awarded the Level 3certification (highest amongst telecom serviceproviders in SA) for the second year in a row withregard to the Broad Based Black EconomicEmpowerment initiatives of the SA government.

As a part of Neotel’s growth story, it had acquiredTranstel, a division of the state owned transportcompany Transnet. This acquisition was completedand the organization has been fully integrated withNeotel. This integration has resulted in the Companyachieving better scale in its operations and is nowyielding some visible cost synergies.

JV with CEC

It was reported last year that your Company hadentered into an equity joint venture agreement (EJV)with the shareholders of China EnterpriseCommunications Limited (CEC). On 10 June 2010, TataCommunications (Hong Kong) Ltd, a wholly-ownedindirect subsidiary of Tata Communications Ltd andthe shareholders of CEC jointly withdrew their equityjoint venture application with the ChineseGovernment and mutually agreed to terminate thevarious agreements regarding Tata Communications’proposed equity investment in CEC.

CEC and Tata Communications will continue with theirexisting network services co-operation relationshipand have also entered into a new co-operationagreement whereby Tata Communications and CECwill work together on a commercial basis to allowTata Communications to benefit from access to CEC’snetwork and assets in China, as Tata Communicationscontinues to focus on this key market.

ORGANISATIONAL RESTRUCTURING

Consolidating Subsidiaries

Your Company had seven direct and 37 indirectsubsidiaries as on 31 March 2010. As reported earlier,a process had been initiated to reduce this numberto a total of about 30, through appropriaterestructuring. The aim is to have no more than oneentity in each country to the extent possible andnecessary.

With the launch of the new brand ‘TataCommunications’, the name of the parent and thenames of the first level of subsidiaries have beenchanged to reflect this new global brand. AppropriateBrand Equity and Brand Promotion Agreements will

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be signed with Tata Sons Ltd. by those subsidiarieswhose names have been changed.

Global Structure

Tata Communications has structured itself into globalbusiness units and global shared service functions,to best enable it to operate in its different customersegments and markets. Several initiatives are beingimplemented within the framework of this structureto improve customer experience, define and create acommon company culture, tighten corporate identityand branding and implement the next generationnetwork architecture for converged services, amongothers.

Corporate Sustainability Initiatives

Tata Communications believes in the need to enhancethe quality of life of people and to serve thecommunities where it operates. As a member of theTata Council for Community Initiatives, the Companyhas been constantly learning from group initiativesand improving its processes and policies to servesociety better. The Company’s principles of corporatesustainability are based on the premises of creatingsustainable value for enhancing, human, social, naturaland economic capital. It lays great importance onbeing accountable to all its stakeholders.

As part of the affirmative action initiatives aimed atproviding support to the marginalized sections of thecommunity, Tata Communications implementedseveral programmes addressing three major driversof social equilibrium: education, employability andentrepreneurship development. The EntrepreneurshipDevelopment Programme (EDP) being run inpartnership with the Entrepreneurship DevelopmentInstitute (EDI), Ahmedabad, has been a great success.During the year 2009-10, three EDPs were conductedat Nasik, Surat and Lonavla. Around 80 socially andeconomically under-privileged candidates havesuccessfully completed the training in these EDPs. Outof this, 47 candidates have already started their ownmicro-enterprises. Similarly, the Company hasprovided vocational training in IT related skills to 330socio-economically disadvantaged youth, makingthem employable. During the year, the Companysupported socio-economically disadvantagedstudents doing engineering courses in terms ofsustenance scholarships and remedial coaching.

The Company encourages a culture of volunteerismto contribute to socio-economic development. Duringthe year 2009-10, approximately 800 volunteersdevoted more than 6,600 hours of their personal timeto collectively make a difference to the lives of manymarginalized and affected segments of society. Duringthe year, the Company and its employees alsocontributed towards the relief measures for the floodvictims of AP and Karnataka.

During the year, the Company continued itspartnership with Dr Reddy’s Foundation (DRF) in theactivities of the Telecom Training Academy that hasbeen set up to provide internship opportunities indifferent vocational skills to students from theeconomically weaker sections from rural and smallertowns to make them acquire the right type of skillsrequired for the telecom industry. As on 31 March2010, there are about 80 interns in the Company atvarious stages of the internship programme. Manyinterns from the previous batches have alreadysuccessfully completed their internship and havebeen absorbed in the industry.

Towards enabling visually challenged students, theCompany partnered with Victoria Memorial Schoolfor the Blind and supported it in establishing arecording studio for converting books and otherreading materials to digital format in CDs, for use bythe visually challenged.

The Company is sensitive towards environmental andecological concerns arising out of its operations.Carbon footprint mapping and reduction are animportant agenda for the Company. The Companybelieves in Green IT infrastructures and is constantlyimproving its data centers and operations to becomemore and more energy efficient. The Company hasan ISO 14001 certified Environmental ManagementSystem and a well enunciated Environment Policy inplace to guide its activities.

Tata Communications was recently awarded aCertificate of Appreciation under ExemplaryInnovations in CSR category of the Business World-FICCI-SEDF CSR Award 2009-10. This Certificate ofAppreciation recognizes Tata Communications’commitment and contributions to the cause of socio-economic development of the communities by wayof innovations in employee volunteering,

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entrepreneurship development and employabilityenhancement (DRF Initiative).

Management of Business Ethics (MBE)

The Company aims to be recognized in a sustainedmanner for being ethical and value driven in all itsendeavours. It actively promotes demonstration ofthis behaviour by its employees and otherstakeholders through a series of activities andprocesses within the framework of the Tata Code ofConduct. The Company has put in place the necessarystructures and processes, to implement and improveethical standards and practices in the organization.All new recruits are provided an overview of the TataCode of Conduct and the Company’s WhistleblowerPolicy as part of their induction process. To internalizethe code of conduct and sustain the momentum, theCompany conducts employee seminars, compliancetraining and ethics awareness workshops at frequentintervals. Relevant personnel are also providedtraining on compliance with the Foreign CorruptPractices Act (FCPA) of the US with which theCompany must comply by virtue of its US listing. TheCompany understands that a strong commitment toethics is critical to the long term success of businessand believes that any success not achieved ethicallyis no success at all. In order to inculcate the ethicalvalue system deep into the minds of the employees,the Company has launched a Web Based TrainingModule on the Tata Code of Conduct available to allits employees globally. It has helped to create a betterunderstanding and awareness about our value systemamong our global workforce.

RISKS AND CONCERNS

Like all businesses, Tata Communications is exposedto certain risks and concerns in the course of itsbusiness:

Price Reductions

Reductions in prices for communications services,both voice and data, in India and worldwide havehad and are expected to continue to have an adverseeffect on our operations. We expect that the pricesfor our communications services will generallycontinue to decrease as overall competitive activityincreases and as we and our competitors increasecapacity on existing and new networks or as a resultof technological advances. The recent economic

downturn globally has led to a slowdown in customeruptake and put increasing downward pressure onprices as customers seek to reduce costs.

Key Customers – Service Providers

Business with other carriers and service providersrepresents a large proportion of our total business.Several carriers that we do business with have in therecent past suffered from reduced profit margins andother significant financial pressures. Marketrestructuring through acquisitions and mergerscontinue and this could lead to realignment amongthe various players in the industry. Some of thesechanges could negatively impact our business.Further, if any of the major carriers that we dobusiness with encounter sudden financial difficultiesor file for bankruptcy, we may be unable to recoveramounts owed to us.

Technology Risk

Technology is continuously changing in thetelecommunications industry and service providersneed to ensure that they are constantly bringing newservices and technologies to market in order to beable to compete effectively. We continuously develop,test and introduce new communications services sothat we can compete for new customers and in newsegments of the communications business.Sometimes the introduction of new services requiresthe successful upgrade or development of newtechnology, which may be dependent on externalvendors. If we are not able to successfully completethe development and introduction of new services,including new managed services, in a timely manner,our business could be adversely affected.

Intellectual property management and protectionis becoming increasingly important in globalbusinesses. It is important that we are able tosource, either through our own development,acquisition or licensing, the necessary intellectualproperty rights on a cost effective basis in order tobe able to continue doing business or introducenew services. In addition, the Company must bevigilant in protecting its own intellectual propertyrights through patent, copyright, trademark andtrade secret laws in various jurisdictions worldwide.Any impediment in this process could harm ourbusiness.

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Operating Risks

We must continue to increase the volume of voice,Internet, data, and video transmissions on our globalnetwork in order to realize the anticipated cash flow,operating efficiencies and cost benefits of ournetwork, particularly since certain of our costs (suchas repair and maintenance costs) are fixed.

Any one of several factors could adversely impact ourongoing operations such as:

• our technical infrastructure is vulnerable todamage, interruptions or failures which mayresult in reduced traffic, reduced revenues andharm to our reputation by virtue of our beingunable to fulfil our commitments undersignificant contracts.

• We may be unable to hire and retain sufficientqualified personnel or to source the rightequipment and technology.

• Acquisitions have been key to our growth andsuccessful integration of acquired businesses isimportant for us to realize the full value of ourinvestments.

• Our operations are global and any terroristactivities and any other acts of violence or warinvolving India, the United States and othercountries which impact our business continuitycould adversely affect our results.

Lack of End Customer Ownership

An important concern for the Company in its longdistance voice business in India is the lack of directaccess to end consumers. Tata Communications isdependent on access providers to route the nationallong distance and international calls of theircustomers through the Company’s networks. Severalof these operators have taken licenses and startedoperations as our competitors in the long distanceand other markets thereby shrinking the Company’saddressable market. It would be a seriousdisadvantage not to have access to a large enoughmarket to compete for business.

A customer choice regime for long distance callingwas to have been implemented in accordance withthe TRAI directive in phases for different segments ofthe long distance sector, with the finalimplementation of carrier access code (CAC) and

carrier pre selection (CPS) to be completed byDecember 2003. The customer choice regime has notbeen implemented due to technical and otherreasons. This delay is a cause for concern for TataCommunications because it restricts the market thatthe Company can directly address.

In an order last year, the TRAI recalled the directiverequiring all service providers to implement CAC/CPS;instead the TRAI recommended the use of callingcards as the customer choice mechanism, which theDoT has accepted. Now long distance operators cansell directly to end-customers calling cards fordomestic and international long distance services.However, there is still uncertainty around theinterconnection terms and conditions.

Regulatory Environment

We have interests in a large number of geographicareas throughout the world and must comply withan extensive range of requirements that are meantto regulate and supervise the licensing, constructionand operation of telecommunications networks andservices. These requirements are likely to increase withour overseas expansion. In particular, there areagencies which regulate and supervise the allocationof frequency spectrum and which monitor andenforce regulation and competition laws that applyto the telecommunications industry. Legal andregulatory decisions and changes in the regulatoryenvironment in the jurisdictions in which we dobusiness could adversely affect us.

The tariffs charged by telecommunication serviceproviders in India are subject to TRAI regulations. TheCompany periodically renegotiates interconnectagreements with various domestic mobile serviceoperators and basic telecom service providers andsettlement rates with international carriers, resultingin the revision of rates from time to time dependingon market conditions. Such revisions could be adverseand could have a material effect on TataCommunications’ operations and financial condition.

In December 2009, the DoT notified an amendmentto the license condition making it mandatory to seeksecurity clearance before placement of purchaseorders for telecom equipments/software to be usedin provisioning of telecom services. This amendmentand subsequent notifications insisting that the

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licensees provide certain undertakings/certificationsmay result in substantial delays in creating capacityin our networks and in provisioning of services tocustomers, which may adversely affect the revenuesand profitability of the Company.

The Grey Market and the IUC Regime

Effective 1 October 2008 the TRAI discontinued theaccess deficit charge (ADC) built into the interconnectionusage charge (IUC) regime governing inter-operatorsettlements for voice calls passing through differentnetworks. However, effective 1 April 2009, the IUCregulations provide for a higher termination charge ofRs.0.40 per minute for incoming international longdistance calls as against Rs.0.20 per minute forterminating domestic long distance calls. This differencecreates an arbitrage opportunity which may make thetotal elimination of the grey market difficult.

Increasing Competition in India

The de-regulation of the Indian telecom marketexposes the Company to increased competition in allits key segments:

• The Internet Service Provider (ISP) business isintensely competitive and has a large number ofplayers. ISPs are allowed to provide Internettelephony calls overseas. Though the quality ofsuch service may not be comparable to traditionalinternational long distance (ILD) calls, it mayimpact Tata Communications’ ILD business, as alsothe Company’s own Internet telephony services.

• Tata Communications operates in the markets forinternational long distance, national long distanceand broadband services, where there are severalpotential and existing competitors. Relaxation oflicensing conditions and granting of new licencesfor national long distance (NLD) and ILD services,including to several international operators, bythe DOT has intensified competition in thesesectors. New ILD licensees have established directconnectivity with foreign carriers, and increasedcompetition is likely to impact the Company’sbusiness adversely. The DoT has permitted resaleof international private leased circuit services,which will further intensify the competition.

Funding

We have made, and in the future would need to make,substantial capital investments in new

telecommunications projects, which may expose usto liquidity and execution risks. Our operations andprofitability may be adversely affected if the fundingrequired for the plans is relatively more expensive ordelayed.

The Company incurred substantial debt in the fiscalyear 2010 primarily to finance its various projects aswell as fund the capital requirements of itssubsidiaries. As of 31 March 2010, the outstandingprincipal amount of our debt was approximately Rs.23.28 billion for the Company on a standalone basisand Rs. 66.65 billion on a consolidated basis. TheCompany may need to resort to additional long-termdebt and working capital lines of credit to meet futurefinancing needs, with the possibility of raising non-debt funding being limited at this juncture. This wouldincrease the debt servicing obligations of theCompany. Unless the Company is able to explore non-debt funding avenues in the near future, its ability toraise additional debt funding may remain subject tocertain restrictions, in turn adversely affecting its debtservicing ability and capital expenditure programme.

Weakening of the rupee against the dollar or othermajor foreign currencies may have an adverse effecton our cost of borrowing and consequently mayincrease our financing costs, which could have asignificant adverse impact on our results.

Changing Economic Conditions

Downturns in the Indian, regional and globaleconomies could have a material adverse effect onthe Company’s business prospects. TataCommunications’ operations and investments as wellas rights to undersea cable capacity extending toother countries, exposes the Company to risksinherent in international operations. These include:

• General economic, social and political conditions;

• The difficulty of enforcing agreements andcollecting receivables through certain foreignlegal systems;

• Foreign currency exchange rates fluctuations,which could adversely affect the results of ouroperations and the value of our internationalassets and investments although the Companypartially hedges its foreign exchange risk;

• Foreign earnings may be subject to withholding

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requirements or the imposition of tariffs,exchange controls or other restrictions;

• Difficulties in obtaining licenses orinterconnection arrangements on acceptableterms.

Key Disputes and Litigation

Over the past fiscal years, the Company has madecertain tax holiday and expense claims based on ourunderstanding of the tax laws as reinforced by legalprecedent and legal advice received from externaltax counsel. In some cases the Indian Tax Authorityhas not accepted our claims and in few instances haslevied penalties against the Company. We havechallenged the position taken by the Indian TaxAuthority, which are at various stages of adjudication.If all of these disputes are decided against us, wecould have an adverse financial implication.

The Government of India (GOI) had allowed otherplayers into the international long distance (ILD)business from 1 April 2002, terminating theCompany’s exclusivity two years ahead of schedule.The GoI gave a compensation package and had givenan assurance prior to disinvestment of 2007 that itwould consider additional compensation, if foundnecessary on a detailed review when undertaken.However, in February 2002, just before thedisinvestment of the Company, the GoI unilaterallygranted a further dispensation as full and finalsettlement of every sort of claim against thepremature ILD demonopolisation. The Company fileda claim in the Mumbai High Court in 2005 which isstill to come up for hearing.

As reported earlier, in the year 2005, the Companyalong with several other service providers hadchallenged before the Hon’ble Telecom DisputesSettlement And Appellate Tribunal (TDSAT), thedefinition of “gross revenue” and “adjusted grossrevenue” (AGR) as applied by the DoT for levyinglicence fees. The final verdict as was rendered by theTDSAT on 30 August 2007 was not entirely satisfactoryto the Company and it has challenged the TDSAT’sjudgement in the Hon’ble Supreme Court of India. Asreported earlier, the DoT also has filed an appeal inthe Apex Court against the judgement of the TDSAT.Both the appeals are pending and this matter issubjudice.

International Operations

A large part of the Company’s consolidated revenuesare generated through its operations in internationalmarkets. Integrating acquisitions and managingoperations in diverse international locations is verycritical to the success of Tata Communications’business plans.

A list of additional “risk factors” which could impactthe business of the Company’s profitability are morefully set forth in the Company’s Form 20-F, which isfiled annually with the U.S. Securities and ExchangeCommission and can be found at the following weblink:<http://secfilings.nyse.com/ files.php?symbol= TCL>.

INTERNAL CONTROL SYSTEMS AND THEIRADEQUACY

Tata Communications has a well-developed internalcontrol system and has also implemented the SAPsystem for Enterprise Resource Planning. Internalcontrol systems including those for the newly-acquiredbusinesses are continuously reviewed and improved.The financial authority at various management levelsis clearly defined in the delegation of powers. Technicaland financial operations are controlled by state-of-the-art technology and systems. The accounts of theCompany are subjected to internal and statutory audit.

CAUTIONARY STATEMENT

Statements in the directors’ report and managementdiscussion and analysis describing the Company’sobjectives, projections, estimates and expectationsmay be ‘forward-looking statements’ within themeaning of applicable securities laws and regulations.Actual results could differ substantially or materiallyfrom those expressed or implied. Important factorsthat could make a difference to the Company’soperations include economic conditions affectingdemand/supply and price conditions in the domesticand overseas markets in which the Company operates,changes in government regulations, policies, tax lawsand other incidental factors. Further, the Companyretains the flexibility to respond to fast-changingmarket conditions and business imperatives.Therefore, the Company may need to change any ofthe plans and projections that may have beenoutlined in this report, depending on marketconditions.

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REPORT ON CORPORATE GOVERNANCE FOR THE YEAR 2009-10(In accordance with clause 49 of the listing agreement with Indian stock exchanges)

Attendance No. of Directorships No. of Committee Positions No. of SharesBoard Meetings at the last AGM in Indian Public held in Public Companies held as on

Name Category during the tenure (07.08.2009) Companies Including including 31 March 2010Tata Communications Ltd. Tata Communications Ltd.

Held Attended Chairman Member Chairman Member

Directors in Office (as on 31 March 2010)

Mr. Subodh Bhargava Independent 7 7 Yes 3 9 4 5 NIL[Chairman] Non Executive

Mr. N. Srinath Not Independent 7 7 Yes 2 3 Nil 1 NILExecutive

Mr. Kishor A. Chaukar Not Independent 7 7 Yes 4 11 3 3 NILNon Executive

Corporate governance is about promoting corporatefairness, transparency and accountability. The corporategovernance structure specifies the distribution of rightsand responsibilities of the board, managers, shareholdersand other stakeholders, and spells out the rules andprocedures for making decisions on corporate affairs.

1. CORPORATE GOVERNANCE PHILOSOPHY ANDPRACTICE

The Company being a Tata Company, follows fair,transparent and ethical governance practices. TheCompany has adopted the Tata Code of Conduct for itsemployees including the Managing Director, as also a Codeof Conduct for its Non-Executive Directors. Both theseCodes are available on the Company’s website.

The Company believes that, though total business riskelimination is not possible, it can be minimized byconsistently developing and following the best practicesof Corporate Governance. To this end, the Company focuseson developing and implementing higher standards ofaccountability to enable optimum returns to allstakeholders. The Company is installing new state-of-theart systems including integrated financial accounting andbudgeting systems and a systematic process of trainingand development which enhances the quality of itspersonnel.

The Company’s operations and accounts are audited atthree levels: an internal audit; a statutory audit by an Indianaccounting firm under Indian accounting requirements andtheir restatement as per the US GAAP by an internationallyrecognized accounting firm. The Company is in compliancewith the requirements of the revised guidelines oncorporate governance stipulated under Clause 49 of theListing Agreements with the Stock Exchanges. Besides, theCompany, being listed on the New York Stock Exchange,has an obligation to comply with the stringent rules andregulations of the Sarbanes-Oxley Act, 2002 (SOX). TheCompany believes that achieving SOX compliance will,inter-alia, further enhance its financial reporting structure.

The Company communicates regularly with itsshareholders through bulletins, presentations andmeetings with analysts and investors.

2. BOARD OF DIRECTORS

The Company is managed exclusively by and under thedirections of the Board. The composition of the Board isgoverned by the applicable laws and regulations and theArticles of Association of the Company. The powersdelegated by the Board to the Managing Director and bythe Managing Director to the subordinate officers aredocumented in the Delegation of Powers (DoP). The DoPis reviewed periodically.

Eleven out of twelve directors are non-executive directors,forming more than half of the total number of directors.

The Company has four independent directors and oneexecutive director.

None of the directors held directorships in more than thepermissible number of companies under the applicableprovisions. Similarly, none of the directors on the board’ssub-committees held membership of more than tencommittees of boards, nor is any director a chairman ofmore than five committees of boards.

Mr. H.P. Mishra, who was nominated earlier by theGovernment of India as a permanent (non-retiring) Director,has ceased to be a Director on the Board of TataCommunications Limited with effect from 1 April 2010. Mr.Manish Sinha, Dy. Director General (LF), Department ofTelecommunications, has been appointed in his place onthe Board as a permanent (Non-retiring) Director.

The names and categories of the directors on the board,their attendance at board meetings during the year andat the last annual general meeting, and the number ofdirectorships and committee memberships held by themin other companies as of 31 March 2010 (with Directorshipsupdated as of 31 May 2010) are given below:

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Notes :

(a) None of the directors is related to any other director.

(b) None of the directors has any business relationship with the Company.

(c) None of the directors received any loans and advances from the Company during the year.

(d) The information as required under Annexure IA to Clause 49 is being made available to the board.

(e) Apart from Directors’ Remuneration, the Company did not have any pecuniary relationship or transactions with non-executive directors during 2009-10.

(f ) The detailed resume of each director and the details of the directors proposed to be appointed / reappointed at the24th Annual General Meeting are published elsewhere in the annual report.

(g) The gap between two board meetings did not exceed four months. The dates on which the 7 board meetings wereheld are as follows:

1&2 April 2009 26 May 2009 25 July 2009 7 August 2009

26 October 2009 1 December 2009 29 January 2010

Attendance No. of Directorships No. of Committee Positions No. of SharesBoard Meetings at the last AGM in Indian Public held in Public Companies held as on

Name Category during the tenure (07.08.2009) Companies Including including 31 March 2010Tata Communications Ltd. Tata Communications Ltd.

Held Attended Chairman Member Chairman Member

Directors in Office (as on 31 March 2010)

Mr. P.V. Independent 7 5 No Nil 1 Nil 1 NILKalyanasundaram Non Executive

Dr. V.R.S. Sampath Independent 7 7 Yes Nil 2 Nil 1 NILNon Executive

Mr. Amal Ganguli Independent 7 7 Yes Nil 13 5 5 NILNon Executive

Mr. Vinod Kumar Not Independent 7 7 Yes Nil 4 Nil Nil NILNon Executive

Mr. S. Ramadorai Not Independent 7 4 Yes 3 10 3 4 NILNon Executive

Mr. A.K. Srivastava1 Not Independent 7 5 Yes Nil 3 Nil 1 NILNon Executive

Mr. Arun Gandhi Not Independent 7 5 Yes Nil 13 Nil 4 NILNon Executive

Mr. H.P. Mishra1 Not Independent 7 5 Yes Nil 1 Nil 1 NIL(Until 1 April 2010) Non Executive

Dr. Ashok Not Independent 7 6 Yes Nil 8 Nil 5 NILJhunjhunwala Non Executive

Directors who joined after 31 March 2010

Mr. Manish Sinha1 Not Independent[w.e.f. 1 April 2010] Non Executive Nil Nil NA Nil 3 Nil 3 NIL

1 Nominee director of the Government of India.

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3. AUDIT COMMITTEE

The audit committee consists of four members. TheChairman of the committee is Mr. Amal Ganguli, anindependent director, who is Fellow of the Institute ofChartered Accountants in England and Wales, Fellow ofInstitute of Chartered Accountants of India, Fellow of BritishInstitute of Management, Member of New Delhi Chapterof Institute of Internal Auditors, Florida, USA. Mr. AmalGanguli became the Chairman of the Audit Committeew.e.f. 19 October 2006.

The other members of the committee are Mr. SubodhBhargava, Independent Director, Mr. P.V. Kalyanasundaram,Independent Director and Mr. Manish Sinha, GovernmentNominee Director. Mr. Satish Ranade, Company Secretary& Chief Legal Officer is the audit committee’s Secretary.Mr. H.P. Mishra, ceased to be a Director on the Board ofTata Communications Limited with effect from 1 April 2010and consequently ceased to be a member of the AuditCommittee from that date. Mr. Manish Sinha, Dy. DirectorGeneral (LF), Department of Telecommunications, who wasappointed on 1 April 2010 on the Board was also appointedas a member of the Audit Committee.

The audit committee has adequate powers and detailedterms of reference to play an effective role as requiredunder the provisions of the Companies Act, 1956 andclause 49 of Company’s listing agreement with the stockexchanges.

Attendance at the Audit Committee Meetings

Name No. of Audit CommitteeMeetings during 2009-10

Held during AttendedTenure

Mr. Amal Ganguli[Chairman] 8 8Mr. Subodh Bhargava 8 8Mr. P.V. Kalyanasundaram 8 5Mr. H.P. Mishra 8 5[until 1 April 2010]

Directors who joined after 31 March 2010

Mr. Manish Sinhaw.e.f. 1 April 2010] NIL NIL

At the Annual General Meeting held on 7 August 2009,the Chairman of the Audit Committee, Mr. Amal Ganguliwas present. During the last financial year, the AuditCommittee held eight meetings and not more than fourmonths had elapsed between any two meetings. The datesof meetings of the Audit Committee are as follows:

8 April 2009 28 April 2009 26 May 2009 24 July 2009

23 September 2009 25 October 2009

18 December 2009 28 January 2010

4. REMUNERATION COMMITTEE

a) Constitution and Terms of Reference

The Remuneration Committee consists of threemembers. The Chairman of the Committee is Mr.Kishor Chaukar. Mr. Subodh Bhargava and Mr. A.K.Srivastava are the other members on theCommittee. Mr. Satish Ranade, Company Secretaryand Chief Legal Officer is the RemunerationCommittee’s Convener. One meeting of theRemuneration Committee was held on 26 May2009. All the members of the RemunerationCommittee were present in the meeting.

The broad terms of reference of theRemuneration Committee are to review theperformance of the Whole-time Director, afterconsidering the Company’s performance andrecommend to the Board remuneration includingsalary, perquisites and commission to be paid tothe Company’s Whole-time Director within theoverall ceilings approved by the shareholders.

b) Remuneration Policy

The distribution of commission amongst the non-executive directors (NEDs) is placed before theBoard. The commission to NEDs is proposed tobe distributed broadly on the basis of theirattendance and contribution at the Board andCommittee meetings as well as the time spenton operational matters other than at themeetings. Mr. Vinod Kumar, Director who is inemployment of a subsidiary of the Company isnot paid sitting fees or commission. The Boardhas not recommended any commission to thenon-executive directors for the financial year2009-10.

The Company paid sitting fees of Rs.20,000/- permeeting to the NEDs for attending the meetingsof the Board and Audit Committee. The Companypaid sitting fees of Rs.10,000/- per meeting tothe NEDs for attending the meetings of theCommittees of the Board other than the AuditCommittee.

The Company pays remuneration by way of salary,perquisites and allowances (fixed component)and commission (variable component) to thewhole time director. Salary is paid within therange approved by the shareholders. Annualincrements, recommended by the RemunerationCommittee are approved by the Board. Withinthe prescribed ceiling, the perquisites package isrecommended by the remuneration committeeand approved by the Board.

Commission is calculated with reference to netprofits of the Company in a particular financial

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year and is determined by the Board of Directorsat the end of the financial year based on therecommendations of the remunerationcommittee, subject to overall ceilings stipulatedin Sections 198 and 309 of the Companies Act,1956. Specific amount payable to the whole-timedirector is based on the performance criteria laiddown by the Board which broadly takes in toaccount the profits earned by the Company forthat year.

c) Table of commission and sitting fees to thenon-executive directors for the year 2009-10is as follows:

(Amount in Rs.’000)

Name of the Director Commission Sitting Fees

Mr. Subodh Bhargava[Chairman] NIL 330

Mr. Kishor A. Chaukar NIL 260

Mr. P.V. Kalyanasundaram NIL 220

Dr. V.R.S. Sampath NIL 220

Mr. Amal Ganguli NIL 310

Mr. Vinod Kumar * NIL NIL

Mr. S. Ramadorai NIL 80

Mr. A.K. Srivastava** NIL NIL

Mr. Arun Gandhi NIL 100

Mr. H.P. Mishra(until 1 April 2010) ** NIL NIL

Dr. Ashok Jhunjhunwala NIL 140

Mr. Manish Sinha **[w.e.f. 1 April 2010] NIL NIL

NIL 1,660

* Mr. Vinod Kumar being the managing director andemployee of an International subsidiary of the Company,no sitting fees/commission is deemed payable to him.

** The Government Directors have informed the Companythat they shall not accept any Sitting Fees and commissionas their Directorships are considered to be part of theirofficial duty.

d) The details of remuneration to the whole-timedirector during the year 2009-10 are as follows:

(Amount in Rs.’000)

Name Salary Perquisites & Commission* Allowances

Mr. N. Srinath 7187.24 1344.67 7500.00

Total 7187.24 1344.67 7500.00

* Commission payable will be paid only after the date ofthe Annual General Meeting.

5. INVESTOR GRIEVANCE COMMITTEE

The committee consists of three members. The Chairmanof the Committee is Mr. Kishor A. Chaukar who is theManaging Director of Tata Industries Limited. The othermembers are Dr. V.R.S. Sampath, Independent Director andMr. A.K. Srivastava, nominee Director of the Government.During the last financial year, the Committee held fourmeetings on 26 May 2009, 25 July 2009, 26 October 2009and 29 January 2010. Mr. Satish Ranade, Company Secretary& Chief Legal Officer is the convener of the InvestorGrievance Committee.

The details of grievances received from the shareholdersduring the year and their status on 31 March 2010 is givenbelow:

Sr. Nature of Complaints No. of Complaints

No. Received Pending

1. SEBI/Stock ExchangeComplaint 1 NIL

2. Direct/Miscellaneous/Other Complaint 1 NIL

TOTAL 2 NIL

This committee has been delegated the powers to approvethe issue of Duplicate Share Certificates and approvetransfer/transmission of shares. However, in the interestof shareholder friendliness, the Registrar and TransferAgents have been authorised to issue Duplicate ShareCertificates and approve transfer/transmission up to amaximum of 500 shares per folio, limited only to routineday-to-day work.

As the shares of the Company are under compulsorydematerialized trading for all investors, this delegation isconsidered adequate. All the shares received for transfertill 31 March 2010 has been duly processed.

6. ETHICS AND COMPLIANCE COMMITTEE

In accordance with the Securities and Exchange Board ofIndia (Prohibition of Insider Trading) Regulations, 1992, asamended, the Board of Directors of the Company adoptedthe “Tata Communications Code Of Conduct For Preventionof Insider Trading and Code of Corporate Disclosure

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Practices” to be followed by “Directors”, “DesignatedEmployees”, “Designated Persons” and “Insiders”. The codeis based on the principle that Directors, DesignatedEmployees, Designated Persons and Insiders should nothave undue advantage over other shareholders, in theirpersonal security transactions, due to their possibleadvance knowledge of Price Sensitive Information. Thecode, therefore, seeks to ensure timely and adequatedisclosure of Price Sensitive Information to the investorcommunity by the Company to enable them to takeinformed investment decisions with regard to theCompany’s securities.

In terms of the said code, an Ethics and ComplianceCommittee was constituted in 2003. The presentcommittee consists of three members. The Chairman of

the committee is Mr. Kishor A. Chaukar, who is theManaging Director of Tata Industries Limited, Dr. V.R.S.Sampath, Independent Director and Mr. Manish SinhaGovernment Nominee Director are the members. Mr. SatishRanade, Company Secretary & Chief Legal Officer is theconvener of the Committee. Mr. H.P. Mishra, ceased to be aDirector on the Board of Tata Communications Limited witheffect from 1 April 2010 and consequently ceased to be amember of the Ethics and Compliance Committee fromthat date. Mr. Manish Sinha, Dy. Director General (LF),Department of Telecommunications, who was appointedon 1 April 2010 on the Board was also appointed as amember of the Ethics and Compliance Committee. Fourmeetings of the committee were held during the year2009-10 on 26 May 2009, 25 July 2009, 26 October 2009and 29 January 2010.

7 GENERAL BODY MEETINGS

The location and time of the last three general body meetings are as follows:

Meeting Date Location, Description and Type of Resolutions Voting

7 August 2009 The 23rd Annual General Meeting was held at 1100 All the resolutions were put to votehours at MC Ghia Hall, Bhogilal Hargovindas Building, by show of hands and were carriedSecond Floor, 18/20 Kaikhushru Dubash Marg, unanimously.Kalaghoda, Mumbai 400023.There were Seven resolutions (1 special and 6 ordinary).

2 August 2008 The 22nd Annual General Meeting was held at 1100 All the resolutions were put to votehours at MC Ghia Hall, Bhogilal Hargovindas Building, by show of hands and were carriedSecond Floor, 18/20 Kaikhushru Dubash Marg, unanimously.Kalaghoda, Mumbai 400023.There were Seven resolutions (2 special and 5 ordinary).

