Tata Anual Report

www.tatacommunications.com

Tata Communications Limited VSB, Mahatma Gandhi Road, Fort Mumbai, 400 001 India

23rd

Communicate behind a single purpose.

Taking our company,

shareholders, partners

and employees

farther together

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TWENTY THIRD ANNUAL REPORT 2008-09

CONTENTS

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

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

Directors’ Report ................................................................................................................ 8

Report on Corporate Governance .............................................................................. 20

Declaration by CEO regarding Company’s Code of Conduct andCEO/CFO Certification ..................................................................................................... 34

Secretarial Responsibility Statement ......................................................................... 35

Auditors’ Certificate on Corporate Governance ..................................................... 36

Auditors’ Report ................................................................................................................. 37

Balance Sheet ..................................................................................................................... 40

Profit & Loss Account ....................................................................................................... 41

Cash Flow Statement ....................................................................................................... 42

Schedules ............................................................................................................................. 43

Notes to the Accounts ..................................................................................................... 53

Section 212 of the Companies Act, 1956, related to Subsidiary Companies 85

Consolidated Accounts

Auditors’ Report on Consolidated Financial Statements .................................... 87

Consolidated Balance Sheet .......................................................................................... 88

Consolidated Profit & Loss Account ........................................................................... 89

Consolidated Cash Flow Statement ........................................................................... 90

Consolidated Schedules ................................................................................................. 91

Consolidated Notes to the Accounts ......................................................................... 97

Board of Directors ............................................................................................................. 129

Annual General Meeting on Friday, 7 August 2009, 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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CORPORATE DETAILS

BOARD OF DIRECTORS(As on 30 June 2009)

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)

Mr. H. P. Mishra (Government Nominee)

Dr. Ashok Jhunjhunwala (Panatone 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 AmericaCitibank Inc.Deustche BankHDFC Bank Ltd.Hongkong & Shanghai Banking CorporationIndian Overseas BankState Bank of IndiaAxis Bank Ltd.Vijaya 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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NOTICENOTICE is hereby given that the Twenty Third Annual General Meeting of Tata Communications Limited will be held at1100 hours on Friday, 7 August 2009, 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 2009, 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 declare dividend for the financial year 2008-2009.

3. To appoint a Director in place of Mr. Subodh Bhargava who retires by rotation at this Annual General Meeting andbeing eligible offers himself for reappointment.

4. To appoint a Director in place of Mr. Kishor Chaukar who retires by rotation at this Annual General Meeting andbeing eligible offers himself for reappointment.

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

Special Business

6. To appoint Dr. Ashok Jhunjhunwala as a Director liable to retire by rotation in respect of whom a notice under theprovisions of section 257 of the Companies Act, 1956 has been received by the Company from a member signifyinghis intention to propose Dr. Ashok Jhunjhunwala as a candidate for the office of director.

7. To consider and, if thought fit, to pass with or without modification the following as 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 2009-2010 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 2010) wherever in India or abroad.”

8. To consider and if thought fit, to pass, with or without modifications, the following as Special Resolution:

“RESOLVED THAT pursuant to Sections 94, 81(1A) and 16 and other applicable provisions, if any, of the Companies Act of1956, and the Memorandum and Articles of Association of the Company, the Authorised Share Capital of the Company beincreased and re-classified from Rs. 300,00,00,000 (Rupees Three Hundred Crore) divided in to 30,00,00,000 (Thirty Crore)equity shares of Rs. 10 each to Rs.2000,00,00,000 (Rupees Two Thousand Crore) divided into 100,00,00,000 (One HundredCrores) equity shares of Rs.10 each and 100,00,00,000 (One Hundred Crores) Preference Shares of Rs.10 each with thepower to the Board to decide on the extent of variation in such rights and to classify from time to time such shares into anyclass of shares.”

“RESOLVED FURTHER THAT for the purpose of giving effect to this resolution, the Board of Directors of the Company be andis hereby authorised to take all such steps and actions and give such directions as may be in its absolute discretiondeemed necessary and expedient and to settle any question that may arise in this regard.”

“RESOLVED FURTHER THAT Clause V of the Memorandum of Association of the Company be and is hereby altered to readas follows:

V. The authorised Share Capital of the Company is Rs. 2000,00,00,000/- (Rupees Two Thousand Crore) divided into100,00,00,000 (One Hundred Crore) equity shares of Rs 10 each and 100,00,00,000 (One Hundred Crore) PreferenceShares of Rs. 10 each with the power to the Board to decide on the extent of variation in such rights and to classifyfrom time to time such shares into any class of shares, with the rights, privileges and conditions attached thereto asare provided by the Articles of Association of the Company for the time being with power to increase and reduce the

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capital of the Company and to divide the shares in the capital for the time being into several classes and to attachthereto respectively such preferential, deferred, qualified or special rights, privileges or conditions as may be determinedby or in accordance with the Articles of Association of the Company and to vary, modify or abrogate any such rights,privileges or conditions in such manner as may for the time being be provided by the Articles of Association of theCompany.”

9. To consider and if thought fit, to pass, with or without modifications, the following as Special Resolution:

“RESOLVED THAT Article 5 of the Articles of Association of the Company be and is hereby altered to read as follows:

Article 5:The authorised Share Capital of the Company is Rs. 2000,00,00,000/- (Rupees Two Thousand Crore) dividedinto 100,00,00,000 (One Hundred Crore) equity shares of Rs 10 each and 100,00,00,000 (One Hundred Crore) PreferenceShares of Rs. 10 each with the power to the Board to decide on the extent of variation in such rights and to classifyfrom time to time such shares into any class of shares, with the rights, privileges and conditions attached thereto asare provided by the Articles of Association of the Company for the time being with power to increase and reduce thecapital of the Company and to divide the shares in the capital for the time being into several classes and to attachthereto respectively such preferential, deferred, qualified or special rights, privileges or conditions as may be determinedby or in accordance with the Articles of Association of the Company and to vary, modify or abrogate any such rights,privileges or conditions in such manner as may for the time being be provided by the Articles of Association of theCompany.”

By Order of the Board of Directors

Satish RanadeCompany Secretary

Dated : 10 July 2009Registered 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 all items except item Nos.1 to 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.

5. This may be taken as notice of declaration of dividend for 2008-2009 in accordance with Article 93 of Articles ofAssociation of the Company in respect of dividend for that year when declared.

6. Registers of members and transfer books of the Company shall remain closed from 24 July 2009 to 7 August 2009(both days inclusive) for the purpose of ascertaining eligibility to dividend.

7. The dividend as recommended by the Board of Directors, if declared at this Annual General Meeting, shall be paid onor after Wednesday, 12 August 2009.

(i) to those shareholders whose names appear on the Company’s Register of Members after giving effect to allvalid share transfers in physical form lodged with the Registrar & Transfer Agents (R&T Agents) of the Companyon or before Thursday, 23 July 2009.

(ii) in respect of shares held in electronic form, to those “deemed members” whose names appear in the statementsof beneficial ownership furnished by National Securities Depository Limited (NSDL) and Central Depository

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Services (India) Limited (CDSL) as at the end of business on Thursday, 23 July 2009. In respect of shares held indemat mode, the dividend will be paid on the basis of beneficial ownership as per details to be furnished byNSDL and CDSL for this purpose.

8. 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 2002 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 asgiven in the table below.

Date of AGM Balance as on Dividend Remarks Transfer to30 June 2009 for the year Investor

(Rs.) Education &Protection

Fund

20 August 2002 2041234.00 2001-02 Final Dividend 19 Sept 2009

2 September 2003 1404799.50 2002-03 Final Dividend 2 Oct 2010






Total 7818284.50

9. 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.

10. Members are requested to notify any change in their addresses immediately, in any event not later than Thursday, 23July 2009, so as to enable us to dispatch the dividend warrants at the correct addresses:

a) In case of physical shares to the R & T Agents, M/s Sharepro Services (India) Private Limited, 13 AB, SamhitaWarehousing Complex, 2nd Floor, Near Sakinaka Telephone Exchange, Andheri Kurla Road, Andheri East,Mumbai-400 072.

b) In case of shares held in demat form to their depositary participants (DPs).

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Annexure to the Notice dated 10 July 2009The Statement of Material Facts pursuant to Section 173 (2) of the Companies Act, 1956.

In respect of Item No. 6

Dr. Ashok Jhunjhunwala was appointed as an additional Director on the Board with effect from 25 October 2008 underArticle 66B of the Articles of Association of the Company. Pursuant to the provisions of Section 260 of the Companies Actof 1956 and under the said Article, Dr. Ashok Jhunjhunwala holds office up to the date of the forthcoming AnnualGeneral Meeting. Dr. Ashok Jhunjhunwala is eligible for appointment as a Director of the Company and the Company has,pursuant to section 257 of the Companies Act of 1956, received a notice in writing proposing his candidature forappointment. If appointed, Dr. Ashok Jhunjhunwala will act as a non-executive Director liable to retire by rotation.

Necessary details regarding Dr. Jhunjhunwala and his brief resume has been given in the Annexure attached to theNotice. Keeping in view the experience and expertise, his appointment as Director of the Company is recommended.

None of the directors other than Dr. Ashok Jhunjhunwala are concerned or interested in the above Resolution.

In respect of Item No.7

M/s. S B Billimoria & Co., Chartered Accountants were appointed as the statutory auditors of the Company at the TwentySecond Annual General Meeting of the Company held on 2 August 2008 and hold office till the conclusion of the TwentyThird 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 statutory auditors of the Company is required to be approved by aSpecial Resolution pursuant to Section 224A of the Companies Act, 1956.

None of the directors are interested in the Resolution.

In respect of Item No.8 & 9

Presently the Authorised Capital of the Company is Rs. 300 crore while the Issued and paid-up capital is Rs. 285 crore. Inview of this, it is proposed that the authorised capital be increased to Rs.2000 crore and reclassified into 100,00,00,000(One Hundred Crore) equity shares of Rs 10 each and 100,00,00,000 (One Hundred Crore) Preference Shares of Rs. 10each with the power to the Board to decide on the extent of variation in such rights and to classify from time to timesuch shares into any class of shares.

Increase in authorised capital and reclassification of authorised capital require changes in the Memorandum and Articlesof Association of the Company and require approval of the shareholders. According necessary resolutions have beenproposed for the consideration of the shareholders.

The directors recommend the Resolutions.

None of the directors are interested in the Resolutions.

By Order of the Board of Directors


Dated : 10 July 2009Registered Office:VSB, FortM.G. Road, Mumbai - 400 001.

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Details of Directors Seeking Appointment/Re-Appointment at the23rd Annual General Meeting

Particulars

Date of Birth

Date of Appointment

Qualifications

Expertise in SpecificFunctional Area

Directorships held in otherPublic Companies (excludingforeign and privatecompanies)

Memberships/Chairmanshipsof Committees in otherPublic Companies

Shareholding in TCL

Mr. Subodh Bhargava

30 March 1942

15 May 2002

B.E. (Mech)

General Management

Wartsila India Limited -(Chairman)Tata Steel LimitedSamtel Colour LimitedTRF LimitedCarborundum UniversalLimitedGlaxoSmithKline ConsumerHealthcare LimitedBatliboi LimitedSRF LimitedPower Finance CorporationLimitedLarsen & Toubro LimitedTata Motors Limited

Audit CommitteeSamtel Colour Limited –(Chairman)Carborundum UniversalLimited - (Chairman)GlaxoSmithKline ConsumerHealthcare Limited -(Chairman)Tata Steel Limited -(Chariman)Wartsila India LimitedTRF LimitedSRF LimitedBatliboi Limited

Shareholders / InvestorGrievance CommitteeNil

Nil

Mr. Kishor Chaukar

1 August 1947

1 July 2002

BA (Eco) – KarnatakaUniversity, PGDBA (IndianInstitute of Management,Ahmedabad), DEA – RuralEconomics – University ofDijon, France.