14 December 2007 Court Convened Extraordinary General Meeting was All three resolutions were put toheld at 1100 hours on Friday, at MC Ghia Hall, Bhogilal vote by show of hands and wereHargovindas Building, Second Floor, 18/20 Kaikhushru carried unanimously.Dubash Road Marg, Kalghoda, Mumbai - 400 021.(3 special resolutions).

2 August 2007 The 21st Annual General Meeting was held at 1100 All the resolutions were put to votehours at MC Ghia Hall, Bhogilal Hargovindas Building, by show of hands and were carriedSecond Floor, 18/20 Kaikhushru Dubash Marg, unanimously.Kalaghoda, Mumbai 400023.There were Ten resolutions (2 special and 8 ordinary).

8 DISCLOSURES

i) There were no significant related-partytransactions of the Company with its promoters,directors or management, their subsidiaries orrelatives that may have potential conflict withthe interest of the Company at large. Notenumber B.21 of the Notes on Accounts may alsobe referred to in this respect. No non-compliancenotice has been issued and no penalties orstrictures have been imposed on the Companyby SEBI, any stock exchange or any statutory

authority on any matter related to capital marketsduring the last three years.

ii) The Company has adopted a Whistle BlowerPolicy and has established necessary mechanismsfor employees to report concerns about unethicalbehaviour. No person has been denied access tothe Audit Committee.

iii) SECRETARIAL AUDIT

A qualified practicing Company Secretary carriedout quarterly secretarial audit to reconcile the

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total admitted capital with National SecuritiesDepository Limited (NSDL) and CentralDepository Services (India) Limited (CDSL) andthe total issued and listed capital.

The audits confirm that the total issued/paid-upcapital is in agreement with the total number ofshares in physical form and the total number ofdematerialized shares held with NSDL and CDSL.

iv) The Company fulfilled the following non-mandatory requirements:

a. The Company has setup a RemunerationCommittee. Please see the paragraph onRemuneration Committee.

b. The Auditor’s Report on the financialstatements of the Company is unqualified.

9. MEANS OF COMMUNICATION

Company’s quarterly results are ordinarily published in theFinancial Express and Loksatta among others, andare also hosted on Company’s website:www.tatacommunications.com. The Company’s pressreleases, details of significant developments and investorupdates are also made available on the website.

The Company generally holds a press conference/investors’meet after the half-yearly results are taken on record bythe board relating to the period ending 30 September and31 March every year.

The management discussion and analysis forms part ofthe directors’ report and is included in the annual reportfor the year 2009-10. Segmental information may bereferred to in Note number B.20 of the Notes on Accounts.

10 SHAREHOLDER INFORMATION

DATE AND VENUE OF THE AGM

The twenty fourth annual general meeting of the Companywill be held at 1100 hours on Friday, 6 August 2010, at MCGhia Hall, Bhogilal Hargovindas Building, Second Floor, 18/20 Kaikhushru Dubash Road Marg, Kalaghoda,Mumbai - 400023.

FINANCIAL CALENDAR

Fiscal year ending : 31 March 2010

Annual General Meeting : 6 August 2010

KEY FINANCIAL REPORTING DATES FOR THE FINANCIALYEAR 2010-11

First quarter ending30 June 2010 : On or before 14 August 2010

Second quarter ending30 September 2010 : On or before 14 November 2010

Third quarter ending31 December 2010 : On or before 14 February 2011

Fourth quarter ending31 March 2011 : On or before 15 May, 2011

or if audited, on or before30 May 2011.

BOOK CLOSURE DATES FOR THE PURPOSE OF DIVIDEND

The Company’s register of members and share transferbooks will remain closed from 2 August 2010 to 6 August2010 (both days inclusive).

DIVIDEND POLICY

Company believes in enhancing shareholders returns everyyear and in line with this company has constantlyendeavored to maintain the Dividend Payout Ratio atbroadly same levels every year. However, there are variousconstraints that may impact on a firm’s decision to payout earnings in the form of dividends.

• Cash flow constraints

• Contractual constraints

• Legal constraints

• Tax considerations

• Return considerations

The board recommends dividends at its discretion. Thefactors that may be considered by the Board before makingany recommendations for the dividend include, but arenot limited to, future expansion plans and capitalrequirements, profits earned during the financial year,overall financial conditions, cost of raising funds fromalternate sources, liquidity and cash flow position andapplicable taxes including tax on dividend as well asexemptions under tax laws available to various categoriesof investors from time to time, and money marketconditions.

DIVIDEND PAYMENT

The Board has not recommended payment of any dividendfor the Financial Year 2009-10.

LISTING ON STOCK EXCHANGES IN INDIA AND LISTINGFEES

The Company’s shares are listed on the stock exchangesat Mumbai (BSE) and National Stock Exchange (NSE) inIndia. Annual listing fees as due to each of the above stockexchanges for 2009-10 have been paid.

LISTING ON STOCK EXCHANGE OUTSIDE INDIA

The Company’s ADRs are listed on the New York StockExchange (NYSE) and have been traded on the NYSE since15 August 2000. The annual listing fee payable to the NYSEis being paid regularly.

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DEPOSITORY BANK FOR ADR HOLDERS

The Bank of New York Mellon, 101, Barclays Street, 22nd

Floor West, New York, NY 10286, Telephone: +1 (212) 8158365, Facsimile: +1 (212) 571 3050.

Local Address : The Bank of New York Mellon, 3 NorthAvenue, Maker Maxcity, Premises No. 35 & 36, 3rd Floor,Bandra Kurla Complex, Bandra (East), Mumbai 400 051.Telephone: 91-22-30282301, Facsimile: 91-22-67703917.

CUSTODIAN FOR THE DEPOSITORY IN INDIA

ICICI Bank Limited, Securities Markets Services, 1st Floor,Empire Complex, 414 Senapati Bapat Marg, Lower Parel,Mumbai – 400013. Telephone: 91-22-6667 2026, 6667 2030.Facsimile: 91-22-6667 2779/2740.

STOCK CODE

Bombay Stock Exchange : 500483

National Stock Exchange : TATACOMM

New York Stock Exchange : TCL

ISIN No. for equity shares : INE151A01013

ISIN No. for ADRs : US8765641050

CUSIP No. for ADRs : 876564105

STOCK MARKET DATA RELATING TO SHARES LISTED IN INDIA

Monthly high and low quotations and volume of shares traded at BSE, NSE and NYSE for 2009-10 are:

MonthBSE Share Price (In Rs.) NSE Share Price (In Rs.) NYSE ADR Price (in USD)

Average Average AverageHigh Low Volume High Low Volume High Low Volume

Apr-09 594.90 510.55 51500 593.75 510.00 317400 24.89 20.34 112500

May-09 651.00 464.00 64300 660.00 457.35 583900 27.46 18.90 203800

Jun-09 561.90 441.00 293700 562.00 440.05 1297900 22.55 17.60 251500

Jul-09 519.70 450.00 89600 520.00 450.00 435800 21.78 18.02 102600

Aug-09 535.95 460.10 89300 536.00 460.10 355700 21.49 18.76 67200

Sep-09 516.30 470.00 72500 517.85 470.00 265400 20.93 19.21 74400

Oct-09 498.50 387.00 64700 497.95 384.10 291100 21.35 15.13 136800

Nov-09 399.00 336.20 63300 398.40 335.00 248400 16.74 14.71 102600

Dec-09 400.00 335.00 75300 396.00 334.10 349400 17.49 14.13 103700

Jan-10 377.80 307.00 144100 377.70 337.50 514700 16.26 13.11 147600

Feb-10 338.00 280.00 54000 313.75 277.25 205200 14.19 12.27 98300

Mar-10 304.70 273.20 63100 301.50 271.80 210200 12.99 12.10 107500

SHARE TRANSFER SYSTEM

Share transfers in physical form can be lodged with the R&T agents of the Company. The transfers are normally processedwithin 15 days from the date of receipt if the documents are complete in all respects. The Investor Grievances Committeeis empowered to approve the share transfers. However, in the interests of shareholder friendliness, the R&T Agents havebeen empowered to approve the share transfers up to 500 shares per folio per transfer.

33

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COMMUNICATIONS


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DISTRIBUTION OF SHAREHOLDING

Number of ShareholdersNumber of ordinary shares held

31.03.2010 31.03.2009

1 to 500 69078 46851

501 to 1000 1393 816

1001 to 10000 1387 965

Over 10000 118 108

Total 71976 48740

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CATEGORIES OF SHAREHOLDERS AS OF 31 MARCH

Category Number of Voting Strength Number of Shares HeldShareholders (Percentage)

PROMOTERS 2010 2009 2010 2009 2010 2009

Tata Group

Panatone Finvest Limited 2 2 33.24 36.73 94729654 104671123

Tata Sons Limited 4 3 12.94 10.88 36871497 31013497

The Tata Power Company Limited 1 1 3.85 2.48 10980837 7075837

Tata Steel Limited 0 0 0.00 0 0 0

Tata Industries Limited 0 0 0.00 0 0 0

Central Government 1 1 26.12 26.12 74446885 74446885

NON-PROMOTERS

Indian Public Financial Institutions 37 56 11.89 11.15 33875430 31779685

Indian Nationalised Banks 8 13 0.07 0.04 188438 103522

Foreign Financial Institutions 50 88 0.91 1.50 2602296 4287323

Foreign companies (shares held 2 2 7.48 8.70 21317826 24788680by The Bank of New York Mellon as depository for ADRs)

Non-resident individuals / 1057 563 0.09 0.03 255548 94455Overseas Corporate Bodies

Other Indian Bodies Corporate 1346 875 0.71 0.68 2037223 1925404

Others 69468 47136 2.70 1.69 7694366 4813589

Total 71976 48740 100 100 285000000 285000000

Dematerialisation of Shares and Liquidity

Approx 99.92% of the Company’s share capital available in the market is dematerialised as on 31 March 2010. TheCompany’s shares are regularly traded on the Stock Exchange Mumbai and the National Stock Exchange, as is evidentfrom the table containing stock market data.

Outstanding ADRs

10658913 ADRs (each representing two ordinary shares of the Company) are outstanding as of 31 March 2010. In respectof these ADRs, the option to convert into shares is alive.

COMMUNICATIONS


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SHARE CAPITAL HISTORY

Details of share capital history since incorporation is as follows:

Dates Particulars of Issue Number of Total Number Nominal Value

Shares of Shares of Shares (Rs.)

19.03.1986 Allotted as Purchase consideration for assets& liabilities of OCS 126 126 126,000

01.04.1986 Allotted as Purchase consideration for assets& liabilities of OCS +599,874 600,000 600,000,000

March 1991 Shares of Rs.1000/- each subdivided intoshares of Rs.10/- each NIL 60,000,000 600,000,000

06.02.1992 Bonus of 1:3 issued to Government of India. +20,000,000 80,000,000 800,000,000

Jan-Feb 1992 12 million shares disinvested in favour ofIndian Financial Institutions byGOI @ Rs.123/- per share NIL 80,000,000 800,000,000

1994-1995 2,382,529 Shares transferred to disinvestedparties as bonus shares NIL 80,000,000 800,000,000

27.03.1997 Raised its share capital by way of GDR Issue,and also GOI Divested 39 lakh shares in GDRmarkets @ US$13.93 per GDR equivalent toRs.1000 per share. +12,165,000 92,165,000 921,650,000

04.04.1997 Raised its capital by way of GDR Issue GreenShoe option @ US$13.93 per GDR equivalentRs.1000 per share. +2,835,000 95,000,000 950,000,000

Feb 1999 10 million shares divested by GOI in GDRmarkets @ US$9.25 per GDR equivalent toRs.786.25 per share. NIL 95,000,000 950,000,000

May 1999 396,991 shares Divested by GOI by way ofoffer of shares to employees @ Rs.294 pershare locked in for a period of 3 years. NIL 95,000,000 950,000,000

Sept 1999 10 lakh shares Divested by GOI in domesticmarkets @ Rs.750 per share. NIL 95,000,000 950,000,000

15.08.2000 Listing of ADRs on New York Stock Exchange NIL 95,000,000 950,000,000

24.11.2000 Bonus shares in the ratio of 2:1. +190,000,000 285,000,000 2,850,000,000

27.09.2001 Declared dividend @ 500% i.e. Rs.50/- pershare at 15 AGM. NIL 285,000,000 2,850,000,000

January 2002 Paid special interim Dividend of 750%i.e. Rs.75/- per share NIL 285,000,000 2,850,000,000

13.02.2002 25% Stake transferred to Tata Group’sinvestment vehicle Panatone Finvest Ltd.Govt holdings reduced to 27.97% from52.97%. Ceases to be a Government of IndiaEnterprise NIL 285,000,000 2,850,000,000

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21.02.2002 5264555 shares Divested by GOI by way ofoffer of shares to employees @ Rs.47.85 pershare locked in for a period of 1 year. NIL 285,000,000 2,850,000,000

10.04.02 Open Offer by Panatone Finvest Limited inaccordance with SEBI guidelines to acquireupto 57 million shares @ Rs.202/- per share NIL 285,000,000 2,850,000,000

08.06.02 Open offer complete with Panatone holdingtotal of 128249910 shares including57 million shares as above. NIL 285,000,000 2,850,000,000

Locations of Other Offices

Regional Offices: Mumbai, Chennai, Kolkata and New Delhi.

Branches: Ambattur, Arvi, Bengaluru, Bhubaneswar, Chandigarh, Coimbatore, Dehradun, Ernakulam, Gandhinagar, Goa,Guwahati, Hyderabad, Indore, Jaipur, Jalandhar, Kanpur, Patna, Pondicherry, Pune, Thiruvananthapuram.

Address for Correspondence

Dates Particulars of Issue Number of Total Number Nominal Value

Shares of Shares of Shares (Rs.)

Registered Office

VSB, Mahatma Gandhi Road,Fort, Mumbai - 400 001.Tel : +91 22 6657 8765Fax : +9122 6639 5162Email : [email protected] : www.tatacommunications.com

Corporate Office

Plot No. C-21 and C-36, G Block,Bandra Kurla Complex, Bandra (East)Mumbai – 400 098.Tel : +91 22 6657 8765Fax : +9122 6639 5162Email : [email protected] : www.tatacommunications.com

Compliance Officer

Mr. Satish RanadeCompany Secretary & Chief Legal OfficerPlot No. C-21 and C-36, G Block,Bandra Kurla Complex, Bandra (East)Mumbai – 400 098.Tel : +91 22 6657 8765Fax : +91 22 6725 1962Email : [email protected]

Any shareholder complaints/queries may be addressedto:

Registrar and Transfer Agents

M/s. Sharepro Services (India) Pvt. Ltd.(Unit: Tata Communications Limited)13 AB, Samhita Warehousing Complex,2nd Floor, Near Sakinaka Telephone Exchange,Andheri Kurla Road, Andheri (East),Mumbai – 400072.Tel : (022) 2851 1872, 67720300/400.Fax : (022) 26591586, 28508927.E-mail : [email protected]

Any queries relating to financial statements of theCompany may be addressed to:

Investor Relations CellTata Communications LimitedVSB, MG Road,Fort, Mumbai - 400 001.Tel : +91 (22) 66578765Fax: +91 (22) 66395162Email: [email protected]

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DIRECTORS’ RESPONSIBILITY STATEMENT FOR THE YEAR 2009-10

Pursuant to Section 217(2AA) of the Companies Act, 1956, the directors, based on the representations received from theoperating management, confirm that:

• In the preparation of the annual accounts, the applicable accounting standards have been followed and there are nomaterial departures;

• They have consulted the Statutory Auditors in the selection of the accounting policies and have applied themconsistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profit of the Company for thatperiod;

• They have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

• They have prepared the annual accounts on a going concern basis.

• All Board members and senior management personnel have affirmed compliance with the stipulated code of conduct.

On behalf of the Board of Directors

Subodh BhargavaDated: 5 July 2010 Chairman

Secretary Responsibility Statement

The Company Secretary & Chief Legal Officer confirms that the company has:

(i) maintained all the books of account and statutory registers required under the Companies Act,1956(“the Act”) and the rules made thereunder;

(ii) filed all the forms and returns and furnished all the necessary particulars to the Registrar of Companies and/orauthorities as required by the Act;

(iii) issued all notices required to be given for convening of board meetings and the general meeting, within the timelimit, if any, prescribed by law;

(iv) conducted the board meetings and annual general meeting as per the Act;

(v) complied with all the requirements relating to the minutes of the proceedings of the meetings of the directors andthe shareholders;

(vi) made due disclosures required under the Act including those required in pursuance of the disclosures made bythe directors;

(vii) obtained all the necessary approvals of directors, shareholders, the central government and other authorities asper the requirements;

(viii) effected share transfers and dispatched the certificates within the statutory time limit;

(ix) paid dividend amounts to the shareholders and transferred unpaid dividend amounts, if applicable, to the generalrevenue account of the central government or the investor education and protection fund within the time limitprescribed;

(x) complied with the applicable requirements of the listing agreement entered into with the stock exchanges in Indiaand the applicable requirements of the New York Stock Exchange.

The Company has also complied with other statutory requirements under the Companies Act, 1956 and other relatedstatutes in force.


Dated : 11 June 2010 & Chief Legal Officer

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DECLARATION REGARDING COMPLIANCE BY BOARDMEMBERS AND SENIOR MANAGEMENT PERSONNEL

WITH THE COMPANY’S CODE OF CONDUCT

This is to confirm that the Company has adopted a Code of Conduct for its Board Members and senior management ofthe Company.

I confirm that the Company has in respect of the financial year ended March 31, 2010, received from the senior managementteam of the Company and the Members of the Board a declaration of compliance with the Code of Conduct as applicableto them.

Place: Mumbai Satish Ranade N. SrinathDate: 11 June 2010 Company Secretary Managing Director & CEO

& Chief Legal Officer

CHIEF EXECUTIVE OFFICER (CEO) AND CHIEF FINANCIAL OFFICER (CFO)CERTIFICATION FOR THE YEAR 2009-10

As required under Clause 49(V) of the Listing Agreement with Indian Stock Exchanges, the undersigned hereby confirmthe following:

a) We have reviewed financial statements and the cash flow statement for the year and that to the best of ourknowledge and belief:

i) these statements do not contain any materially untrue statement or omit any material fact or contain statementsthat might be misleading;

ii) these statements together present a true and fair view of the Company’s affairs and are in compliance withexisting accounting standards, applicable laws and regulations.

b) There are, to the best of our knowledge and belief, no transactions entered into by the Company during the yearwhich are fraudulent, illegal or violative of the Company’s code of conduct.

c) We accept responsibility for establishing and maintaining internal controls for financial reporting and that we haveevaluated the effectiveness of internal control systems of the Company pertaining to financial reporting and havedisclosed to the Auditors and the Audit Committee, deficiencies in the design or operation of such internal controls,if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies.

d) We have indicated to the Auditors and the Audit Committee the following:

i) significant changes in internal control over financial reporting during the year, if any;

ii) significant changes in accounting policies during the year and that the same have been disclosed in the notesto the financial statements, if any; and

iii) There have been no instances of fraud of which we have become aware.

Place: Mumbai Sanjay Baweja N. SrinathDate: 11 June 2010 Chief Financial Officer Managing Director & CEO

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AUDITORS’ CERTIFICATE ON COMPLIANCE WITH THE CONDITIONS OF CORPORATEGOVERNANCE UNDER CLAUSE 49 OF THE LISTING AGREEMENTS

To the Members of

TATA COMMUNICATIONS LIMITED

We have examined the compliance with the conditions of corporate governance by TATA COMMUNICATIONS LIMITED(‘the Company) for the year ended on 31 March, 2010, as stipulated in Clause 49 of the Listing Agreement of the saidCompany with stock exchanges.

The compliance of conditions of Corporate Governance is the responsibility of the Company’s Management. Ourexamination has been limited to a review of the procedures and the implementation thereof, adopted by the Companyfor ensuring compliance with the conditions of corporate governance. It is neither an audit nor an expression of opinionon the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us and the representationsmade by the Directors and the Management, we certify that the Company has complied with the conditions of corporategovernance as stipulated in the above mentioned Listing Agreement.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiencyor effectiveness with which the Management has conducted the affairs of the Company.

For S. B. BILLIMORIA & CO.Chartered Accountants

(Registration No. 101496W)

Saira NainarPartner

Membership No: 40081Mumbai, 9 July, 2010

41

AUDITORS’ REPORT

TO THE MEMBERS OF TATA COMMUNICATIONS LIMITED

1. We have audited the attached Balance Sheet of TATACOMMUNICATIONS LIMITED (“the Company”) as at31st March, 2010, the Profit and Loss Account and theCash Flow Statement of the Company for the yearended on that date, both annexed thereto. Thesefinancial statements are the responsibility of theCompany’s Management. Our responsibility is toexpress an opinion on these financial statementsbased on our audit.

2. We conducted our audit in accordance with theauditing standards generally accepted in India. ThoseStandards require that we plan and perform the auditto obtain reasonable assurance about whether thefinancial statements are free of materialmisstatements. An audit includes examining, on a testbasis, evidence supporting the amounts and thedisclosures in the financial statements. An audit alsoincludes assessing the accounting principles used andthe significant estimates made by the Management,as well as evaluating the overall financial statementpresentation. We believe that our audit provides areasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report)Order, 2003 (CARO) issued by the Central Governmentin terms of Section 227(4A) of the Companies Act,1956, we give in the Annexure a statement on thematters specified in paragraphs 4 and 5 of the saidOrder.

4. Further to our comments in the Annexure referred toin paragraph 3 above, we report that:

(i) we have obtained all the information andexplanations which to the best of our knowledgeand belief were necessary for the purposes ofour audit;

(ii) in our opinion, proper books of account asrequired by law have been kept by the Companyso far as it appears from our examination of thosebooks;

(iii) the Balance Sheet, the Profit and Loss Accountand the Cash Flow Statement dealt with by thisreport are in agreement with the books ofaccount;

(iv) in our opinion, the Balance Sheet, the Profit andLoss Account and the Cash Flow Statement dealtwith by this report are in compliance with theAccounting Standards referred to in Section211(3C) of the Companies Act, 1956;

(v) in our opinion and to the best of our informationand according to the explanations given to us,the said accounts give the information requiredby the Companies Act, 1956 in the manner sorequired and give a true and fair view inconformity with the accounting principlesgenerally accepted in India:

(a) in the case of the Balance Sheet, of the stateof affairs of the Company as at 31st March,2010;

(b) in the case of the Profit and Loss Account, ofthe profit of the Company for the year endedon that date and

(c) in the case of the Cash Flow Statement, ofthe cash flows of the Company for the yearended on that date.

5. On the basis of the written representations receivedfrom the Directors as on 31st March, 2010 taken onrecord by the Board of Directors, we report that noneof the Directors is disqualified as on 31st March, 2010from being appointed as a director in terms of Section274(1)(g) of the Companies Act, 1956.



P. R. RameshPartner

(Membership No. 070928)

MUMBAI, 31 May, 2010


42

COMMUNICATIONS


ANNEXURE TO THE AUDITORS’ REPORT(Referred to in paragraph 3 of our report of even date)

(i) Having regard to the nature of the Company’sbusiness/ activities/ result for the year, clauses (vi), (xii),(xiii), (xiv), (xviii), and (xx) of CARO are not applicableto the Company.

(ii) (a) The Company has maintained proper recordsshowing full particulars, including quantitativedetails and situation of fixed assets.

(b) According to the information and explanationsgiven to us, the fixed assets were physicallyverified by the management in accordance withthe programme of verification, which in ouropinion, is reasonable having regard to the sizeof the Company and the nature of its assets. Thedifferences identified pursuant to the physicalverification have been duly adjusted in the booksof account. Having regard to the size of theCompany and on the basis of the explanationsreceived, in our opinion, the net unadjusteddifferences were not significant.

(c) The fixed assets disposed off during the year, inour opinion, do not constitute substantial part offixed assets of the Company and such disposalhas, in our opinion, not affected the goingconcern status of the Company.

(iii) (a) As explained to us, the stocks of stores and spareshave been verified by the Management inaccordance with the programme of verification.In our opinion, the frequency of verification isreasonable.

(b) In our opinion and according to the informationand explanations given to us, the proceduresphysical verification of stocks followed by theManagement are reasonable and adequate inrelation to the size of the Company and thenature of its business.

(c) In our opinion and according to the informationand explanations given to us, the Company ismaintaining proper records of inventory. Thediscrepancies noticed on verification between thephysical stocks and book records were notmaterial having regard to the size of theoperations of the Company.

(iv) According to the information and explanations givento us, the Company has not taken or granted any loanssecured or unsecured from or to companies, firms orother parties covered by the register maintainedunder Section 301 of the Companies Act, 1956.

(v) In our opinion and according to the information andexplanations given to us, there is adequate internalcontrol system commensurate with the size of theCompany and the nature of its business for thepurchase of inventory and fixed assets. The internalcontrol systems for rendering of certain enterprisedata services needs to be suitably strengthened.Except for the forgoing, we have not observed anycontinuing major weakness in the internal controlsystems.

(vi) (a) To the best of our knowledge and belief andaccording to the information and explanationsgiven to us, we are of the opinion that thetransactions that need to be entered into theregister maintained under Section 301 of theCompanies Act, 1956 have been so entered.

(b) In our opinion and having regard to ourcomments in paragraph (v)(a) above, andaccording to the information and explanationsgiven to us, transactions made in pursuance ofcontracts or arrangements entered in the registermaintained under Section 301 of the CompaniesAct, 1956 and exceeding value of Rupees fivelakhs in respect of any party during the year havebeen made at prices which are reasonable havingregard to prevailing market prices at the relevanttime, where such market prices are available.

(vii) In our opinion, the Company has an internal auditsystem commensurate with the size and nature of itsbusiness.

(viii) We have broadly reviewed the books of account andrecords maintained by the Company relating totelecommunication activities pursuant to the Rulesmade by the Central Government for the maintenanceof cost records under Section 209(1)(d) of theCompanies Act, 1956 and are of the opinion that primafacie, the prescribed accounts and records have been

43

made and maintained. We have, however, not made adetailed examination of the records with a view todetermining whether they are accurate or complete.

(ix) (a) According to the information and explanationsgiven to us, the Company is generally regular indepositing with appropriate authoritiesundisputed statutory dues including Providentfund, Investor Education and Protection Fund,Employees’ state insurance, Income tax, Wealthtax, Sales tax, Customs duty, Excise duty, Servicetax, cess and other material statutory duesapplicable to it.

(b) According to the information and explanationsgiven to us, no undisputed amounts payable inrespect of Provident fund, Investor Education andProtection Fund, Employees’ state insurance,Income tax, Sales tax, Customs duty, Excise dutyand cess were in arrears, as at March 31, 2010 fora period of more than six months from the datethey became payable.

(c) According to the information and explanationsgiven to us, details of dues of Sales tax, Servicetax and Income tax which have not beendeposited on account of any dispute are givenbelow:

Particulars Period to Forum where Amount

which the the dispute (Rs. in

amount is pending crores)

relates

Sales Tax 2005-06,

2006-07, Jt. Commissioner 117.11

2001-02 Commissioner 0.06

Entry Tax 2002-03, Deputy

2005-06 Commissioner 0.03

2007-08 Nagar Nigam

Meerut 0.04

Cess 2005-06 to Navi Mumbai 0.85

2008-09 Muncipal

Corporation

(x) The Company does not have accumulated losses. TheCompany has not incurred cash losses during thefinancial year covered by our audit and in theimmediately preceding financial year.

(xi) In our opinion and according to the information andexplanations given to us, the Company has notdefaulted in repayment of dues to a financialinstitution or bank or debenture-holders.

(xii) In our opinion and according to the information andexplanations given to us, the terms and conditionson which the Company has given guarantee for loanstaken by others from banks or financial institutionsare not prima facie prejudicial to the interest of theCompany.

(xiii) To the best of our knowledge and belief and accordingto the information and explanations given to us, inour opinion, term loans availed by the Company wereprima facie applied by the Company during the yearfor the purpose for which they were obtained.

(xiv) According to the information and explanations givento us, and on an overall examination of the BalanceSheet of the Company, funds raised on short termbasis have prima facie not been used during the yearfor long term investment.

(xv) According to the information and explanations givento us and the records examined by us, security/charges have been created in respect of secureddebentures issued.

(xvi) To the best of our knowledge and belief and accordingto the information and explanations given to us, nofraud by the Company and no material fraud on theCompany was noticed or reported during the year,although there have been few instances of receivablesbecoming doubtful of recovery, consequent uponfraudulent representation made by the customers, theamounts thereof are not material in the context ofthe size of the Company and the nature of thebusiness and which were subsequently written off.



P. R. RameshPartner

(Membership No. 070928)

MUMBAI, 31 May, 2010


44

COMMUNICATIONS


BALANCE SHEET AS AT 31 MARCH, 2010As at As at

Schedule 31 March, 2010 31 March, 2009Rs in crores Rs in crores

SOURCE OF FUNDS:SHARE CAPITAL 1 285.00 285.00RESERVES AND SURPLUS 2 6,995.78 6,513.05

TOTAL SHAREHOLDERS’ FUNDS 7,280.78 6,798.05SECURED LOANS 3 1,281.76 1,288.82UNSECURED LOANS 4 1,357.15 1,039.05DEFERRED TAX LIABILITY (NET) (Refer Note B17, Schedule 20) 175.11 133.25

TOTAL FUNDS EMPLOYED 10,094.80 9,259.17

APPLICATION OF FUNDS:FIXED ASSETS: 5(a) Gross Block 6,820.94 5,890.00(b) Less: Accumulated Depreciation/Amortisation 2,316.14 1,792.06

(c) Net Block 4,504.80 4,097.94(d) Capital work-in-progress 386.15 536.38

4,890.95 4,634.32

INVESTMENTS 6 2,501.30 2,723.67CURRENT ASSETS, LOANS AND ADVANCESA. CURRENT ASSETS

(a) Inventories 7 1.25 1.56(b) Sundry Debtors 8 632.29 1,343.22(c) Cash and Bank Balances 9 110.86 372.37(d) Other Current Assets 10 196.61 252.71

941.01 1,969.86B. LOANS AND ADVANCES 11 3,750.37 2,827.42

4,691.38 4,797.28

Less: CURRENT LIABILITIES AND PROVISIONS(A) CURRENT LIABILITIES 12 1,814.16 2,607.49(B) PROVISIONS 13 174.67 288.61

1,988.83 2,896.10

NET CURRENT ASSETS 2,702.55 1,901.18

TOTAL APPLICATION OF FUNDS 10,094.80 9,259.17

SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS 20

In terms of our report attached For and on behalf of the Board

For S.B. BILLIMORIA & CO.Chartered Accountants

P.R. RAMESH SUBODH BHARGAVA N SRINATHPartner Chairman Managing Director &

Chief Executive Officer

SANJAY BAWEJA SATISH RANADEChief Financial Officer Company Secretary & Chief Legal Officer

MUMBAI MUMBAIDATED: 31 May, 2010 DATED: 31 May, 2010

45

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH, 2010Schedule Year ended Year ended

31 March, 2010 31 March, 2009Rs in crores Rs in crores

INCOME:REVENUES FROM TELECOMMUNICATION SERVICES 3,218.04 3,749.43OTHER INCOME 14 125.75 169.82INTEREST INCOME 15 39.67 61.98

TOTAL INCOME 3,383.46 3,981.23

EXPENDITURE:SALARIES AND RELATED COSTS 16 418.44 355.53NETWORK COSTS 17 1,415.04 1,761.37OPERATING AND OTHER EXPENSES 18 638.12 786.02DEPRECIATION AND AMORTISATION 574.73 425.27(Net of transfer from Capital Reserve)INTEREST EXPENSE 19 246.08 190.60

TOTAL EXPENDITURE 3,292.41 3,518.79

PROFIT BEFORE TAXES AND EXCEPTIONAL ITEMS 91.05 462.44EXCEPTIONAL ITEMS:(a) CLAIM SETTLEMENT (Refer note B11, Schedule 20) — 95.60(b) PROFIT ON SALE OF LONG TERM INVESTMENT — (346.65)

(Refer note B5, Schedule 20)(c) INTEREST ON INCOME TAX REFUND (218.28) —

(Refer note B9, Schedule 20)

PROFIT BEFORE TAXES 309.33 713.49TAXES(a) CURRENT TAX 64.30 150.36(b) DEFERRED TAX EXPENSE 41.86 41.68(c) EXCESS PROVISION FOR TAX WRITTEN BACK (280.01) —

(Refer note B9, Schedule 20)(d) FRINGE BENEFIT TAX — 5.50

PROFIT AFTER TAXES 483.18 515.95BALANCE BROUGHT FORWARD FROM PREVIOUS YEAR 2,099.38 1,892.30ADD: ADJUSTMENT FOR PROFIT FOR MERGER OF — 2.72

VSNL BROADBAND LIMITED (VBL) (Refer note B10, Schedule 20)LESS: DEFERRED TAX ADJUSTMENT ON MERGER OF VBL — 7.44

(Refer note B17, Schedule 20)AMOUNT AVAILABLE FOR APPROPRIATIONS 2,582.56 2,403.53APPROPRIATIONS :(a) PROPOSED DIVIDEND (Refer note B3, Schedule 20) — 128.25(b) TAX ON DIVIDEND — 21.80(c) GENERAL RESERVE 48.32 51.60(d) DEBENTURE REDEMPTION RESERVE (Refer note B14, Schedule 20) 354.84 102.50

BALANCE CARRIED TO BALANCE SHEET 2,179.40 2,099.38

EARNINGS PER SHAREBasic/Diluted earnings per share (Rs.) 16.95 18.10(Refer Note B20, Schedule 20)








46

COMMUNICATIONS


CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH, 2010Year ended Year ended

31 March 2010 31 March 2009Rs in crores Rs in crores

CASH FLOWS FROM OPERATING ACTIVITIES1 PROFIT BEFORE TAXES AND EXCEPTIONAL ITEMS 91.05 462.44

Adjustments for:Depreciation and amortisation 574.73 425.27Prior year depreciation and excess depreciation written back (1.63) (0.07)(Profit)/loss on sale of fixed assets (2.67) 1.52Interest income (39.67) (61.98)Interest expense 246.08 190.60Fixed assets written down 8.01 3.37Dividend income on current investments — (21.56)Profit on sale and revaluation gain on current investments (31.15) (34.15)Provision for Contingencies 0.23 1.39Bad Debts written off 121.65 151.35Provisions for Doubtful advances 2.80 —Provisions for Doubtful Debts (92.18) 2.41Dividend income from long-term investments (4.10) (3.96)

OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 873.15 1,116.63Inventories 0.31 3.98Sundry debtors 681.46 (408.88)Other current assets 45.83 210.60Loans and advances 8.79 141.70Margin Money with Banks and Unpaid Dividend 0.14 0.32Restricted cash — (0.04)Current liabilities and provisions (784.10) 484.70

Cash generated from operations before tax and exceptional items 825.58 1,549.01Income tax paid (459.43) (366.74)

Cash generated from operations before exceptional items 366.15 1,182.27Interest on income tax refunds 218.28 —Claim settlement — (95.60)

NET CASH FROM OPERATING ACTIVITIES 584.43 1,086.672 CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of fixed assets (838.48) (1,315.11)Purchase of long-term investments (6.84) —Advance paid against equity share capital (0.04) (395.71)Sale/(Purchase) of current investments (net of mutual funds dividend re-invested) (net) 260.40 (226.63)Proceeds from sale of fixed assets 3.97 3.85Proceeds from sale of long-term investment — 424.22Loans to subsidiaries(net) (254.74) (543.03)Dividend income from long-term investments 4.10 3.96Fixed deposits (net) (0.24) (7.22)Interest received 49.94 49.96

NET CASH USED IN INVESTING ACTIVITIES (781.93) (2,005.71)3 CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from short term loans 2,738.84 1,387.13Repayment of short term loans (3,209.16) (1,232.42)Proceeds from long term loans 791.03 1,700.00Repayment of long term loans (9.68) (357.06)Dividends paid including dividend tax (150.23) (150.39)Interest paid (224.91) (142.88)

NET CASH FLOW FROM / (USED IN) FINANCING ACTIVITIES (64.11) 1,204.38

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (261.61) 285.34

CASH AND CASH EQUIVALENTS AS AT THE BEGINNING OF THE YEAR 363.87 78.53(Refer Note B16, Schedule 20)

CASH AND CASH EQUIVALENTS AS AT THE END OF THE YEAR 102.26 363.87(Refer Note B16, Schedule 20)

Notes :1. Figures in brackets represent outflows.2. Advance paid to Tata Communications Internet Services Ltd. of Rs. 290 crores is converted into cumulative convertible preference shares of Rs. 190 crores and

equity shares of Rs. 100 crores respectively and to Tata Communications Banking InfraSolutions Ltd. of Rs. 0.05 crores and VSNL SNOSPV Pte. Ltd. of Rs. 24.30crores have been converted into equity shares during the year ended 31 March, 2009.

3. Loans to Tata Communications International Pte. Ltd. of Rs. 208.46 crores have been converted into equity shares and to VSNL SNOSPV Pte. Ltd. of Rs. 94.41crores is converted into cumulative convertible redeemable preference shares during the year ended 31 March, 2009.







47

SCHEDULES FORMING PART OF THE BALANCE SHEETAs at As at

SCHEDULE - 1 31 March, 2010 31 March, 2009SHARE CAPITAL Rs in crores Rs in crores

AUTHORISED :300,000,000 (2009:300,000,000) Equity Shares of Rs.10 each 300.00 300.00

ISSUED, SUBSCRIBED AND PAID UP285,000,000 (2009: 285,000,000) Equity Shares of Rs.10 each, fully paid up 285.00 285.00

Of the above:

1) 60,000,000 (2009: 60,000,000) shares have been fully paid up, pursuant to a contract without payment being receivedin cash

2) 210,000,000 (2009: 210,000,000) shares have been allotted as fully paid bonus shares by capitalisation of GeneralReserve

3) 15,000,000 (2009: 15,000,000) shares are allotted as fully paid up by way of Euro issue,represented by 7,500,000American Depository Receipts (ADRs)

SCHEDULE - 2RESERVES AND SURPLUS

CAPITAL RESERVE (Refer Note B2, Schedule 20)Balance at the beginning of the year 207.69 208.29Less : Depreciation on assets gifted transferred to Profit and Loss account 0.45 0.60

207.24 207.69

SECURITIES PREMIUM ACCOUNTBalance at the beginning of the year 725.01 834.88Less: Adjustment pursuant to merger of VSNL Broadband limited

as approved by H’ble High Court (Refer Note B10, Schedule 20) — 109.87

Balance at the end of the year 725.01 725.01

GENERAL RESERVEBalance at the beginning of the year 3,378.47 3,326.87Add: Transferred from Profit and Loss account 48.32 51.60

3,426.79 3,378.47

DEBENTURE REDEMPTION RESERVEBalance at the beginning of the year 102.50 —Add: Transferred from profit and loss account (Refer Note B14, Schedule 20) 354.84 102.50

457.34 102.50

PROFIT AND LOSS ACCOUNTBalance carried forward 2,179.40 2,099.38

6,995.78 6,513.05


48

COMMUNICATIONS



SCHEDULE - 3 31 March, 2010 31 March, 2009SECURED LOANS Rs in crores Rs in crores

DEBENTURES (Refer Note B14(a), Schedule 20)

10,000, 11.70% Rated taxable Secured Redeemable Non-convertible Debenturesof face value Rs. 10 lakhs each 1,000.00 1,000.00

1,900, 11.00% Rated taxable Secured Redeemable Non-convertible Debenturesof face value Rs. 10 lakhs each 190.00 190.00

550, 11.20% Rated taxable Secured Redeemable Non-convertible Debenturesof face value Rs. 10 lakhs each 55.00 55.00

50, 11.25% Rated taxable Secured Redeemable Non-convertible Debenturesof face value Rs. 10 lakhs each 5.00 5.00

TERM LOAN

Term - Loan from Bank (note) 31.76 38.82

1,281.76 1,288.82

Note: Secured by Plant and Machinery of Rs. 127.00 crores and Office Equipments of Rs. 0.50 crores and Furniture andFixtures of Rs.0.50 crores

SCHEDULE - 4UNSECURED LOANS

DEBENTURES (Refer Note B14(b), Schedule 20)4000, 7.74% Rated taxable Unsecured Redeemable Non-convertible Debenturesof face value Rs. 10 lakhs each 400.00 —

1500, 9.50% Rated taxable Unsecured Redeemable Non-convertible Debenturesof face value Rs. 10 lakhs each 150.00 —

1500, 9.85% Rated taxable Unsecured Redeemable Non-convertible Debenturesof face value Rs. 10 lakhs each 150.00 —

LONG TERM LOANS[Repayable Rs. 405.25 crores within one year (2009: Rs. 0.13 crores)]

From Banks 524.86 450.00

From Others 13.55 —

SHORT - TERM LOANS FROM BANKS (Repayable within one year) 118.74 589.05

1,357.15 1,039.05

49

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50

COMMUNICATIONS



SCHEDULE - 6 31 March, 2010 31 March, 2009INVESTMENTS Number of shares Rs in crores Rs in croresI. TRADE INVESTMENTS (At Cost)A. Fully Paid Equity Shares (Unquoted)

Tata Teleservices Ltd. * 439,863,622 933.75 933.75(Equity shares of Rs 10 each)

New ICO Global Communications (Holdings) Limited 680,373 0.01 0.01(Class A common stock of US$ 0.01 each)

United Telecom Limited - Joint Venture 5,731,900 35.82 28.99(Equity shares of NRS 100 each)(1,093,060 Equity shares of NRS 100 each subscribedduring the year) (Refer Note B4, Schedule 20)

Cochin Submarine Cable Depot India Private Limited - Joint Venture 40,000 0.04 —(Equity shares of Rs.10 each)(40,000 Equity shares of Rs.10 each subscribed during the year)

B. Investment in Subsidiary Companies(i) Fully Paid Equity Shares (Unquoted)

Tata Communications Lanka Limited 13,661,422 7.41 7.41(Equity shares of LKR 10 each)

Tata Communications International Pte. Ltd. * 110,810,000 474.23 474.23(Equity shares of US$ 1 each) (Refer Note B6, Schedule 20)

Tata Communications Services (America) Inc. 3,000 1.31 1.31(Equity shares of US$ 0.01 each)

VSNL SNOSPV Pte. Ltd. * 769,333 3.29 3.29(Equity shares of US$ 1.00 each) (Refer Note B6, Schedule 20)

Tata Communications Internet Services Ltd. 195,004,050 194.47 194.47(Equity shares of Rs. 10 each) (Refer Note B6, Schedule 20)

Tata Communications Transformation Services Limited 500,000 0.50 0.50(Equity shares of Rs. 10 each)

Tata Communications Banking InfraSolutions Limited 50,000 0.05 0.05(Formerly known as Banking ATM InfraSolutions Limited)(Equity shares of Rs. 10 each)

S&A Internet Services Private Limited 10,000 0.01 —(Equity shares of Rs.10 each)(10,000 Equity shares of Rs.10 each subscribed during the year)

(ii) Fully Paid Preference Shares (Unquoted)Tata Communications International Pte. Ltd * 30,955,250 139.32 139.32

(Cumulative convertible redeemablePreference Shares of US$1 each)(Refer Note B6, Schedule 20)

Tata Communications Internet Services Limited 19,000,000 190.00 190.00(Cumulative convertible Preference Shares of Rs.100 each)(Refer Note B6, Schedule 20)

VSNL SNOSPV Pte. Ltd * 24,680,000 118.71 118.71(Cumulative convertible redeemablePreference shares of US $ 1 each)(Refer Note B6, Schedule 20)

2,098.92 2,092.04

* Equity investments in these companies are subject to certain restrictions on transfer as per the terms of individualcontractual agreements

51

II. OTHERS As at As at31 March, 2010 31 March, 2009

No. of Units Rs in crores Rs in croresINVESTMENT IN MUTUAL FUNDS (Unquoted)

Fixed Maturity Plan

UTI Fixed Income Interval Fund -Monthly Interval Plan I-Institutional Plan-Growth — 15.00

ICICI Prudential Interval Fund IV-Quarterly Interval Plan B-Institutional Plan-Growth — 25.00

Liquid Growth Plan

JM Money Manager Fund - Super Plus Plan - Growth — 60.17

Kotak Long Term Floater Growth — 60.28

ICICI Prudential Flexible Income Plan - Growth — 60.88

TATA Floater Fund - Growth — 25.00

Birla Sunlife Savings Fund - Institutional Plan - Growth 14,303,818 25.00 10.14

Fortis Money Plus - Institutional Plan - Growth — 80.04

HDFC Floating Rate Income Fund -Short Term Fund-Wholesale Plan-Growth — 60.06

IDFC Money Manager Treasury Plan B - Growth — 25.04

LIC MF Liquid Fund - Growth — 100.02

LIC Income Plus Fund-Growth — 100.00

Baroda Pioneer Treasury Advantage Fund-IP-Growth 74,804,905 77.54 —

DSP BlackRock Floating Rate Fund-IP-Growth 60,516 8.01 —

IDFC Money Manager Fund-Treasury Plan C-Growth 68,741,536 75.01 —

Kotak Flexi Debt Fund-IP-Growth 44,187,481 50.01 —

LIC Savings Plus Fund - Growth 76,658,737 112.06 —

ICICI Prudential Flexible Income Plan-Premium-Growth 2,628,862 45.00 —

ICICI Prudential Ultra Short Term Plan-Sup Premium-Growth 7,995,431 8.25 —

Reliance Medium Term-Growth 786,908 1.50 —

Short Term Growth Plan

Canara Robeco Short Tem Fund -Institutional Plan -Growth — 10.00

402.38 631.63

Total (I + II) 2,501.30 2,723.67

Book Value of unquoted investments 2,501.30 2,723.67All investments other than investment in Mutual Funds are long-term investment

SCHEDULES FORMING PART OF THE BALANCE SHEETSCHEDULE - 6INVESTMENTS (Contd.)


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SCHEDULE - 7 31 March, 2010 31 March, 2009INVENTORIES Rs in crores Rs in crores

Equipment for resale 0.08 0.08Less: Provision for obsolescence (0.08) (0.08)

— —Consumable stores and spares 1.25 1.56

1.25 1.56

SCHEDULE - 8SUNDRY DEBTORS (UNSECURED)Over six monthsConsidered good 166.32 549.67Considered doubtful 100.94 193.12

267.26 742.79Less: Provision for doubtful debts (100.94) (193.12)

166.32 549.67Other debtsConsidered good 465.97 793.55

632.29 1,343.22

SCHEDULE - 9CASH AND BANK BALANCES (Refer Note B16, Schedule 20)Cash in hand 0.05 0.06Cheques in hand 65.93 54.77Remittances in transit 2.57 0.28Current accounts with Scheduled Banks 34.35 54.10Deposit accounts with Scheduled Banks 7.96 263.16

110.86 372.37

SCHEDULE - 10OTHER CURRENT ASSETSInterest receivable (note) 16.23 26.50Service tax recoverable 48.32 95.82Pension contributions recoverable from Government of India[Net of provision of Rs. 53.71 crores; (2009: Rs. 53.71 crores)](Refer note B7, Schedule 20) 7.44 7.44NLD licence fees reimbursement recoverable from Government of India 0.64 0.64Licence fees paid under protest (Refer note B13, Schedule 20) 115.73 120.85Others 8.25 1.46

196.61 252.71

Note: Interest receivable includes interest due from subsidiaries of Rs. 14.31 crores (2009: Rs. 23.54 crores)

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SCHEDULE - 11 31 March, 2010 31 March, 2009LOANS AND ADVANCES (UNSECURED) Rs in crores Rs in crores

Considered good

Prepaid expenditure 119.37 97.81

Loans and advances to employees (note 1) 1.16 2.59

Deposits

– Public bodies 11.64 11.63

– Others 20.21 34.41

Advance recoverable in cash or kind for value to be received 83.21 83.94

Advance payment of tax (net of provision for tax) 2,092.85 1,417.70

Loans and advances to subsidiary companies, joint ventures and associate (note 2) 1,367.64 1,132.37

Others 54.29 46.97

3,750.37 2,827.42

Considered doubtful

Other loans and advances 10.41 7.61

Less: Provision for doubtful advances (10.41) (7.61)

3,750.37 2,827.42

Notes:

(1) Staff Advances includes loans due from officer of the Company Rs. 0.01 crores (2009:Rs. 0.01 crores)[Maximum amount due at any time during the year is Rs. 0.01 crores (2009: Rs. 0.01 crores)]

(2) Loans and advances to subsidiary companies, joint ventures and associate

Tata Communications International Pte. Ltd. 817.04 834.17

Tata Communications (Bermuda) Limited 0.16 0.01

VSNL SNOSPV Pte. Ltd. 407.08 151.59

Neotel (Pty)Ltd. 2.32 2.29

Tata Communications (Netherlands) BV 1.91 2.98

Tata Communications Lanka Ltd. 0.08 0.03

Tata Communications (UK) Limited — 0.29

Tata Communications (US) Inc. 4.29 0.30

Tata Communications Internet Services Limted 104.20 138.70

Tata Communications Transformation Services Limited 3.08 0.06

Tata Communications Banking InfraSolutions Limited(Formerly known as Banking ATM InfraSolutions Limited) 25.66 0.35

Videsh Sanchar Nigam Spain Srl 0.01 0.01

Tata Communications (America) Inc. 0.61 1.59

S&A Internet Services Pvt. Ltd. 1.06 —

United Telecom Limited 0.01 —

Cochin Submarine Cable Depot (India) Private Limited 0.13 —


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SCHEDULE - 12 31 March, 2010 31 March, 2009CURRENT LIABILITIES Rs in crores Rs in croresSundry Creditors:

– Creditors for interconnect charges 524.22 1,015.84

– Dues of micro, small and medium enterprise (Refer note B33, Schedule 20) 1.27 0.69

– Others (note 3) 631.79 794.88

Deferred revenues and advance received from customers 445.45 498.36

Liability towards Investors Education and Protection Fund under Section 205Cof the Companies Act 1956 (not due): Unpaid dividend (note 1) 0.60 0.78

Government of India Current Account 20.57 20.57

Other liabilities (note 2) 120.46 227.74

Interest accrued but not due on loans 69.80 48.63

1,814.16 2,607.49

Notes:

(1) There are no dividends due and outstanding for a period exceeding seven years.

(2) Includes Rs.10.22 crores overdrawn book bank balance (2009: Rs. 86.04 crores)

(3) Sundry creditors - others includes due to subsidiary companies,joint ventures and associate

Tata Communications (Canada) ULC 14.17 12.92

Tata Communications Lanka Ltd 0.01 —

Tata Communications Banking InfraSolutions Limited 0.20 —

Neotel Pty Ltd. 2.96 —

Videsh Sanchar Nigam Spain Srl. 0.18 0.18

Tata Communications (Hongkong) Limited — 0.06

Tata Communications International Pte Ltd — 5.02

Tata Communications Internet Services Limted 0.18 —

United Telecom Limited 9.11 9.32

Tata Communications Transformation Services Ltd. 2.67 1.51

Tata Communications UK Limited 1.01 1.36

Tata Communications (Japan) KK 0.46 —

SCHEDULE - 13PROVISIONSProvisions for employee benefits 156.71 120.46Provision for proposed dividend — 128.25Tax on dividend — 21.80Provision for contingencies (Refer Note B24, Schedule 20) 9.26 9.40Provision for taxes (net of advance taxes) 8.70 8.70

174.67 288.61

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SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNTYear ended Year ended

SCHEDULE - 14 31 March, 2010 31 March, 2009OTHER INCOME Rs in crores Rs in crores

Dividend Income from current Investments — 21.56

Dividend Income from investment in a subsidiary 4.10 3.96

Profit on sale of current investments (net) 31.15 34.07

Profit on sale of fixed assets (net) 2.67 —

Rent 19.84 21.98

Exchange gain (net) (12.28) 46.56

Provisions / Liabilities no longer required - written back 23.75 10.78

Other 56.52 30.91

125.75 169.82

SCHEDULE - 15INTEREST INCOME

Interest income

Bank Deposits 1.76 20.21[Tax deducted at source Rs.0.56 crores (2009: Rs. 1.67 crores)]

Other Loans and Advances (note) 37.91 41.77[Tax deducted at source Rs.5.51 crores (2009: Rs. 6.45 crores)]

39.67 61.98

Note:Interest on Loans and Advances includes Rs.37.66 crores (2009: Rs. 41.58 crores) from subsidiaries.Tax Deducted at source on such income is Rs.5.45 crores (2009: Rs. 6.45 crores)

SCHEDULE - 16SALARIES AND RELATED COSTS

Salaries and related costs 346.14 292.72

Contributions to provident,gratuity and other funds 33.20 31.69

Staff welfare expenses 39.10 31.12

418.44 355.53

SCHEDULE - 17NETWORK COSTS

Charges for use of transmission facilities 1,240.81 1,569.50

Royalty and licence fee to Department of Telecommunications 122.77 125.76

Rent of satellite channels 25.64 31.35

Rent of landlines [net of excess provision written back Rs. Nil(2009: Rs. 10.02 crores)] 20.88 28.66

Administrative lease charges 4.94 6.10

1,415.04 1,761.37


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SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNTYear ended Year ended

SCHEDULE - 18 31 March, 2010 31 March, 2009OPERATING AND OTHER EXPENSES Rs in crores Rs in crores

Consumption of stores 11.56 11.20

Light and power 107.72 90.87

Repairs and Maintenance:

– Buildings 12.99 11.13

– Plant and Machinery 120.81 148.53

– Others 14.87 14.48

Bad Debts written off 121.65 151.35

Provision for doubtful debts / (written back) (92.18) 2.41

Advances written off 3.81 —

Provision for doubtful advances 2.80 —

Rent 17.35 40.77

Rates and taxes 6.06 10.35

Travelling expenses 20.03 22.17

Telephone expenses 17.41 13.27

Printing, postage and stationery 3.89 2.69

Legal and professional fees 55.32 57.80

Advertising and publicity 19.35 8.13

Commissions 20.63 22.51

Services rendered by agencies 68.48 80.30

Insurance 9.89 7.82

Donations — 0.40

Loss on sale of fixed assets (net) — 1.52

Prior period adjustments (net) (0.77) 0.18

Other expenses 96.45 88.14

638.12 786.02

SCHEDULE - 19INTEREST EXPENSE

Interest paid on loans 93.66 143.20

Interest on Debentures 167.86 46.06

Other Interest 2.28 1.35

Less: Interest Capitalisation (17.72) (0.01)

246.08 190.60

Note:Interest expense (before capitalisation) includes interest on fixed loans of Rs. 245.65 crores (2009: Rs. 118.37 crores)

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SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTSSCHEDULE 20

A. SIGNIFICANT ACCOUNTING POLICIES

1. Basis of Preparation

The financial statements are prepared under the historical cost convention and the requirements of the CompaniesAct, 1956.

2. Use of estimates

The preparation of financial statements requires the management of the Company to make estimates and assumptionsthat affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as atthe date of the financial statements and reported amounts of income and expenses during the period. Examples ofsuch estimates include provisions for doubtful debts and advances, employee benefits, provision for income taxes,impairment of assets and useful life of fixed assets.

3. Fixed Assets

i) Fixed assets are stated at cost less accumulated depreciation. Cost includes freight, duties, taxes and all incidentalexpenses incurred to bring the assets to their present location and condition.

ii) Fixed assets received as gifts from other Foreign Telecom Carriers / vendors are capitalised and credited tocapital reserve on the basis of notional cost (cost assessed by custom authorities). Cost includes freight, insuranceand customs duty.

iii) Intangible assets in the nature of Indefeasible Rights of Use (IRUs) for international and domestictelecommunication circuits are classified under fixed assets. IRU agreements in respect of these intangiblesubstantially transfer all the risks and rewards of ownership.

iv) Jointly owned assets are capitalised in proportion to the Company’s ownership interest in such assets.

v) Costs of borrowing related to the acquisition or construction of fixed assets that are attributable to the qualifyingassets are capitalized as part of the cost of such asset. A qualifying asset is one which necessarily takes asubstantial period to get ready for its intended use. All other borrowing costs are recognized as an expense inthe period in which they are incurred in accordance with the Accounting Standard on “Borrowing Costs” (AS-16)notified by the Companies (Accounting Standards) Rules, 2006.

4. Depreciation

Depreciation is provided on the straight line method (SLM), at the rates and in the manner prescribed in ScheduleXIV to the Companies Act, 1956 except as follows:

Assets Rates of Depreciation /Period of amortisation

i) Plant and Machinery

a. Land cables 6.33%

b. Earth station and switches 7.92%

c. Other Networking equipments 11.88%

d. Customer premises cables & equipments 19.00%

ii) Indefeasible Rights of Use (IRU’s) Life of IRU or period of agreement,whichever is lower

iii) Leasehold Land Over the lease period

These rates are not less than those prescribed under Schedule XIV.


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SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS (Contd.)

5. Operating Leases

Lease arrangements where the risk and rewards incidental to ownership of an asset substantially vest with the lessorare classified as operating leases.

Rental income and rental expenses on assets given or obtained under operating lease arrangements are recognisedon a straight line basis over the term of the lease.

The initial direct costs relating to operating leases are recorded as expenses as they are incurred.

6. Impairment

At each balance sheet date, the Company reviews the carrying amounts of its fixed assets to determine whetherthere is any indication that those assets suffered an impairment loss. If any such indication exists, the recoverableamount of the asset is estimated in order to determine the extent of the impairment loss. The recoverable amount isthe higher of an asset’s net selling price and value in use. In assessing the value in use, the estimated future cashflows expected from the continuing use of the asset and from its ultimate disposal are discounted to their presentvalues using a pre-determined discount rate that reflects the current market assessments of the time value ofmoney and risks specific to the asset.

7. Investments

Long-term investments are valued at cost less provision for other than temporary diminution in value.

Current investments comprising investments in mutual funds are stated at the lower of cost or market value,determined on an individual investment basis.

8. Inventories

Inventories are valued at the lower of cost or net realisable value. Cost is determined on a weighted average basis.

9. Employee Benefits

i) Short Term Employee benefits

The undiscounted amount of short term employee benefits expected to be paid in exchange for servicesrendered by employees is recognized during the period when the employee renders the service. These benefitsinclude compensated absences such as paid annual leave and performance incentives payable within twelvemonths.

ii) Post employment benefits

Contributions to defined contribution retirement benefit schemes are recognized as expenses when employeeshave rendered services entitling them to the contributions.

For defined benefit schemes, the cost of providing benefits is determined using the Projected Unit CreditMethod, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses arerecognized in full in the profit and loss account for the period in which they occur. Past service cost is recognizedimmediately to the extent that the benefits are already vested, and otherwise is amortized on a straight-linebasis over the average period until the benefits become vested.

The retirement benefit obligation recognized in the balance sheet represents the present value of the definedbenefit obligation as adjusted for unrecognized past service cost, and as reduced by the fair value of schemeassets. Any asset resulting from this calculation is limited to past service cost, plus the present value of availablerefunds and reductions in future contributions to the scheme.

10. Revenue Recognition

i) Revenues from Telephony services are recognised at the end of each month based upon minutes of trafficcompleted in such month. A substantial portion of revenues are on account of recoveries from ForeignTelecommunication Carriers for incoming traffic and recovery from domestic carriers for delivery of calls onforeign and domestic networks.

59


ii) Revenues from Data services are recognised over the period of the respective arrangements based on contractedfee schedules.

iii) Revenues from right to use of fibre capacity provided based on IRU are recognised over the period of sucharrangements.

iv) Revenues from Internet Telephony services are recognised based on usage.

v) Dividends from investments are recognized when the right to receive payment is established and no significantuncertainty as to measurability or collectibility exists.

vi) Transactions with providers of telecommunication services such as buying, selling, swapping and/or exchangeof traffic are accounted for as non-monetary transactions depending on the terms of the agreements enteredinto with such telecommunication service providers.

11. Taxation

i) Current tax expense is determined in accordance with the provisions of the Income Tax Act, 1961. Deferred taxassets and liabilities are measured using the tax rates, which have been enacted or substantively enacted at thebalance sheet date. Deferred tax expense or benefit is recognized on timing differences being the differencesbetween taxable incomes and accounting incomes that originate in one period and are capable of reversing inone or more subsequent periods.

ii) In the event of unabsorbed depreciation and carry forward of losses, deferred tax assets are recognised only tothe extent that there is virtual certainty that sufficient taxable income will be available to realise these assets. Inother situations, deferred tax assets are recognised only to the extent that there is reasonable certainty thatsufficient future taxable income will be available to realise these assets.

iii) Provision for current income taxes and advance taxes arising in the same jurisdiction are presented in thebalance sheet after offsetting on an assessment year basis.

12. Foreign Currency Transactions

i) Foreign currency transactions are converted into Indian Rupees at rates of exchange approximating thoseprevailing at the transaction date or at average exchange rate during the transaction month. Foreign currencymonetary assets and liabilities are translated to Indian Rupees at the closing rate prevailing on the balancesheet date. Exchange differences on foreign currency transactions are recognized in the profit and loss account.

ii) Premium or discount on forward contracts are amortised over the life of such contracts and recognised in theprofit and loss account. Forward contracts outstanding as at the balance sheet date are stated at exchangerates prevailing at the reporting date and any gains or losses are recognised in the profit and loss account. Profitor loss arising on cancellation or enforcement/exercise of forward exchange is recognised in the profit and lossaccount in the period of such cancellation or enforcement/exercise.

13. Earnings Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders(after deducting preference dividends and attributable taxes) by the weighted average number of equity sharesoutstanding during the year. The weighted average number of equity shares outstanding during the year is adjustedfor events if any of bonus issue to existing shareholders and share split.

For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equityshareholders and the weighted average number of shares outstanding during the year are adjusted for the effects ofall dilutive potential equity shares from the exercise of options on unissued share capital. The number of equityshares is the aggregate of the weighted average number of equity shares and the weighted average number ofequity shares, which would be issued on the conversion of all the dilutive potential equity shares into equity shares.Options on unissued equity share capital are deemed to have been converted into equity shares.

14. Contingent Liabilities and Provision

Provisions are recognised in respect of present probable obligations, the amount of which can be reliably estimated.Contingent Liabilities are disclosed in respect of possible obligations that may arise from past events but their


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existence is confirmed by the occurrence or non-occurrence of one or more uncertain future events not whollywithin the control of the Company.

B. NOTES TO ACCOUNTS

1. The Company was incorporated on 19 March, 1986. The Government of India vide its letter No. G-25015/6/86OCdated 27 March, 1986, transferred all the assets and liabilities of the Overseas Communications Service (OCS) (part ofthe Department of Telecommunications, Ministry of Communications) as appearing in the Balance Sheet as at 31March, 1986 to the Company with effect from 01 April, 1986. As per the letter no. G-25015/6/86-OC dated 23 October,2001 of Government of India, Department of Telecommunications, there was no requirement to register a formaltransfer deed or deed of sale in the matter of such transfer of assets. During the year 2007-08, the Company changedits name to Tata Communications Limited and the fresh certificate of incorporation consequent upon the change ofname was issued by the Registrar of Companies, Maharashtra on 28 January, 2008.

2. Capital reserve includes Rs. 205.22 crores in respect of foreign exchange gains on unutilized proceeds from GlobalDepository Receipts credited to Capital Reserve in 2000-01 Rs. 203.70 crores and Rs. 1.52 crores in 2001-02.

3. The Board of Directors have recommended a dividend of Rs. NIL (2009: Rs. 4.50) per share for the year ended 31March, 2010.

4. The Company has an investment of Rs. 35.82 crores (2009: Rs. 28.99 crores) in United Telecom Ltd. Nepal (“UTL”)representing an equity interest of 26.66 percent (2009: 26.66 percent) in the issued and paid-up capital of UTL. In theopinion of the management, having regard to the long gestation period inevitable to the nature of the joint venture’sbusiness and future business projections, there is no other than temporary diminution, in value of the investments.

5. During the year 2008-09, in terms of the agreements entered into between Tata Teleservices Ltd. (“TTSL”), Tata SonsLtd. (“TSL”) and NTT DoCoMo, Inc. of Japan (Strategic Partner-SP), TSL gave an option to the Company to sell 36,542,378equity shares in TTSL to the SP, as part of a secondary sale of 253,163,941 equity shares effected along with aprimary issue of 843,879,801 shares by TTSL to the SP. Accordingly, the Company realized Rs 424.22 crores on sale ofthese shares resulting in a profit of Rs 346.65 crores which was reflected as exceptional item in the profit and lossaccount for the previous year.

If certain performance parameters and other conditions are not met, should the SP decide to divest its entireshareholding in TTSL, acquired under the primary issue and the secondary sale, and should TSL be unable to find abuyer for such shares, the Company is obligated to acquire the shareholding of the SP, at the higher of fair value or50 percent of the subscription purchase price, in proportion of the number of shares sold by the company to theaggregate of the secondary shares sold to the SP, or if the SP divests the shares at a lower price pay a compensationrepresenting the difference between such lower sale price and the price referred to above.

Further, in the event of breach of the representations and warranties (other than title and tax) and covenants notcapable of specific performance, the Company is liable to reimburse TSL, on a pro rata basis, up to a maximum sumof Rs 548.50 crores.

The exercise of the option by SP being dependent on several variables, the liability, if any, in this respect is remoteand indeterminable.

6. The Company has an investment of Rs. 474.23 crores (2009: Rs. 474.23 crores) in Equity Shares and Rs.139.32 crores(2009: Rs. 139.32 crores) in preference shares of Tata Communications International Pte. Ltd (“TCIPL”), Rs. 3.29 crores(2009: Rs. 3.29 crores) in Equity Shares and Rs. 118.71 crores (2009: Rs. 118.71 crores) in preference shares of VSNLSNOSPV Pte. Ltd (“SNOSPV”), Rs. 194.47 crores (2009: Rs. 194.47 crores) in Equity Shares and Rs.190.00 crores (2009:Rs. 190.00 crores) in preference shares of Tata Communications Internet Services Ltd (“TCISL”) wholly ownedsubsidiaries. In the opinion of the management, having regard to the nature of these subsidiaries’ businesses andfuture business projections, there is no other than temporary diminution, in value of the investments despite theaccumulated losses which has significantly eroded the net worth of these subsidiaries.

61


7. As at 31 March, 2010 the proportionate share of pension obligations and payments of Rs. 61.15 crores (2009 : Rs61.15 crores ) to the erstwhile Overseas Communications Service (“OCS”) employees were recoverable from theGovernment of India (“the Government”). Pursuant to discussions with the Government, the Company had made aprovision of Rs. 53.71 crores (2009 : Rs 53.71 crores) thereby having a net amount due from the Government towardsits share of pension obligations of Rs. 7.44 crores (2009 : Rs 7.44 crores).