General Management

Tata Industries Limited -(Managing Director)Tata Advanced MaterialsLimitedTata Teleservices LimitedTata Autocomp SystemsLimitedIDFC Private EquityCompany LimitedTata InvestmentCorporation LimitedTata Business SupportServices Limited -(Chairman)Tata Petrodyne LimitedTSR Darashaw Limited(Charman)Praj Industries LimitedTata Industrial ServicesLimitedTata Yazaki AutocompLimitedTata Teleservices(Maharashtra) Limited-(Director & Chairman)

Audit CommitteeTata Business SupportServices Ltd - (Chairman)Tata Autocomp SystemsLtd.Tata Teleservices Ltd.

Shareholders / InvestorGrievance CommitteeNil

NIL

Mr. S. Ramadorai

6 October 1944

28 June 2007

B.Sc.,BS in electronics fromBangalore,MS in ComputerScience from University ofCalifornia – UCLA, USA.

General Management

Tata Industries LimitedTata Consultancy ServicesLimited(Manaaging Director)Tata Elxsi Limited(Vice Chariman)Tata Technologies Limited(Chairman)CMC Limited (Chairman)WTI Advanced TechnologyLimitedHindustan Unilever LimitedPiramal Healthcare Limited(Formerly known asNicholas Piramal IndiaLimited)C-Edge TechnologiesLimitedTata Teleservices(Maharashtra) LimitedComputational ResearchLaboratories Limited

Audit CommitteeTata Technologies Limited -(Chairman)Tata Elxsi LimitedHindustan Unilever Limited

Shareholders / InvestorGrievance CommitteeTata Consultancy ServicesLimited

NIL

Dr. Ashok Jhunjhunwala

22 June 1953

25 October 2008

B.Tech degree from IIT,Kanpur, MS and Ph.D degreesfrom the University of Maine

General Management

Polaris Software Lab LimitedSasken CommunicationsTechnologies LimitedState Bank of India3i Infotech LimitedTata Teleservices(Maharashtra) LimitedBharat Electronics LimitedExicom Tele-Systems Ltd.Tejas Networks Limited

Audit CommitteeSasken CommunicationsTechnologies LimitedPolaris Software Lab LimitedTata Teleservices(Maharashtra) Limited -(Chairman)State Bank of India

Shareholders / InvestorGrievance CommitteePolaris Software Lab Limited

NIL

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DIRECTORS’ REPORTDear Shareholders,

The directors are pleased to present the 23rd annual reportand audited accounts of Tata Communications Limited(“TCL”) for the financial year ended 31 March 2009.

PERFORMANCE

During the year under review, your Company earned atotal revenue of Rs. 39.84 billion (previous year Rs. 34.65billion) an increase of 14.97 percent. Profit before tax forthe year was Rs. 7.13 billion, (previous year Rs.4.50 billion)an increase of 58.56 percent. Profit after tax was Rs. 5.16billion (previous year Rs. 3.04 billion) an increase of 69.46percent.

On a consolidated basis, for 2008-09, the Company’s totalincome was Rs. 102.23 billion (previous year 85.38 billion),an increase of 19.74 percent EBIDTA was Rs. 13.50 billion(previous year 8.80 billion), an increase of 53.43 percent.Consolidated profit before tax after exceptional items wasRs. 4.23 billion (previous year 1.49 billion), an increase of183.88 percent whereas profit before tax beforeexceptional items was Rs. 1.56 billion (previous year 1.60billion), a decrease of 2.40 percent.

The audited annual accounts for the year 2008-09 havebeen drawn up taking into account the court orderapproving the amalgamation of VSNL Broadband Limited,a 100% subsidiary in the nature of merger into theCompany with effect from 1 March 2007.

Funding

During the year, your Company issued secured redeemablenon-convertible debentures aggregating to Rs. 12.50 billionon a private placement basis. Out of this amount,debentures worth Rs.10.00 billion were subscribed to byone investor on a five year term. The balance debenturesworth Rs. 2.5 billion were subscribed to by 16 investorscomprising of different insurance companies and bankswith terms ranging from five and half years to ten years.All these debentures have been rated ‘AAA’ by CARE, arenowned rating agency. IDBI Trusteeship Services Limitedhas been appointed as the trustees for these debentures.

The Trust Deeds for the above debenture issues will beavailable for inspection by any member, at the registeredoffice of the Company during normal working hours 21days before the date of the 23rd Annual General Meeting(AGM).

The Company will continue to raise additional funds frombanks, bond markets etc. in line with the need formaintaining sustained growth of business.

Dividend

The directors are pleased to recommend a dividend ofRs.4.50 per share (Rs.4.50 per share for the previous year)for the financial year ended 31 March 2009. The amountavailable for appropriation is Rs. 24.03 billion, out of which

the Company proposes to transfer Rs. 0.5 billion to generalreserves, leaving Rs. 20.99 billion to the balance sheet.

OVERVIEW

Over the last few years, your Company has built on itsstrategy to provide a range of communications services tocustomers in the wholesale, enterprise and retail segments.It has invested considerably in network infrastructure andservice delivery capability in and out of India. Last year,the Company launched its new brand identity “TataCommunications” integrating the various other brandsunder which it had been going to market previously andthis has been very well received.

The Company’s focussed strategy has enabled it to be oneof the leading players worldwide in its major businesssegments, with operations in more than 50 countries. TataCommunications remains one of the top three providersof international wholesale voice services and wholesaleVoice over Internet Protocol (VoIP) services and one of thelargest owners and providers of submarine cable capacityin the world. The Company is a global Tier-1 InternetServices Provider (ISP) and is a major player in the growingglobal IP Transit market. Your Company also offerstelecommunication services through its subsidiary in SriLanka and joint ventures/associates in Nepal and SouthAfrica.

During the year under review, the business of the Companygrew with enterprises demanding more global connectivityand services, increasing broadband penetration worldwideand rich media, interactive digital content becoming moreand more popular globally. The global demand forbandwidth and Internet connectivity continues to surge,giving Tata Communications the opportunity to leverageits Tata Global Network (“TGN”) of optical fiber underseacables and Internet Protocol (IP) network. Your Companyexpects to commission additional submarine cable systemsin the year 2009-10 connecting emerging markets in Asia,the Middle East and Africa to each other and onwards toEurope to meet the demands of consumer broadband,enterprise and wholesale customers over the next five toeight years.

Customer Service and Operations

Tata Communications has set up an extensive frameworkfor servicing the specific needs of our customers acrossvarious market segments and geographies. We continueto focus on building long lasting relationships with ourcustomers and business associates and to seek to lead theindustry in responsiveness and flexibility.

The service fulfilment, service assurance and billingfunctions are integrated into a single team called CustomerServices and Operations. This provides the right focus and

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synergies across all customer touch points in all stages ofthe service life cycle and has led to significantly enhancedCustomer Satisfaction across our business segments andgeographies.

Premature Termination of Monopoly andCompensation

The Company continues to pursue its claim forcompensation consequent to the premature terminationof its International Long Distance (ILD) monopoly in India.The Government of India (GOI) had allowed other playersinto the ILD business from 1 April 2002, terminating TataCommunications’ exclusivity two years ahead of schedule.It gave Tata Communications a compensation package andhad given an assurance prior to disinvestment that it wouldconsider additional compensation if found necessary on adetailed review, when undertaken. However, in February2002, just before the disinvestment of the Company, theGoI unilaterally granted a further dispensation as full andfinal settlement of every sort of claim against thepremature ILD demonopolisation.

Tata Communications feels that the compensation isinadequate as the losses, as estimated by independentagencies at that time, were quantified at a much highervalue. The Company had been pursuing the GoI to consideradditional compensation and to ensure that the claim wasnot barred by time under The Limitation Act, 1963 , filed aclaim in the Mumbai High Court in 2005 which is still tocome up for arguments.

Flag Arbitration Matter

The damages claim filed by Reliance Globalcom Limited(earlier known as FLAG Telecom) in February 2007 in theInternational Chamber of Commerce (ICC) ArbitrationTribunal is now closed. On 27 August 2008, the Tribunaldelivered a final award dealing with the issue of damages.According to the award, a sum of approximately US$ 19million plus interest from May 2006 was paid against thesum of US$385 million claimed.

Surplus Land

Under the terms of the share purchase and shareholders’agreements signed between the Government of India (GoI)and the strategic partner (parties) at the time ofdisinvestment by the Government in 2002, it was agreedthat certain identified lands would be demerged into aseparate company. It was further provided that if for anyreason the Company cannot hive off or demerge the landinto a separate entity, alternative courses as stipulated inthe share purchase and shareholders’ agreement wouldbe explored. A draft scheme of demerger was presentedto the Board in April 2005, and the parties are examiningthe legality and feasibility of implementing the scheme.The land identified for demerger at different locationsmeasures 773.13 acres, and carries a book value of Rs.1.64million.

It was reported last year that the VSNL Employees Co-

operative Housing Society, Chennai (Society) had movedthe Hon’ble Delhi High Court in respect of their longpending issue of transfer of 32.5 acres of land situated atPadianallur, Chennai to the Society. The division bench ofthe Hon’ble High Court finally ruled in favour of the Societyand the Company initiated the process of transferring thesaid land to the Society. The Company has received theconsideration amount as determined by the court in full.The transfer process is pending and is likely to becompleted shortly. In the meanwhile, the contempt petitionfiled by the Society against the Company is pending inthe Hon’ble Delhi High Court.

The area of the land identified for demerger excluding theabove 32.5 acres now measures 740.63 acres with a bookvalue of approx. Rs. 1.63 million.

HUMAN RESOURCES

Tata Communications continues to focus on building theskills and capabilities of its human resources to enablethem to perform effectively in a competitive market. YourCompany invests in continuous training to enhanceemployee skills and capabilities. Tata Communicationsoffers ample avenues to its employees to not onlycontribute but also learn and grow.

The different corporate entities that are part of TataCommunications together employed 5,825 people as on31 March 2009, (5,147 on 31st March 2008). Of these, 1050(1,008 previous year) were located outside India. Theworkforce profile is diverse and multi-cultural with peopleof about 40 nations on rolls. The Company seeks to hireand retain the best talent available globally to support itsbusiness. Many work teams are geographically dispersedand employ seamless work practices in a way similar towhat is prevalent in other companies with comparableglobal operations.

At Tata Communications employees are encouraged to livethe vision and values adopted by the Company. Integrityis recognized and rewarded.

An employee satisfaction survey is carried out annuallythrough an independent global agency across all ourdifferent operating locations. This year, more than 95% ofthe employees participated in this survey and the overallemployee satisfaction score showed a healthy upwardtrend across all major parameters and across allgeographies.

The compensation and employee benefit practices of TataCommunications are designed to be competitive in therespective geographies where we operate. Employeerelations continued to be harmonious across all ourlocations through a process of continuous dialogue andopenness to find mutually acceptable solutions to issues.

AWARDS AND RECOGNITION

The Company’s transformational initiatives are being

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recognised in India and various international markets.During the year, the Company earned several prestigiousrecognitions, including:

o Global Telecoms Business Innovation Award forInternational Wholesale Infrastructure Transformationand International Network InfrastructureTransformation

o 2008 Telephony Award for Most Innovative ManagedService

o Best Market Strategy at 2008 Global WholesaleTelecommunications Awards

o Frost & Sullivan #1 Enterprise Data Services Providerin India 2008.