8. Pursuant to acquisitions of Tyco Global Network (“TGN”) and Teleglobe (“TLGB”), the Company from 1 April, 2006adopted the Residual Profits Split Method (“RPSM”) for recording transactions pertaining to InternationalTelecommunications Services under its Transfer Pricing Policy. This policy governs the majority of the transactionsbetween the Company and its international subsidiaries. The Company’s subsidiary in the Netherlands is designatedas the Central Contracting Party (“CCP”) and Transfer Pricing Administrator (“TPA”).

9. During the year the Company received a favourable order from Income tax Appellate Tribunal (ITAT) pertaining tofinancial year 1993-94, which was further supported by a favourable legal advice. Consequently the Company haswritten back the corresponding tax provision of Rs. 280.01 crores. Interest on the above of Rs. 215.56 crores isincluded in Rs. 218.28 crores of interest on Income tax refund reflected as exceptional item in Profit and loss account.

10. The Board of Directors of the Company at its meeting held on 4 December, 2007 had approved the merger of theCompany’s wholly owned subsidiary, VSNL Broadband Limited with effect from 1 March, 2007.The Hon’ble HighCourt of Judicature at Bombay approved the scheme vide their order dated 3 April, 2009.a) Pursuant to the scheme of merger, profits of VBL for the period 1 March, 2007 to 31 March 2008 amounting to

Rs. 2.72 crores (net of tax) has been included in the Company’s opening balance of Profit and Loss Account.b) The excess of the cost of investment held by the Company in VSNL Broadband Limited over the net book value

of assets taken over by the Company amounting to Rs. 109.87 crores has been transferred to the SecuritiesPremium Account.

11. On 27 August, 2008, the Arbitration Tribunal (the “Tribunal”) of the International Chamber of Commerce, Haguehanded down a final award in the arbitration proceedings brought by Reliance Globalcom Limited (“Reliance”),formerly known as ‘FLAG Telecom’, against the Company relating to the Flag Europe Asia Cable System. The Tribunaldirected the Company to pay Rs. 95.60 crores (US$ 21.45 million) as final settlement against US$ 385 million claimedby Reliance. The amount of Rs. 95.60 crores was charged to Profit and Loss Account for the year ended 31 March2009 and disclosed as an exceptional item.

12. The Company had entered into an agreement with effect from 1 January, 2007 with one of its customers forcarriage of NLD traffic for a period of two years. In view of disputes between the parties, the agreement wastruncated with effect from July, 2008. Pending resolution of the dispute, the Company had not recorded the amountclaimed from the customer as there was no certainty of realizing the amount claimed. The matter was referred toConciliation and an award of Rs. 29 crores was made leaving the modalities of settlement to the parties. The discussionsare to be initiated and negotiated. The result of these negotiations on settlement cannot be reasonably estimatedand hence has not been recognized.

13. In January 2008, an amount of Rs. 295 crores was paid to the Department of Telecommunications (DoT) underprotest, towards payment of licence fees, interest and penalty demanded by DoT before issue of certain licences tothe Company. Against this, the Company carried a provision of Rs. 174. 15 crores for license fees and interest thereonwhich has been set off against the payment of Rs. 295 crores for the presentation in the financials. The Company hasfiled the petition in the Honorable Supreme Court of India challenging the judgement of TDSAT relating to thecomputation of license fee.Additionally, the Company has also filed a petition in the Telecom Disputes Settlement and Appellate Tribunal(TDSAT) challenging applicability of penal provisions under ILD and NLD licence agreements, whereby DoT claimedpenalty and interest on penalty amounting to Rs. 115.73 crores (included in aforesaid Rs. 295 crores). Consequently,the amount of Rs.115.73 crores together with the excess license fee paid of Rs. 5.12 crores (Payment of Rs. 295 croresas reduced by Rs. 289.88 crores computed by the Company for license fees, interest thereon and penalty) totalling toRs. 120.85 crores was reflected as an asset in the books as at 31 March, 2009.During the year, TDSAT has accepted the Company’s position and decided in favour of the Company. However, DoThas filed an appeal in the Honorable Supreme Court of India challenging the judgement of TDSAT relating to thewaiver of Penalty and Interest on Penalty. Further, DoT completed the assessment for year ended 31 March, 2006 inthe current fiscal and adjusted the aforesaid excess license fee of Rs. 5.12 crores; as a result, the balance amount ofRs. 115.73 crores is reflected as an asset in the books as at 31 March, 2010.


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14. Debentures

a) Secured Debentures

During the year 2008-09, the Company issued Rated Taxable Secured Redeemable Non-convertible Debenturesin demat form for cash at par on private placement basis aggregating Rs 1250 Crores. IDBI Trusteeship ServicesLimited has been appointed as trustee to the debenture issue.

i) Nature of Security

Rs. 1,000 crores, 11.70% debentures (face value of Rs. 10,00,000 each) are secured by a first legal mortgageand charge on the Company’s immovable property being the free hold land at Mouje Maharajpura, Gujaratand Plant and machinery represented by earth stations, network equipments, Land and sea cables,transmission equipments and other telecom equipments.

Rs. 250 crores, debentures (interest ranging from 11.00% to 11.25%, face value of Rs. 10,00,000 each) aresecured by a first legal mortgage and charge on the Company’s immovable property being the free holdland at Parambur Barracks, Chennai and Plant and machinery represented by land cable network andequipments.

ii) Redemption Terms

These debentures are due for redemption as given below-

Date of redemption as per 10000, 11.70% 1900, 11.00% 550, 11.20% 50, 11.25%terms of issue Debentures Debentures Debentures Debentures

Rs. in Crores

25 November, 2011 400

25 November, 2012 400

25 November, 2013 200

23 July, 2014 190

23 January, 2016 55

23 January, 2019 5

Total 1,000 190 55 5

For facilitating the above redemptions, the Company has created a Debenture Redemption Reserve ofRs 316.07 crores (2009 : Rs 102.50 crores) has been appropriated during the current year.

b) Unsecured Debentures

During the year, the Company has issued Rated, Unsecured, Taxable, Redeemable Non-convertible Debentures offace value Rs 10,00,000 each, in demat form for cash at par on private placement basis aggregating Rs 700 Crores.

i) Redemption Terms

Date of redemption as per 4000,7.74% 1500,9.50% 1500,9.85%terms of issue Debentures Debentures Debentures

Rs. in Crores

25 March, 2012 400

08 June, 2014 150

02 July, 2019 150

Total 400 150 150

For facilitating the above redemptions, the Company has created a Debenture Redemption Reserve ofRs 38.77 crores has been appropriated during the current year.

63


15. Employee Benefits:

Retirement Benefits

a) Defined Contribution plan

- Provident Fund

The Company makes contribution towards provident fund under a defined contribution retirement benefitplan for qualifying employees. The provident fund is administered by the Trustees of the TATA CommunicationsEmployees’ Provident Fund Trust. Under this scheme, the Company is required to contribute a specified percentageof payroll cost to fund the benefits.

The Rules of the Company’s Provident Fund administered by a Trust require that if the Board of Trustees areunable to pay interest at the rate declared for Employees’ Provident Fund by the Government under para 60 ofthe Employees’ Provident Fund Scheme, 1952 for the reason that the return on investment is less or for anyother reason, then the deficiency shall be made good by the Company. Having regard to the assets of the Fundand the return on the investments, the Company does not expect any deficiency in the foreseeable future.There has also been no such deficiency since the inception of the Fund.

Provident fund contributions amounting to Rs.13.45 crores (2009: Rs.11.36 crores) have been charged to theprofit and loss account.

b) Defined Benefit Plans

- Gratuity

The Company makes annual contributions under the Employees Gratuity Scheme to a fund administered byTrustees covering all eligible employees. The plan provides for lump sum payments to vested employees atretirement, death while in employment or on termination of employment of an amount equivalent to 15 dayssalary for each completed year of service or part thereof in excess of six months. Vesting occurs upon completionof five years of service.

- Medical Benefit

The Company reimburses domiciliary and hospitalization expenses not exceeding specified limits incurred byeligible and qualifying employees and their dependent family members under the Tata CommunicationsEmployee’s Medical Reimbursement Scheme. The scheme provides for cashless hospitalization where the claimsare directly settled by the Company.

- Pension Plan

The Company’s pension obligations relate to certain employees transferred to the Company from theOverseas Communications Service (“OCS”). The Company purchases life annuity policies from an insurancecompany to settle such pension obligations. During the year the Company has incurred a charge of Rs 7.77crores (2009 : Rs. 10.51 crores) to meet the additional pension obligation on account of increase in DearnessAllowances.

The details in respect of the status of funding and the amounts recognized in the Company’s financial statementsfor the year ended 31 March, 2010 for these defined benefit schemes are as under:


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(i) Changes in the defined benefit obligation:(Rs. in crores)

Defined Benefit Plans

Gratuity Medical Benefit(Funded) (Unfunded)

As at As at

31 March, 2010 31 March, 2009 31 March, 2010 31 March, 2009Projected defined benefit obligation,beginning of the year 32.71 27.41 35.68 31.54

Current Service Cost 2.84 2.33 4.45 4.03

Past Service Cost 13.07 - - -

Interest Cost 2.58 2.00 2.68 2.52

Liability transferred from / (to) other Companies 0.14 0.46 - -

Actuarial (gain) / loss (3.59) 2.00 5.91 6.69

Benefits paid (2.23) (1.49) (5.55) (9.10)

Projected benefit obligation at theend of the year 45.52 32.71 43.17 35.68

(ii) Changes in the fair value of plan assets for gratuity:(Rs. in crores)

As at As atParticulars 31 March, 2010 31 March, 2009

(Funded) (Funded)Fair value of plan assets, beginning of the year 30.10 30.73Expected return on plan assets 2.52 2.40Employer’s contribution 2.51 -Transfer (to)/from other Company 0.14 0.46Actuarial (loss)/ gain 0.62 (2.00)Benefits paid (2.23) (1.49)

Fair value of plan assets at the end of the period 33.66 30.10

(iii) The amounts recognised in the Profit and Loss Account for the year ended 31 March, 2010:(Rs. in crores)

Defined Benefit Plans

Gratuity Medical Benefits(Funded) (Unfunded)

As at As at

31 March, 2010 31 March, 2009 31 March, 2010 31 March, 2009

Current service cost 2.84 2.33 4.45 4.03Past service cost 13.07 - - -Interest cost 2.58 2.00 2.68 2.52Expected return on plan assets (2.52) (2.40) - -Net actuarial loss/(gain)recognised in the year (4.21) 4.00 5.91 6.69

Net Gratuity and MedicalBenefits Cost 11.76 5.93 13.04 13.24

65


iv) The amounts recognized in the Balance sheet is as follows

(Rs. in crores)Defined Benefit Plans


As at As at

31 March, 31 March, 31 March, 31March, 31March, 31March,2010 2009 2008 2010 2009 2008

Liability at the end of the year 45.52 32.71 27.41 43.16 35.68 31.54

Fair value of plan assets at theyear end (33.65) (30.10) (30.73) - - -

Net (asset)/liability inbalance sheet 11.87 2.61 (3.32) 43.16 35.68 31.54

(v) Categories of plan assets as a percentage of total plan assets:

Category of assets As at As at31 March, 2010 31 March, 2009

Percentage Percentage

Corporate Bonds - 1.97

State Government Bonds - 8.33

Insurer Managed Funds 100.00 89.70

Total 100.00 100.00

The Company’s policy and objective for plan assets management is to maximize return on plan assets tomeet future benefit payment requirements while at the same time accepting a low level of risk. The assetallocation for plan assets is determined based on the investment criteria approved under the Income TaxAct, 1961 and is also subject to other exposure limitations.

vi) Principal actuarial assumptions used in accounting for gratuity and medical benefit obligations:

(Percentage)Defined Benefit Plans


Assumptions As at As at

31 March, 2010 31 March, 2009 31 March, 2010 31 March, 2009

Discount rate 8.25 7.50 8.25 7.50

Expected return on plan assets 8.00 8.00 - -

Increase in compensation cost 6.00 6.00 6.00 6.00

Health care cost increase rate - - 2.00 2.00

The estimates of future compensation cost considered in the actuarial valuation take account of inflation,seniority, promotion and other relevant factors.


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vii). Effect of change in Assumed Health Care Cost Trend Rate. A one-percentage-point change in assumedhealth care cost trend rates would have the following effects:

(Rs. in crores)Defined Benefit Plans

As at As at31 March, 2010 31 March, 2009

1 Percentage point 1 Percentage point

Increase Decrease Increase DecreaseEffect on service cost 0.44 0.48 0.44 0.43Effect on interest cost 0.26 0.27 0.31 0.31Effect on post-employmentbenefit obligation 4.71 4.62 3.89 3.82

The Company expects to contribute Rs. 14.11 crores (2009: Rs. 2.08 crores) towards employer’s contributionfor funded defined benefit plans in 2010-11.

16. Cash and cash equivalents represent:As at As at

31 March, 2010 31 March, 2009Rs. in crores Rs. in crores

Cash and Cheques on hand and balances held with scheduled banks 100.33 108.93Remittances in transit 2.57 0.28Deposit accounts held with scheduled banks 7.96 263.16

110.86 372.37Deposits with original maturity over three months (7.92) (7.68)Margin Money held with banks (0.04) -Restricted Cash Balance (0.04) (0.04)Current Account / Deposits held for unpaid dividends (0.60) (0.78)

Cash and cash equivalents 102.26 363.87

17. Deferred tax liability:As at As at


Deferred tax liability

Difference between accounting and tax depreciation 270.51 261.63

Deferred tax assetsProvision for doubtful debts 33.53 67.02Provision for post-employment medical benefits and leave encashment 8.94 8.83pursuant to transitional provision of AS 15Provision for leave encashment 11.98 9.39Provision for Bonus 5.24 3.96Expenditure incurred on NLD license fees 19.23 21.47Unearned income and deferred revenues 12.62 14.28Others 3.86 3.43

95.40 128.38

Net deferred tax liability 175.11 133.25

Note: Amalgamation of VSNL Broadband Limited with the Company resulted in recognition of net deferred tax liabilityof Rs. 7.44 crores as on 31 March, 2008 which was adjusted against opening balance of the profit and loss account forthe year ended 31 March, 2009.

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18. Auditors Remuneration

Included in operating and other expenses:Year Ended Year ended


Auditors’ remuneration and expenses

(i) Audit fees 1.15 1.15(ii) Tax audit fees 0.25 0.22(iii) Other professional services 0.41 0.52(iv) Service tax * 0.22 0.23

Auditors’ remuneration excludes fees of Rs. 7.59 crores (2009: Rs. 14.16 crores) payable/paid for professional servicesto a firm of chartered accountants in which some partners of the firm of statutory auditors are partners.

* Service tax credit has been availed.

19. Managerial Remuneration

a) Managerial Remuneration for managing director and non-executive directors.

Year Ended Year Ended31 March, 2010 31 March, 2009

Rs. in crores Rs. in croresSalaries 0.63 0.68Contribution to provident and other funds 0.09 0.04Estimated monetary value of perquisites 0.13 0.14Commission 0.75 0.45Non-executive directors’ Commission - 0.27Non-executive directors’ sitting fees 0.17 0.21

1.77 1.79

b) Computation of Net Profit in accordance with Section 309(5) of the Companies Act,1956


Rs. in crores Rs. in crores

Profit before taxes 309.33 713.49

Add: Managerial Remuneration 1.77 1.79

Provision for doubtful debts (net) (92.18) 2.41

Provision for doubtful advances 2.80 -

Total (A) (87.61) 4.20Less: Profit on Sale of fixed Assets 3.23 2.06

Profit on Sale of Long term Investments - 346.65

Total (B) 3.23 348.71

Net profit as per Section 309(5) of the Companies Act, 1956 218.49 368.98

Maximum amount permissible for the Managing Directorunder section 309 of the Companies Act, 1956 10.92 18.45Remuneration to Managing Director including commission 1.60 1.31Maximum Commission permissible to Non-executive Directorsunder section 309 of the Companies Act, 1956 2.18 3.69Commission to Non-executive Directors - 0.27


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20. Earnings per Share


Rs. in crores, Rs. in crores,

Net Profit after tax 483.18 515.95Number of Shares 285,000,000 285,000,000Basic and Diluted Earning Per Share (Rs.) 16.95 18.10

21. Segment Reporting

a) Business Segments

The reportable segments for the year ended 31 March, 2010 and 31 March, 2009 are “Wholesale Voice”, “Enterpriseand Carrier Data” and “Others”. The composition of the reportable segments is as follows:

- Wholesale Voice: includes International and National Voice services.

- Enterprise and Carrier Data: includes corporate data transmission services like International Private LeasedCircuits (IPLC), Frame Relay (FR), Internet Leased Line Circuits (ILL) and National Private Leased Circuits(NPLC).

- Others: includes Virtual Private Network, Data Centre, TV up-linking, Transponder lease, Corporate InternetTelephony (CIT) and other services.

Rs. in croresYear Ended 31 March, 2010

Wholesale Enterprise and Others TotalVoice Carrier Data

Revenue from Telecommunicationand Other Services 1,247.01 1,322.63 648.40 3,218.04

Segment Profits 253.09 1,117.60 362.86 1,733.55

Unallocable expenses (net) 1,627.65Non Cash Expenses (unallocable) 14.85

Profit before taxes and exceptional items 91.05Exceptional Expenses/(Income) (net) (218.28)

Profit before taxes 309.33Tax expense (net) (173.85)

Profit after taxes 483.18

69


Rs. in croresYear Ended 31 March, 2009

Wholesale Enterprise and Others TotalVoice Carrier Data

Revenue from Telecommunication Services 1,740.59 1,450.46 558.38 3,749.43

Segment Profits 330.52 1,131.29 341.84 1,803.65

Unallocable expenses (net) 1,336.45Non Cash Expenses (unallocable) 4.76

Profit before taxes and exceptional items 462.44Exceptional Expenses/(Income) (net) (251.05)

Profit before taxes 713.49Tax expense (net) 197.54

Profit after taxes 515.95

i) Revenues and expenses, which are directly identifiable to segments, are attributed to the relevant segment.Expenses on rent of satellite channels and landlines, royalty and license fees are allocated on the basis of usage.The segment result is the segment revenues less the segment expenses. Certain costs, including depreciationwhich are not allocable to segments have been classified as “Unallocable expense”.

ii) Telecommunication services are provided utilizing the Company’s assets which do not generally make adistinction between the types of services. As a result, fixed assets are used interchangeably between segments.In the absence of a meaningful basis to allocate assets and liabilities between segments, no allocation has beenmade.

b) Geographical Segments:

The secondary reportable segments are Geographical. Revenues have been allocated to countries based onlocation of the customers and are as follows:

Segment revenues by Geographical MarketYear Ended Year Ended


India 2,433.75 2,905.84United Kingdom 140.30 183.41United States of America 129.31 136.03Singapore 65.09 97.37United Arab Emirates 65.23 103.83Saudi Arabia 43.96 48.97

Others* 340.40 273.98

3,218.04 3,749.43

*Others include amounts recorded as revenues from Tata Communication (Netherlands) BV of Rs 165.06 crores(2009 : Rs. 62.95 crores). Tata Communication (Netherlands) BV is a Central contracting party and a transferpricing administrator for inter-company transactions between Tata Communications Limited and its internationalsubsidiaries (Refer Note B-8, Schedule 20)


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22. Related Party Disclosures:

A. LIST OF RELATED PARTIES AND RELATIONSHIP

I. Investing parties (Promoters)

1 Panatone Finvest Limited

2 Tata Sons Limited

II. Subsidiaries (Held Directly)

1 Tata Communications Internet Services Limited

2 Tata Communications Banking InfraSolutions Limited(formerly known as Banking ATM InfraSolutions Limited)

3 Tata Communications Transformation Services Limited

4 Tata Communications Lanka Limited

5 Tata Communications Services (America) Inc.

6 Tata Communications International Pte. Ltd.

7 VSNL SNOSPV Pte Ltd

8 S&A Internet Services Private Limited (Date of Acquisition : 27 November, 2009)

III Other Subsidiaries (Held Indirectly)

1 Tata Communications (Australia) Pty Limited

2 Tata Communications (Belgium) SPRL

3 Tata Communications Services (Bermuda) Limited

4 Tata Communications (Bermuda) Limited

5 Tata Communications (Canada) ULC

6 VSNL International (IPCO) LLC

7 Tata Communications (US) Inc.

8 VSNL International (ITXC) Corp

9 Tata Communications (America) Inc.

10 VSNL International (Global) Corp.

11 Tata Communications (Middle East) FZ-LLC

12 Tata Communications (UK) Limited

13 Tata Communications (France) SAS

14 Tata Communications Deutschland GmbH

15 Tata Communications (Guam) LLC

16 Tata Communications (Hong Kong) Limited

17 Tata Communications (Hungary) LLC

71


18 Tata Communications (Ireland) Limited

19 TCPoP Communication GmbH (Date of Incorporation: 30 April, 2009)

20 Tata Communications (Taiwan) Limited (Date of Incorporation: 02 November, 2009)

21 Tata Communications (Italy) S.r.l

22 Tata Communications (Japan) KK

23 ITXC IP Holdings S.a r.l

24 Teleglobe International Luxembourg S.a r.l (Under Members’ Voluntary Liquidation)

25 TLBG Luxembourg Holdings Sarl (Under Members’ Voluntary Liquidation)

26 Tata Communications (Nordic) AS

27 VSNL International (Poland) Sp. z oo

28 Tata Communications (Portugal) Unipessoal LDA

29 Tata Communications (Portugal) Instalacao E Manutencao De Redes LDA

30 Tata Communications (Puerto Rico) Inc

31 Tata Communications (Russia) LLC

32 Teleglobe Asia Pte Ltd

33 Videsh Sanchar Nigam Spain Srl

34 Tata Communications (Sweden) AB

35 Tata Communications (Switzerland) GmbH

36 Tata Communications (Netherlands) B.V.

37 VSNL Telecommunications (Bermuda) Ltd (Liquidated vide order dated 24 April, 2009)

38 Teleglobe Bermuda Ltd (Liquidated vide order dated 09 October, 2009)

39 VSNL International (Hong Kong) Limited (Liquidated vide order dated 20 November, 2009)

40 VSNL UK Limited (Liquidated vide order dated 18 October, 2009)

41 Teleglobe International Limited (Liquidated vide order dated 20 October, 2009)

IV Joint Venture

1 United Telecom Limited

2 Cochin Submarine Cable Depot (INDIA) Private Limited (Incorporated on 31 December, 2008)

V Joint Venture / Associate of wholly owned subsidiary

1 Neotel (Pty) Ltd. (Held through VSNL SNOSPV Pte Ltd.)

2 SEPCO Communications Pty Ltd. (Held through VSNL SNOSPV Pte Ltd.)

3 BitGravity Inc. (Held through Tata Communications International Pte. Ltd.)(Incorporated on 14 December, 2009)

VI Key Managerial Personnel

Mr. N. Srinath Managing Director and Chief Executive Officer TCL Group


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B. Related party transaction(Rs. in crores)

Transactions Investing Subsidiaries Key Joint Joint TotalCompany Managerial Venture Venture/

Personnel Associatesof wholly

ownedsubsidiary

Dividend PaidPanatone Finvest Limited 47.10 - - - - 47.10

52.19 - - - - 52.19Tata Sons Limited 13.96 - - - - 13.96

10.92 - - - - 10.92

Total 61.06 - - - - 61.0663.11 - - - - 63.11

BEBP Expenses

Tata Sons Limited 7.87 - - - - 7.875.66 - - - - 5.66

Total 7.87 - - - - 7.875.66 - - - - 5.66

Revenues fromTelecommunicationservices

Tata Communications - 165.06 - - - 165.06(Netherlands) BV - 62.95 - - - 62.95

Tata Communications - 11.90 - - - 11.90International Pte. Ltd. - 7.60 - - - 7.60

Tata Communications - 0.45 - - - 0.45(Canada) ULC - - - - - -

Tata Communications - 8.03 - - - 8.03(America) Inc. - 5.60 - - - 5.60

Tata Communications - 0.53 - - - 0.53Deutschland GmbH - 0.48 - - - 0.48

Tata Communications - 5.12 - - - 5.12(Hongkong) Limited - 2.88 - - - 2.88

Tata Communications - 2.50 - - - 2.50(UK) Limited - 1.11 - - - 1.11

Tata Communications - 24.58 - - - 24.58(US) Inc. - 6.33 - - - 6.33

United Telecom Limited - - - 4.38 - 4.38- - - 2.19 - 2.19

73


B. Related party transaction (Contd.)(Rs. in crores)



ownedsubsidiary

Tata Communications - 0.15 - - - 0.15Lanka Limited - 0.55 - - - 0.55

Tata Communications - 0.30 - - - 0.30Transformation Services - 0.20 - - - 0.20Limited

Neotel Pty Ltd. - - - - 22.32 22.32- - - - 49.95 49.95

Tata Communications - 45.13 - - - 45.13Internet Services Limited - 37.63 - - - 37.63

Tata Communications - 5.77 - - - 5.77Services (America) Inc. - 1.39 - - - 1.39

Tata Sons Limited 1.16 - - - - 1.162.53 - - - 2.53

Tata Communications - 3.34 - - - 3.34Banking InfraSolutions - - - - - -Limited

Tata Communications - 0.01 - - - 0.01(Japan) KK - - - - - -

Tata Communications - 0.01 - - - 0.01(Australia) Pty Limited - - - - - -

S&A Internet - 0.02 - - - 0.02Services Pvt. Ltd. - - - - - -

Tata Communications - 0.05 - - - 0.05(France) SAS - - - - - -

Total 1.16 272.95 - 4.38 22.32 300.812.53 126.72 - 2.19 49.95 181.39

Network Cost


United Telecom Limited - - - 58.09 - 58.09- - - 36.99 - 36.99

Tata Communications - - - - - -Internet Services Limited - 0.20 - - - 0.20


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ownedsubsidiary

Neotel Pty Ltd. - - - - 2.82 2.82- - - - - -

Total - 7.92 - 58.09 2.82 68.83- 69.10 - 36.99 - 106.09

Purchase ofFixed Assets

Tata Communications - 0.30 - - - 0.30International Pte. Ltd. - - - - - -

Tata Communications - 11.56 - - - 11.56Internet Services Limited - - - - - -

Total - 11.86 - - - 11.86- - - - - -

Services rendered







VSNL SNOSPV Pte Ltd. - 1.59 - - - 1.59- 0.34 - - - 0.34

Tata Communications - - - - - -Lanka Limited - - - - - -


Total - 24.95 - - - 24.95- 15.91 - - - 15.91

75





ownedsubsidiary

Services received



Total 0.01 12.82 - - - 12.830.09 12.30 - - - 12.39

Equity capital contribution(Refer Cash Flow Statement)

Tata Communications - - - - - -International Pte. Ltd. - 208.46 - - - 208.46


Tata Communications - - - - - -Banking InfraSolutions - 0.05 - - - 0.05Limited

United Telecom Limited - - - 6.83 - 6.83- - - - - -

Cochin Submarine - - - 0.04 - 0.04Cable Depot (India) - - - - - -Private Limited

Total - - - 6.87 - 6.87- 308.51 - - - 308.51

Preference capitalcontribution


VSNL SNOSPV Pte. Ltd - - - - - -- 118.71 - - - 118.71

Total - - - - - -- 308.71 - - - 308.71


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ownedsubsidiary

Interest Income



Tata Communications - @ - - - @(Bermuda) Limited - 0.31 - - - 0.31

Tata Communications - 0.03 - - - 0.03(America) Inc. - @ - - - @

Tata Communications - - - - - -(Canada) ULC - @ - - - @

Tata Communications - - - - - -(Guam) LLC. - 0.17 - - - 0.17

Tata Communications - - - - - -(UK) Limited - 0.20 - - - 0.20


VSNL SNOSPV Pte. Ltd. - 7.43 - - - 7.43- 4.01 - - - 4.01

Tata Communications - @ - - - @Lanka Limited - @ - - - @

Videsh Sanchar - @ - - - @Nigam Spain Srl - 0.06 - - - 0.06

S&A Internet - 0.09 - - - 0.09Services Pvt. Ltd. - - - - - -

Tata Communications - 0.90 - - - 0.90Banking InfraSolutions - 0.01 - - - 0.01Limited

Total - 37.66 - - - 37.66- 41.64 - - - 41.64

77





ownedDividend Income subsidiary


Total - 4.10 - - - 4.10- 3.96 - - - 3.96

Loan given / ForexAdjustments



S&A Internet Services - 1.05 - - - 1.05Pvt. Ltd. - - - - - -



Total - 612.13 - - - 612.13- 570.95 - - - 570.95

Loan repaid




Total - 357.40 - - - 357.40- 102.16 - - - 102.16

Advances given bythe Company



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ownedsubsidiary

Tata Communications - 0.16 - - - 0.16(Bermuda) Limited - 21.42 - - - 21.42


Neotel Pty Ltd. - - - - 0.04 0.04- - - - 0.01 0.01

Tata Communications - 3.03 - - - 3.03Transformation Services - - - - - -Limited


Videsh Sanchar Nigam - @ - - - @Spain Srl - 5.18 - - - 5.18


Cochin Submarine Cable - - - 0.13 - 0.13Depot (India) Private Limited - - -

Tata Communications - 3.99 - - - 3.99(US) Inc - 13.11 - - - 13.11

Tata Communications - @ - - - @(Hong kong) Limited - @ - - - @




United Telecom Limited - - - 0.01 - 0.01- - - - - -


Tata Communications - - - - - -(America) Inc. - 1.61 - - - 1.61

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ownedsubsidiary

Tata Communications - - - - - -(Japan) KK - 8.48 - - - 8.48

Tata Communications - 11.07 - - - 11.07(Canada) ULC - - - - - -

Total - 39.71 - 0.14 0.04 39.89- 601.63 - - 0.01 601.64

Advances repaid to/taken from the Company/Forex Adjustments



Tata Communications - - - - - -(Bermuda) Limited - 21.56 - - - 21.56

Neotel Pty Ltd. - - - - - -- - - - 0.02 0.02

Tata Communications - @ - - - @(France) SAS - - - - - -


Tata CommunicationsInternet Services Limited - 35.83 - - - 35.83

- 765.31 - - - 765.31

Tata Communications - 6.64 - - - 6.64(Canada) ULC - 11.30 - - - 11.30


Tata Communications - - - - - -Services (America) Inc - @ - - - @

Tata Communications - - - - - -(US) Inc. - 13.76 - - - 13.76

Tata Communications - - - - - -(Japan) KK - 8.48 - - - 8.48


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ownedsubsidiary

Videsh Sanchar - - - - - -Nigam Spain Srl - 5.17 - - - 5.17


Total - 52.62 - - - 52.62- 857.65 - - 0.02 857.67

ManagerialRemuneration

N. Srinath - - 1.60 - - 1.60- - 1.31 - - 1.31

Total - - 1.60 - - 1.60- - 1.31 - - 1.31

BalancesReceivables


United Telecom Limited - - - - - -- - - 0.04 - 0.04




Tata Communications - 0.13 - - - 0.13Deutschland GmbH - 0.12 - - - 0.12


Tata Communications - 1.22 - - - 1.22Services (America) Inc - 1.14 - - - 1.14


Tata Communications - - - - - -Lanka Limited - 0.04 - - - 0.04

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ownedsubsidiary

Neotel Pty Ltd. - - - - 11.27 11.27- - - - 24.10 24.10



Tata Communications - 0.01 - - - 0.01(Australia) Pty Limited - - - - - -

Tata Comminications - 4.99 - - - 4.99(Hong Kong) Limited. - - - - - -

Tata Communications - 0.01 - - - 0.01(France) SAS - - - - - -

Tata Communications - 4.16 - - - 4.16Banking InfraSolutions - - - - - -Limited - - - - - -


Total 0.07 150.46 - - 11.27 161.800.34 112.18 - 0.04 24.10 136.66

Payables

Tata Communications - 2.67 - - - 2.67Transformation Services - 1.51 - - - 1.51Limited.

Videsh Sanchar Nigam - 0.18 - - - 0.18Spain Srl - 0.18 - - - 0.18



Tata Communications - 0.18 - - - 0.18Internet Services Limited - - - - - -

N. Srinath - - 0.75 - - 0.75- - 0.45 - - 0.45


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ownedsubsidiary


Tata Communications - - - - - -(Hong kong) Limited - 0.06 0.06

United Telecom Limited - - 9.11 - 9.11- - 9.32 - 9.32

Neotel Pty Ltd. - - - 2.96 2.96- - - - -

Tata Sons Limited 7.87 - - - 7.876.88 - - - 6.88

Tata Communications - 0.01 - - - 0.01Lanka Limited - - - - - -


Total 7.87 10.99 0.75 9.11 2.96 31.686.88 9.14 0.45 9.32 - 25.79

Loans Given


VSNL SNOSPV Pte Ltd. - 386.32 - - - 386.32- 137.28 - - - 137.28



Total - 1,226.55 - - - 1,226.55- 971.80 - - - 971.80

Advance Receivable


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ownedsubsidiary

VSNL SNOSPV Pte.Ltd. 20.77 - - - 20.7714.31 - - - 14.31

Tata Communications 0.16 - - - 0.16(Bermuda) Limited 0.01 0.01

Neotel Pty Ltd. - - - 2.32 2.32- - - 2.29 2.29

United Telecom Limited - - 0.01 - 0.01- - - -

Tata Communications 2.44 - - - 2.44International Pte. Ltd. - - - - -

S&A Internet Services @ - - - @Pvt. Ltd. - - - - -

Tata Communications 104.20 - - - 104.20Internet Services Limited 138.70 - - - 138.70

Tata Communications 0.61 - - - 0.61(America) Inc. 1.59 - - - 1.59

Tata Communications 1.91 - - - 1.91(Netherlands) BV 2.98 - - - 2.98

Tata Comminications @ - - - @(Hong Kong) Limited @ - - - @

Tata Communications @ - - - @Deutschland GmbH - -

Tata Communications 4.29 - - - 4.29(US) Inc. 0.30 - - - 0.30

Tata Communications 0.08 - - - 0.08Lanka Limited 0.03 0.03

Tata Communications @ - - - @Services (America) Inc @ - - - @

Videsh Sanchar Nigam 0.01 - - - 0.01Spain Srl 0.01 - - - 0.01

Tata Communications - - - - -(UK) Limited 0.29 - - - 0.29

Cochin Submarine Cable - - 0.13 - 0.13Depot (India) Private Limited - - - -


84

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ownedsubsidiary

Tata Communications 1.08 - - - 1.08Banking InfraSolutions - - - - - -Limited

Total - 138.63 - 0.14 2.32 141.09- 158.28 - 2.29 160.57

Advance Payable



Tata Communications - 0.57 - - - 0.57(UK) Limited - - -


-

Tata Communications - @ - - - -@

(France) SAS - - - - - -

Total - 7.89 - - - 7.89- 11.92 11.92

Advance against equity

VSNL SNOSPV Pte. Ltd - @ - - - -@

- - - - - -

Total - @ - - - @- - - - - -

Interest Accrued-otherdeposits

VSNL SNOSPV Pte. Ltd 3.24 - - - 3.243.10 - - - 3.10

Tata Communications 10.08 - - - 10.08International Pte. Ltd. 20.43 - - - 20.43

S&A Internet Services 0.09 - - - 0.09Pvt. Ltd. - - - - -

Tata Communications 0.90 - - - 0.90Banking InfraSolutions 0.01 - - - 0.01Limited

85





ownedsubsidiary

Total - 14.31 - - - 14.3123.54 - - - 23.54

Guarantees on behalf of subsidiaries

Tata Communications - 2,115.47 - - - 2,115.47(Netherlands) BV - 2,389.48 - - - 2,389.48

Tata Communications - 2,827.61 - - - 2,827.61International Pte. Ltd. - 1,786.82 - - - 1,786.82

VSNL SNOSPV Pte. Ltd - 479.40 - - - 479.40- 673.80 - - - 673.80






Total - 5,512.76 - - - 5,512.76- 4,941.03 - - - 4,941.03

Letter of Comfort onbehalf of subsidiaries

VSNL SNOSPV Pte. Ltd - 202.55 - - - 202.55- - - - - -


Tata Communications - 225.05 - - - 225.05(Netherlands) BV - - - - - -

Tata Communications - 675.15 - - - 675.15(Bermuda) Limited - - - - - -


86

COMMUNICATIONS


Tata Communications - 52.00 - - - 52.00Banking InfraSolutions Limited - - - - - -

Tata Communications - - - - - -(US) Inc. - 89.48 - - - 89.48


Total - 1,226.77 - - - 1,226.77- 170.82 - - - 170.82

Note - @ represents transaction of amount less than Rs. 50,000/-

23. Operating lease arrangements:

(a) As lessee:

Year ended Year ended31 March, 2010 31 March, 2009

Rs. in crores Rs. in croresMinimum lease payments under operating leasesrecognised as expense in the year 18.82 24.06

At the balance sheet date, minimum lease payments under non-cancellable operating leases fall due as follows:


Rs. in crores Rs. in croresDue not later than one year 15.20 17.28Due later than one year but not later than five years 14.54 18.90Later than five years 1.17 2.25

30.91 38.43

Operating lease payments represent rentals payable by the Company for certain buildings and satellite channels.

(b) As lessor:

i) The Company has leased under operating lease arrangements certain Indefeasible Rights of Use (“IRU”)with gross carrying amount and accumulated depreciation of Rs. 84.33 crores (2009: Rs.84.33 crores) andRs. 27.80 crores (2009: Rs. 22.30 crores ) respectively as at 31 March, 2010. Depreciation expense of Rs. 5.50crores (2009: Rs. 5.51 crores) in respect of these assets has been charged in the Profit and Loss Account forthe Year Ended 31 March, 2010.

In case of certain lease agreements aggregating Rs. 331.85 crores ( 2009: Rs. 272.31 crores) for the yearended 31 March, 2010, the gross block, accumulated depreciation and depreciation expense of the assetsgiven on IRU basis is not readily determinable and hence not disclosed. The lease rentals associated withsuch IRU arrangements for the year ended 31 March, 2010 amounts to Rs. 27.74 crores (2009:Rs. 23.39crores).





ownedsubsidiary

87

In respect of such leases, rental income of Rs. 34.59 crores (2009: Rs. 30.24 crores) has been recognized inthe profit and loss account for the Year Ended 31 March, 2010.

Future lease rental receipts will be recognized in the Profit and Loss Account of subsequent years as follows:


Rs. in crores Rs. in croresNot later than one year 33.81 29.09Later than one year but not later than five years 132.02 116.38Later than five years 155.97 145.43

321.80 290.90

ii) The Company has leased certain premises under operating lease arrangements. Future lease rental incomein respect of these leases will be recognised in the profit and loss account of subsequent years as follows:


Rs. in crores Rs. in croresNot later than one year 0.01 0.01Later than one year but not later than five years @ 0.01Later than five years - -

0.02 0.02

Note - @ represents future lease rental income of amount less than Rs. 50,000/-

Lease rental income of Rs. 0.01 crores (2009: Rs. 0.01 crores) in respect of the above leases has beenrecognised in the profit and loss account for the current year.

24. Provision for Contingencies:

Rs. in crores

31 March, 2010 31 March, 2009Asset Asset

Retirement RetirementObligation Others Total Obligation Others Total

Opening Balance 0.40 9.00 9.40 6.16 9.00 15.16Addition 0.10 - 0.10 - - -Utilisation (0.01) - (0.01) (4.37) - (4.37)Provision written back (0.23) - (0.23) (1.39) - (1.39)

Closing Balance 0.26 9.00 9.26 0.40 9.00 9.40

1. The provision for Asset Retirement Obligation has been recorded in the books of the Company in respect ofundersea cables and switches owned by the Company.

2. Others include amounts provided towards claims made by a creditor of the Company.



88

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25. Contingent Liabilities and Capital Commitments



Guarantees given on behalf of subsidiaries (Refer note 1) 5,512.76 4,941.03

i. Claims for taxes on income (Refer note 2 )

(a) Income tax disputes where the department is inappeal against the Company 322.00 310.61

(b) Income tax disputes where the Company has afavorable decision in other assessment year for the same issue 22.39 22.39

(c ) Income tax disputes other than the above 1,448.89 1,521.78

ii. Claims for other taxes 118.08 49.80iii. Other claims 495.08 788.71

Notes:

(1) Guarantees given on behalf of subsidiaries

The guarantees have been provided in the ordinary course of business and no liability on the Company isexpected to materialize in this respect.

(2) Significant claims by the revenue authorities in respect of income tax matters are in respect of deductionsclaimed under Section 80-IA of the Income Tax Act, 1961 from Assessment Year 1996-97 onwards havebeen disallowed by the revenue authorities. The Company has contested the disallowance and has preferredappeals which are pending.

(3) The Company has taken appropriate professional advice in respect of the claims / appeals and has taken allnecessary steps to protect its interest. Based on expert opinion, no provision is required in respect of theseclaims / appeals.

(4) As on 31 March, 2010, the Company has issued Letters of Comfort for the credit facility agreement inrespect of various subsidiaries –

Name of Subsidiary Year Ended Year Ended31 March, 2010 31 March, 2009

Rs. in crores Rs. in croresTata Communications (US) Inc (TCU) - 89.48

Tata Communications Transformation Services Ltd (TCTSL) 27.01 30.50

Tata Communications International Pte Ltd. (TCIPL) 45.01 50.84

VSNL SNOSPV Ltd 202.55 -

Tata Communications (Netherland) Ltd 225.05 -

Tata Communications (Bermuda) Ltd 675.15 -

Tata Communications Banking InfraSolutions Ltd (TCBIL) 52.00 -

The Company has undertaken to the lenders of TCU, TCTSL and TCIPL that it shall retain full managementcontrol so long as amounts are due to the lenders.

(5) The Company has issued a support letter to Tata Communications International Pte. Limited (TCIPL), forproviding financial support enabling, in turn, TCIPL to issue such support letters to certain subsidiarieshaving negative net worth as at 31 March, 2010 aggregating Rs. 1,508.41 crores (2009 : Rs 1,417.55 crores)in various geographies in order that they remain going concerns with reference to the provisions ofapplicable insolvency laws in their country of residence.


89


The Company has also issued a support letter to Tata Communications Internet Services Limited (TCISL) forproviding financial support so that it remains going concern with reference to the provisions of applicableinsolvency laws in the country.The letters of comfort / support mentioned in (4) and (5) above have been provided in the ordinary courseof business and no liability on the company is expected to materialize in these respects.

(6) Contingent liabilities, if any, in respect of sale of shares of Tata Teleservices Limited has been stated in NoteB-5, schedule 20.

B. Capital commitmentsEstimated amount of contracts remaining to be executed on capital account (including loan commitment towholly owned subsidiaries), not provided for Rs. 2,489.86 crores (2009: Rs. 2,350.08 crores).

26. Value of Imports on C.I.F. basisYear Ended Year Ended


Stores, Spares and others 12.30 11.42Capital Goods 251.09 458.39

27. Earnings in foreign currenciesYear Ended Year Ended


Revenue from telecommunication services 774.31 865.32Interest income 36.67 41.58Dividend Income 4.10 3.96Other income 16.44 22.34

831.52 933.20

28. Expenditure in foreign currenciesYear Ended Year Ended


Charges for use of transmission facilities 453.75 790.76Rent of satellite channels 12.42 24.16Administrative lease charges 4.94 6.10Repairs and maintenance 89.52 81.01Legal and professional fees 7.12 28.21Settlement of claims - 95.60Interest 2.21 5.12Others 16.47 6.36

586.43 1,037.32


90

COMMUNICATIONS


29. Value of imported and indigenous stores/spares consumedYear Ended Year Ended

31st March, 2010 31st March, 2009Rs. in crores Rs. in crores

Value Percentage Value Percentage

Imported 0.04 0.37 1.45 12.95Indigenous 11.52 99.63 9.75 87.05

11.56 100.00 11.20 100.00

30. United Telecom Limited (“UTL”) is a Joint Venture between the Company, Mahanagar Telephone Nigam Limited,Telecommunications Consultant India Limited and Nepal Ventures Private Limited. The Company has 26.66 percentequity ownership in UTL. UTL operates basic telephony services in Nepal based on Wireless-in-local loop technology.

The Company’s share in income, expenses, assets and liabilities of UTL based on management accounts for the YearEnded 31 March, 2010 and Year Ended 31 March, 2009 are as follows:


Rs. In crores Rs. In crores

Income 27.13 13.04

Expenses 27.11 13.58


Rs. In crores Rs. In crores

Assets 35.93 36.52

Liabilities 15.32 22.48

Contingent liability in respect of claims of taxes and duties Rs. Nil (2009: Rs. Nil).

31. In the previous year, the Company had entered into a Joint Venture (40:60) with Indian Ocean Cableship Pte. Ltd.Singapore for investment in M/s Cochin Submarine Cable Depot (India) Private Limited. During the year, the Companyhas subscribed to 40,000 shares of face value Rs 10 each amounting to Rs 0.04 crores.

32. Net Dividend remitted to non-resident shareholders in foreign currency

The Company has not remitted any amount in foreign currencies on account of dividends during the year and doesnot have information as to the extent to which remittances, if any, in foreign currencies on account of dividendshave been made by/on behalf of non – resident shareholders. The particulars of final dividends for the year ended31 March, 2009 paid to non – resident shareholders are as under:


Number of non-resident shareholders 822 794Number of shares held by them 26,633,326 23,089,178Year to which dividend relates 2008-09 2007-08Amount remitted net of tax (Rs. in crores) 11.98 10.39

33. Micro, Small and Medium Enterprises

According to information available with the Management, on the basis of intimation received from suppliers regardingtheir status under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act), the Company hasamounts due to Micro and Small Enterprises under the said Act as at 31 March, 2010 as follows :


91



Rs. in crores Rs. in crores(a) i. Principal amount remaining unpaid to any supplier

beyond scheduled date as on 31 March, 2010 0.01 0.64

ii. Interest on (a)(i) above 0.00 0.05

(b) i. The amount of principal paid beyond the appointed date 2.70 12.02

ii. The amount of interest paid beyond the appointed date — —

(c) Amount of interest due and payable on delayed payments 0.03 —

(d) Amount of interest accrued and due as on 31 March, 2010 0.03 0.05

(e) Total outstanding dues of micro, small and medium enterprises 1.27 0.69

34. Disclosure as required under clause 32 of the Listing Agreement

a) Amount of loans and advances in the nature of loans outstanding from subsidiaries during the year ended31 March, 2010

Name of the Company Outstanding as at Maximum Investment in Investment in31 March, 2010 amount shares of shares of

outstanding the Company subsidiariesduring the year of the Company

Rs. in crores Rs. in crores No of shares No of shares

Tata CommunicationsInternational Pte Ltd 817.04 1,221.52 - 110,810,000

VSNL SNOSPV Pte.Ltd 407.08 420.60 - 769,333

Tata CommunicationsLanka Ltd 0.08 0.08 - 13,661,422

Tata CommunicationsInternet Services Limted 104.20 140.02 - 195,004,050

Tata CommunicationsTransformation Services Limited 3.08 3.08 - 500,000

Tata Communications BankingInfraSolutions Limited 25.66 25.66 - 50,000

S&A Internet Services Private Limited 1.06 1.06 - 10,000

b) The details of remuneration to the whole-time director during the year 2009-10 are as follows:

(Rs. in crores)

Name Salary Perquisites & CommissionAllowances

Mr. N. Srinath 0.72 0.13 0.75

Total 0.72 0.13 0.75

35. Previous year’s figures have been regrouped and reclassified wherever necessary.


92

COMMUNICATIONS


21. Balance Sheet Abstract and Company’s General Business Profile in terms of Part IV of Schedule VI to the CompaniesAct, 1956.

I. Registration Details

Registration No. 3 9 2 6 6 State Code 1 1 (REFER CODE LIST)

Balance Sheet Date 3 1 0 3 2 0 1 0

Date Month Year

II. Capital Raised during the year (Amount in Rs. Crores)Public Issue Right Issue

N I L N I L

Bonus Shares Private Placement

N I L N I L

III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Crores)Total Liabilities Total Assets

1 0 0 9 4 . 8 0 1 0 0 9 4 . 8 0

Source of FundsPaid-up Capital Reserves & Surplus

2 8 5 . 0 0 6 9 9 5 . 7 8

Secured Loans Unsecured Loans

1 2 8 1 . 7 6 1 3 5 7 . 1 5

Deferred Tax Liabilities

1 7 5 . 1 1

Application of FundsNet Fixed Assets Investments

4 8 9 0 . 9 5 2 5 0 1 . 3 0

Net Current Assets Misc. Expenditure

2 7 0 2 . 5 5 N I L

Accumulated Losses

N I L

IV. Performance of Company (Amount in Rs. Crores)Turnover Total Expenditure

3 2 1 8 . 0 4 3 2 9 2 . 4 1

� Profit/Loss Before Tax � Profit/Loss After Tax

+ - 3 0 9 . 3 3 + - 4 8 3 . 1 8

(Please tick appropriate box + for Profit, - for Loss)Earning per Share in Rs. Dividend%

1 6 . 9 5 N I L

93

V. Generic Names of Three Principal Products/Services of Company (as per monetary terms)

Item Code No. (ITC Code)*

Product Description T E L E C O M M U N I C A T I O N S

S E R V I C E S

Item Code No. (ITC Code)

Product Description

Item Code No. (ITC Code)

Product Description

* Note : For ITC code of products please refer to the publication Indian Trade Classification based on harmonized commoditydescription and coding system by Ministry of Commerce, Directorate General of Commercial Intelligence & Statistics,Calcutta - 700 001

ANNEXURE ICode List 1 : State Codes

State Code State Name State Code State Name

01 Andhra Pradesh 02 Assam03 Bihar 04 Gujarat05 Haryana 06 Himachal Pradesh07 Jammu & Kashmir 08 Karnataka09 Kerala 10 Madhya Pradesh11 Maharashtra 12 Manipur13 Meghalaya 14 Nagaland15 Orissa 16 Punjab17 Rajasthan 18 Tamil Nadu20 Uttar Pradesh 21 West Bengal22 Sikkim 23 Arunachal Pradesh24 Goa 52 Andaman Islands53 Chandigarh 54 Dadra Islands55 Delhi 56 Daman & Diu57 Lakshwadeep 58 Mizoram59 Pondicherry

For and on behalf of the Board

SUBODH BHARGAVA N. SRINATHChairman Managing Director &


SANJAY BAWEJA SATISH RANADEChief Financial Officer Company Secretary & Chief Legal OfficerMUMBAIDATED: 31 May, 2010


94

COMMUNICATIONS


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96

COMMUNICATIONS


CONSOLIDATED FINANCIALSTATEMENTS 2009-10

97

AUDITORS’ REPORT ON CONSOLIDATED FINANCIAL STATEMENTSTO THE BOARD OF DIRECTORS OF TATA COMMUNICATIONS LIMITED

1) We have audited the attached Consolidated BalanceSheet of TATA COMMUNICATIONS LIMITED (“theCompany”), its subsidiaries and jointly controlledentities (the Company, its subsidiaries and jointlycontrolled entities constitute “the Group”) as at 31March, 2010, the Consolidated Profit and Loss Accountand the Consolidated Cash Flow Statement of theGroup for the year ended on that date, both annexedthereto. The Consolidated Financial Statementsinclude investments in associates accounted on theequity method in accordance with AccountingStandard 23 (Accounting for Investments in Associatesin Consolidated Financial Statements) and the jointlycontrolled entities accounted in accordance withAccounting Standard 27 (Financial Reporting ofInterests in Joint Ventures) as notified under theCompanies (Accounting Standards) Rules, 2006. Thesefinancial statements are the responsibility of theCompany’s Management and have been prepared onthe basis of the separate financial statements andother information regarding components. Ourresponsibility is to express an opinion on theseConsolidated Financial Statements based on our audit.

2) We conducted our audit in accordance with theauditing standards generally accepted in India. ThoseStandards require that we plan and perform the auditto obtain reasonable assurance about whether thefinancial statements are free of materialmisstatements. An audit includes examining, on a testbasis, evidence supporting the amounts and thedisclosures in the financial statements. An audit alsoincludes assessing the accounting principles used andthe significant estimates made by the Management,as well as evaluating the overall financial statementpresentation. We believe that our audit provides areasonable basis for our opinion.

3) (a) We did not audit the financial statements ofcertain subsidiaries and joint ventures, whosefinancial statements reflect total assets of Rs.921.80 crores, as at 31 March, 2010, total revenuesof Rs. 518.46 crores and net cash outflowamounting to Rs. 80.69 crores for the year thenended and the share of loss of associate ofRs.146.99 crores for the year then ended havebeen considered in the Consolidated FinancialStatements. These financial statements have beenaudited by other auditors whose reports havebeen furnished to us and our opinion in so far asit relates to the amounts included in respect ofthese subsidiaries, joint ventures and associateare based solely on the reports of the otherauditors.

(b) As stated in note B17, Schedule 20, the financialstatements of certain subsidiaries and jointventures which represents total assets of Rs.410.95 crores as at 31 March, 2010, total revenueof Rs. 11.56 crores and net cash outflowamounting to Rs.3.55 crores for the year thenended and the share in loss of associate of Rs.0.55 crores for the year then ended have beenincorporated in the consolidated financialstatements on the basis of unaudited financialstatement as provided by the management ofthose subsidiaries, joint ventures and associate.

4) We report that the Consolidated Financial Statementshave been prepared by the Company in accordancewith the requirements of Accounting Standard 21(Consolidated Financial Statements), AccountingStandard 23 (Accounting for Investment in Associatesin Consolidated Financial Statements) and AccountingStandard 27 (Financial Reporting of Interests in JointVentures) as notified under the Companies(Accounting Standards) Rules, 2006.

5) Subject to the matter referred to in paragraph 3 (b)above, based on our audit and on consideration ofthe separate audit reports on the individual financialstatements of the Company, and the aforesaidsubsidiaries and joint ventures and associates, and tothe best of our information and according to theexplanations given to us, in our opinion, theConsolidated Financial Statements give a true and fairview in conformity with the accounting principlesgenerally accepted in India:

(i) in the case of the Consolidated Balance Sheet, ofthe state of affairs of the Group as at 31 March,2010;

(ii) in the case of the Consolidated Profit and LossAccount, of the loss of the Group for the yearended on that date and

(iii) in the case of the Consolidated Cash FlowStatement, of the cash flows of the Group for theyear ended on that date.

For S. B. BILLIMORIA & CoChartered Accountants

(Registration No.101496W)

P. R. RameshPartner

(Membership No.070928)

MUMBAI, 31 May 2010


98

COMMUNICATIONS


CONSOLIDATED BALANCE SHEET AS AT 31 MARCH, 2010Schedule As at As at

31st March 10 31st March 09Rs. in crores Rs. in crores

SOURCES OF FUNDS :SHARE CAPITAL 1 285.00 285.00RESERVES AND SURPLUS 2 4,249.90 4,821.44

TOTAL SHAREHOLDERS’ FUNDS 4,534.90 5,106.44MINORITY INTEREST LIABILITY 5.75 4.97SECURED LOANS 3 2,148.85 1,781.76UNSECURED LOANS 4 5,159.81 4,883.62DEFERRED TAX LIABILITY (NET)(Refer Note B21, Schedule 20) 198.12 155.90

TOTAL FUNDS EMPLOYED 12,047.43 11,932.69

APPLICATION OF FUNDS:FIXED ASSETS: 5(a) Gross Block 15,361.53 12,878.48(b) Less: Accumulated Depreciation/ Amortisation 5,137.64 3,940.18

(c) Net Block 10,223.89 8,938.30(d) Capital work-in-progress 1,850.63 2,667.57

12,074.52 11,605.87

GOODWILL (ON CONSOLIDATION) 55.88 57.54INVESTMENTS 6 1,304.18 1,676.04CURRENT ASSETS, LOANS AND ADVANCESA. CURRENT ASSETS

(a) Inventories 7 41.88 17.83(b) Sundry Debtors 8 2,187.75 2,862.97(c) Cash and Bank Balances 9 284.11 875.93(d) Other Current Assets 10 436.06 391.68

2,949.80 4,148.41B. LOANS AND ADVANCES 11 3,191.94 2,407.71

6,141.74 6,556.12Less: CURRENT LIABILITIES AND PROVISIONS(A) Current Liabilities 12 7,117.94 7,474.38(B) Provisions 13 410.95 488.50

7,528.89 7,962.88

NET CURRENT LIABILITIES (1,387.15) (1,406.76)

TOTAL ASSETS (NET) 12,047.43 11,932.69

SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS 20In terms of our report attached For and on behalf of the BoardFor S.B.BILLIMORIA & CO.Chartered AccountantsP.R. RAMESH SUBODH BHARGAVA N. SRINATHPartner Chairman Managing Director

& Chief Executive OfficerSANJAY BAWEJA SATISH RANADEChief Financial Officer Company Secretary & Chief Legal Officer


99

CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH, 2010Schedule Year ended Year ended

31st March 10 31st March 09Rs. in crores Rs. in crores

INCOME:REVENUES FROM TELECOMMUNICATION AND OTHER SERVICES 11,025.56 9,963.17OTHER INCOME 14 119.53 193.98INTEREST INCOME 15 49.13 49.39

TOTAL INCOME 11,194.22 10,206.54

EXPENDITURE:SALARIES AND RELATED COSTS 16 1,537.12 1,240.18NETWORK COSTS 17 6,468.99 5,300.22OPERATING AND OTHER EXPENSES 18 2,007.09 2,056.90INTEREST EXPENSE 19 569.69 350.69DEPRECIATION, AMORTISATION AND IMPAIRMENT(Refer Note 4, Schedule 5) 1,510.80 1,102.27

TOTAL EXPENDITURE 12,093.69 10,050.26

PROFIT/ (LOSS) BEFORE TAXES AND EXCEPTIONAL ITEMS (899.47) 156.28EXCEPTIONAL ITEMS:(a) (Profit)/ Loss on sale of long term Investments

(Refer Note B4, Schedule 20) — (362.08)(b) Claim Settlement (Refer Note B6, Schedule 20) — 95.60(c) Interest on Income Tax Refund

(Refer Note B15, Schedule 20) (218.28) —

PROFIT/ (LOSS) BEFORE TAXES (681.19) 422.76TAXES(a) CURRENT TAX 92.85 179.36(b) DEFERRED TAX EXPENSE 44.77 44.25(c) FRINGE BENEFIT TAX — 7.12(d) EXCESS PROVISION FOR TAX WRITTEN BACK

(Refer Note B15, Schedule 20) (280.01) —

NET PROFIT/ (LOSS) BEFORE MINORITY INTEREST (538.80) 192.03

MINORITY INTEREST (Share of Loss/(Profit) (net)) 88.60 131.78SHARE IN LOSS OF ASSOCIATE (147.54) (8.01)

NET PROFIT/ (LOSS) (597.74) 315.80

BALANCE BROUGHT FORWARD FROM PREVIOUS PERIOD 448.92 444.81LESS: TAX ADJUSTMENT ON MERGER OF VSNL BROADBAND LTD. — (0.10)LESS: DEFERRED TAX ADJUSTMENT ON MERGER OF VSNL BROADBAND LTD. — (7.44)

PROFIT/ (LOSS) BALANCE BEFORE APPROPRIATIONS (148.82) 753.07APPROPRIATIONS :(a) PROPOSED DIVIDEND (Refer note B3, Schedule 20) — 128.25(b) TAX ON DIVIDEND — 21.80(c) GENERAL RESERVE 48.32 51.60(d) TRANSFER TO DEBENTURE REDEMPTION RESERVE

(Refer note B18, Schedule 20) 354.84 102.50

BALANCE CARRIED TO BALANCE SHEET (551.98) 448.92

EARNINGS PER SHARE (EPS)Basic/Diluted earnings per share (Rs.) (20.97) 11.08(Refer Note B22, Schedule 20)SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS 20

In terms of our report attached For and on behalf of the BoardFor S.B.BILLIMORIA & CO.Chartered AccountantsP.R. RAMESH SUBODH BHARGAVA N. SRINATHPartner Chairman Managing Director




100

COMMUNICATIONS


CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010Year ended Year ended

31st March, 2010 31st March, 2009Rs. in crores Rs. in crores

1 CASH FLOWS FROM OPERATING ACTIVITIESPROFIT BEFORE TAXES AND EXCEPTIONAL ITEMS (899.47) 156.28Adjustments for:Depreciation,amortisation and impairment 1,510.80 1,102.27Loss /(Profit) on sale of fixed assets 1.14 1.55Interest income (49.13) (49.39)Interest expense 569.69 350.69Fixed assets written down 10.67 3.37Provision for Doubtful debts (61.39) 12.13Bad Debts written off 193.99 208.88Provision for contingency 1.94 (0.41)Dividend income/profit on sale of current investments (34.48) (59.92)Valuation Gain / (loss) on current investments - (0.08)Loss / (Profit) on sale of long-term investments (0.98) (2.88)

OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 1,242.78 1,722.49Inventories (21.76) (5.73)Sundry debtors 65.83 (667.86)Other current assets, loans and advances (126.62) (69.34)Restricted cash - (0.04)Current liabilities and provisions 672.45 1,164.50

Cash generated from operations before tax and exceptional items 1,832.68 2,144.02Compensation paid to Flag - (95.60)Interest on income tax refunds 218.28 -

Cash generated from operations before taxes 2,050.96 2,048.42Income tax (paid)/refunds (498.16) (377.41)

NET CASH FROM OPERATING ACTIVITIES 1,552.80 1,671.01

2 CASH FLOWS FROM INVESTING ACTIVITIESPurchase of fixed assets (2,773.75) (3,222.31)Business acquisitions, (Refer Note B30(ii), schedule 20) - (58.02)Amount paid towards Joint Venture with China Enterprise Communications (Refer Note B9, schedule 20) - (59.77)Amount paid towards Investments in Bit Gravity (Refer Note B10, schedule 20) - (48.56)Equity stake purchased in Bit Gravity (Refer Note B10, schedule 20) (6.15) -Sale/ (Purchase) of current investments (net of mutual funds dividend reinvested) (net) 281.75 (247.36)Proceeds from sale of fixed assets 15.65 4.43Proceeds from sale of long-term investment 0.98 427.10Dividend income from current investments 0.03 0.14Fixed deposits (net) 2.57 (10.70)Investment in equity / preference shares in Neotel (Refer Note B8, Schedule 20) (37.35) (61.61)Interest received 13.42 25.18

NET CASH USED IN INVESTING ACTIVITIES (2,502.85) (3,251.48)

3 CASH FLOWS FROM FINANCING ACTIVITIESProceeds from unsecured loans 3,991.22 2,849.94Repayment of unsecured loans (3,323.26) (1,891.78)Proceeds from secured loans 307.57 1,692.50Repayment of secured loans (12.18) (16.26)Dividends paid including dividend tax (150.23) (150.38)Dividends paid to Minority (0.47) (0.45)Interest paid (548.55) (313.56)

CASH FLOW FROM FINANCING ACTIVITIES 264.10 2,170.01

NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (685.95) 589.54CASH AND CASH EQUIVALENTS AS AT THE BEGINNING OF THE YEAR 863.42 288.40(Refer Note B20, Schedule 20)Effect of exchange on cash and cash equivalents 79.90 (14.52)

CASH AND CASH EQUIVALENTS AS AT THE END OF THE YEAR 257.37 863.42

(Refer Note B20, Schedule 20)

Notes:1 Figures in brackets represent outflows.2 Pursuant to the acquisition of 27% stake in Neotel (Pty) Ltd. from Eskom and Transnet in the previous year, an amount of Rs. 73.52 crores receiveable

from these shareholders against a binding agreement was adjusted against the carrying value of Investment in Associate during the year ended31 March, 2009 (Refer Note B8, Schedule 20)

In terms of our report attached For and on behalf of the BoardFor S.B.BILLIMORIA & CO.Chartered AccountantsP.R. RAMESH SUBODH BHARGAVA N. SRINATHPartner Chairman Managing Director



101

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET

As at As at31st March, 2010 31st March, 2009

SCHEDULE - 1 Rs. in crores Rs. in croresSHARE CAPITALAUTHORISED :300,000,000 (2009:300,000,000) Equity Shares of Rs.10 each 300.00 300.00

ISSUED, SUBSCRIBED AND PAID UP285,000,000 (2009: 285,000,000) Equity Shares of Rs.10 each, fully paid up 285.00 285.00

SCHEDULE - 2RESERVES AND SURPLUSCapital Reserve– Balance at the beginning of the year 217.84 208.16

Add: Capital Reserve on NBSS Acquisition by Neotel(net of Minority share) (Refer note B30 (ii)) — 10.15Less: Depreciation on Gifted Assets (0.45) (0.60)Add: Translation Adjustments 1.52 0.13

– Balance at the end of the year 218.91 217.84

Securities Premium (Refer Note B14, Schedule 20)– Balance at the beginning of the year 725.01 834.88

Less: Adjustment pursuant to merger of VSNL Broadband Limited — (109.87)


General Reserve– Balance at the beginning of the year 3,378.46 3,326.86

Add: Transferred from Profit and Loss account 48.32 51.60

– Balance at the end of the year 3,426.78 3,378.46

Debenture Redemption Reserve (Refer Note B18, Schedule 20)– Balance at the beginning of the year 102.50 —

Add: Transferred from Profit and Loss account 354.84 102.50


Profit and Loss Account (551.98) 448.92

4,276.06 4,872.73Exchange Translation Reserve (net) (26.16) (51.29)

TOTAL 4,249.90 4,821.44

Notes:

1. Capital reserve includes Rs. 205.22 crores in respect of foreign exchange gains on unutilised proceeds from GlobalDepository Receipts credited to Capital Reserve Rs. 203.70 crores in 2000-01 and Rs. 1.52 crores in 2001-02.

2. Capital reserve includes Rs. 11.67 crores (2009: 10.15 crores) which represents Group’s share in capital reserve ofJoint Venture SEPCO Communications (Pty.) Ltd. arising on acquisition made during 2008-09.