During the year, your Company’s MD & CEO, Mr. N Srinath,was named as the world’s eighth most influential telecompersonality by the Global Telecoms Business magazine aswell as the ‘Telecom Person of the Year’ by the India-basedVoice and Data magazine.

CONTINUOUS IMPROVEMENT

Your Company continues with various internal initiativesto compete effectively, improve organisational flexibilityand respond quickly to customers. Some importantinitiatives are:

Business Excellence

Your Company has been constantly transforming itself intandem with market and regulatory changes using theframework of the Tata Business Excellence Model (TBEM)which covers areas like leadership, strategy, customer andmarket focus, knowledge management, human resources,process management planning, customer service and socialresponsibility.

The Company was the first telecom service provider in theworld to obtain the TL 9000 certification; the first telecomcompany in India to obtain the ISO 14001 certification forenvironment management; and the first telecom serviceprovider in India and the world to obtain the BS 7799 andthe ISO 27001 certifications respectively for informationsecurity. During the year, the Company received the ISO27001 certification for its Managed Security Services, andthe ISO 20000 and 27001 certifications for its ManagedServices and Data Centres.

Your Company continuously works to streamline internalprocesses across all its entities globally and institutionalisea culture of continuous improvement. The internal auditand revenue assurance teams actively contribute tosustaining process improvement efforts. Seniormanagement regularly tracks implementation of ideas forimprovement.

Compliance with SOX

Pursuant to its listing on the New York Stock Exchange,Tata Communications has been complying with section404 of the Sarbanes Oxley Act, 2002 (SOX). SOX lays down

requirements for internal control over financial reportingand its documentation. For the current fiscal year, inaddition to management’s own assessment of theeffectiveness of such internal control, the Company’sexternal auditors are also required to issue an opinion onwhether effective internal control over financial reportingwas maintained in all material respects by themanagement.

Revenue Assurance

Revenue Assurance aims to prevent revenue leakages andensure robust internal controls and IT processes that keeppace with increasing business complexities, thus movingtowards zero tolerance of revenue leakages. Your companyhas recently undertaken a benchmark study to enhancerevenue assurance processes and the findings will beimplemented this year

Enterprise Risk Management

Tata Communications has established an enterprise-widerisk management (ERM) framework to optimiseidentification and management of risks, as well as tocomply with clause 49 of the Listing Agreement. In linewith your Company’s commitment to deliver sustainablevalue, this framework aims to provide an integrated andorganised approach for evaluating and managing risks. Theoutput of this ERM exercise also forms the basis of theCompany’s annual internal audit programme.

Risk-based Internal Audit

The risk assessments performed under the ERM exercise isa key input for the annual audit plan, which covers theCompany’s various business and functional units. Thisapproach provides adequate assurance to theManagement by covering the appropriate areas under theaudit plan.

STATUTORY INFORMATION AND DISCLOSURES

Fixed Deposits

Tata Communications has not accepted nor does it holdany public deposits.

Particulars of Employees

The provisions of Section 217(2A) of the Companies Act,1956, read with the Companies (Particulars of Employees)Rules, 1975, require the Company to provide certain detailsabout the employees who were in receipt of remunerationof not less than Rs. 24 lakhs during the year ended 31March 2009 or not less than Rs. Two lakhs per month,during any part of the said year. The Company had 194such employees employed during the year ended 31 March2009. As per the provisions of section 219(1)(b)(iv) of theCompanies Act, 1956, the Directors’ Report being sent tothe shareholders does not include this annexure. TheAnnexure regarding the Particulars of Employees undersection 217(2A) of the Companies Act, 1956 will beavailable for inspection by any members at the registeredoffice of the Company during working hours, 21 daysbefore the date of the AGM.

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R & D, Technology Absorption and Foreign ExchangeEarnings

There are no particulars to be disclosed pertaining to theyear under review, in respect of Research & Development(R&D) and technology absorption as required underCompanies (Disclosure of Particulars in the Report of theBoard of Directors) Rules, 1988. For the purpose of Form ‘C’under the said rules, foreign exchange earnings wereequivalent to Rs.9.33 billion and foreign exchange outgowas equivalent to Rs. 10.37 billion.

Auditors’ Report

There are no qualifications in the report of the statutoryauditors for the year 2008-09.

Subsidiaries

The statement pursuant to section 212 of the CompaniesAct, 1956 containing details of the Company’s subsidiaries,is attached. The consolidated financial statements of theCompany and its subsidiaries, prepared in accordance withaccounting standard 21 (AS 21) prescribed by the Instituteof Chartered Accountants of India, form part of the annualreport 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 will also beavailable for inspection by any shareholder at theCompany’s registered office.

The Board of Directors

The Board of Directors of the Company consists of twelveDirectors. Dr. Mukund Rajan, Director, resigned from theBoard with effect from 24 June 2008. Dr. AshokJhunjhunwala joined the Board on 25 October 2008.

In accordance with the provisions of the Companies Act,1956 and the Company’s Articles of Association, Mr. SubodhBhargava, Mr. Kishor Chaukar and Mr. S. Ramadorai retireby rotation at the ensuing annual general meeting andbeing eligible, offer themselves for reappointment.

In accordance with the provisions of the Companies Act,1956 and the Company’s Articles of Association, Dr. AshokJhunjhunwala holds office only up to this Annual GeneralMeeting; notices under the provisions of section 257 ofthe Companies Act, 1956 have been received by theCompany from a member signifying his intention topropose Dr. Ashok Jhunjhunwala as a candidate for theoffice of Director.

For details about the directors, please refer to Point 2 ofthe Report on Corporate Governance.

None of the Company’s directors is disqualified from beingappointed as a Director as specified in Section 274 of theCompanies Act, 1956 as amended by the Companies(Amendment) Act, 2000.

Corporate GovernancePursuant to Clause 49 of the Listing Agreement with thestock exchanges, a Management Discussion and Analysis,Corporate Governance Report and Auditors’ Certificateregarding compliance with conditions of corporategovernance form a part of the directors’ report.DIRECTORS’ RESPONSIBILITY STATEMENTPursuant to Section 217(2AA) of the Companies Act, 1956,the directors, based on the representations received fromthe operating management, confirm that:• In the preparation of the annual accounts, the

applicable accounting standards have been followedand there are no material departures;

• They have consulted the Statutory Auditors in theselection of the accounting policies and have appliedthem consistently and made judgements andestimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of theCompany at the end of the financial year and of theprofit of the Company for that period;

• They have taken proper and sufficient care, to thebest of their knowledge and ability, for themaintenance of adequate accounting records inaccordance with the provisions of the Companies Act,1956, for safeguarding the assets of the Company andfor preventing and detecting fraud and otherirregularities;

• They have prepared the annual accounts on a goingconcern basis.

• All Board members and senior managementpersonnel have affirmed compliance with thestipulated code of conduct.

ACKNOWLEDGMENTSThe directors would like to express their thanks to thevarious customers and business associates of the Companyaround the world for their support and confidence in theCompany and the services provided by it. They wish toalso recognise and commend the dedication andcommitment of all the employees globally.The directors appreciate the support of various Ministriesand departments of the Government of India, includingthe Department of Telecommunications and theInformation & Broadcasting Ministry as well as theGovernments and regulators of the various countries inwhich Tata Communications operates. The directors arealso grateful to the Company’s other stakeholders andpartners including its shareholders, bankers, solicitors andsuppliers for their support.

On behalf of the Board of Directors

Subodh BhargavaDated: 24 June 2009 Chairman

Registered OfficeVSB, M. G. Road, Fort,Mumbai - 400001.

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ANNEXURE 1: MANAGEMENT DISCUSSION AND ANALYSIS

INDUSTRY ANALYSIS

Indian Telecom Market

Over the last decade the Indian telecom industry haschanged significantly, with all major segments beingopened up to competition. There are several new entrantsin areas the Company operates in reducing its addressablemarket and increasing competition. There are now morethan 250 circles-based access licenses, 23 licensed NLDoperators and 18 licensed ILD operators several of whomare large international companies who now have a directpresence in the country.

India’s telecom market is growing rapidly and is expectedto be a Rs.1,380 billion sector by 2010, contributing 5.4%to India’s gross domestic product (GDP). According to thelatest figures from the Telecom Regulatory Authority ofIndia (TRAI), during 2008-09, India’s mobile subscriber baseincreased approximately 58%, from 165.11 million to261.09 million, while the fixed subscriber base declinedapproximately 3.26% from 40.75 million to 39.42 million.During the year, the broadband subscriber base grew byapproximately 67%, from 2.34 million to 3.90 million

The past year has also witnessed significant regulatorydevelopments including changes in the access deficitcharge (ADC) regime, a review of the Interconnect regime,announcements on the auction of spectrum for 3G andBroadband Wireless Access (BWA) services andrecommendations by the TRAI on issues like Mobile VirtualNetwork Operators, Internet Telephony and Carrier AccessCode (CAC)/calling cards. The past year also witnessed theannouncement of Mobile Number Portability (MNP) withimplementation expected to take place in the third quarterof fiscal year 2010. In summary, the telecom landscapecontinues to evolve and operators such as your Companywill have to constantly transform themselves to remaincompetitive.

Global Telecom Market

The global telecom industry has also seen changes in thesegments your Company participates in.

The international wholesale voice market continues to bea business of scale, with constant pressures on prices andmargins. The recent global economic downturn has furtherincreased the pressure on prices for international voicecalls. Alternate services such as portal based offerings onthe Web are growing in popularity and usage. The share ofmobile communications continues to grow in relation tofixed voice and there is an increasing use of Voice overInternet Protocol (VoIP) in providing services.

The need for profitability in a largely commoditized marketis making operators seek both scale and efficiency in theiroperations. Apart from driving consolidation, this could also

create new business models based on greater collaborationbetween operators which we believe, your Company is wellpositioned to benefit from.

The data market is also undergoing rapid changes. Withthe growing need for bandwidth around the world, therecontinues to be growth in the demand for submarine cablecapacity. Several new cable systems have been announcedor are being constructed in different markets such as acrossthe Pacific, within Asia, connecting Europe and Asia andon both the east and west coasts of Africa. Availability oflarge capacity in line with market growth and diversity toprovide continuity of services in the event of cable cutsdue to acts of man or nature continue to be importantdrivers of this growth. The addition of these new cablespresent both investment opportunities as well asdownward price challenges.

The growth of the internet on the back of growing globalbroadband usage, increasing demand for multimediaservices, the success of new collaboration andcommunications applications and the continued increasein the use of the web by both individuals and corporationsis driving the demand for IP bandwidth. Growth is seen inthe demand for IP Transit services in all the majorgeographies but prices continue to fall, thereby increasingpressures on margins. New services such as ContentDistribution Networks are fast emerging as growthopportunities leveraging the increasing demand for videotraffic on the web. Your company is actively rolling outthese services to maintain margins and maintain volumegrowth.

The global enterprise market has seen growing demandfor network services, data center services, and value addedservices. While the global recession has caused delays indecision-making and deferred procurement by somecustomer segments, Information and CommunicationsTechnology investments by enterprises broadly continuesto grow. This is motivated by the need for betterengagement and service levels with their own customers,the need for higher velocity and flexibility in business, andthe growth of global supply chains and markets. Industryleaders are more sharply focused on increasing the ratioof IT budgets that are applied towards competitiveadvantage and innovation versus basic services andcompliance.

Mobile VAS

Whilst the Mobile industry has shown some resilience tothe economical downturn, there is some concern is onrevenue growth as they face the prospect of fewer newsubscribers and a flat to declining ARPU. This effect is mostpronounced in the established markets of Europe andNorth America while developing markets such as the

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Middle East, Asia and Africa have managed to maintainrelatively consistent growth to date.

The economic downturn has had a negative effect onbusiness and leisure travel and a significant impact onMobile Network Operators (MNO) roaming revenues. Inmany large roaming markets this has been compoundedby legislated reductions in roaming rates. With MNOsincreasingly focused on cost-cutting measures, it presentsan opportunity for providers of cost-saving Value AddedServices such as Steering of Roaming and RoamingHubbing/Brokerage and associated services.

MNOs are also rolling-out broadband HSPA/3G+ networksand Mobile Broadband is rapidly increasing its share ofoverall customer usage and revenue. As MNOs expand theirbroadband networks and subsequently their requirementsfor core internet connectivity, it creates new opportunitiesfor providers of wholesale IP transit and data services. Yourcompany is leveraging its strength in the Data Services byextending this offering to Mobile Operators.

Carrier Outsourcing

The new challenges in the global economy are compellingcarriers to find quicker and more cost-effective ways toservice their customers. While carriers in developedmarkets are seeking to reduce costs, carriers in emergingmarkets are attempting to overcome skills shortages andexpedite time to market for new services or geographies.This is generating significant demand for various types ofnetwork skills as well as for process improvement anddeployment capability.

By leveraging its global technical expertise and theavailability of highly skilled resources in India, yourCompany is uniquely positioned to take advantage of thisemerging Transformation Services opportunity withinternational Carriers. Tata Communications TransformationServices, our 100% owned subsidiary has world-classDelivery Centers in Pune and Chennai. We have highlyskilled telecom professionals who have wide experienceacross the full range of telecom services in both developedand emerging markets. With an end to end processcapability coupled with domain expertise, they are workingon several opportunities in Europe, N America, Middle-Eastand Africa.

Impact of Global Economic Scenario

The economic slowdown triggered by events in the USAcontinues to impact most markets worldwide. Most of thedeveloped markets are in the midst of a recession andeven the high-growth emerging markets like India andChina are seeing a slowdown in growth rates. Sectors likebanking and financial services and manufacturing havebeen hit most due to the financial crisis and theconsequent slowdown in demand. Businesses across theworld are battling to reduce costs and conserve cash; at

the same time, they are also seeking to access the growthopportunities that are still available in emerging marketsin Asia, Middle East and Africa. The biggest impact this ishaving on your Company’s business is in terms of severeprice pressures from existing customers, delays in ordersfrom some customers and more intense price basedcompetition for new customer acquisitions.

REGULATORY DEVELOPMENTS

Phasing Out of Access Deficit Charge (ADC)

The ADC charge applicable to long distance calls in Indiahas been phased out during the year. This has led to adecline in the cost of terminating voice calls and inreducing the arbitrage opportunity for internationalincoming calls to India.

AGR in TDSAT

As reported earlier, in the year 2005, the Company alongwith several others had challenged before the Hon’bleTelecom Disputes Settlement And Appellate Tribunal(TDSAT), the definition of “gross revenue” and “adjustedgross revenue” (AGR) as applied by the DoT for levyinglicence fees as being unfair and beyond the scope andpowers of the DoT. It was represented that the presentdefinition of adjusted gross revenue has a number ofanomalies, such as that it encompassed several additionalrevenue streams that were unrelated to the activities underthe licence.

It had been reported last year that the Company was notsatisfied with the final verdict rendered by TDSAT on 30August 2007. The Company was not satisfied on two issues,viz. (i) date of applicability of the TDSAT verdict, whichaccording to the Company should be the date from whichthe license fee based on revenue sharing regime cameinto effect and (ii) deductibility of charges passed on toother service providers for leasing bandwidth, port charges,etc, which was disallowed by TDSAT. The Company haschallenged TDSAT’s order of 30 August 2007 on the abovetwo issues in the Hon’ble Supreme Court of India. Asreported, the DoT also has filed an appeal in the ApexCourt. Both the appeals are pending and this matter issubjudice.

The Company has also separately filed a petition in TDSATon the matter of applicability of penal provisions underILD and NLD license agreements towards charging of penalinterest. This matter is currently under hearing.

The regulatory scenario in the other geographies acrossthe world where your Company operates through itssubsidiaries did not see any major policy changesimpacting the Company’s business.

The Company continues to implement and comply withits obligations under the agreement between the Company(and several of its subsidiaries) and the various U.S.

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Government Departments (Department of Justice, U.S.Federal Bureau of Investigation, the U.S. Department ofHomeland Security, and the U.S. Department of Defense).

As a part of this requirement, the Company and itssubsidiaries have, over the last year, invested in enhancingthe security for its North American networks, appointed aChief Security Officer; hired a Chief Information SecurityOfficer for North America and Europe; rolled out securitytraining for North American and European employees; andestablished formal mechanisms to identify and addressnetwork security issues by creating committees of seniorengineers and managers to address findings and plans formitigation.

OPERATIONAL REVIEW

Your Company operates under three main businesssegments globally – Wholesale Voice, Enterprise and CarrierData and Other Services.

Global Voice Services

International Long Distance (ILD)

Tata Communications remains one of the leading providersof international voice communication services both in Indiaand globally. Your Company has several hundred directand bilateral relationships with leading international voicetelecommunication providers.

In India as per current regulations, your company doesnot have direct access to the end customer and isdependent on traffic from other access operators for itslong distance services. Several of the operators who weregiving us their long distance traffic have themselves takenlicenses thereby reducing the Company’s addressablemarket. Your company continues to compete leveragingits scale of operations and operational expertise. Itcontinues to lobby the regulator and the licensor tointroduce direct customer access mechanisms such ascalling cards

Globally, during the year under review, there were furtherreductions in tariff and interconnect rates, increasing thedownward pressure on revenues. However, to an extent,this downward pressure was compensated by trafficvolumes continuing to increase. Globally, your Companycontinues to focus on increasing volumes and thusrevenues, while cutting costs to improve margins.

During 2008-09, globally, Tata Communications handled24.61 billion minutes of international voice traffic, a growthof 13% over the previous year. Traffic to and from Indiahas grown from about 6.86 billion minutes in 2007-08 toabout 8.49 billion in the year under review. Increasingcompetition is expected to shrink the Company’saddressable market and hence affect this businessadversely. Your Company believes that its scale, reach,innovative solutions, expertise and strong businessrelationships give it the capability to compete in this space.

The Company has also moved to capture the emergingmarket for outsourcing services in the international voicebusiness and is expecting to grow in this space in thefuture.

National Long Distance (NLD)

Increased mobile penetration has resulted in significantgrowth in the NLD traffic within India. The Company’s NLDtraffic has grown by over 43% from 7.01 billion minutes in2007-08 to 10.04 billion minutes in 2008-09. The increasedcompetition through the issue of new NLD licences, alongwith other regulatory initiatives, has reduced the gapbetween NLD and local tariffs. Continued shrinkage in theCompany’s addressable market and falling tariffs isexpected to affect this business.

Your Company has a strong network infrastructure andinterconnect agreements with all basic and cellular mobileservice operators in India to carry NLD traffic to and fromtheir networks. However, Tata Communications isdependent on getting traffic from these access providers,many of whom have acquired their own NLD licences.Meanwhile, direct customer access mechanisms such asthe Carrier Access Code (CAC) have not yet beenimplemented. During the year, the telecom regulatorreviewed the long pending consultation process for theimplementation of CAC and eventually recalled the CACdirective and recommended calling cards operated byNLD/ILD operators as an alternative to the CAC. Theserecommendations have been submitted to theDepartment of Telecommunications (DoT), Government ofIndia and are awaiting acceptance and further directionsfrom the DoT. Any such implementation will enable TataCommunications to enter the retail long distance market.

While increased competition in the long distance spaceaffects your Company’s business, it also opens upopportunities to share the Company’s networkinfrastructure with new licensees. The regulator hasrecently permitted sharing of active infrastructure and thisopens up new avenues for your Company. The regulatorhas initiated a consultation process for the introduction ofInternet Telephony in the NLD sector. Depending uponthe manner and timing of the implementation of suchregulatory changes, this may provide new avenues for theCompany in the NLD business area, although at lowermargins.

Carrier and Enterprise Data Services

Carrier Data

Tata Communications is one of the world’s leadingwholesale providers of data, IP and mobile signallingservices. Your Company leverages its Global submarinecable network to provide high-speed bandwidthconnectivity to other telecom carriers and Internet ServiceProviders (ISPs) worldwide. The TGN network which extendsacross the Atlantic and Pacific Oceans, across select

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locations in Europe and from India to Singapore continuesto expand its coverage of new geographies and routes.The latest addition to the TGN system is TGN-Intra Asia,which was recently commissioned and will provideconnectivity from Singapore to Hong Kong and Japan, withbranching to the Philippines and Vietnam. TGN-Eurasia willconnect Mumbai to Western Europe via Egypt and isexpected to be launched during this fiscal. In addition, yourCompany is playing a significant role in the creation ofother cable systems that connect India to the Middle Eastand Africa. These are expected to be operational in thesecond half of the coming year.

Tata Communications also operates one of the world’sleading IP networks and provides wholesale IP transitservices to tier-2 ISPs and regional carriers. Your Companyis one of the few ISPs that have a strong position in all themajor regions worldwide, including North America, Europe,Asia and Africa. The Company is also introducing othervalue-added services like Content Delivery Networks (CDN)to leverage its existing position within the ISP marketsegment.

Tata Communications is a leading provider of mobilesignalling services to mobile operators worldwide. Itsofferings include signalling conversion and managedroaming services. In addition, the Company is introducingnew, innovative services such as hubbing for prepaidservices and is working with partners to develop offeringsin the emerging mobile-commerce market.

Enterprise Data

The Indian enterprise segment has been growing at a veryhealthy rate. In the past financial year, even after adjustingfor the market driven price drops, the Indian industry grewnoticeably in terms of revenue. This growth is driven bytwo factors. Firstly, Indian business have recognized theneed and imperative to use IT and Networking technologyto improve productivity and create competitive advantage.Secondly, as Indian business grows globally andinternational companies are increasing their Indianpresence, there is an associated need for greaterconnectivity to and within the country. . Banking andfinancial services, information technology and businessprocess outsourcing/call centres are some examples ofhigh growth sectors in the country.

In addition to being a leading player in the Indian datamarket, your Company also serves enterprises globally,providing worldwide connectivity through its own network,or assisted by partners in different geographies. As voice,data and video communications converge, the demandfor IP based data services is growing worldwide. Bydeveloping differentiated services and offering competitivepricing, your Company is tapping these large and lucrativeglobal markets.

Tata Communications offers a wide range of customisedtelecommunication solutions. In addition to international

and national private leased circuits (IPLCs and NPLCs), yourCompany offers a wide range of Virtual Private Networksand associated Managed Services (Multi Protocol LabelSwitching), Ethernet Services, Internet Access, ManagedHosting, Messaging, Internet Telephony, etc. The Companyalso provides other value added offerings such asCollaboration and Conferencing services, Managed Securityservices, and other Professional services.

The Company continues to expand its coverage ofManaged Global Virtual Private Network (MPLS-VPN) andEthernet services throughout the globe by directlyentering selective new markets as well as throughpartnerships with regional / local operators. To furtherstrengthen its customer value proposition, TataCommunications partners with Tata Consultancy Servicesand other Software and Systems integration companies,for integrated joint product and service offerings. YourCompany also markets its services through indirectchannels catering to the small and medium enterprisemarket in India and some international markets.