102

COMMUNICATIONS


SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET

As at As at31st March, 2010 31st March, 2009

SCHEDULE - 3 Rs. in crores Rs. in croresSECURED LOANSDEBENTURES (Refer Note B18 (A), Schedule 20)

10,000, 11.70% Rated taxable Secured Redeemable Non-convertibleDebentures of face value Rs. 10 lakhs each 1,000.00 1,000.00

1,900, 11.00% Rated taxable Secured Redeemable Non-convertibleDebentures of face value Rs. 10 lakhs each 190.00 190.00

550, 11.20% Rated taxable Secured Redeemable Non-convertibleDebentures of face value Rs. 10 lakhs each 55.00 55.00

50, 11.25% Rated taxable Secured Redeemable Non-convertibleDebentures of face value Rs. 10 lakhs each 5.00 5.00

TERM LOANSFrom Banks

Hongkong and Shanghai Banking Corporation Limited (Secured by hypothecationof moveable properties of Rs. 128.00 crores (2009:128.00 crores)) 31.76 38.83

Punjab National Bank (Refer Note) 5.76 9.04

Everest Bank Limited (Refer Note) 0.30 0.47

Everest Bank Limited and Nepal SBI Bank Limited (Refer Note) 2.31 4.20

Consortium led by Nedbank Ltd. (Refer Note) 858.72 475.01

Others — 4.21

TOTAL 2,148.85 1,781.76

Note:Secured against fixed assets of Joint Ventures

SCHEDULE - 4UNSECURED LOANSDEBENTURES (Refer Note B18 (B), Schedule 20)

4000, 7.74% Unsecured Redeemable Non-convertible Debenturesof face value Rs. 10 lakhs each 400.00 —



LOANS (Repayable within one year Rs. 1,682.80 Crores (2009: 654.08 crores))

From Banks 4,184.99 4,742.89

From Others 274.82 140.73

TOTAL 5,159.81 4,883.62

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104

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SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEETAs at As at

31st March, 2010 31st March, 2009SCHEDULE - 6 Rs. in crores Rs. in croresINVESTMENTSTrade Investments - Long Term (At Cost) (Quoted) (Refer Note)594,177 nos. (2009: 643,377 nos.) fully paid equity shares inArt Technology Group Inc. — —

Trade Investments - Long Term (At Cost) (Unquoted)A. Fully Paid Equity Shares

(a) Tata Teleservices Ltd. 748.03 748.03(b) New ICO Global Communications (Holdings) Limited 0.01 0.01(c) Wmode Inc. 2.55 2.88

B. Convertible Bonds of China Enterprise Netcom Corporation Ltd. 31.51 35.59(Refer Note B9, Schedule 20)

C. Investment in Associates (Refer Note B8 and B10, Schedule 20)(a) Equity Shares in Neotel (at cost) 88.54 90.16

Less: Share in Loss (88.54) (8.01)

— 82.15(b) Preference Shares in Neotel (at cost) 79.51 49.77

Less: Share in Loss (66.46) —

13.05 49.77(c) TOTAL (a+b) 13.05 131.92

(d) Equity Shares in Bit Gravity (at cost) 5.95 —Less: Share in Loss (0.52) —

5.43 —(e) Convertible Promissory Note and warrants of Bit Gravity. 51.76 58.47

(f ) TOTAL (d+e) 57.19 58.47

TOTAL (c+f ) 70.24 190.39

TOTAL (A+B+C) 852.34 976.90

Current Investments (Unquoted)Investments In Mutual Funds 451.84 699.14

TOTAL 1,304.18 1,676.04

Note:Market Value of Quoted investments Rs. 11.79 crores (2009: Rs. 8.34 crores)

SCHEDULE - 7INVENTORIESEquipments for resale 0.08 0.08Less: Provision for obsolescence (0.08) (0.08)

— —

Consumable stores and spares 44.41 18.29Less: Provision for obsolescence (2.53) (0.46)

TOTAL 41.88 17.83

105


31st March, 2010 31st March, 2009SCHEDULE - 8 Rs. in crores Rs. in croresSUNDRY DEBTORS (UNSECURED)

(a) Over six months

Considered good 313.13 388.22

Considered doubtful 325.41 360.55

(b) Other debts

Considered good 1,874.62 2,474.75

Considered doubtful 16.66 36.02

2,529.82 3,259.54Less: Provision for doubtful debts (342.07) (396.57)

TOTAL 2,187.75 2,862.97

SCHEDULE - 9CASH AND BANK BALANCES (Refer Note B20, Schedule 20)

Cash in hand 0.53 0.94

Cheques in hand 66.18 55.17

Remittances in transit 2.57 0.28

Current accounts with banks 143.00 487.04

Deposit accounts with banks 71.83 332.50

TOTAL 284.11 875.93

SCHEDULE - 10OTHER CURRENT ASSETS

Interest receivable 65.17 29.46

Service tax / VAT recoverable 60.08 107.24

Pension contributions recoverable from Government of India(net of provision of Rs. 53.71 crores (2009: Rs. 53.71 crores))(Refer Note B5, Schedule 20) 7.44 7.44

Licence fees paid recoverable from Government of India 0.64 0.64

Licence fees paid under protest (Refer Note B13, Schedule 20) 115.73 120.85

Others 187.00 126.05

TOTAL 436.06 391.68


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31st March, 2010 31st March, 2009SCHEDULE - 11 Rs. in crores Rs. in croresLOANS AND ADVANCES (UNSECURED)

Considered good

– Loans and Advances to employees 19.48 5.63

– Deposits with public bodies and others 86.89 84.63

– Prepaid expenditure 538.19 524.38

– Advance payment of tax (net of provision for tax) 2,101.50 1,422.08

– Other loans and advances 445.88 370.99

3,191.94 2,407.71

Considered doubtful

– Other loans and advances 11.79 8.51

Less: Provision for doubtful advances (11.79) (8.51)

TOTAL 3,191.94 2,407.71

SCHEDULE - 12CURRENT LIABILITIES

Sundry Creditors:

– Creditors for interconnect charges 1,889.98 1,926.19

– Dues of micro, small and medium enterprises 2.05 0.69

– Others 1,635.13 2,089.07

Unearned income and deferred revenues 2,978.72 2,378.94

Investor Education and Protection Fund - unpaid dividend 0.60 0.78

Government of India current account 20.57 20.57

Interest accrued but not due on loans taken from banks 69.83 48.68

Deposits / Advances from Customers 216.41 662.06

Other liabilities (Refer Note) 304.65 347.40

TOTAL 7,117.94 7,474.38

Note:Includes Rs.13.42 crores overdrawn book balance (2009: Rs. 105.35 crores)

SCHEDULE - 13PROVISIONS

Provisions for employee benefits 304.05 246.38

Provision for proposed dividend — 128.25

Tax on dividend — 21.80

Provision for contingencies (Refer Note B27, Schedule 20) 63.59 42.86

Provision for tax (net of advance taxes) 43.31 49.21

TOTAL 410.95 488.50

107

SCHEDULES FORMING PART OF THE CONSOLIDATED PROFIT AND LOSS ACCOUNTYear ended Year ended

31st March 2010 31st March 2009SCHEDULE-14 Rs. in crores Rs. in croresOTHER INCOME

Dividend income from current investments 0.15 22.52

Profit on sale of current investments (net) 34.33 37.40

Profit from sale of long term investment 0.98 2.88

Rent 13.51 14.84

Exchange gain (net) (16.53) (16.30)

Provisions / Liabilites no longer required written back 30.40 23.92

Other 56.69 108.72

TOTAL 119.53 193.98

SCHEDULE-15INTEREST INCOME

On Bank deposits (Tax deducted at source Rs. 0.05 cores (2009: Rs. 1.80 crores)) 9.33 30.94

On Other loans and advances (Tax deducted at source Rs. NIL (2009: Rs. NIL)) 39.80 18.45

TOTAL 49.13 49.39

SCHEDULE - 16SALARIES AND RELATED COSTS

Salaries and bonus 1,302.43 1,115.42

Contribution to provident, gratuity and other funds 156.51 56.34

Staff welfare expenses 78.18 68.42

TOTAL 1,537.12 1,240.18

SCHEDULE-17NETWORK COSTS

Charges for use of transmission facilities 6,279.98 5,090.87

Royalty and licence fee to Department of Telecommunications 127.74 131.89

Rent of satellite channels 25.80 31.47

Rent of landlines 30.52 39.89

Administrative lease charges 4.95 6.10

TOTAL 6,468.99 5,300.22


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SCHEDULES FORMING PART OF THE CONSOLIDATED PROFIT AND LOSS ACCOUNTYear ended Year ended

31st March 2010 31st March 2009SCHEDULE-18 Rs. in crores Rs. in croresOPERATING AND OTHER EXPENSES

Consumption of stores 22.53 14.70

Light and power 207.78 173.99

Repairs and Maintenance:

– Buildings 30.62 32.76

– Plant and Machinery 429.86 480.05

– Others 22.30 25.88

Bad Debts written off 193.99 208.88

Provision for doubtful debts/(written back) (61.39) 12.13

Advance written off 3.81 -

Provision for doubtful advances 3.52 -

Rent 236.29 218.17

Rates and taxes 75.68 60.78

Travelling expenses 82.21 77.95

Telephone 48.13 41.27

Printing, postage and stationery 17.90 15.06

Legal and professional fees 110.97 116.76

Advertising and publicity 91.47 67.62

Commissions 49.99 51.64

Insurance 23.96 15.36

Donations 0.36 0.62

Loss on sale of fixed assets (net) 1.14 1.55

Services rendered by agencies 221.83 239.61

Other expenses 194.14 202.12

TOTAL 2,007.09 2,056.90

SCHEDULE - 19INTEREST EXPENSE

Interest on:

- Bank Loans 328.21 320.32

- Debentures 167.86 46.06

- Others 135.12 42.14

Less : Interest Expense capitalized (61.50) (57.83)

TOTAL 569.69 350.69

109

SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTSSCHEDULE 20

SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS

A. SIGNIFICANT ACCOUNTING POLICIES

1. Basis of preparation

The consolidated financial statements of Tata Communications Limited (the Company), its subsidiaries and jointlycontrolled entities (“the Group”) are prepared under the historical cost convention and the requirements of theCompanies Act, 1956.

The financial statements of certain subsidiaries having a negative net worth have been prepared on a ‘going concern’assumption and included in these consolidated statement on that basis as the Company has provided a supportletter regarding providing financial support to enable those entities continuing as a ‘going concern’ with referenceto the provisions of applicable insolvency laws in their country of residence.

2. Principles of consolidation

The financial statements of the subsidiary companies used in the consolidation are drawn up to the same reportingdate as of the Company.

The consolidated financial statements have been prepared on the following basis:

i) The financial statements of the Company and its subsidiary companies have been combined on a line-by-linebasis by adding together like items of assets, liabilities, income and expenses. Inter-company balances andtransactions, and unrealised profits or losses have been fully eliminated.

ii) The results of subsidiaries acquired during the year are included in the consolidated profit and loss accountfrom the date of acquisition.

iii) The consolidated financial statements include the interest in joint ventures which has been accounted as perthe ‘proportionate consolidation’ method as per Accounting Standard 27-‘Financial Reporting of Interests inJoint Ventures’. Unrealised profits and losses have been eliminated to the extent of the Company’s share in thejoint ventures.

iv) The consolidated financial statements include the interest in associates which has been accounted as per‘Equity Accounting’ Method as per Accounting Standard 23 – ’Accounting for investments in Associates inConsolidated Financial Statements’.

v) The excess of cost to the Company of its investment in a subsidiary company over its share of the equity of thesubsidiary company at the date on which the investment in the subsidiary company is made is recognized as‘Goodwill’ being an asset in the consolidated financial statements. Alternatively, where the share of equity in thesubsidiary companies as on date of investment, is in excess of cost of investment of the Company, it is recognisedas `Capital Reserve’ and shown under the head `Reserves and Surplus’, in the consolidated financial statements.

vi) Minority interest in the net assets of consolidated subsidiaries consists of the amount of equity attributable tothe minority shareholders at the dates on which investments are made by the Company in the subsidiarycompanies and further movements in their share in the equity, subsequent to the dates of investments.

vii) Losses applicable to the minority in excess of the minority’s interest in the subsidiaries equity are allocatedagainst the majority interest except to the extent that the minority has a binding obligation and is able to makean additional investment to cover the losses.

3. Use of estimates

The preparation of financial statements requires the management of the Company to make estimates and assumptionsthat affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as atthe date of the financial statements and reported amounts of income and expenses during the period. Examples ofsuch estimates include allocation of purchase price on acquisition, provisions for doubtful debts and advances,employee benefit obligations, provision for income taxes, provision for cable restoration, impairment of assets, assetretirement obligation and useful lives of fixed assets.


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4. Fixed assets

a) Fixed assets are stated at cost less accumulated depreciation. Cost includes freight, duties, taxes, salaries andemployee benefits directly related to the construction or development of the asset and all incidental expensesincurred to bring the assets to their present location and condition.

b) Fixed assets received as gifts from other Foreign Telecom Carriers / vendors are capitalised and credited toCapital Reserve on the basis of notional cost (cost assessed by customs authorities). Cost includes freight,insurance and customs duty.

c) Intangible assets in the nature of Indefeasible Rights of Use (IRU’s) for international and domestictelecommunication circuits are recorded as fixed assets. IRU agreements transfer substantially all the risks andrewards of ownership.

d) Jointly owned assets are capitalised in proportion to the Company’s ownership interest in such assets.

e) Costs of borrowing related to the acquisition or construction of fixed assets that are attributable to the qualifyingassets are capitalized as part of the cost of such asset. A qualifying asset is one which necessarily takes asubstantial period to get ready for its intended use. All other borrowing costs are recognized as an expense inthe period in which they are incurred in accordance with the Accounting Standard 16 on ‘Borrowing Costs’notified by the Companies (Accounting Standards) Rules, 2006.

f ) Consideration for purchase of business in excess of the value of net assets acquired is recognised as goodwill.

g) Internally developed computer software, and licence fees have been classified as intangible assets.

h) Assets acquired pursuant to an agreement for exchange of similar assets are recorded at the net book value ofthe asset given up, with an adjustment for any balancing receipt or payment of cash or any other form ofconsideration.

5. Depreciation

Depreciation other than on freehold land and capital work-in-progress is charged over the periods set out below soas to write-off the cost of the asset on a straight line basis over the estimate useful lives, at the following rates:

a) Leasehold land Lease period

b) Leasehold improvements Lease period

c) Buildings 1.64% to 6.67%

d) Plant and Machinery

(i) Indefeasible Rights of Use (IRU’s) Life of IRU or period of agreement, whichever is lower

(ii) Other plant and machinery 4.75% to 33.33%

e) Furniture and fixtures 6.33% to 33.33%

f ) Office equipment 4.75% to 33.33%

g) Computers 10.00% to 33.33%

h) Motor vehicles 9.50%

i) Goodwill on purchase of business 60/120 months

j) Intangibles

(i) Internally developed computer software 20.00% to 33.33%

(ii) License fees 4.00%

111

6. Leases

Lease arrangements where the risk and rewards incidental to ownership of an asset substantially vests with thelessor are classified as operating lease.

Rental income and rental expenses on assets given or obtained under operating lease arrangements are recognisedon a straight - line basis over the term of the relevant lease.

The initial direct costs relating to operating leases are recorded as expenses as they are incurred.

Assets given under finance lease are recognised at an amount equal to the net investment in the lease and thefinance income is based on a constant rate of return on the outstanding net investment.

Assets acquired under lease where the Company has substantially all the risks and rewards of ownership are classifiedas finance lease. Such leases are capitalised at the inception of the lease at lower of the fair value or the presentvalue of the minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid isallocated between the liability and the interest cost so as to obtain a constant periodic rate of interest on theoutstanding liability for each year.

7. Impairment

At each balance sheet date, the Company reviews the carrying amounts of its fixed assets and goodwill included ineach cash generating unit to determine whether there is any indication that those assets suffered an impairmentloss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extentof the impairment loss. Recoverable amount is the higher of an asset’s net selling price and value in use. If therecoverable amount of the cash generating unit is less than the carrying amount of the unit the impairment loss isallocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other asset of theunit pro-rata on the basis of the carrying value of each asset in the unit. An impairment loss recognised for goodwillis not reversed in the subsequent period unless there are changes in external events.

8. Asset Retirement Obligation (“ARO”)

The Company’s ARO relate to the removal of cable systems and switches when they will be retired. Provision isrecognised based on management’s best estimate of the eventual costs that relate to such obligation and is adjustedto the cost of such assets. The estimated costs are based on historical cost information, industry factors and technicalestimates received from consortium members of the cable systems.

9. Investments

Long-term investments are valued at cost less provision other than temporary diminution in value. Current investmentscomprising investments in mutual funds are stated at the lower of cost or fair value, determined on an individualinvestment basis. The acquisition cost of an investment acquired in exchange, or part exchange, for another asset isdetermined based on the fair value of the asset given up.

10. Inventories

Inventories are valued at the lower of cost and net realisable value. Cost is determined on a weighted average basis.

11. Employee Benefits

(i) Short-term employee benefits

The undiscounted amount of short term employee benefits expected to be paid in exchange for servicesrendered by employees is recognized during the period when the employee renders the service. These benefitsinclude compensated absences such as paid annual leave and performance incentives payable within twelvemonths.

(ii) Post-employment benefits

Contributions to defined contribution retirement benefit schemes are recognized as an expense when employeeshave rendered services entitling them to the contributions.



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For defined benefit schemes, the cost of providing benefits is determined using the Projected Unit CreditMethod, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses arerecognized in full in the profit and loss account for the period in which they occur. Past service cost is recognizedimmediately to the extent that the benefits are already vested, and otherwise is amortized on a straight-linebasis over the average period until the benefits become vested.

The retirement benefit obligation recognized in the balance sheet represents the present value of the definedbenefit obligation as adjusted for unrecognized past service cost, and as reduced by the fair value of schemeassets. Any asset resulting from this calculation is limited to past service cost, plus the present value of availablerefunds and reductions in future contributions to the scheme.

12. Revenue recognition

a) Revenues from Telephony services are recognised at the end of each month based upon minutes of trafficcompleted in such month.

b) Revenues from Data services are recognised over the period of the respective arrangements based on contractedfee schedules.

c) Revenues from right to use of fibre capacity provided based on IRU are recognized over the period of sucharrangements.

d) Revenues from Internet services are recognized based on usage

e) Dividend from investments is recognized when the right to receive payment is established and no significantuncertainty as to measurability or collectability exists.

f ) Transactions with providers of telecommunication services such as buying, selling, swapping and/or exchangeof traffic are accounted for as non-monetary transactions depending on the terms of the agreements enteredinto with such telecommunication service providers.

13. Taxation

Current income tax expense comprises taxes on income from operations in India and foreign tax jurisdictions.Income tax payable in India is determined in accordance with the provisions of the Income Tax Act, 1961.Taxexpense relating to overseas operations is determined in accordance with tax laws applicable in countries wheresuch operations are domiciled.

Deferred tax expense or benefit is recognized on timing differences being the difference between taxable incomeand accounting income that originate in one period and are capable of reversal in one or more subsequent periods.Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted orsubstantively enacted by the balance sheet date.

Deferred tax assets in respect of unabsorbed depreciation and carry forward tax losses are recognized only to theextent that there is virtual certainty that there will be sufficient future taxable income available to realise theseassets. All other deferred tax assets in respect of other timing differences are recognized if there is a reasonablecertainty that sufficient future taxable income will be available to realise such assets.

Advance taxes and provisions for current income taxes are presented in the balance sheet after off-setting advancetax and income tax provision arising in the same tax jurisdiction and where the Group intends to settle the asset andliability on a net basis.

The Group offsets deferred tax assets and deferred tax liabilities relating to taxes on income levied by the samegoverning tax authorities.


113

14. Foreign currency transactions

a) Foreign currency transactions are converted into Indian Rupees at rates of exchange approximating thoseprevailing at the transaction date. Foreign currency monetary assets and liabilities are translated to IndianRupees at the closing rate prevailing on the balance sheet date. Exchange differences on foreign currencytransactions are recognised in the profit and loss account.

b) Premium or discount on forward contracts is amortised over the life of such contracts and is recognized in theProfit and Loss Account. Forward contracts outstanding as at the balance sheet date are stated at exchange rateprevailing at the reporting date and any gains or losses are recognized in the profit and loss account. Profit orloss arising on cancellation or enforcement/exercise of a forward exchange is recognized in the profit and lossaccount in the period of such cancellation or enforcement/exercise outstanding as at the balance sheet dateare marked-to-market with the values as reported by banks and any gains or losses are recognized in the profitand loss account.

c) For the purpose of consolidation of foreign subsidiaries and joint ventures, income and expenses are translatedat average rates and the assets and liabilities are stated at closing rate. The net impact of such change isdisclosed under exchange translation reserve.

15. Derivative financial instruments

The Group enters into option contracts and interest rate swaps to manage it’s exposure on foreign exchange raterisk and interest rate risk globally. Exposures to currency and interest rate risk are monitored on an ongoing basisand the Group endeavours to keep the net exposure at acceptable levels.

These derivatives are initially recognized at fair value at the date a derivative contract is entered into and aresubsequently re-measured to their fair value at each reporting date. The resulting gain or loss is recognized in profitand loss account immediately.

16. Earning Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders(after deducting preference dividends and attributable taxes) by the weighted average number of equity sharesoutstanding during the year. The weighted average number of equity shares outstanding during the year is adjustedfor events of bonus issue if any, to existing shareholders and share split.

For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equityshareholders and the weighted average number of shares outstanding during the year are adjusted for the effects ofall dilutive potential equity shares from the exercise of options on unissued share capital. The number of equityshares is the aggregate of the weighted average number of equity shares and the weighted average number ofequity shares, which would be issued on the conversion of all the dilutive potential equity shares into equity shares.Options on unissued equity share capital are deemed to have been converted into equity shares.

17. Contingent Liabilities and Provision

Provisions are recognized in respect of present probable obligations, the amount of which can be reliably estimated.Contingent Liabilities are disclosed in respect of possible obligations that may arise from past events but theirexistence is confirmed by the occurrence or non-occurrence of one or more uncertain future events not whollywithin the control of the Company.



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B. NOTES TO ACCOUNTS

1. Particulars of subsidiaries, associates and joint ventures are as follows:

Percentage of voting powerCountry of As at 31 As at 31Incorporation March, 2010 March, 2009

Subsidiaries (Held Directly)

Tata Communications Internet Services Limited India 100.00 100.00

Tata Communications Transformation Services Limited India 100.00 100.00

Tata Communications Lanka Limited Sri Lanka 90.00 90.00

S&A Internet Services Private Limited(Date of acquisition: 27 November, 2009) India 100.00 -

Tata Communications Services (America) Inc. United States of America 100.00 100.00

Tata Communications International Pte. Ltd Singapore 100.00 100.00

VSNL SNOSPV Pte. Ltd. Singapore 100.00 100.00

Tata Communications Banking InfraSolutions Limited(Formerly known as Banking ATM InfraSolutions Limited) India 100.00 100.00

Subsidiaries (Held Indirectly)

Tata Communications (Bermuda) Limited Bermuda 100.00 100.00

Tata Communications (Netherlands) BV Netherlands 100.00 100.00

Tata Communications (Hong Kong) Limited Hong Kong 100.00 100.00

ITXC IP Holdings S.A.R.L. Luxembourg 100.00 100.00

Tata Communications (America) Inc. United States of America 100.00 100.00

Teleglobe Asia Pte. Ltd. Singapore 100.00 100.00

Tata Communications (Canada) ULC Canada 100.00 100.00

Tata Communications (Belgium) S.P.R.L. Belgium 100.00 100.00

Teleglobe International Luxembourg Sarl UnderMembers’ Voluntary Liquidation Luxembourg 100.00 100.00

Tata Communications (Italy) SRL Italy 100.00 100.00

TLGB Luxembourg Holdings Sarl UnderMembers’ Voluntary Liquidation Luxembourg 100.00 100.00

Tata Communications (Portugal) Unipessoal LDA Portugal 100.00 100.00

Tata Communications (France) SAS France 100.00 100.00

Tata Communications (Nordic) AS Norway 100.00 100.00

VSNL International (Global) Corp. United States of America 100.00 100.00

Tata Communications (Guam) LLC Guam 100.00 100.00

Tata Communications (Portugal)Instalacao E Manutencao De Redes LDA Portugal 100.00 100.00

Tata Communications (US) Inc. United States of America 100.00 100.00

Tata Communications (Australia) Pty Ltd. Australia 100.00 100.00

Tata Communications Services (Bermuda) Limited Bermuda 100.00 100.00

VSNL International (IPCO) LLC United States of America 100.00 100.00


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Tata Communications (Puerto Rico) Inc. Puerto Rico 100.00 100.00

VSNL International (ITXC) Corp. United States of America 100.00 100.00

VSNL International (Poland) Sp.z.o.o Poland 100.00 100.00

Tata Communications (Japan) KK. Japan 100.00 100.00

Videsh Sanchar Nigam Spain Srl Spain 100.00 100.00

Tata Communications (UK) Limited United Kingdom 100.00 100.00

Tata Communications Deutschland GMBH Germany 100.00 100.00

Tata Communications (Middle East) FZ-LLC United Arab Emirates 100.00 100.00

Tata Communications (Hungary) LLC Hungary 100.00 100.00

Tata Communications (Ireland) Limited Ireland 100.00 100.00

Tata Communications (Russia) LLC Russia 100.00 100.00

Tata Communications (Switzerland) GmbH Switzerland 100.00 100.00

Tata Communications (Sweden) AB Sweden 100.00 100.00

TCPoP Communication GmbH(Date of Incorporation: 30 April, 2009) Austria 100.00 -

Tata Communications (Taiwan) Limited(Date of Incorporation: 02 November, 2009) Taiwan 100.00 -

VSNL Telecommunications (Bermuda) Limited(Liquidated vide order dated 24 April, 2009) Bermuda - 100.00

VSNL UK Limited(Liquidated vide order dated 18 October, 2009) United Kingdom - 100.00

Teleglobe Bermuda Limited(Liquidated vide order dated 9 October, 2009) Bermuda - 100.00

VSNL International (Hong Kong) Limited(Liquidated vide order dated 20 November, 2009) Hong Kong - 100.00

Teleglobe International Limited(Liquidated vide order dated 20 October, 2009) United Kingdom - 100.00

Joint Ventures

United Telecom Limited Nepal 26.66 26.66

SEPCO Communications (Pty.) Ltd. South Africa 43.16 43.16

(Held through VSNL SNOSPV Pte LTD)

Cochin Submarine Cable Depot (India) Private Limited(Date of Incorporation: 31 December, 2008) India 40.00 -

Associates

NEOTEL (Pty.) Ltd. South Africa 27.00 27.00

(Held through VSNL SNOSPV Pte LTD)

Bit Gravity Inc (Date of acquisition: 14 December, 2009) United States of America 22.86 -

(Held through Tata CommunicationsInternational Pte Limited)

Percentage of voting powerCountry of As at 31 As at 31Incorporation March, 2010 March, 2009


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2. The Company was incorporated on 19 March, 1986. The Government of India vide its letter No.G-25015/6/86OCdated 27 March, 1986, transferred all the assets and liabilities of the Overseas Communications Service (OCS) (part ofthe Department of Telecommunications, Ministry of Communications) as appearing in the Balance Sheet as at 31March, 1986 to the Company with effect from 01 April, 1986. As per the letter no. G-25015/6/86-OC dated 23 October,2001 of Government of India, Department of Telecommunications, there was no requirement to register a formaltransfer deed or deed of sale in the matter of such transfer of assets. During the year 2007-08, the Company changedits name to Tata Communications Limited and the fresh certificate of incorporation consequent upon the change ofname was issued by the Registrar of Companies, Maharashtra on 28 January, 2008. The Management has changednames of certain subsidiaries and is in the process of changing the names of the other subsidiaries to reflect thename “Tata Communications” in names.

3. The Board of Directors of the Company recommended a dividend of Rs. NIL (2009: Rs. 4.50) per share to its shareholdersfor the year ended 31 March, 2010.

4. During the year 2008-09, in terms of the agreements entered into between Tata Teleservices Ltd. (“TTSL”), Tata SonsLtd. (“TSL”) and NTT DoCoMo, Inc. of Japan (Strategic Partner-SP), TSL gave an option to the Company to sell 36,542,378equity shares in TTSL to the SP, as part of a secondary sale of 253,163,941 equity shares effected along with aprimary issue of 843,879,801 shares by TTSL to the SP. Accordingly, the Company realized Rs 424.22 crores on sale ofthese shares resulting in a profit of Rs 362.08 crores which was reflected as exceptional item in the profit and lossaccount for the previous year.

If certain performance parameters and other conditions are not met, should the SP decide to divest its entireshareholding in TTSL, acquired under the primary issue and the secondary sale, and should TSL be unable to find abuyer for such shares, the Company is obligated to acquire the shareholding of the SP, at the higher of fair value or50 percent of the subscription purchase price, in proportion of the number of shares sold by the Company to theaggregate of the secondary shares sold to the SP, or if the SP divests the shares at a lower price pay a compensationrepresenting the difference between such lower sale price and the price referred to above.

Further, in the event of breach of the representations and warranties (other than title and tax) and covenants notcapable of specific performance, the Company is liable to reimburse TSL, on a pro rata basis, up to a maximum sumof Rs 548.50 crores.

The exercise of the option by SP being dependent on several variables, the liability, if any, in this respect is remoteand indeterminable.

5. As at 31 March, 2010 the proportionate share of pension obligations and payments of Rs. 61.15 crores (2009: Rs 61.15crores) to the erstwhile Overseas Communications Service (“OCS”) employees were recoverable from the Governmentof India (“the Government”). Pursuant to discussions with the Government, the Company had made a provision of Rs.53.71 crores (2009: Rs 53.71 crores) thereby having a net amount due from the Government towards its share ofpension obligations of Rs. 7.44 crores (2009: Rs 7.44 crores).

6. On 27 August, 2008, the Arbitration Tribunal (the “Tribunal”) of the International Chamber of Commerce, Haguehanded down a final award in the arbitration proceedings brought by Reliance Globalcom Limited (“Reliance”),formerly known as ‘FLAG Telecom’, against the Company relating to the Flag Europe Asia Cable System. The Tribunaldirected the Company to pay Rs. 95.60 crores (US$ 21.45 million) as final settlement against US$ 385 million claimedby Reliance. The amount of Rs. 95.60 crores was charged to Profit and Loss Account for the year ended 31 March2009 and disclosed as an exceptional item.

7. On January 16, 2010, the Group through its UK subsidiary completed its purchase of business and assets of Cosmosbusiness of British Telecommunications PLC (“BT”) for a cash consideration of Rs. 14.62 crores (GBP 2 million). BT is inthe business of development and supply of the product, together with the provision of equipment and professionalservices exclusively relating to the Product. The entire amount of consideration is attributable to the Mosaic (Software)platform and hence there is no Goodwill/Capital Reserve involved in the transaction.

8. On January 19, 2009 the Group entered into an agreement with Eskom and Transnet (two South African state ownedenterprises) to acquire their 27% interest in Neotel, the second telecommunications operator in South Africa for aconsideration of Rs. 135.13 crores which is valued at Rs 132.60 crores (2009: Rs 139.93 crores) as on balance sheetdate in the form of Rs 88.54 crores (2009: Rs 90.16 crores) in equity shares and Rs 44.06 crores (2009: Rs 49.77 crores)in preference shares. During the year the Company has further subscribed to preference shares in Neotel which isvalued at Rs 35.45 crores.

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9. In fiscal 2009, the Group through its Hong Kong subsidiary had advanced an amount of Rs. 59.77 crores ($ 14 Million)towards the investment in the joint-venture represented by two bonds of Rs. 15.04 crores ($3.5 million) each (valuedat Rs. 31.51 crores and Rs. 35.59 crores in 2010 and 2009 respectively), subscribed on June 16, 2008 in China EnterpriseCommunications Limited’s (CEC) Hong Kong subsidiary viz. China Enterprise Netcom Corporation Ltd., and by payingan amount of Rs. 29.69 crores (US $ 7 million) into an escrow account on August 13, 2008.

The bonds were to be redeemed and paid to the Company’s Hong Kong subsidiary by CEC’s Hong Kong subsidiaryupon approval of the Joint Venture and closure of the transaction, while the amount in escrow was to be released toCEC in partial satisfaction of the purchase price of the shares in CEC.

The bonds have been valued at Rs. 31.51 crores (2009: Rs. 35.59 crores) as on balance sheet date and have beenclassified under investments and the amount paid into escrow has been valued at Rs. 31.51 crores (2009: Rs. 35.59crores) as on balance sheet date and has been classified under Loans and Advances in the financials. The parties tothe agreement are at an advanced stage for terminating the agreement and the above amount of Rs. 63.02 crores(US $ 14 million) will be paid back to the Company.

10. On August 6, 2008, the Group through its Dutch subsidiary subscribed to a convertible promissory note and warrantsissued by Bit Gravity Inc., a non public company, for a cash consideration of Rs. 48.56 crores ($11.5 million) valued atRs 51.76 crores (2009: Rs 58.47 crores) as on balance sheet date. The convertible notes carry interest at 5% perannum. The notes are convertible to Bit Gravity’s common stock at the same price as that issued to other investors30 days before the Company’s exercise of the conversion option. In the event that no common stocks have beenissued 30 days before conversion, preferred stocks will be issued at fair values.

The warrants can be exercised to obtain Bit Gravity’s common stock at the same price as that issued to otherinvestors 30 days prior to the date of Company’s exercise. In the event no common stock has been issued 30 daysbefore the exercise of warrants, preferred stocks will be issued at fair value.

In addition to above, on December 14, 2009, Company has acquired an equity interest of 22.86% for a considerationof Rs 6.15 crores ($1.3 million) valued at Rs 5.95 crores in Bit Gravity. Hence, the Company has accounted for thisinvestment as investment in associate. Under the terms of Stock purchase agreement dated December 14, 2009entered with seller, The Company received an option to acquire same number of shares at same price. This option isrequired to be exercised within 6 months of stock purchase agreement.

11. In the previous year the Company entered into a Joint Venture (40:60) with Indian Ocean Cableship Pte LimitedSingapore (IOCPL) for investment in M/s Cochin Submarine Cable Depot (India) Private Limited. During the year theCompany subscribed to 40,000 shares of face value Rs 10 each amounting to Rs 0.04 crores.

12. During the year the Company acquired 100% equity interest in S&A Internet Services Private Limited for aconsideration of Rs 0.01 crores. Goodwill on consolidation arising on account of this is Rs 0.14 crores.

13. In January 2008, an amount of Rs. 295 crores was paid to the Department of Telecommunications (DoT) underprotest, towards payment of licence fees, interest and penalty demanded by DoT before issue of certain licences tothe Company. Against this, the Company carried a provision of Rs. 174.15 crores for license fees and interest thereonwhich has been set off against the payment of Rs. 295 crores for the presentation in the financials. The Company hasfiled the petition in the Honorable Supreme Court of India challenging the judgement of TDSAT relating to thecomputation of license fee.

Additionally, the Company has also filed a petition in the Telecom Disputes Settlement and Appellate Tribunal(TDSAT) challenging applicability of penal provisions under ILD and NLD licence agreements, whereby DoT claimedpenalty and interest on penalty amounting to Rs. 115.73 crores (included in aforesaid Rs. 295 crores). Consequently,the amount of Rs.115.73 crores together with the excess license fee paid of Rs. 5.12 crores (Payment of Rs. 295 croresas reduced by Rs. 289.88 crores computed by the Company for license fees, interest thereon and penalty) totalling toRs. 120.85 crores was reflected as an asset in the books as at 31 March, 2009.

During the year, TDSAT has accepted the Company’s position and decided in favour of the Company. However, DoThas filed an appeal in the Honorable Supreme Court of India challenging the judgement of TDSAT relating to thewaiver of Penalty and Interest on Penalty. Further, DoT completed the assessment for the year ended 31 March, 2006in the current fiscal and adjusted the aforesaid excess license fee of Rs. 5.12 crores; as a result, the balance amount ofRs. 115.73 crores is reflected as an asset in the books as at 31 March, 2010.


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14. The Board of Directors of the Company at its meeting held on 4 December, 2007 approved the merger of theCompany’s wholly owned subsidiary, VSNL Broadband Limited (VBL) with effect from 1 March, 2007. The Hon’bleHigh Court of Judicature at Bombay approved the scheme vide their order dated 3 April, 2009.

The excess of the cost of investment held by the Company in VBL over the net book value of assets taken over by theCompany amounting to Rs. 109.87 crores has been transferred to the Securities Premium Account.

15. During the year the Company received a favourable order from Income tax Appellate Tribunal (ITAT) pertaining tofinancial year 1993-94, which was further supported by a favourable legal advice. Consequently the Company haswritten back the corresponding tax provision of Rs. 280.01 crores. Interest on the above of Rs. 215.56 crores is includedin Rs. 218.28 crores of interest on Income tax refund reflected as exceptional item in Profit and loss account.

16. The Company had entered into an agreement with effect from 1 January, 2007 with one of its customers for carriageof NLD traffic for a period of two years. In view of disputes between the parties, the agreement was truncated witheffect from July, 2008. Pending resolution of the dispute, the Company had not recorded the amount claimed fromthe customer as there was no certainty of realizing the amount claimed. The matter was referred to conciliation andan award of Rs. 29 crores was made leaving the modalities of settlement to the parties. The discussions are to beinitiated and negotiated. The result of these negotiations on settlement cannot be reasonably estimated and hencehas not been recognized.

17. Financial Statements for the following companies considered in the consolidated financial statements are based onmanagement accounts and are therefore unaudited:

(Rs. in crores)Subsidiaries Total Assets Total Revenues Cash flows

included in included in included inConsolidation Consolidation Consolidation

VSNL SNOSPV Pte Ltd. 376.91 - (2.32)S&A Internet Services Pvt. Ltd. 0.87 0.01 0.03

Total 377.78 0.01 (2.29)

Joint Ventures Share in Total Share in Total Share in CashAssets included in Revenues included in flows included in

Consolidation Consolidation Consolidation

United Telecom Ltd 33.01 11.55 (1.29)Sepco (Pty.) Ltd. (Standalone) (0.02) - 0.02Cochin Submarine Cable Depot (India)Pvt. Ltd. 0.18 - 0.01

Total 33.17 11.55 (1.26)

Associate Share in lossincluded in consolidation

Bit Gravity Inc. 0.55

18. A) Secured Debentures

During the year 2008-09, the Company issued Rated Taxable Secured Redeemable Non-convertible Debenturesin demat form for cash at par on private placement basis aggregating to Rs 1250 Crores. IDBI TrusteeshipServices Limited has been appointed as trustee to the debenture issue.

Nature of Security

Rs. 1,000 crores, 11.70% debentures (face value of Rs. 10,00,000 each) are secured by a first legal mortgage andcharge on the Company’s immovable property being the free hold land at Mouje Maharajpura, Gujarat andPlant and machinery represented by earth stations, network equipments, Land and sea cables, transmissionequipments and other telecom equipments.


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Rs. 250 crores, debentures (interest ranging from 11.00% to 11.25%, face value of Rs. 10,00,000 each) aresecured by a first legal mortgage and charge on the Company’s immovable property being the free hold landat Parambur Barracks, Chennai and Plant and machinery represented by land cable network and equipments.

Redemption Terms

These debentures are due for redemption as given below-

Date of redemption 10000, 11.70% 1900, 11.00% 550, 11.20% 50, 11.25%as per terms Debentures Debentures Debentures Debentures

of issue Rs. in Crores

25 November, 2011 40025 November, 2012 40025 November, 2013 20023 July, 2014 19023 January, 2016 5523 January, 2019 5

Total 1,000 190 55 5

For facilitating the above redemptions, the Company has created a Debenture Redemption Reserve of Rs316.07 crores (2009: Rs 102.50 crores) has been appropriated during the current year.

B) Unsecured Debentures

During the year, the Company has issued Rated, Unsecured, Taxable, Redeemable Non-convertible Debenturesof face value Rs 10,00,000 each, in a demat form for cash at par on a private placement basis aggregating Rs 700Crores.

Redemption Terms

Date of redemption 4000, 7.74% 1500, 9.50% 1500, 9.85%as per terms Debentures Debentures Debenturesof issue Rs. in Crores

25 March, 2012 40008 June, 2014 15002 July, 2019 150

Total 400 150 150

For facilitating the above redemptions, the Company has created a Debenture Redemption Reserve of Rs.38.77crores has been appropriated during the current year.

19. Employee Benefits:

(A) Domestic

Retirement Benefits

(a) Defined Contribution plan

- Provident Fund

The Company makes contribution towards provident fund to a defined contribution retirement benefit plan forqualifying employees. The provident fund is administered by the Trustees of the Tata Communications Employees’Provident Fund Trust. Under this scheme, the Company is required to contribute a specified percentage ofpayroll cost to fund the benefits. For certain subsidiaries contribution is paid to Provident Fund Commissioner.


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The Rules of the Company’s Provident Fund administered by a Trust require that if the Board of Trustees areunable to pay interest at the rate declared for Employees’ Provident Fund by the Government under para 60 ofthe Employees’ Provident Fund Scheme, 1952 for the reason that the return on investment is less or for anyother reason, then the deficiency shall be made good by the Company. Having regard to the assets of the Fundand the return on the investments, the Company does not expect any deficiency in the foreseeable future.There has also been no such deficiency since the inception of the Fund.

On account of provident fund a sum of Rs. 17.23 crores (2009: Rs. 14.46 crores) has been charged to the profitand loss account.

(b) Defined Benefit Plans

- Gratuity

The Company makes annual contributions for Employee’s Gratuity scheme to a fund administered by trusteescovering all eligible employees. The plan provides for lump sum payment to vested employees at retirement,death while in employment or on termination of employment in an amount equivalent to 15 days salarypayable for each completed year of service or part thereof in excess of six months. Vesting occurs uponcompletion of five years of service. For certain subsidiaries gratuity plan is unfunded.

- Medical Benefit

The Company reimburses domiciliary and hospitalisation expenses incurred by eligible and qualifying employeesand their dependent family members not exceeding certain specified limits under the Tata Communicationemployee’s medical reimbursement scheme. The scheme provides for cashless hospitalisation where the claimsare directly reimbursed by the Company.

- Pension Plan

The Company’s pension obligation is in respect of certain employees transferred to the Company from theOverseas Communications Service (OCS). The Company purchases life annuity policies from an insurance companyto settle such pension obligation. During the year the Company purchased additional annuity of Rs 7.77 crores(2009: Rs. 10.51 crores) to meet the additional pension obligation on account of increase in Dearness Allowance.

The details in respect of status of funding and the amounts recognized in the Company’s financial statement asat 31 March, 2010 and 2009 for these defined benefit schemes are as under:

(i) Changes in the defined benefit obligation:Defined Benefit Plans

Gratuity Gratuity MedicalBenefit

(Funded) (Unfunded) (Unfunded)As at 31 As at 31 As at 31

March, 2010 March, 2010 March, 2010Rs. in crores Rs. in crores Rs. in crores

Projected defined benefit obligation, beginningof the year (1 April, 2009) 33.35 1.36 35.68

Current Service Cost 2.92 0.54 4.45

Past Service Cost 13.21 0.60 -

Interest Cost 2.64 0.14 2.68

Liability transferred from other companies 0.14 0.11 -

Others (0.27) - -

Actuarial (gain) / loss (3.78) 0.27 5.90

Benefits paid (2.26) (0.07) (5.54)

Projected benefit obligation at the end of the year 45.95 2.95 43.17


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Defined Benefit PlansGratuity Gratuity Medical

Benefit(Funded) (Unfunded) (Unfunded)

As at 31 As at 31 As at 31March, 2009 March, 2009 March, 2009Rs. in crores Rs. in crores Rs. in crores

Projected defined benefit obligation, beginningof the year (1 April, 2008) 27.93 0.80 31.54

Current Service Cost 2.50 0.40 4.03

Interest Cost 2.04 0.04 2.52

Liability transferred to other companies 0.46 - -

Actuarial (gain) / loss 2.01 0.20 6.69

Benefits paid (1.59) (0.08) (9.10)

Projected benefit obligation at the end of the year 33.35 1.36 35.68

(ii) Changes in the fair value of plan assets for gratuity:

Particulars As at 31 As at 31March, 2010 March, 2009

(Funded) (Funded)Rs. in crores Rs. in crores

Fair value of plan assets, beginning of the year 30.29 30.82

Expected return on plan assets 2.56 2.41

Employer’s contribution 2.76 0.15

Transfer from other company 0.14 0.46

Actuarial (loss)/ gain 0.60 (1.99)

Benefits paid (2.26) (1.56)

Fair value of plan assets at the end of the year 34.09 30.29

(iii) The amounts recognised in the profit and loss account for the year ended 31 March, 2010 and 2009



Year ended 31 Year ended 31 Year ended 31March, 2010 March, 2010 March, 2010Rs. in crores Rs. in crores Rs. in crores

Current service cost 2.92 0.54 4.45

Past service cost 13.21 0.60 -

Interest cost 2.64 0.14 2.68

Expected return on plan assets (2.56) - -

Net actuarial loss/(gain) recognised in the year (4.38) 0.27 5.90

11.83 1.55 13.03



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Current service cost 2.50 0.40 4.03

Interest cost 2.04 0.04 2.52

Expected return on plan assets (2.41) - -

Net actuarial loss/(gain) recognised in the year 3.94 0.27 6.69

6.07 0.71 13.24

(iv) The amounts recognized in the Balance sheet is as follows


Benefits(Funded) (Unfunded) (Unfunded)


Present value of funded obligations 45.95 - -

Fair value of plan assets (34.09) - -

Present value of unfunded obligations - 2.95 43.17

Net (asset)/liability in balance sheet 11.86 2.95 43.17






Present value of unfunded Obligations - 1.36 35.68

Net (asset)/liability in balance sheet 3.06 1.36 35.68


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Present value of unfunded Obligations - 0.80 31.54

Net (asset)/liability in balance sheet (2.89) 0.80 31.54


Category of assets As at 31 As at 31March, 2010 March, 2009

Corporate Bonds - 1.96%

State Government Bonds - 8.28%

Insurer Managed Fund 100.00% 89.76%

Total 100.00% 100.00%

The Company’s policy and objective for plan assets management is to maximize return on plan assets tomeet future benefit payment requirements while at the same time accepting a low level of risk. The assetallocation for plan assets is determined based on investment criterion approved under the Income Tax Act,1961 and is also subject to other exposure limitations.

(vi) Principal actuarial assumptions used in accounting for gratuity and medical benefit obligations:

Gratuity Gratuity MedicalBenefits

(Funded) (Unfunded) (Unfunded)Assumptions As at 31 As at 31 As at 31

March, 2010 March, 2010 March, 2010

Discount rate 8.25% 8.00% – 8.25% 8.25%Expected return on plan assets 8.00% - -Increase in compensation cost 6.00% 6.00% 6.00%Health care cost increase rate - - 2.00%

Gratuity Gratuity MedicalBenefits

(Funded) (Unfunded) (Unfunded)Assumptions As at 31 As at 31 As at 31

March, 2009 March, 2009 March, 2009

Discount rate 7.50% – 8.00% 7.75% 7.50%Expected return on plan assets 8.00% - -Increase in compensation cost 6.00% – 7.00% 5.00% 6.00%Health care cost increase rate - - 2.00%

The estimates of future compensation cost considered in actuarial valuation take account of inflation,seniority, promotion and other relevant factors.



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(vii) Effect of change in Assumed Health Care Cost Trend Rate. A one-percentage-point change in assumedhealth care cost trend rates would have the following effects:

31 March, 2010 31 March, 20091 Percentage point 1 Percentage point

Increase Decrease Increase DecreaseRs. in crores Rs. in crores Rs. in crores Rs. in crores

Effect on service cost 0.44 0.48 0.44 0.43

Effect on interest cost 0.26 0.27 0.31 0.31

Effect on post-employmentbenefit obligation 4.71 4.62 3.89 3.82

As the present value of the plan assets is less than the present value of funded obligations, the Companyexpects to contribute Rs 14.19 crores to its funded defined benefit plans in 2010-11.

(B) International

(a) Defined Contribution plans

The Group makes contribution to defined contribution retirement benefit plans under the provisions ofsection 401(k) of the Internal Revenue Code for USA employees, a Registered Retirement Savings Plan(RRSP) for Canadian employees and a Group Stakeholder Pension plan (GSPP) for UK employees. An amountof Rs. 12.34 crores (2009: Rs. 11.50 crores) is charged to Profit and loss account for the year ended31 March, 2010.

In addition to above the Group has made a contribution of Rs. 11.42 crores (2009: Rs 8.14 crores) in respectof Sepco, a joint venture with the Group.

(b) Defined Benefit Pension Plans

Pension

On 13 February, 2006 the Group assumed Teleglobe’s contributory and non-contributory defined benefitpension plans covering certain of its Canadian employees, designed in accordance with conditions andpractices in Canada.

In addition, the Group assumed Teleglobe’s unfunded Supplemental Employee Retirement Plan (“SERP”)maintained for certain senior Canadian executives as part of the acquisition closed on 13 February, 2006.

Health and Life insurance

The Group also assumed a post-retirement health care and life insurance plan for its current retirees andfuture retirees in the purchase of Teleglobe.

The details in respect of status of funding and the amounts recognised in the Company’s financial statementas at 31 March, 2010 for these defined benefit schemes are as under:


125

(i) Changes in the defined benefit obligation:

Pension Plans Health careand Life

insurancePlans

Non-Contributory contributory SERP

As at As at As at As at31 March, 31 March, 31 March, 31 March,

2010 2010 2010 2010Rs. in crores Rs. in crores Rs. in crores Rs. in crores

Projected defined benefit obligation,beginning of the year (1 April, 2009) 283.70 238.02 7.84 7.33

Current Service cost 1.70 5.88 0.34 0.10

Interest cost 23.55 20.04 0.70 0.60

Benefits paid (22.65) (21.09) - (0.95)

Actuarial (gain)/loss 73.79 81.77 3.50 (0.04)

Effect of foreign exchange rate changes 26.96 23.02 0.79 0.66



insurancePlans


As at As at As at As at31 March, 31 March, 31 March, 31 March,


Projected defined benefit obligation,beginning of the year (1 April, 2008) 351.30 297.46 11.17 8.41

Current Service cost 2.03 8.08 0.45 0.13

Interest cost 20.54 17.68 0.69 0.49

Benefits paid (21.89) (21.18) (0.21) (0.96)

Actuarial (gain) / loss (81.39) (75.14) (4.68) (1.05)





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(ii) Changes in the fair value of plan assets for pension plans

Pension Plans

Non- Non-Contributory Contributory Contributory contributory

As at 31 As at 31 As at 31 As at 31March, 2010 March, 2010 March, 2009 March, 2009Rs. in crores Rs. in crores Rs. in crores Rs. in crores

Fair value of plan assets, beginningof the year 440.95 317.06 460.90 321.79

Actual return on plan assets 25.37 18.59 25.82 18.29

Contributions - 17.52 - 15.42

Benefits paid (22.65) (21.09) (21.89) (21.18)

Actuarial gain / (loss) 17.11 12.48 (40.66) (28.92)


Fair value of plan assets, endof the year 500.95 373.68 440.95 317.06

(iii) The components of pension expense recognized in the Profit and Loss account for the year ended 31March, 2010 and 2009:

Year ended 31 Year ended 31March, 2010 March, 2009Rs. in crores Rs. in crores

Current service cost 8.02 10.69

Interest cost 44.89 39.40

Actual return on plan assets (43.96) (44.11)

Net Actuarial loss/(gain) recognized 125.62 (92.68)

Effect of foreign exchange ratechanges (Net) (39.03) 34.65

95.54 (52.05)


127

(iv) The amounts recognized in the Balance sheet is as follows:


insurancePlans


Year ended Year ended Year ended Year ended31 March, 31 March, 31 March, 31 March,


Present value of funded obligations 387.05 347.64 - -

Fair value of plan assets (500.95) (373.68) - -

Present value of unfunded obligations - - 13.17 7.70

Net (asset)/liability in balance sheet (113.90) (26.04) 13.17 7.70


insurancePlans









insurancePlans










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Category of assets As at 31 As at 31March, 2010 March, 2009

Government Bonds 76.00% 76.00%

Equity securities 19.00% 19.00%

Short term investments 5.00% 5.00%

Total 100.00% 100.00%

The Company uses an active management style to manage short-term securities, Canadian equitiesand international equities. Canadian bonds, US equities and the asset mix are managed passively. Toaccomplish this, the Company has entrusted this task to a professional investment manager. Themanagement mandate defines the targeted asset allocation and the parameters for evaluating themanager performance.

(vi) The assumptions used for the pension plans and the other benefit plans on a weighted-average basisare as follows:

Assumptions As at 31 As at 31March, 2010 March, 2009

Discount rate used for benefit costs 8.00% 5.75%

Discount rate used for benefit obligations 5.75% 8.00%

Expected long-term return on plan assets 5.50% 5.50%

Inflation 2.25% 2.50%

Rate of compensation increase 3.25% 3.50%

(vii) The health care cost trend rate has a significant effect on the amounts reported. The assumed healthcare trend rate used to determine the accumulated post-retirement benefit obligation calculated as at31 March, 2010 is 9.30% (2009:9.32%). A one-percentage-point change in assumed health care costtrend rates would have the following effects:

31 March, 2010 31 March, 20091 Percentage point 1 Percentage point

Increase Decrease Increase DecreaseRs. in crores Rs. in crores Rs. in crores Rs. in crores

Effect on service cost 0.02 0.01 0.03 0.02

Effect on interest cost 0.04 0.04 0.04 0.04

Effect on post-employmentbenefit obligation 0.61 0.54 0.47 0.42

The Group expects to contribute Rs. 21.52 crores (2009: Rs. 18.94 crores) to its defined benefit plans in2010-11.

129


20. Cash and cash equivalents represent :-

As at 31 As at 31March, 2010 March, 2009Rs. in crores Rs. in crores

Cash and Cheques on hand and balances held with banks 209.71 543.15

Remittances in transit 2.57 0.28

Deposit accounts held with banks 71.83 332.50

284.11 875.93

Less: Deposits with original maturity over three months (9.09) (11.65)

Less: Current Account / Deposits held for unpaid dividends (0.60) (0.78)

Less: Deposit accounts held as margin money (17.01) (0.04)

Less: Other Restricted Cash (0.04) (0.04)

Cash and cash equivalents 257.37 863.42

21. Deferred tax:

As at 31 As at 31March, 2010 March, 2009Rs. in crores Rs. in crores

Deferred tax liability/(assets) (Net)

Difference between accounting and tax depreciation 357.43 363.25

Provision for Leave Encashment (12.17) (9.39)

Provision for doubtful debts (33.53) (67.02)

Provision for Bonus (5.24) (3.96)

Expenditure incurred on NLD and EGO license fees (19.22) (21.46)

Unearned income / deferred revenues (72.44) (83.86)

Provisions for post employment benefit and Leave encashmentpursuant to the transitional provisions of AS-15 (8.94) (8.84)

Others (7.77) (12.82)

Net Deferred Tax Liability 198.12 155.90

Note: Amalgamation of VSNL Broadband Limited with the Company resulted in recognition of net deferred taxliability of Rs. 7.44 crores as on 31 March, 2008 which was adjusted against opening balance of the profit and lossaccount for the year ended 31 March 2009.


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22. Earnings per Share

Rs. in Croresexcept Number of shares and

Earnings per share dataYear ended Year ended

31 March 2010 31 March 2009

Net Profit after tax (597.74) 315.80

Weighted Number of Shares 285,000,000 285,000,000

Basic and Diluted Earnings per share Rs. (20.97) Rs. 11.08

23. Segment Reporting

Business Segments

The reportable segments for the year ended 31 March, 2010 and 31 March, 2009 are “Wholesale Voice”, “Enterpriseand Carrier Data” and “Others”. The composition of the reportable segments is as follows:

- Wholesale Voice: includes International and National Voice services.

- Enterprise and Carrier Data: includes corporate data transmission services like International Private LeasedCircuits (IPLC), Frame Relay (FR), Internet Leased Line Circuits (ILL) and National Private Leased Circuits (NPLC).

- Others: includes Global Roaming, Internet, Virtual Private Network, Data Center, TV up-linking, Transponder leaseCorporate Internet Telephony (CIT) and other services.

Year ended 31 March, 2010Rs. in crores

Wholesale Enterprise Others TotalVoice and

Carrier Data

Revenues from Telecommunications and Other Services 6,282.72 3,298.40 1,444.44 11,025.56

Segment Results 1,176.93 2,362.41 1,017.23 4,556.57

Unallocable expenses (net) (5,310.83)

Non Cash Expenses (Unallocable) (145.21)

Profit/(Loss) before taxes and exceptional items (899.47)

Exceptional Items 218.28

Profit/(Loss) before taxes (681.19)

Tax (expense)/income 142.39

Profit/(Loss) after taxes (538.80)

Minority interest – Share of Loss (Net) 88.60

Share in Loss of Associates (147.54)

Net Profit/(Loss) (597.74)

131


Year ended 31 March, 2009Rs. in crores

Wholesale Enterprise Others TotalVoice and

Carrier Data

Revenues from Telecommunications and Other Services 5,696.38 2,982.65 1,284.14 9,963.17

Segment Results 1,494.92 2,171.13 996.90 4,662.95

Unallocable expenses (net) (4,282.70)

Non Cash Expenses (Unallocable) (223.97)

Profit/(Loss) before taxes and exceptional items 156.28

Exceptional Items 266.48

Profit/(Loss) before taxes 422.76

Tax (expense)/income (230.73)

Profit/(Loss) after taxes 192.03

Minority interest – Share of Loss (Net) 131.78

Share in Loss of Associates (8.01)

Net Profit/(Loss) 315.80

i) Revenues and expenses, which are directly identifiable to segments, are attributed to the relevant segment.Expenses on rent of satellite channels and landlines, and royalty and license fees are allocated on the basis ofusage. Expenses on Leased Circuits acquired for Backbone and Access is allocated on the basis of revenue.Segment result is segment revenues less segment expenses. Certain costs, including depreciation which are notallocable to segments have been classified as “unallocable expense”.

ii) Telecommunication services are provided utilizing the Group assets which do not generally make a distinctionbetween the types of services. As a result, fixed assets are used interchangeably between segments. In theabsence of a meaningful basis to allocate assets and liabilities between segments, no allocation has been made.

Geographical Segment:

Segment revenues by Geographical Market



India 2,850.86 3,242.30

United States of America 1,936.25 1,788.06

United Kingdom 1,172.20 676.11

Canada 427.51 397.17

Germany 355.68 314.10

South Africa 526.76 293.09

Balance c/f 7,269.26 6,710.83


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Balance b/f 7,269.26 6,710.83

Saudi Arabia 176.09 211.02

Singapore 204.45 191.11

Bermuda 129.17 132.97

Hong Kong 178.73 115.90

Spain 137.05 124.21

France 125.21 137.74

United Arab Emirates 84.03 109.93

Netherlands 94.76 82.86

Others 2,626.81 2,146.60

11,025.56 9,963.17

24. Related Party Disclosures

(a) List of related parties and relationship:

I. Investing party

• Panatone Finvest Limited

• Tata Sons Limited

II. Key Managerial Personnel

• N.Srinath - Managing Director and Chief Executive Officer

• Vinod Kumar - Managing Director (Tata Communications International Pte. Ltd.) and Director of TataCommunications Limited.

III. Joint Ventures

• United Telecom Ltd.

• SEPCO Communications (Pty.) Ltd.

• (including its direct and indirect subsdiaries - Neotel (Pty.) Ltd. and Neotel Business Support Services(Pty.) Ltd.

• Cochin Submarine Cable Depot (India) Private Limited

IV. Associates

• Neotel (Pty.) Ltd

• Bit Gravity Inc.

SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS (Contd.)Geographical Segment (Contd.):

Segment revenues by Geographical Market



133

(b) Related party transactions

(Rs. in crores)

Key Joint TotalInvesting Managerial Venture /Company Personnel Associate

Transactions

Dividend Paid

Panatone Finvest Limited 47.10 - - 47.1052.19 - - 52.19

Tata Sons Limited 13.96 - - 13.9610.92 - - 10.92

Total 61.06 - - 61.0663.11 - - 63.11

BEBP Expenses


Total 10.28 - - 10.2815.47 - - 15.47

Revenues from Telecommunication services


United Telecom Limited - - 3.22 3.22- - 1.60 1.60

Bit Gravity Inc. - - 2.74 2.74- - - -

Neotel (Pty.) Ltd. - - 46.98 46.98- - 41.69 41.69

Total 1.16 - 52.94 54.102.53 - 43.29 45.82

Network Cost


Bit Gravity Inc. - - 17.74 17.74- - - -

Neotel (Pty.) Ltd. - - 35.57 35.57- - 11.12 11.12

Total - - 95.91 95.91- - 38.25 38.25



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Services received

Neotel (Pty.) Ltd. - - 0.55 0.55- - - -


Total 0.01 - 0.55 0.560.09 - - 0.09

Interest Income

SEPCO Communications (Pty.) Ltd. - - 12.25 12.25- - 7.63 7.63

Bit Gravity Inc. - - 0.81 0.81- - - -

Neotel (Pty.) Ltd. - - 18.65 18.65- - 3.06 3.06

Total - - 31.71 31.71- - 10.69 10.69

Loan given -


Neotel (Pty.) Ltd. - - 42.05 42.05- - 131.58 131.58

Total - - 104.36 104.36- - 180.67 180.67

Advances given by the Company -

Cochin Submarine Cable Depot (India) Private Limited - - 0.08 0.08- - - -

Neotel (Pty.) Ltd. - - - -- - 0.01 0.01

Total - - 0.08 0.08- - 0.01 0.01

Advances repaid by the Company

Neotel (Pty.) Ltd. - - - -- - 0.01 0.01

Total - - - -- - 0.01 0.01

Managerial Remuneration - 8.68 - 8.68- 8.90 - 8.90

Total - 8.68 - 8.68- 8.90 - 8.90

SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS (Contd.)(Rs. in crores)


135

Balances

Receivables


United Telecom Limited - - - -- - 0.03 0.03

Neotel (Pty.) Ltd. - - 66.80 66.80- - 27.17 27.17

Bit Gravity Inc - - 2.49 2.49- - - -


Total 0.08 - 93.20 93.280.34 - 37.24 37.58

Payables

Neotel (Pty.) Ltd. - - 28.24 28.24- - 2.77 2.77

Managerial Remuneration - 0.75 - 0.75- 0.45 - 0.45

Bit Gravity Inc - - 7.99 7.99- - - -



Total 11.22 0.75 42.91 54.8816.68 0.45 9.61 26.74

Loans Given


Neotel (Pty.) Ltd. - - 173.64 173.64- - 131.58 131.58

Total - - 305.94 305.94- - 201.57 201.57

Advance Receivable

Cochin Submarine Cable Depot (India) Private Limited - - 0.08 0.08- - - -

Neotel (Pty.) Ltd. - - 1.32 1.32- - 1.30 1.30

Total - - 1.40 1.40- - 1.30 1.30

Note:

1) Figures in italic are in respect of the previous year

2) The un-eliminated portion of transactions and balances with joint ventures has been disclosed for purposeof related party disclosures.

SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS (Contd.)(Rs. in crores)



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25. Operating lease arrangements:

(a) As lessee:



Minimum lease payments under operatingleases recognized as expense in the year 409.95 355.38

At the balance sheet date, minimum lease payments under non- cancellable operating leases fall due as follows:



Due not later than one year 411.27 295.17

Due later than one year but not later than five years 854.19 731.04

Later than five years 633.25 447.25

1,898.71 1,473.46

Operating lease payments represent rentals payable by the Company for certain buildings, satellite channels,office equipments, computer equipments and certain circuit capacities.

The minimum future lease payments have not been reduced by minimum operating sublease rentals of Rs.11.40 crores (2009: Rs 22.17 crores) due in the future under non-cancellable subleases for certain buildings,which primarily commenced in January 2002 and extend until 31 July, 2011. Rs. 9.02 crores (2009: Rs. 8.60 crores)was recognized in the current year as minimum sublease rental against the same.

(b) As lessor:

(i) The Company has leased under operating lease arrangements certain Indefeasible Right of Use (IRU) withgross carrying amount and accumulated depreciation of Rs. 50.45 crores (2009: Rs. 50.45 crores) and Rs.18.25 crores (2009: Rs. 14.89 crores) respectively as at 31 March, 2010. Depreciation expense of Rs. 3.36crores (2009: Rs. 3.36 crores) in respect of these assets has been charged in the profit and loss account forthe year ended 31 March, 2010.

In case of certain lease arrangements aggregating to Rs. 331.85 crores (2009: Rs. 272.31 crores) for the yearended 31 March, 2010, the gross block, accumulated depreciation and depreciation expenses of the assetsgiven on IRU basis is not readily determinable and hence not disclosed. The lease rentals associated withsuch IRU arrangements for the year ended 31 March, 2010 amounts Rs. 27.74 crores (2009: Rs. 23.39 crores).

In respect of the above, rental income of Rs. 31.74 crores (2009: Rs. 27.39 crores) has been recognised in theprofit and loss account for the year ended 31 March, 2010.

Future lease rental receipts will be recognized in the profit and loss account of subsequent years as follows:



Not later than one year 30.96 26.24

Later than one year but not later than five years 120.62 104.98

Later than five years 138.90 124.65

290.48 255.87


137

(ii) The Company has leased certain premises under operating lease arrangements. Future lease rental incomein respect of these leases will be recognized in the profit and loss account of subsequent years as follows:



Not later than one year 0.01 0.01

Later than one year but not later than five years - 0.01

Later than five years - -

0.01 0.02

Lease rental income of Rs. 0.01 crores (2009: Rs. 0.01 crores) in respect of the above leases has beenrecognized in the profit and loss account for the current year.

26. Finance Lease arrangements:

(a) As Lessee

As on 31 March, 2010, assets under finance leases with gross carrying amount and accumulated depreciation ofRs. 85.42 crores (2009: Rs. 95.08 crores) and Rs. 56.77 crores (2009: Rs. 49.51 crores) respectively, are included inthe total fixed assets. The net carrying amount of each class of asset under finance leases is as follows:

Gross carrying Accumulated Net carryingamount Depreciation amount

As at 31 March, As at 31 March, As at 31 March,

2010 2009 2010 2009 2010 2009

Rs. in crores Rs. in crores Rs. in crores

Building 1.84 1.84 0.19 0.16 1.65 1.69

Plant and Machinery 65.70 73.04 41.90 36.00 23.80 37.04

Furniture and Fixtures 4.26 4.81 1.77 1.51 2.49 3.30

Computers 13.62 15.39 12.91 11.84 0.71 3.55

85.42 95.08 56.77 49.51 28.65 45.58

Minimum lease payments and the corresponding present value are as follows:

Minimum lease Present Value Difference representingpayments (“MLP”) of (“MLP”) Interest

Year ended 31 March, Year ended 31 March, Year ended 31 March,

2010 2009 2010 2009 2010 2009

Rs. in crores Rs. in crores Rs. in crores

Not later than one year - 0.30 - 0.30 - -

Later than one yearbut not later than five years - - - - - -

Later than five years - - - - - -

- 0.30 - 0.30 - -



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27. Provision for Contingencies:


Asset AssetRetirement RetirementObligation Obligation

(“ARO”) Others Total (“ARO”) Others Total

Balance as at beginningof the year 33.86 9.00 42.86 20.41 9.00 29.41

Provision made during the year 2.18 - 2.18 1.12 - 1.12

Payment made during the year - - - (4.23) - (4.23)

Liability incurred in current year 22.73 - 22.73 14.11 - 14.11

Effect of change in foreignexchange rate (gain)/ loss (3.94) - (3.94) 3.98 - 3.98

Provisions no longer requiredwritten back (0.24) - (0.24) (1.53) - (1.53)

Balance as at end of the year 54.59 9.00 63.59 33.86 9.00 42.86

Notes:

1) The provision for ARO has been recorded in the books of the Group in respect of undersea cables and switchesowned by the Group.