Increasing costs of capital have resulted in the delay andcancellation of private data center facilities, driving morepurchases of data center collocation and hostedcomputing services from external service providers.Virtualization technology is changing the economics ofdata center computing, with utility computing and cloudcomputing on the cusp of moving into the mainstream.Your Company’s global and India managed hosting servicesare aggressively supporting this direction.

Adoption of new services and service delivery models thatenhance competitiveness is accelerating eg. the globaladoption of Ethernet for wide area networks in which yourCompany is a major player both globally and in India.

Managed security services from specialist providers enablecompliance and business protection with lowest costs ofownership, often in the network cloud. Your Company’sglobal Managed Security Service suite is young, but well-ranked by analysts such as Gartner.

“Virtual meetings” using simple and life-like Telepresenceendpoints provide enhanced collaboration across globalcompanies and markets, reducing travel and raisingproductivity. Your Company is a global leader in ManagedTelepresence services for companies and betweencompanies.

The Company is actively expanding its fibre and wirelessaccess network based on the new Wi-Max technology, toprovide its own last mile connectivity to its enterprisecustomers.

Other Services

In the retail space, Tata Communications remains a premierInternet Service Provider (ISP), offering connectivity,messaging, Internet telephony and a wide variety of

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content services. Tata Communications is also emergingas a key player in India’s broadband sector.

Internet and Broadband Services

The growth in broadband subscribers has been slower thananticipated, the primary issue being the limited availabilityof quality last mile networks capable of delivering thebandwidth that broadband needs. To overcome the lastmile connectivity problem, your Company has rolled outits own wireless networks based on Wi-Max technologiesin Bangalore, Delhi, NCR, Chandigarh and Hyderabad, withencouraging customer feedback. However, this is basedon limited spectrum available with the company. Therecent announcements of auction of spectrum for BWA bythe DoT when completed should provide an impetus tothe spread of quality last mile networks for broadband. Asreported earlier, your Company’s retail business unit,providing Internet broadband services, was hived off to awholly owned subsidiary, TCISL.

Tata Communications Internet Services Ltd (TCISL), offersinternet access and a host of other value-added servicesin the retail segment. The product portfolio includeswireline, wireless and dial up broadband / internet accessservice, WiFi internet offering and content and value addedservices like movies, music, gaming, online back up, PCsecurity, web hosting, domain name registering, etc. TCISLremains a premium ISP and continues to have one of thehighest ARPUs (Average Revenue Per User per month)among broadband service providers. TCISL is activelyengaged in WiMax industry initiatives and is a member ofthe Board of the global WiMax Forum.

Wi-Fi

Wi-fi services are an important supplement to theCompany’s internet access services. Wi-Fi enablescomputers, PDAs and other computing devices to use high-speed Internet without any wires or cables, at places thatare Wi-Fi enabled, called hotspots. With over 500 hotspots,TCISL is India’s leading Wi-Fi hotspot provider spread acrosssegments such as airports, hotels, coffee shops, restaurantchains, hospitals, educational institutes, railway stations,shopping malls and even stores. Through its partnershipwith global internet service providers and aggregators,TCISL now offers its customers a Global Internet Roamingservice in over 160 countries. TCISL is the only Indian ISPto be a member of this Wireless Broadband Alliance (WBA).

For the optimum growth and development of therespective businesses of VSNL Broadband Limited (a 100%subsidiary of your Company providing last mileinfrastructure) and Tata Communications, your Boardconsidered it desirable to restructure the business bymerging VSNL Broadband Limited with TataCommunications. A comprehensive scheme ofarrangement was filed last year for this purpose. With theapproval of the Hon’ble High Court at Mumbai, VSNL

Broadband Limited merged with Tata CommunicationsLimited with effect from 1 March 2007.

New Growth Opportunities

TCTSL

With the increasing need for reducing costs several carriersaround the world are looking to low cost economies inwhich to relocate some of their business processes.Leveraging its operating expertise in different globaldeveloped and emerging markets and its relationships withthese carriers, your Company is seeking to cater to thisneed. This initiative is implemented through TataCommunications Transformation Services Limited, a whollyowned subsidiary (TCTSL) in India.

Through its world class delivery centres in Pune andChennai, TCTSL provides Business Transformation, TelecomBPO and Consultancy Services to telecommunicationscarriers around the world. TCTSL delivers solutions for allstages of the carrier processes and operations, such asnetwork engineering, design, implementation andoperations. TCTSL operations are totally independentensuring full confidentiality in managing businessprocesses of its customers. TCTSL employs about 770people and has customer interfaces in Europe and NorthAmerica.

TCBIL

In order to capture emerging opportunities in banking andfinancial services, your Company has formed TataCommunications Banking InfraSolutions Ltd. (earlier knownas BAIL) in February, 2008, as its 100% owned subsidiary.TCBIL aims at providing infrastructure solutions to thebanking industry including services relating to establishingand operating Automated Teller Machines (ATMs),Electronic Transaction Processing solutions (ETPS), ChequeTruncation Services (CTS), Core Banking Solutions (CBS),etc. With a highly experienced team of professionals fromthe Banking and Financial Services industry, TCBILcommenced its commercial operations in April 2009. Thecompany has already received orders for its services fromsome of the leading banks in the country.

Joint Ventures & Associates

Neotel (Proprietary) Ltd.

Neotel (earlier SNO) was set up as South Africa’s SecondNational Operator in 2005. During the year, two of theshareholders in the company, Eskom and Transnet, soldtheir entire 30% stake in Neotel to the Company and TataAfrica thereby increasing our combined stake to aneffective 56% (earlier 26%).

Neotel today employs around 1,100 people, and offerstelecommunication services to the Wholesale, Enterprisesand Consumer segments. Neotel runs the first NextGeneration Network and the first CDMA network of South

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Africa (SA). It has also been awarded the Level 3certification (highest amongst telecom service providersin SA), with regard to Broad Based Black Empowermentinitiative of the SA government.

As a part of Neotel’s growth story, it had acquired ‘Transtel’,a division of the state owned transport company Transnet.This acquisition was completed and the organization hasbeen fully integrated with Neotel. This integration hasresulted in the creation of Neotel Business Support System(NBSS), a unit that now also supports other telecomcompanies for project services.

JV with CEC

It was reported last year that your Company had enteredinto a joint venture agreement with the shareholders ofChina Enterprise Communications Limited (CEC) underwhich the Company would acquire 50% equity interest inCEC, subject to the approvals of the requisite governmentaland regulatory bodies in China. The process of obtainingregulatory clearances in China in respect of this transactionis still ongoing.

Cable Depot JV at Cochin

The South East Asia and Indian Ocean Cable MaintenanceAuthority (SEAIOCMA) consortium, which is entrusted withthe maintenance of undersea cables in the Asia-pacificregion, has located a repair ship owned by Indian OceanCableship Pte Ltd. Singapore (IOCPL) at Cochin port, inorder to reduce the time gap for repair of any cables inthe Indian Ocean region. So as to ensure efficient andtimely repairs, spares such as cable and other material areneeded to be stored at the same location. For this purpose,a cable depot is being established at Cochin as a jointventure called Cochin Submarine Cable Depot (India) PvtLtd. with IOCPL investing 60% in this joint venture (JV)and your Company the balance 40%. This JV has secured apiece of land on lease from the Cochin Port Trust forestablishing a custom bonded depot. The construction ofthe depot is expected to be completed in the current fiscalyear.

ORGANISATIONAL RESTRUCTURING

Consolidating Subsidiaries

Your Company had 8 direct and 40 indirect subsidiaries ason 31 March 2009. As reported earlier, a process had beeninitiated to reduce this number to a total of about 30through appropriate restructuring. The aim is to have nomore than one entity in each country to the extentpossible. With the launch of the new brand ‘TataCommunications’, the name of the parent and the namesof the first level of subsidiaries have been changed toreflect this new global brand. Appropriate Brand Equityand Brand Promotion Agreements will be signed with TataSons Ltd. by those subsidiaries whose names have beenchanged.

Global Structure

Tata Communications has structured itself into globalbusiness units and global shared service functions, to bestenable it to operate in its different customer segmentsand markets. Several initiatives are being implementedwithin the framework of this structure to improve customerexperience, define and create a common company culture,tighten corporate identity and branding and implementthe next generation network architecture for convergedservices, among others.

Corporate Sustainability Initiatives

Tata Communications believes in the need to improve thequality of life of people and to serve the society thatprovides its customers and other stakeholders. Thisapproach to business has been enunciated in theCompany’s Corporate Sustainability Policy. As a memberof Tata Council for Community Initiatives, the Companyhas been constantly learning from group initiatives andimproving its processes and policies to serve society better.

The Company fosters an internal culture of volunteerismand contributes to the socio-economic development ofthe communities it operates in globally, through financialand other assistance to various causes and organizations.The Corporate Sustainability activities have been alignedwith Employee Volunteering Programmes (EVP). During theyear, nearly 600 volunteers devoted substantial personaltime to improving the conditions of the communities inwhich we operate. During the under review, the Companyand its employees also contributed in a major way tosupport the relief measures for the flood victims of Biharstate.

The Company continued to partner with Dr Reddy’sFoundation (DRF) in the activities of the Telecom TrainingAcademy that has been set up to provide internshipopportunities in different vocational skills required for thetelecom industry. The Academy focuses on developingstudents from economically weaker sections of society,especially candidates completing their Diploma/ITI coursesfrom rural and smaller towns. The Academy has about 200interns at various stages of the internship programme.Three batches of interns have already successfullycompleted their internship and have been absorbed inthe industry.

As part of the Affirmative Action initiatives aimed atproviding support to the marginalized sections of thecommunity Tata Communications implemented severalprogrammes addressing three major drivers of socialequilibrium: Education, Employability and Entrepreneurshipdevelopment. The Entrepreneurship DevelopmentProgramme (EDP) which runs in partnership with theEntrepreneurship Development Institute (EDI), Ahmedabad,has received a good response.

The Company is sensitive towards environmental andecological concerns arising out of its operations. Towards

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that end, the Company has an Environmental ManagementSystem and a well enunciated Environment Policy in placeto guide its activities. In 2005 it became the first telecomservice provider in India to become ISO 14001 certified.

Management of Business Ethics (MBE)

The Company values, promotes and ensures ethicalbehaviour by employees and other stakeholders througha series of activities and processes. Tata Communicationshas been systematically implementing the Tata Code ofConduct. The Company has put in place the necessarystructures and processes, to implement and improveethical standards and practices in the organization.

During the induction process, new entrants are informedand educated about the Tata Code of Conduct and theCompany’s Whistleblower Policy. To internalize the codeof conduct and sustain the momentum, the Companyconducts employee seminars and ethics awarenessworkshops at frequent intervals.

RISKS AND CONCERNS

Like all businesses, Tata Communications is exposed tocertain risks and concerns in the course of its business:

End Customer Ownership for Long Distance voiceservices in India

An important concern for the Company in its voicebusiness continues to be the lack of direct access to endcustomers. Tata Communications is dependent on accessproviders to route the national long distance andinternational calls of their customers through its networks.Some of these operators are also competitors of TataCommunications in the long distance and other markets.This risk is further increased by the new licenses issued forNLD and ILD services, further shrinking the Company’saddressable market. It would be a serious disadvantagenot to have access to a large enough market to competefor business. Tata Communications has been pursuingimplementation of Direct Customer Access either throughthe CAC regime or through services like calling cards whichhas not happened so far.

Delay in Implementation of Customer Choice Regime

A customer choice regime for long distance calling was tohave been implemented in accordance with the TRAIDirective in phases for different segments of the longdistance sector, with the final implementation of carrieraccess code (CAC) and carrier pre selection (CPS) to becompleted by December 2003. Carrier selection givessubscribers the option to either pre-select a long distancecarrier for all ILD calls, or choose a provider for each call bydialing a carrier access code before making a call.Customers can then freely choose their long distancecarrier based on competitiveness and quality, rather thanthe choice being made for them by access operators, as isthe case at present.

However, the customer choice regime has not beenimplemented due to technical and other reasons. This delayis a cause for concern for Tata Communications because itrestricts the market that the Company can directly address.In a recent order, the TRAI recalled the Directive requiringall service providers to implement CAC/CPS; instead theTRAI recommended the use of calling cards as thecustomer choice mechanism. TRAI recommended that longdistance operators be permitted to offer calling cards(using an Intelligent Network platform) that could be solddirectly to end-customers for domestic and internationallong distance services. The DoT is yet to accept andimplement this recommendation.

Regulatory Environment and Tariffs

The tariffs charged by telecommunication service providersin India, including Tata Communications, are subject to TRAIregulations. Tata Communications periodically renegotiatesinterconnect agreements with various domestic mobileservice operators and basic telecom service providers andsettlement rates with international carriers, resulting in therevision of rates from time to time depending on marketconditions. Such revisions could be adverse and could havea material effect on Tata Communications’ operations andfinancial condition.

The TRAI has initiated consultations to Internet telephony.The use of Internet telephony may lead to a steep fall inNLD rates and margins. The manner and timing ofimplementation of the new Internet telephony frameworkcould impact the Company’s NLD business significantly.

The Grey Market and the IUC Regime

Effective 1 October 2008 the TRAI discontinued the accessdeficit charge (ADC) built into the interconnection usagecharge (IUC) regime governing inter-operator settlementsfor voice calls passing through different networks. There isno assurance that abolishing this ADC will completelyeliminate the grey market, or that volumes of legitimatecarriers like Tata Communications would be favourablyimpacted. Besides, effective 1st April, 2009, the IUCregulations provide for a higher termination charge ofRs.0.40 per minutes for incoming international longdistance calls as against Rs.0.20 per minute for terminatingdomestic long distance calls. This difference creates anarbitrage opportunity which may make total eliminationof Grey Market difficult.

Increasing Competition

The de-regulation of the Indian telecom market exposesthe Company to increased competition:

• The Internet Service Provider (ISP) business is intenselycompetitive and has a large number of players.

• ISPs are allowed to provide Internet telephony callsoverseas. Though the quality of such service may not becomparable to traditional ILD calls, it may impact Tata

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Communications’s ILD business, as also the Company’s ownInternet telephony services.

• Tata Communications operates in the markets forinternational long distance, national long distance andbroadband services, where there are several potential andexisting competitors. Relaxation of licensing conditions andgranting of the new licences for NLD and ILD services,including to several international operators, by the DOThas intensified competition in these sectors.

• New ILD licensees, like BSNL, Vodafone etc, haveestablished direct connectivity with foreign carriers, andincreased competition is likely to impact the Company’sbusiness adversely, particularly in the Gulf region.

• The DoT has permitted resale of international privateleased circuit services, which will further intensify thecompetition.

International Operations

A large part of the Company’s consolidated revenues aregenerated through its operations in international markets.Integrating acquisitions and managing operations indiverse international locations is very critical to the successof Tata Communications’ business plans. Changes in localregulations in any of these countries may adversely affectthe operations of the overall group of TataCommunications companies. A list of additional “riskfactors” which could impact the business of the Company’sinternational subsidiaries are more fully set forth in theCompany’s Form 20-F, which is filed annually with the U.S.Securities and Exchange Commission and can be found atthe following weblink: <http://secfilings.nyse.com/files.php?symbol= TCL>.

Debts

The Company incurred substantial debt in the fiscal year2009 primarily to finance its various projects as well asfund the capital requirements of its subsidiaries. As of 31March 2009, the outstanding principal amount of our debtwas approximately Rs.23.28 billion for the Company on astandalone basis and Rs.66.65 billion on a consolidatedbasis. The Company may also need to resort to additionallong-term debt and working capital lines of credit to meetfuture financing needs, with the possibility of raising non-debt funding being limited at this juncture. This wouldincrease the debt servicing obligations. Unless theCompany is able to explore non-debt funding avenues inthe near future, its ability to raise debt funding may remainsubject to certain restrictions, in turn adversely affectingits debt servicing ability and capital expenditureprogramme.

Changing Economic Conditions

Downturns in the Indian, regional and global economies

could have a material adverse effect on the Company’sbusiness prospects. Tata Communications’ operations andinvestments as well as rights to undersea cable capacityextending to other countries, exposes the Company to risksinherent in international operations.

These include:

• General economic, social and political conditions;

• The difficulty of enforcing agreements and collectingreceivables through certain foreign legal systems;

• Foreign currency exchange rates fluctuations, whichcould adversely affect our results of operations andthe value of our international assets and investmentsalthough the Company partially hedges its foreignexchange risk;

• Foreign earnings may be subject to withholdingrequirements or the imposition of tariffs, exchangecontrols or other restrictions;

• Difficulties in obtaining licenses or interconnectionarrangements on acceptable terms

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Tata Communications has a well-developed internal controlsystem and has also implemented the SAP system forEnterprise Resource Planning. Internal control systemsincluding those for the newly-acquired businesses arecontinuously reviewed and improved. The financialauthority at various management levels are clearly definedin the delegation of powers. Technical and financialoperations are controlled by state-of-the-art technologyand systems. The accounts of the Company are subjectedto internal and statutory audit.

CAUTIONARY STATEMENT

Statements in the directors’ report and managementdiscussion and analysis describing the Company’sobjectives, projections, estimates and expectations may be‘forward-looking statements’ within the meaning ofapplicable securities laws and regulations. Actual resultscould differ substantially or materially from thoseexpressed or implied. Important factors that could make adifference to the Company’s operations include economicconditions affecting demand/supply and price conditionsin the domestic and overseas markets in which theCompany operates, changes in government regulations,policies, tax laws and other incidental factors. Further, theCompany retains the flexibility to respond to fast-changingmarket conditions and business imperatives. Therefore, theCompany may need to change any of the plans andprojections that may have been outlined in this report,depending on market conditions.

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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

As a part of the Tata Group, the Company has a fair,transparent and ethical governance practices. TheCompany has adopted a Code of Conduct for its employeesincluding the Managing Director. In addition, the Companyhas adopted a Code of Conduct for its Non-ExecutiveDirectors. Both these Codes are available on the Company’swebsite.

The Company believes that total business risk eliminationis never possible but can be minimized by consistentlydeveloping and following the best practices of CorporateGovernance. To this end, the Company focuses ondeveloping 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 through a systematic process oftraining and development has increased 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 by an internationally recognizedaccounting firm according to US GAAP. The Company is incompliance with the requirements of the revised guidelineson corporate governance stipulated under Clause 49 ofthe Listing Agreements with the Stock Exchanges. Besides,the Company being listed on the New York Stock Exchange,

REPORT ON CORPORATE GOVERNANCE FOR THE YEAR 2008-09(In accordance with clause 49 of the listing agreement with Indian stock exchanges)

it has to comply with the stringent rules and regulationsof the Sarbanes-Oxley Act, 2002 (SOX). The Companybelieves that achieving SOX compliance will inter-aliaenhance 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 hold directorships in more than thepermissible number of companies under the applicableprovisions. Similarly, none of the directors on the board’ssub-committees hold membership of more than tencommittees of boards, nor is any director a chairman ofmore than five committees of boards.

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 2009 (with Directorshipsupdated as of 22 June 2009) are given below:

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

Name Category during the tenure (02.08.2008) Including Tata Comm including Tata Comm 31 March 2009

Held Attended Chairman Member Chairman Member

Directors in Office

Mr. Subodh Bhargava Independent 9 9 Yes 2 10 4 6 NIL[Chairman] Non Executive

Mr. N. Srinath Not Independent 9 9 Yes 2 4 - 2 NILExecutive

Mr. Kishor A. Chaukar Not Independent 9 9 Yes 3 11 1 2 NILNon Executive

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Mr. P.V. Kalyanasundaram Independent 9 7 Yes - 1 - 1 NILNon Executive

Dr. V.R.S. Sampath Independent 9 6 Yes - 2 - 2 NILNon Executive

Mr. Amal Ganguli Independent 9 6 Yes - 12 5 9 NILNon Executive

Mr. Vinod Kumar Not Independent 9 7 Yes - 3 - - NILNon Executive

Mr. S. Ramadorai Not Independent 9 5 Yes 2 10 1 3 NILNon Executive

Mr. A.K. Srivastava1 Not Independent 9 7 Yes - 3 - 1 NILNon Executive

Mr. Arun Gandhi Not Independent 9 4 Yes - 7 1 2 NILNon Executive

Mr. H.P. Mishra1 Not Independent 9 8 Yes - 1 - 1 NILNon Executive

Dr. AshokJhunjhunwala[Director: w.e.f. 25 Not Independent 4 3 NA - 9 - 7 NILOctober 2008] Non Executive

Directors served during the year

Dr. Mukund Rajan Not Independent 2 2 NA NA NA NA NA NA[Until 24 June 2008] Non Executive

1 Nominee director of the Government of India.

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 2008-09.

(f ) The detailed resume of each director and the details of the directors proposed to be appointed / reappointed at the23rd 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 nine board meetingswere held are as follows:

2&3 April 2008 17 June 2008 28&30 July 2008 2 August 2008

6 September 2008 25 October 2008 2 December 2008 7 January 2009

28 January 2009

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

Name Category during the tenure (02.08.2008) Including Tata Comm including Tata Comm 31 March 2009

Held Attended Chairman Member Chairman Member

Directors in Office

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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. H.P. Mishra, GovernmentNominee Director. Mr. Satish Ranade, Company Secretaryand Chief Legal Officer is the audit committee’s Secretary.

The audit committee has adequate powers and detailedterms of reference to play an effective role as requiredunder the provisions of the Companies Act, 1956 and clause49 of Company’s listing agreement with the stockexchanges.

Attendance at the Audit Committee Meetings

Name No. of Audit CommitteeMeetings during 2007-08

Held during AttendedTenure

Mr. Amal Ganguli[Chairman] 7 4

Mr. Subodh Bhargava 7 7

Mr. P.V. Kalyanasundaram 7 6

Mr. H.P. Mishra 7 5

At the Annual General Meeting held on 2 August 2008,the Chairman of the Audit Committee, Mr. Amal Ganguliwas present. During the last financial year, the AuditCommittee held seven meetings and not more than fourmonths had elapsed between any two meetings. The datesof meetings of the Audit Committee are as follows:

8 May 2008 17 June 2008 28 July 2008

20 August 2008 25 October 2008 3 December 2008

27 January 2009

4. REMUNERATION COMMITTEE

a) Constitution and Terms of Reference

The Remuneration Committee consists of threemembers. The Chairman of the Committee is Mr. KishorChaukar. Mr. Subodh Bhargava and Mr. A.K. Srivastavaare the other members on the Committee. Mr. SatishRanade, Company Secretary and Chief Legal Officer isthe Remuneration Committee’s Convener. Twomeetings of the Remuneration Committee were heldon 19 May 2008 and 17 June 2008. All the membersof the Remuneration Committee were present in boththe meetings.

The broad terms of reference of the RemunerationCommittee are to review the performance of theWhole-time Directors, after considering the Company’sperformance and recommend to the Boardremuneration including salary, perquisites andcommission to be paid to the Company’s Whole-timeDirectors within the overall ceilings approved by theshareholders.

b) Remuneration Policy

For the financial year 2008-09, the Company proposesto pay remuneration to the nonexecutive directors(NEDs) by way of commission at a rate not exceeding1% per annum of the profits of the Company(computed in accordance with Section 309(5) of theCompanies Act, 1956).