2) Others include amounts provided towards claims made by creditors of the Group.

28. Contingent Liabilities and Capital Commitments

Contingent Liabilities:As at As at


i. Claims for taxes on income (Refer Note 1)

(a) Income tax disputes where the department isin appeal against the Company 322.00 314.70

(b) Income tax disputes where the Company has afavourable decision in other assessment year for the same issue 22.39 22.39

(c) Income tax disputes other than the above 1,489.67 1,544.18

ii. Claims for other taxes 118.08 51.46

iii. Other claims 575.12 888.82


139

Notes:

(1) Significant claims by the revenue authorities in respect of income tax matters are in respect of:

(a) Significant claims by the revenue authorities in respect of income tax matters are in respect of deductionsclaimed under Section 80 IA of the Income Tax Act, 1961 from Assessment years 1996-97 onwards havebeen disallowed by the revenue authorities. The Company has contested the disallowance and has preferredappeals which are pending.

(b) The Company has taken appropriate professional advice in respect of the claims / appeals and has taken allnecessary steps to protect its interest. Based on expert opinion, no provision is required in respect of theseclaims / appeals.

(2) Contingent liabilities, if any, in respect of sale of shares of Tata Teleservices Limited has been stated in Note B-4,schedule 20.

(3) In April 2010, the Company voluntarily disclosed to the U.S. Department of Justice and the U.S. Securities andExchange Commission the results of an internal investigation conducted by outside counsel for the Companyrelating to the activities of a reseller of one of the Company’s subsidiaries, Tata Communications InternationalPte Ltd. The internal investigation found evidence that the reseller may have offered and made improperpayments to officials of a government purchaser in a Southeast Asian country in connection with the resale ofthe Company’s products. The investigation also found evidence that the Company’s sales consultant in thecountry was aware of the reseller’s potentially improper activities. Such activities may have violated the U.S.Foreign Corrupt Practices Act. The investigation did not reveal any prior involvement or knowledge regardingthese activities by any officer or director of the Company or its subsidiary. The Company has taken remedialaction, including terminating its relationship with the sales consultant and with the reseller. The Companycannot predict the ultimate consequences of these matters at this time, nor can we reasonably estimate thepotential liability, if any, related to these matters. However, based on the facts currently known, we do notbelieve that these matters will have a material adverse effect on our business, financial condition, results ofoperations or cash flow.

(4) As part of its normal ongoing review of ITXC Corp.’s (“ITXC”) operations in connection with the post-mergerintegration of Teleglobe, a predecessor in interest to VSNL Telecommunications (Bermuda) Ltd, and ITXC, Teleglobehad identified potential instances of non-compliance with the United States Foreign Corrupt Practices Act(“FCPA”) relating to ITXC’s operations in certain African countries prior to its merger with Teleglobe, consummatedon 31 May, 2004. Teleglobe voluntarily notified the Securities Exchange Commission (SEC) and the U.S. Departmentof Justice (the “DOJ”) of the matter, and the Company has been cooperating fully with the SEC and the DOJ. TheSEC had previously advised Teleglobe that it was conducting an informal inquiry into the matter. Teleglobe hasbeen informed that the SEC issued a formal order of investigation on 15 February, 2005 concerning ITXC’spossible violations of the FCPA and possible related violations of the securities laws. On 27 July, 2005, the SECissued a subpoena to Teleglobe for documents relating to its investigation. The Company cannot predict theextent to which the SEC, the DOJ or any other governmental authorities will pursue administrative, civil orcriminal proceedings, the imposition of fines or penalties or other remedies or sanctions. The Company has notidentified, and does not believe it is likely that, any material adjustment to its financial statements is or will berequired in connection with the results of this investigation, although it is possible that a monetary penalty, ifany, may be material to its results of operations in the period in which it is imposed.

The subsidiaries of the Company in various geographies are routinely party to suits for collection, commercialdisputes, claims from customers and/or suppliers over reconciliation of payments for voice minutes, circuits,Internet bandwidth and/or access to the public switched telephone network, leased equipment, and claimsfrom estates of bankrupt companies alleging that we received preferential payments from such companiesprior to their bankruptcy filings. While management currently believes that resolving such suits and claims,individually or in aggregate, will not have a material adverse impact on the Company’s financial position, the



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FCPA investigations noted above are subject to inherent uncertainties and management’s view of this mattermay change in the future. Were an unfavorable final outcome to occur, such an outcome could have a materialadverse impact on the Company’s financial position and results of operations for the period in which the effectbecomes reasonably estimable.

Capital commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 2,413.22crores (2009: Rs. 3,081.94 crores).

Capital Commitment towards associate is Rs 121.32 crores (2009: Rs 235.02 crores)

As per the Equity Joint Venture (EJV) Agreement entered between the Group through its Hong Kong subsidiaryand the shareholders of CEC additional amount of Rs.30.86 crores (US$ 6.5 million) will be payable to CECsubject to audit and regulatory approvals.

29. United Telecom Limited (UTL) is a Joint Venture between the Company, Mahanagar Telephone Nigam Limited,Telecommunications Consultant India Limited and Nepal Ventures Private Limited. The Company has 26.66 percentequity ownership in UTL. UTL operates basic telephony services in Nepal based on Wireless-in-local loop technology.

The Company’s share in income, expenses, assets and liabilities based on the uniform accounting policy adopted bythe Company and after inter-company eliminations based on management accounts for the year ended 31 March,2010 and 31 March, 2009 are as follows:


LIABILITIES: Rs. in crores Rs. in crores1 Reserves and Surplus (30.03) (25.77)2 Secured Loan 8.37 13.723 Unsecured Loan 6.95 8.76

ASSETS :4 Fixed Assets

(a) Gross Block 47.28 41.77(b) Less: Accumulated Depreciation 20.21 15.80

(c) Net Block 27.07 25.97(d) Capital work-in-progress 6.54 -

33.61 25.975 A. Current Assets

(a) Inventories 1.15 0.78(b) Sundry Debtors 4.58 5.84(c) Cash and Bank Balances 1.82 3.11(d) Other Current Assets 0.66 1.96

8.21 11.69B. Loans And Advances 1.34 12.42

9.55 24.116 Less: Current Liabilities 10.15 17.57

7 Net Current assets (0.60) 6.54


141

1 Traffic Revenue 11.55 2.92 Other Income - 0.063 Interest Income 0.09 0.22

Total Income 11.64 3.18

EXPENDITURE4 Salaries and Related Costs 0.86 0.735 Network Costs 13.20 1.466 Operating and Other Expenses 4.23 3.857 Interest Expense 1.82 2.138 Depreciation 4.79 3.4

Total Expenditure 24.90 11.57

INCOMECONTINGENT LIABILITIES(i) Claims for other Taxes - -(ii) Other Claims - -

- -

30. As at 31 March, 2010, the Company through it’s wholly owned subsidiary, VSNL SNOSPV Pte. Ltd., has 43.16 percent(2009: 43.16 percent) ownership in the issued and paid-up share capital of the Joint Venture SEPCO Communications(Pty.) Ltd. (Sepco).

(i) SEPCO is an investment company which has acquired 51 percent controlling stake in the issued and paid-upshare capital of Neotel (Pty.) Ltd, the licensed second network operator in South Africa. The Company’s share inincome, expenses, assets and liabilities based on the uniform accounting policy adopted by the Company andafter inter-company eliminations for the year ended 31 March, 2010 and 31 March, 2009 are as follows:


LIABILITIES: Rs. in crores Rs. in crores

1 Reserves and Surplus (641.63) (145.23)2 Secured Loan 858.71 479.223 Unsecured Loan 274.73 140.74

ASSETS4 Fixed Assets

(a) Gross Block 805.90 401.84(b) Less: Accumulated Depreciation 194.37 83.90

(c) Net Block 611.53 317.94(d) Capital work-in-progress 161.21 159.85

772.74 477.795 A. Current Assets

(a) Inventories 30.74 15.41(b) Sundry Debtors 108.26 64.26(c) Cash and Bank Balances 33.16 99.80(d) Other Current Assets 123.40 65.22

295.55 244.69B. Loans And Advances 69.30 25.97

364.85 270.66

SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS (Contd.)Year ended Year ended



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6 Less: Current Liabilities and provisions(a) Current Liabilities 257.35 159.62(b) Provisions 25.84 14.19

283.19 173.81

7 Net (Current Liabilities)/Assets 81.66 96.85


INCOME Rs. in crores Rs. in crores1 Traffic Revenue 453.61 245.062 Other Income (18.36) 1.823 Interest Income 5.24 8.15

Total Income 440.49 255.03

EXPENDITURE4 Salaries and Related Costs 116.18 84.875 Network Cost 256.27 124.366 Operating and Other Expenses 194.78 136.287 Interest Expenses 150.96 73.088 Depreciation 96.82 61.7

Total Expenditure 815.01 480.29

CONTINGENT LIABILITIES Rs. in crores Rs. in crores

(i) Claims for other Taxes - -(ii) Other Claims - -

- -

(ii) On 1st April 2008, Neotel Business Support Systems Pty. Ltd. (a wholly owned subsidiary of Neotel) purchased“Transtel” the telecommunications arm of Transnet Pty Ltd for a consideration of Rs. 134.43 crores. The CapitalReserve arising on this transaction was Rs. 53.02 crores. (2009: Rs. 46.08 crores) Group’s share in the considerationand capital reserve is Rs. 58.02 crores and Rs. 11.67 crores (2009: Rs 10.15 crores) respectively.

31. In the previous year the Company entered into a joint venture (40:60) with Indian Ocean Cableship Pte LimitedSingapore (IOCPL) for investment in M/s Cochin Submarine Cable Depot (India) Private Limited. During the year theCompany subscribed to 40,000 shares of face value Rs 10 each amounting to Rs 0.04 crores and the said joint venturehas been included in consolidated financial statements, however Balance Sheet and Profit & Loss of Cochin SubmarineCable Depot (India) Private Limited has not been disclosed separately as the amounts involved are not significant.

32. Previous year’s figures have been regrouped and reclassified wherever necessary.

For and on behalf of the Board

SUBODH BHARGAVA N SRINATHChairman Managing Director &



MUMBAIDATED: 31 May, 2010

SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS (Contd.)As at As at


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Mr. Subodh Bhargava

Mr. Subodh Bhargava, born in 1942, holds a Degree inMechanical Engineering from the University of Roorkee.He started his career with Balmer Lawrie & Co., Kolkatabefore joining the Eicher group of companies in Delhi in1975. On March 31, 2000, he retired as the Group Chairmanand Chief Executive and is now the Chairman Emeritus,Eicher group.

He is the past President of CII and the Association of IndianAutomobile Manufacturers; and the Vice President of theTractor Manufacturers Association. Over several years, hehas been a key spokesperson for Indian industry,contributing to and influencing government policy whilesimultaneously working with industry to evolve newresponses to the changing environment.

He was a member of the Insurance Tariff AdvisoryCommittee, the Economic Development Board of thegovernment of Rajasthan. He was also the chairman of theNational Accreditation Board for Certifying Bodies (NABCB)under the aegis of the Quality Council of India (QCI).

Mr. Bhargava has been closely associated with technicaland management education in India. He was the Chairmanof the Board of Apprenticeship Training and Member ofthe Board of Governors of the University of Roorkee; theIndian Institute of Foreign Trade, New Delhi; Indian Instituteof Management, Indore; the EntrepreneurshipDevelopment Institute of India, Ahmedabad.

He is currently on the Board of Governors of IIM (Lucknow)and other Institutions for Engineering and BusinessManagement Education; the Centre for Policy Research;Member, Technology Development Board, Ministry ofScience & Technology, Govt. of India.

He has been conferred with the first IIT RoorkeeDistinguished Alumnus Award in 2005 by Indian Instituteof Technology, Roorkee. Mr Bhargava is the Chairman ofTata Communications Limited and also Wartsila IndiaLimited and Director on the boards of several IndianCorporates such as Tata Steel Limited; Tata Motors Limited;Power Finance Corporation Ltd.; Larsen & Toubro Ltd. etc.

Mr. N. Srinath

Mr. N. Srinath, born in 1962, has a degree in MechanicalEngineering from IIT (Chennai) and a Management Degreefrom IIM (Kolkata), specialising in Marketing and Systems.

Since joining the Tata Administrative Services in 1986, Mr.Srinath has held positions in Project Management, Sales &Marketing and Management in different Tata companiesin the ICT sector over the last 24 years.

On completing his probation with the TAS in 1987, Mr.Srinath joined Tata Honeywell, a start-up in the businessof process control systems, as Project Executive workingtill late 1988 on securing various statutory approvals andfunding necessary for the project. He then moved to TataIndustries as Executive Assistant to the Chairman, anassignment he handled till March 1992. In that period, hewas also part of the team that set up Tata InformationSystems (later Tata IBM). From June 1992 to February 1998he handled a number of assignments in Tata InformationSystems Limited in Sales & Marketing to enterprisecustomers in the banking, retail, petroleum and processmanufacturing sectors.

In March 1998, Mr. Srinath returned to Tata Industries asGeneral Manager (Projects) responsible for overseeing theproject implementation of Tata Teleservices fixed line

telecom service in the state of Andhra Pradesh. In April1999, he took over as the Chief Operating Officer of TataTeleservices responsible for Sales, Networks andInformation Technology. From late 2000 till February 2002,he was the Chief Executive Officer of Tata Internet Services,a start-up Internet services business serving retail andenterprise customers. Thereafter, he moved to TataCommunications Limited (then VSNL) as a whole-timedirector in charge of operations.

Mr. Srinath has received several recognitions in the telecomindustry. He was named the ‘Telecom CEO of the Year’ inAsia by the leading publishing group Telecom Asia in the2006 edition of their awards. The Institute of EconomicStudies (IES), a research oriented organisation, conferredits Udyog Rattan Award on Mr. Srinath in November 2006.In 2008 and 2009, Mr. Srinath was named as the world’seighth most influential telecom personality by the GlobalTelecoms Business magazine as well as the ‘Telecom Personof the Year’ by the India-based Voice and Data magazinein 2008.

Since February 2007 Mr. Srinath has been the ManagingDirector of Tata Communications Limited & CEO of theTata Communications global group of companies.

BOARD OF DIRECTORS

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Mr. Kishor A. Chaukar

Mr. Kishor A. Chaukar, born in 1947, currently the ManagingDirector of Tata Industries Limited (TIL), is a post-graduatein management from the Indian Institute of Managementat Ahmedabad.

TIL is the smaller of the two principal holding companiesof the Tata Group, India’s largest and best-knownconglomerate. TIL acts as the new projects promotion armof the Group, and spearheads the entry of the Group inthe emerging, high-tech and sunrise sectors of theeconomy.

In his capacity as Managing Director of TIL, Mr. Chaukar isresponsible for enhancing the value and interest of TIL inTIL divisions and in companies where TIL has madeinvestments and/or has sponsored. One of the tasksperformed in the quest for this value enhancement is toprovide strategic direction to these companies.

Mr. Chaukar is a member of the Group Corporate Centre,which is engaged in strategy formulation at the House ofTata. He also chairs the Tata Council for CommunityInitiatives (TCCI) - the nodal forum of the Group on mattersrelated to corporate sustainability.

Mr. Chaukar is a member of the Board and Advisory Boardof several national and international organizations in theCorporate Sustainability and Human Rights space, viz.Global Reporting Initiative – Amsterdam Shell FoundationBreathing Space India Advisory Board – New Delhi, andthe Tata Memorial Centre – Mumbai.

Mr. Chaukar was previously the managing director of ICICISecurities & Finance Company Ltd. (July 1993 to October1998), and a member of the Board of Directors of ICICI Ltd.from February 9, 1995 to October 15, 1998. His otherexperiences include a long stint in Bhartiya Agro IndustriesFoundation, an NGO engaged in rural development.

Mr. P.V. Kalyanasundaram

Mr. P.V. Kalyanasundaram was born in 1958. He received aBachelor of Arts degree in history, from the New College,Chennai in 1977, followed by a Bachelor of Law degreefrom Madras Law College in 1982.

An advocate by profession, Mr. Kalyanasundaram was alegal advisor for Pallavan Transport Corporation, Chennai,a government of Tamil Nadu undertaking, as well as a legaladvisor to the Chennai Metropolitan Water Supply andSewerage Board. He was also a trustee of the JawaharlalNehru Port Trust, Mumbai, and a member of the CensorBoard, Chennai.

Mr. Kalyanasundaram has played a leading role in variouspublic activities. As the managing trustee of the GreenPeace World Charitable Trust, Chennai, he took an activepart in the various welfare measures organized by the trust.These include organizing free eye camps to treat poorpeople.

Between 2000 and 2004, Mr. Kalyanasundaram was thechairman and trustee, Pachayappa’s Trust, Chennai. In thatposition, he managed several educational institutions,including seven colleges and six schools, and looked afterimmovable properties.

Dr. V.R.S. Sampath

Dr. V.R.S Sampath born in 1956, is an advocate and editorof Sattakadir, a law jornal published in Chennai. He is anarbitrator and mediator specially trained from Canada andAustria. He is currently an empanelled advocate to bothCanara Bank and Indian Overseas Bank. He is anIndependent Director of Arani Agro Oil Industries Limited,Hyderabad, a joint venture project of India and Malaysia.

He studied Master of Arts in History, Master of Law inInternational Law and Comparative Constitutional Law.After that, he was engaged in research programme onJudicial History and awarded Director of Philosophy (Ph.D)by the University of Madras. He holds a Post GraduateDiploma in Tourism.

Dr. Sampath has participated in the following InternationalCertificate programmes:

• Conflict Transformation of the International CivilianPeace Keeping and Peace Building Program,Information Dissemination Program, in Austria.

• Peace Building and Conflict Resolution Program, TheCanadian International Institute of AppliedNegotiations, Ottawa, Canada.

• Human Rights and Development Law Program,Institute of Social Studies, The Hague, The Netherlands.

• Social Work and Mental Health Program, Social Workand Youth Leadership Program in California StateUniversity, Long Beach, USA.

Dr. Sampath has been nominated for the followingGovernment Committees:

145

• Member of the Board of Governors of Indian Councilof Forestry Research and Education, Ministry ofEnvironment and Forests, Govt. of India.

• Member of Disciplinary Committee of the Institute ofCost and Work Accountants of India, Ministry ofCorporate Affairs, Government of India.

• Member of Tamil Nadu State Library book selectioncommittee of Govt. of Tamil Nadu. (A gradeCommittee).

• Member of the best Tamil book selection committeeGovt. of Tamilnadu.

Dr. Sampath has served on various government

committees and is the chairman of various non-governmental organizations. He is a member of the IndianCouncil of Arbitration and other professional associations.

Dr. Sampath is an advisor for many educational institutionsin India and abroad.

He regularly organizes seminars and workshops on variousprofessional programmes and development issues. He isan author of many books of law, history, public affairs andtourism.

Dr. Sampath has travelled to many countries to participatein seminars, workshops and conferences on law, humanrights, social work, corporate governance, etc.

Mr. Amal Ganguli

Mr. Amal Ganguli, born in 1939, is a fellow member of theInstitute of Chartered Accountants of India and theInstitute of Chartered Accountants of England and Walesand a member of the New Delhi Chapter of The Instituteof Internal Auditors, Florida, USA. He was the Chairmanand Senior Partner of Pricewaterhouse Coopers (PWC),India till his retirement on 31 March 2003. Besides hisqualifications in the area of accounting and auditing, Mr.Ganguli is a fellow of the British Institute of Managementand alumnus of IMI, Geneva.

Mr. Ganguli, trained in the UK to become a CharteredAccountant. He was encoded as a Partner to PWC, UK/USAfor a year in 1972-73. During his career spanning over 40years, Mr. Ganguli’s range of work included InternationalTax advice and planning, cross border investments,Corporate mergers and re-organizations, financialevaluation of projects, management, operational andstatutory audit and consulting projects funded byInternational funding agencies. In the course of his

professional career, he has dealt with a variety of clientsincluding US AID, World Bank, ADB, NTPC, Alcatel, GE,Hindustan Lever, STC, Hewlett Packard and IBM.

Mr. Ganguli is a member of the Board of Directors of severalcompanies such as Hughes Communications India Limited,Tube Investments of India Limited, HCL TechnologiesLimited, New Delhi Television Limited, Century Textiles andIndustries Limited, Aricent Technologies (Holdings) Ltd,AVTEC Ltd, ICRA Ltd, Tata Communications Limited, MarutiSuzuki India Ltd and Triveni Engineering and IndustriesLimited.

Mr. Ganguli is a member of Audit Committees of HCLTechnologies Limited, Century Textiles and IndustriesLimited, Tube Investments of India Limited and ICRA Ltd.He is chairman of the Audit Committee of AricentTechnologies (Holdings) Ltd, New Delhi Television Ltd, TataCommunications Limited and Maruti Suzuki Ltd. and amember of Remuneration Committees of Tube Investmentsof India Limited and New Delhi Television Limited.

Mr. Vinod Kumar

As president and managing director of TataCommunications International Pte. Ltd., a subsidiary of TataCommunications Limited, and Chief Operating Officer, Mr.Kumar is responsible for expanding Tata Communicationsroadmap and charter into the global communicationsmarket. Mr. Kumar is also responsible for the Global Dataand Mobility Services line of business and oversees theEngineering, IT and Operations functions for the Company.

Mr. Kumar has a wide range of cross-functional experiencein the telecommunications industry. He also has animpressive track record in developing business strategiesand creating fast growth organizations. He was previouslySenior Vice-President of Asia Netcom and responsible forall aspects of generating top-line growth, includingstrategy formulation, product marketing and sales. He wasactively involved in all aspects of the financial restructuring,

COMMUNICATIONS


146


and eventual asset sale of Asia Global Crossing to ChinaNetcom, resulting in the formation of Asia Netcom.

In 1999, Mr. Kumar joined WorldCom Japan as ChiefExecutive Officer and prior to that, he held various seniorpositions in Global One in the United States and Asia wherehe has had major responsibilities in market management,sales, marketing, product management, multinational

account management and operations.

Mr. Kumar born in 1965, completed his coursework for aMasters in Business Administration from The AmericanUniversity. He also graduated with honors in Electrical andElectronic Engineering at the Birla Institute of Technologyand Science in India.

Mr. S. Ramadorai

Mr. S. Ramadorai, born in 1944, Vice-Chairman of TataConsultancy Services Limited (TCS), has been associatedwith TCS for the past 38 years. He took over as CEO of TCSin 1996 when TCS’s revenues were at $160 million and hassince led the company through some of its exciting phases,including its going public in 2004. In October 2009, hestepped down as CEO, leaving a $6 billion global IT servicescompany to his successor and is now the Vice Chairman ofthe company.

Mr. Ramadorai is on the Boards of a number of companiesand educational institutions – Tata Industries, HindustanUnilever Limited, Bombay Stock Exchange and the MITSloan School of Management (EMSAB).

In recognition of Mr. Ramadorai’s commitment anddedication to the IT industry he was awarded the PadmaBhushan in January 2006. In April 2009, he was awardedthe CBE (Commander of the Order of the British Empire)by her Majesty Queen Elizabeth II for his contribution tothe Indo British economic relations.

His academic credentials include a Bachelors degree inPhysics from Delhi University (India), a Bachelor ofEngineering degree in Electronics and Telecommunicationsfrom the Indian Institute of Science, Bangalore (India) anda Masters degree in Computer Science from the Universityof California - UCLA, USA. In 1993, Mr. Ramadorai attendedthe Sloan School of Management’s highly acclaimed SeniorExecutive Development Program.

Mr. A.K. Srivastava

Mr. A.K. Srivastava was born in 1951. Mr. Srivastava is aBachelor of Science and has a Master’s Degree in Sciencebesides being a Graduate from the Institution of Electronicsand Telecommunication Engineers (IETE).

Mr. Srivastava joined the Government of India service in1973. Thereafter, Mr. Srivastava has worked in Departmentof Telecom, ONGC, TCIL and has a wide experience in the

telecommunications industry in Operations/ProjectsManagement/Licensing and Regulations.

Mr. Srivastava is currently the Deputy Director General(Access Service), Department of Telecommunications,Government of India. He is also a Government nomineedirector on the boards of ITI Ltd. and HTL Ltd.

Mr. Arun Gandhi

Mr. Arunkumar Ramanlal Gandhi born in 1943, is a directoron the Board of Directors of Tata Sons Ltd and is a memberof the Group Corporate Centre of the Tata Companies. Heis a fellow member of the Institute of CharteredAccountants in England and Wales and the Institute ofChartered Accountants of India. He is an associate memberof the Chartered Institute of Taxation, London.

Prior to joining Tata Sons, he was with M/s N. M. Raiji & Co.,Chartered Accountants. He joined the firm as a partner inJuly 1969 and in 1993 became a senior partner. The firmhas more than 60 years of professional standing. He joinedTata Sons Limited as an Executive Director on 18th August2003 and continued in that position till 17th August 2008.

Mr. Gandhi has been assisting the Tata Group in acquiringdiverse assets and companies across the globe. This hasenabled the Tata Group to acquire critical assets, resourcesand access to world class R&D facilities.

In the course of his professional career, Mr. Gandhi hasworked on numerous mergers and acquisitions, bothcrossborder and domestic transactions.

Mr. Gandhi has been a member of various committeesconstituted by industry forums and regulatory bodies suchas SEBI’s Takeover Panel Exemption Committee and theInstitute of Chartered Accountants of India’s AccountingStandards Board among various others.

147

Dr. Ashok Jhunjhunwala

Dr. Ashok Jhunjhunwala, born in 1953, received his B.Techdegree from IIT, Kanpur, and his MS and Ph.D degrees fromthe University of Maine. From 1978 to 1981, he was withWashington State University as Assistant Professor. Since1981, he has been teaching at IIT, Madras, where he leadsthe Telecommunications and Computer Networks group( TeNeT ). This group works with industry in thedevelopment of technologies relevant in India. It hasincubated several technology companies which work inpartnership with TeNeT group to develop Telecom andBanking products for Indian Urban and Rural Markets. Hechairs Rural Technology Business Incubator (RTBI) at IITMadras and Mobile Payment Forum of India (MPFI).

Dr. Ashok Jhunjhunwala has been awarded the Padma Shriin the year 2002. He has been awarded Shanti SwarupBhatnagar Award in 1998, Dr, Vikram Sarabhai ResearchAward for the year 1997, Millennium Medal in IndianScience Congress in the year 2000 and H.K. Firodia for

“Excellence in Science and Technology” for the year 2002,Shri Om Prakash Bhasin Foundation Award for Science &Technology for the year 2004, Awarded Jawaharlal NeheruBirth Centenary Lecture Award by INSA for the year 2006,IBM Innovation and Leadership Forum Award by IBM forthe year 2006, awarded Honorary Doctorate by the instituteof Blekinge Institute of Technology Sweden and Excellencein Science and Technology Award, recently awarded “BharatAsmita Vigyaan Tantragyaan Shresththa Award” for the bestuse of Science & Technology through innovation by MITGroup of Institutions. He is a Fellow of World WirelessResearch Forum, IEEE and Indian academies including INAE,IAS, INSA and NAS.

Dr. Jhunjhunwala is a Director in the Board of State Bankof India, TTML, Polaris, 3i Infotech, Sasken, Tejas, IDRBT andExicom. He is a member of Prime Minister’s ScientificAdvisory Committee.

Mr. Manish Sinha

Born in 1967, Mr. Manish Sinha has been DDG (LF) sinceMay 2008 in the Licensing Division of Department ofTelecommunications, Government of India, where he has19 years experience in the Telecom Department. He hasspent a decade in the Operating Division of theDepartment of Telecom, and has worked in the financearea of the Department. From 1996 to 1999, he dealt withpolicy matters and procurement for the Telecom Sector.He has also been instrumental in setting up the BankingOperations and Treasury Functions in the organization of

the incumbent operator i.e. BSNL in India. He has also dealtwith issues relating to evaluation of license conditions,especially those related to the issues of international longdistance network. His current work is to render financialadvice on all licensing issues that arise in DOT. His mainresponsibility is in the arena of determination, collectionand assessment of license fee that are paid by the varioustelecom licensees to the government of India. He holdsspecialized degrees in financial management from IGNOUand an MBA in public policy from the University ofBirmingham.

Registered office : VSB, M.G. Road, Fort, Mumbai - 400 001.

TWENTY FOURTH ANNUAL GENERAL MEETING - 6 AUGUST, 2010 AT 1100 HRS.

ATTENDANCE SLIP

I, Mr/Mrs./Miss................................................................................................. LF/Client ID. No ........................................................... hereby

record my presence at the 24th Annual General Meeting of Tata Communications Limited at the M. C. Ghia Hall,Kalaghoda, Mumbai - 400 001.

...............................

Signature of the Shareholder or Proxy

Notes: 1. Please fill this Attendance Slip and hand it over at the entrance of the hall.

2. SHAREHOLDERS ARE REQUESTED TO BRING THEIR COPIES OF THE NOTICE DOCUMENT WITH THEM.

Registered office : VSB, M.G. Road, Fort, Mumbai - 400 001.

PROXY

I/We ...........................................................................................................................(LF/Client ID. No...................................)

(Address).............................................................................................................being a Member/Members of Tata Communications

Limited, do hereby appoint ........................................................................................ of ......................................or/failing him

...................................................................................................................of ........................................as my/our proxy in my/our absence

to attend and vote for me/us on my/our behalf at the 24th Annual General Meeting of the Company to

be held at 1100 Hrs on Friday, the 6th August, 2010, and at any adjournment thereof.

IN WITNESS whereof I/We have set my/our hand/hands this...................day of..........................2010.

(Signature of the Shareholder across the stamp)

Note : 1. A member entitled to attend and vote is entitled to appoint a proxy to attend and vote instead of himself,and a proxy need not be a Member.

2. A One Rupee Revenue Stamp should be fixed to this and it should then be signed by the Member.

3. The instrument appointing the proxy and the power of attorney or other authority, if any, under which itis signed, or a copy of that power of authority duly certified by a notary or other proper authority, shall bedeposited at the Registered Office of the Company not later than forty-eight hours before the time forthe holding of the Meeting, in default, the instrument of proxy shall not be treated as valid.

Please affix1.00 Re.

RevenueStamp

�



NOTES

NOTES

Atlantic

Pacific

Indian

Ocean

Ocean

Ocean

Ocean

Caribbean Sea

Hudson BayGulf of Alaska

Gulfof Mexico

North Sea

Mediterranean Sea

BalticSea

Black Sea

AralSea

ArabianSea

Bay of Bengal South ChinaSea

Sea ofJapan

(East Sea)

EastChinaSea

YellowSea

Sea ofOkhotsk

Tasman Sea

GreatAustralian

Bight

Russia

Finland

Austria

Italy

Spain

Sweden

Norway

Germany

France

Portugal

Hungary

Romania

Bulgaria

Turkey

Denmark

Poland

Belarus

UkraineCzech. Rep.

Slovakia

Greece

Netherlands

Belgium

Ireland

Lithuania

Latvia

Estonia

Lux.

CroatiaSlovenia

Switz.

Iceland

United States

Canada

Mexico The Bahamas

Cuba

Panama

El Salvador

Guatemala

Belize

Honduras

Nicaragua

CostaRica

JamaicaHaiti

DominicanRepublic

Dominica

Antigua

Argentina

Bolivia

Colombia

Venezuela

Peru

Brazil

Suriname

Guyana

Chile

Ecuador

Paraguay

Uruguay

Kenya

Ethiopia

Eritrea

Sudan

Egypt

Niger

Mauritania

Mali

Nigeria

Somalia

Namibia

Libya

Chad

South Africa

Tanzania

Dem. Rep.Of Congo

Angola

Algeria

Madagascar

Mauritius

Mozambique

Botswana

Zambia

Gabon

Central AfricanRepublic

Tunisia

Malta

Morocco

Uganda

BeninGhana

Coted'Ivoire

Liberia

Sierra Leone

Guinea

Burkina FasoGambia

Cameroon

Sao Tome & Principe

Zimbabwe

Congo

Equatorial Guinea

WesternSahara

Djibouti

Senegal

Guinea Bissau

CapeVerde

Azores

Jordan

Azerbaijan

Kyrgyzstan

Tajikistan

Kuwait

Qatar

U. A. E.

Yemen

Syria

Iraq

Iran

Oman

SaudiArabia

Afghanistan

Pakistan

India

China

Kazakhstan

Turkmenistan

Uzbekistan

Burma

Thailand

Cambodia

Nepal

Vietnam

Sri Lanka

Laos

Bangladesh

Malaysia

Papua NewGuinea

Philippines

Indonesia

East Timor

Japan

Mongolia

South Korea

Australia

NewZealand

U. K.

NewCaledonia

Vanuatu

Guam

Palau

SolomonIslands

Fiji

Comoros

Kiribati

Micronesia

Guadeloupe

MartiniqueSt. Lucia

St. VincentGrenada

Trinidad and Tobago

French Polynesia

Montreal

London

Matawan

Herndon

Frankfurt

Neuilly-sur-Seine

Singapore

Hong KongMumbai

PuneAbu Dhabi

Madrid

Sydney

New Delhi

Kolkata

Chennai

OFFICE LOCATIONS

Corporate Office

Registered Office

Regional Office

VSB, Mahatma Gandhi Road, Fort Mumbai, 400 001 India

Documents

Mr. Manish Sinha (Government Nominee) Mr. Satish Ranade Company Secretary & Chief Legal Officer Mr. Sanjay Baweja Chief Financial Officer REGISTERED OFFICE VSB, Mahatma Gandhi Road,