The distribution of commission amongst the NEDs isplaced before the Board. The commission to NEDs isproposed to be distributed broadly on the basis oftheir attendance and contribution at the Board andCommittee meetings as well as the time spent onoperational matters other than at the meetings. Mr.Vinod Kumar, Director who is in employment of asubsidiary of the Company is not paid sitting fees orcommission.

The Company paid sitting fees of Rs.20,000/- permeeting to the non-executive directors for attendingthe meetings of the Board and Audit Committee. TheCompany paid sitting fees of Rs.10,000/- per meetingto the non-executive directors for attending themeetings of the Committees of the Board other thanthe Audit Committee.

The Company pays remuneration by way of salary,perquisites and allowances (fixed component) andcommission (variable component) to the whole timedirector. Salary is paid within the range approved by

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the shareholders. Annual increments, recommendedby the Remuneration Committee are approved by theBoard. Within the prescribed ceiling, the perquisitespackage is approved by the remuneration committee.

Commission is calculated with reference to net profitsof the Company in a particular financial year and isdetermined by the Board of Directors at the end ofthe financial year based on the recommendations ofthe remuneration committee, subject to overallceilings stipulated in Sections 198 and 309 of theCompanies Act, 1956. Specific amount payable to thewhole-time director is based on the performancecriteria laid down by the Board which broadly takesin to account the profits earned by the Company forthat year.

c) The details of commission to be paid to the non-executive directors for the year 2008-09 are asfollows:

(Amount in Rs.’000)

Name of the Director Commission Sitting Fees

Mr. Subodh Bhargava[Chairman] 676.6 350

Mr. Kishor A. Chaukar 327.4 300

Mr. P.V. Kalyanasundaram 283.7 260

Dr. V.R.S. Sampath 218.3 200

Mr. Amal Ganguli 360.1 210

Mr. Vinod Kumar* NIL NIL

Mr. S. Ramadorai 109.1 100

Mr. A.K. Sivastava 207.3 190

Mr. Arun Gandhi 87.3 80

Mr. H.P. Mishra 327.4 300

Dr. Ashok Jhunjhunwala[Director: w.e.f.25 October 2008] 65.5 60

Dr. Mukund Rajan[Until 24 July 2008] 43.7 40

2706.4 2090

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

d) The details of remuneration to the whole-time directorduring the year 2008-09 are as follows:

(Amount in Rs.’000)

Name Salary Perquisites & Commission* Allowances

Mr. N. Srinath 7,188 1,393 4500.00

Total 7,188 1,393 4500.00

* 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 17 June 2008, 28 July 2008, 25 October 2008and 28 January 2009.

The details of grievances received from the shareholdersduring the year and their status on 31 March 2009 is givenbelow:

Sr. Nature of Complaints No. of Complaints

No. Received Pending

1. SEBI/Stock ExchangeComplaint NIL NIL

2. Direct/Miscellaneous/Other Complaint 2 NIL

TOTAL 2 NIL

This committee has been delegated the powers to approvethe issue of Duplicate Share Certificates and approvetransfer/transmission of shares not exceeding 500 sharesper folio. The Registrar and Transfer Agents have beenauthorised to issue Duplicate Share Certificates andapprove transfer/transmission up to a maximum of 500shares per folio, limited only to routine day-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 2009 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

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adoptedthe “Tata Communications Code Of Conduct ForPrevention of Insider Trading and Code of CorporateDisclosure Practices” to be followed by “Directors”,“Designated Employees”, “Designated Persons” and “Insiders”.The code is based on the principle that Directors,Designated Employees, Designated Persons and Insidersshould not have undue advantage over other shareholders,in their personal 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 the

Company’s securities.

In terms of the said code, an Ethics and ComplianceCommittee was constituted in 2003. The presentcommittee consists of three members. The Chairman ofthe committee is Mr. Kishor A. Chaukar, who is theManaging Director of Tata Industries Limited, Dr. V.R.S.Sampath, Independent Director and Mr. H.P. Mishra,Government Nominee Director are the members. Mr. SatishRanade, Company Secretary and Chief Legal Officer is theconvener of the Committee. Four meetings of thecommittee were held during the year 2008-09 on 17 June2008, 28 July 2008, 25 October 2008 and 28 January 2009.

7. GENERAL BODY MEETINGS

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

Meeting Date Location, Description and Type of Resolutions Voting

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 400001. There were Sevenresolutions (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 - 400 001.(3 special resolutions).

2 August 2007 The 21st Annual General Meeting was held at All the resolutions were put to vote1100 hours at MC Ghia Hall, Bhogilal Hargovindas by show of hands and were carriedBuilding, Second Floor, 18/20 Kaikhushru Dubash Marg, unanimously.Kalaghoda, Mumbai 400001. There were Ten resolutions(2 special and 8 ordinary).

13 September 2006 The 20th Annual General Meeting was held at All the resolutions were put to vote1100 hours at MC Ghia Hall, Bhogilal Hargovindas by show of hands and were carriedBuilding, Second Floor, 18/20 Kaikhushru Dubash Marg, unanimously.Kalaghoda, Mumbai 400001. There were Ten resolutions(2 special and 8 ordinary).

8. DISCLOSURES

i) There were no significant related-party transactionsof the Company with its promoters, directors ormanagement, their subsidiaries or relatives that mayhave potential conflict with the interest of theCompany at large. Note number B.21 of the Notes onAccounts may also be referred to in this respect. Nonon-compliance notice has been issued and nopenalties or strictures have been imposed on theCompany by SEBI, any stock exchange or any statutoryauthority on any matter related to capital marketsduring the last three years.

ii) The Company has adopted a Whistle Blower Policyand has established necessary mechanisms foremployees to report concerns about unethicalbehaviour. No person has been denied access to theAudit Committee.

iii) SECRETARIAL AUDIT

A qualified practicing Company Secretary carried outquarterly secretarial audit to reconcile the totaladmitted capital with National Securities DepositoryLimited (NSDL) and Central Depository Services (India)

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Limited (CDSL) and the total issued and listed capital.

The audits confirm that the total issued/paid-upcapital is in agreement with the total number of sharesin 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 financial statementsof the Company is unqualified.

9. DISCLOSURE REQUIRED BY CLAUSE 32 OF THE LISTING AGREEMENT

Amount of loans and advances in the nature of loans outstanding from subsidiaries during the year ended 31 March 2009

Name of the Company Outstanding Maximum Investment in Investmentas at amount shares of the in shares of

31 March, 2009 outstanding Company subsidiaries ofduring the year the Company

Rs. in crores Rs. in crores No. of shares No. of Shares

Subsidiaries

(i) Tata Communications InternationalPte Ltd (Formerly known as VSNLInternational Pte. Ltd.) 834.17 847.32 - 110,810,000

(ii) VSNL SNOSPV Pte.Ltd 151.59 231.25 - 769,333

(iii) Tata Communications Lanka Ltd(Formerly known as VSNL Lanka Ltd.) 0.03 0.03 - 13,661,422

(iv) Tata Communications Internet ServicesLimited (Formerly known as VSNLInternet Services Limited) 138.70 403.41 - 195,004,050

(v) Tata Communications TransformationServices Limited (formerly known asVSNL Global Services Limited) 0.06 0.06 - 500,000

(vi) Banking ATM InfraSolutions Limited 0.35 0.35 - 50,000

Subsidiaries of Tata Communications International Pte Ltd. No. of Shares

Tata Communications (Australia) Pty Limited 555,001

VSNL Telecommunications (Bermuda) Ltd (In Members Voluntary Liquidation) 1,200,000

Tata Communications (Bermuda) Limited 1,200,000

Tata Communications (Middle East) FZ-LLC 50

Tata Communications (Hong Kong) Limited 2

Tata Communications (Japan) KK 300

Teleglobe International Luxembourg S.a r.l (In Liquidation) 500

TLGB Luxembourg Holdings S.a r.l (In Liquidation) 500

Tata Communications (Puerto Rico) Inc. 1,000

Teleglobe Asia Pte Ltd 534,075

Tata Communications (Netherlands) BV 16,718,000Subsidiaries of Tata Communications (Netherlands) B. V.Tata Communications (Belgium) SPRL 186Tata Communications (Canada) ULC 402

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Tata Communications (US) Inc. 3,000VSNL International (ITXC) Corp. 1,000Tata Communications (UK) Limited 6,500,003Tata Communications (France) SAS 1,847,000Tata Communications Deutschland GmbH 1Tata Communications (Hungary) LLC NATata Communications (Ireland) Limited 1Tata Communications (Italy) S.r.l 10,000Tata Communications (Nordic) AS 1,000VSNL International (Poland) Sp. z o.o. 1,000VSNL (Portugal) Unipessoal Limitada 1,055,000VSNL International (Portugal) Instalacao e Manutencao de Redes LDA 24,894,000Tata Communications (Russia) LLC NAVidesh Sanchar Nigam Spain Srl 413,006Tata Communications (Sweden) AB 1,000Tata Communications (Switzerland) GmbH 5,000Subsidiaries of Tata Communications (UK) LimitedVSNL UK Limited (In Liquidation) 1Teleglobe International Limited (In Liquidation) 8,416,801Subsidiaries of Tata Communications (US) Inc. (Formerly known as VSNL International (US) Inc.)Tata Communications (Guam) L.L.C. NASubsidiaries of Tata Communications (America) Inc.VSNL International (IPCO) LLC NASubsidiaries of VSNL Telecommunications (Bermuda) Ltd.Teleglobe Bermuda Ltd (In Members Voluntary Liquidation) 1,200,000Subsidiaries of Tata Communications (Bermuda) Ltd.ITXC IP Holding SARL 500Tata Communications Services (Bermuda) Limited 12,000ITXC Global Hongkong Limited (In Liquidation) 1,180,000Subsidiaries of Tata Communications (Hong Kong) LimitedVSNL International (Hong Kong) Limited (In liquidation) 10Subsidiaries of VSNL International (ITXC) Corp.Tata Communications (America) Inc. (Formerly known as Teleglobe America Inc.) 100VSNL International (Global) Corp. 100

Note 1. The Hon’ble High Court at Mumbai, approved the merger of a wholly owned subsidiary of the Company, VSNLBroadband Limited, with the Company effective from 1 March, 2007.

Note 2. The Company has subscribed to the Capital clause of Memorandum of Association of a new company CochinSubmarine Cable Depot (India) Private Limited which is intended to be 40% Joint venture of the Company.

10. MEANS OF COMMUNICATION

Company’s quarterly results are ordinarily published inthe Financial Express and Loksatta among others,and are 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 2008-09. Segmental information may bereferred to in Note number B.20 of the Notes on Accounts.

No. of Shares

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11. SHAREHOLDER INFORMATION

DATE AND VENUE OF THE AGM

The twenty third annual general meeting of the Companywill be held at 1100 hours on Friday, 7 August 2009, at MCGhia Hall, Bhogilal Hargovindas Building, Second Floor, 18/20 Kaikhushru Dubash Road Marg, Kalaghoda, Mumbai -400023.

FINANCIAL CALENDAR

Fiscal year ending : 31 March 2009

Annual General Meeting : 7 August 2009

KEY FINANCIAL REPORTING DATES FOR THE FINANCIALYEAR 2009-10

First quarter ending : On or before30 June 2009 31 July 2009

Second quarter ending : On or before30 September 2009 31 October 2009

Third quarter ending : On or before 3131 December 2009 January 2010

Fourth quarter ending31 March 2010 : On or before

30 April, 2010or if audited, on orbefore 30 June 2010.

BOOK CLOSURE DATES FOR THE PURPOSE OF DIVIDEND

The Company’s register of members and share transferbooks will remain closed from 24 July 2009 to 7 August2009 (both days inclusive) for the purpose of ascertainingeligibility to shareholders to receive the final dividend asmay be declared for the year ended March 31, 2009.

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 categories

of investors from time to time, and money marketconditions.

DIVIDEND PAYMENT

The dividend as recommended by the Board of Directors,if declared at this Annual General Meeting, shall be paidon or after Wednesday the 12 August 2009.

(i) to those shareholders whose names appear on theCompany’s Register of Members after giving effect toall valid share transfers in physical form lodged withthe Registrar & Transfer Agents (R&T Agents) of theCompany on or before Thursday, 23 July 2009.

(ii) in respect of shares held in electronic form, to those“deemed members” whose names appear in thestatements of beneficial ownership furnished byNational Securities Depository Limited (NSDL) andCentral Depository Services (India) Limited (CDSL) asat the end of business on Thursday, 23 July 2009. Inrespect of shares held in demat mode, the dividendwill be paid on the basis of beneficial ownership asper details to be furnished by NSDL and CDSL for thispurpose.

BANK DETAILS

In order to provide protection against fraudulentencashment of dividend warrants, members are requestedto provide, if they have not already provided, their bankaccount numbers, bank account type and names andaddresses of bank branches, quoting folio numbers, to theR&T agents (in case of physical shareholding) to enablethem to incorporate the same on the dividend warrants.

In case of dematerialised holding the bank account detailsshould be intimated and updated with the shareholder’sDepository Participant.

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 2008-2009 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.

DEPOSITORY BANK FOR ADR HOLDERS

The Bank of New York, 101, Barclays Street, 22nd Floor West,New York, NY 10286, Telephone: +1 (212) 815 8365,Facsimile: +1 (212) 571 3050.

Local Address : The Bank of New York, Express Towers,12th Floor, Nariman Point, Mumbai 400 021, Telephone:(022) 2204 4941/43, Facsimile: (022) 2204 4942.

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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, 66672030. Facsimile: 91-22-6667 2779/2740.

STOCK CODE

Bombay Stock Exchange : 500483National Stock Exchange : TATACOMMNew York Stock Exchange : TCLISIN No. for equity shares : INE151A01013ISIN No. for ADRs : US8765641050CUSIP 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 for 2008-09 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-08 585.00 461.20 121100 556.00 442.25 431200 28.69 22.00 118700

May-08 520.90 476.00 69500 525.00 478.00 261100 25.50 22.77 58400

Jun-08 514.45 338.00 57500 516.95 339.90 239800 24.80 16.47 186700

Jul-08 479.70 332.00 70500 479.90 340.10 346000 23.11 15.86 134300

Aug-08 473.60 391.00 49200 473.10 390.35 269700 22.27 17.96 144400

Sep-08 484.00 377.10 94300 483.90 380.00 340000 24.60 17.26 192800

Oct-08 522.00 320.00 103900 523.90 323.05 428000 24.00 13.79 349200

Nov-08 550.00 380.50 114900 560.00 380.65 524300 23.55 13.51 321000

Dec-08 521.10 368.90 61400 522.00 329.85 330200 23.34 14.47 238700

Jan-09 549.95 412.05 39600 540.00 410.85 195700 22.50 16.00 217100

Feb-09 460.00 382.00 30700 489.55 380.15 129600 18.66 14.82 127200

Mar-09 542.00 387.00 56000 545.00 390.15 260300 22.00 14.34 157600

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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.

DISTRIBUTION OF SHAREHOLDING

Number of ShareholdersNumber of ordinary shares held

31.03.2009 31.03.2008

1 to 500 46851 50882

501 to 1000 816 1335

1001 to 10000 965 1310

Over 10000 108 153

Total 48740 53680

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CATEGORIES OF SHAREHOLDERS AS OF 31 MARCH

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

2009 2008 2009 2008 2009 2008

PROMOTERS

Tata Group

Panatone Finvest Limited 2 2 36.73 40.70 104671123 115988857

Tata Sons Limited 3 2 10.88 8.51 31013497 24260497

The Tata Power Company Limited 1 1 2.48 0.90 7075837 2575837

Tata Iron & Steel Company Limited 0 0 0.00 0.00 0 0

Tata Industries Limited 0 0 0.00 0.00 0 0

Central Government 1 1 26.12 26.12 74446885 74446885

NON-PROMOTERS

Indian Public Financial Institutions 56 61 11.15 12.74 31779685 36457943

Indian Nationalised Banks 13 15 0.04 0.12 103522 364678

Foreign Financial Institutions 88 72 1.50 1.77 4287323 5056092

Foreign companies (shares heldby The Bank of New York asdepository for ADRs) 2 2 8.70 5.67 24788680 16152446

Non-resident individuals /Overseas Corporate Bodies 563 194 0.03 0.02 94455 66677

Other Indian Bodies Corporate 875 1315 0.68 0.91 1925404 2617031

Others 47136 52015 1.69 2.42 4813589 7013057

Total 48740 53680 100 100 285000000 285000000

Dematerialisation of Shares and Liquidity

Approx 99.93% of the Company’s share capital available in the market is dematerialised as on 31 March 2009. 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

12394340 ADRs (each representing two ordinary share of the Company) are outstanding as of 31 March 2009. In respectof these ADRs, the option to convert into shares is alive.

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SHARE CAPITAL HISTORYDetails 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 forassets & liabilities of OCS 126 126 126,000

01.04.1986 Allotted as Purchase consideration forassets & 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 by GOI@ 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 equivalentto Rs.1000 per share. +12,165,000 92,165,000 921,650,000

04.04.1997 Raised its capital by way of GDR IssueGreen Shoe option @ US$13.93 per GDRequivalent Rs.1000 per share. +2,835,000 95,000,000 950,000,000

Feb. 1999 10million shares divested by GOI in GDRmarkets @ US$9.25 per GDR equivalentto Rs.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/-per share 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 ofIndia Enterprise NIL 285,000,000 2,850,000,000

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

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10.04.02 Open Offer by Panatone Finvest Limitedin accordance with SEBI guidelines toacquire upto 57 million shares@ Rs.202/- per share NIL 285,000,000 2,850,000,000

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

Locations of Other Offices in IndiaAmbattur, Arvi, Bangalore, Bhubaneswar, Chandigarh, Chennai, Coimbatore, Dehradun, Ernakulam, Gandhinagar, Goa,Guwahati, Hyderabad, Indore, Jaipur, Jalandhar, Kanpur, Kolkata, Mumbai, New Delhi, 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

C21 & C36, ‘G’ Block, Bandra Kurla Complex,Mumbai – 400 098.Tel : +91 22 6657 8765Fax : +9122 6639 5162Email : [email protected] : www.tatacommunications.com

Compliance OfficerMr. Satish RanadeCompany Secretary & Chief Legal OfficerC21 & C36, ‘G’ Block, Bandra Kurla Complex,Mumbai - 400 098.Tel : +91 22 6657 8765Fax : +91 22 6725 1962Email : [email protected]

Any shareholder complaints/queries may be addressedto:Registrar and Transfer AgentsM/s. Sharepro Services (India) Pvt. Ltd.Unit : Tata Communications Limited13 AB, Samhita Warehousing Complex,2nd Floor, Near Sakinaka Telephone Exchange,Andheri Kurla Road, Andheri (East),Mumbai - 400 072.Tel : (022) 2851 1872/6772 0300/400Fax : (022) 2659 1586/2850 8927E-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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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, 2009, 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: 25 May 2009 Company Secretary Managing Director & CEO

& Chief Legal Officer

CHIEF EXECUTIVE OFFICER (CEO) AND CHIEF FINANCIAL OFFICER (CFO)CERTIFICATION FOR THE YEAR 2008-09

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: 25 May 2009 Chief Financial Officer Managing Director & CEO

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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 : 25 May 2009 & Chief Legal Officer

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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) (formerly Videsh Sanchar Nigam Limited), for the year ended on 31 March, 2009, as stipulated in Clause49 of the Listing Agreement of the said Company with stock exchanges.

The compliance of conditions of Corporate Governance is the responsibility of the Company’s Management. Our exami-nation has been limited to a review of the procedures and the implementation thereof, adopted by the Company forensuring compliance with the conditions of corporate governance. It is neither an audit nor an expression of opinion onthe 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

P. R. RAMESHPartner

Membership No: 70928Mumbai, 24 June, 2009

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AUDITORS’ REPORT

TO THE MEMBERS OF TATA COMMUNICATIONS LIMITED

1. We have audited the attached Balance Sheet of TATACOMMUNICATIONS LIMITED (“the Company”) as at31 March, 2009, and also the Profit and Loss Accountand the Cash Flow Statement for the year ended onthat date annexed thereto. These financial statementsare the responsibility of the Company’s Management.Our responsibility is to express an opinion on thesefinancial statements based on our audit.

2. We conducted our audit in accordance with auditingstandards generally accepted in India. Those standardsrequire that we plan and perform the audit to obtainreasonable assurance about whether the financialstatements are free of material misstatement. An auditincludes examining, on a test basis, evidencesupporting the amounts and disclosures in thefinancial statements. An audit also includes assessingthe accounting principles used and significantestimates made by management, as well as evaluatingthe overall financial statement presentation. Webelieve that our audit provides a reasonable basis forour opinion.

3. As required by the Companies (Auditor’s Report)Order, 2003 (CARO) issued by the Central Governmentof India in terms of sub-section (4A) of Section 227 ofthe Companies Act, 1956, we enclose in the Annexurea statement on the matters specified in paragraphs 4and 5 of the said Order to the extent applicable.

4. Attention is invited to note B10 of Schedule 20 relatingto the amalgamation of the Company’s wholly ownedsubsidiary, VSNL Broadband Limited, with theCompany. The excess of the carrying value of theinvestment over the net assets has been adjustedagainst Securities Premium account in terms of theCourt Scheme instead of to goodwill as requiredby Accounting Standard 14 – Accounting forAmalgamations, as notified under the Companies(Accounting Standard) Rules, 2006. Consequentlybalance in the Securities Premium account is lowerby Rs.109.87 crores.

5. 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 as

required by law have been kept by the Companyso far as it appears from our examination of thosebooks;

(iii) the Balance Sheet, Profit and Loss Account andCash Flow Statement dealt with by this reportare in agreement with the books of account;

(iv) in our opinion, the Balance Sheet, Profit and LossAccount and Cash Flow Statement dealt with bythis report, read with our comment in paragraph4 above, comply with the accounting standardsreferred to in sub-section (3C) of Section 211 ofthe 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 at31 March, 2009;

(b) in the case of the Profit and Loss Account, ofthe profit for the year ended on that date;and

(c) in the case of the Cash Flow Statement, ofthe cash flows for the year ended on thatdate.

(vi) on the basis of written representations receivedfrom the directors, as on 31 March, 2009, andtaken on record by the Board of Directors, wereport that none of the directors is disqualifiedas on 31 March, 2009 from being appointed as adirector in terms of clause (g) of sub-section (1)of Section 274 of the Companies Act, 1956.


P.R.RAMESHPartner

Membership No: 70928

Mumbai, 26 May, 2009


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

(i) (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, provides for physical verification of allfixed assets at reasonable intervals having regardto the size of the Company and nature of itsassets. The differences identified pursuant to thephysical verification have been duly adjusted inthe books of account. Having regard to the sizeof the operations of the Company and on thebasis of explanations received, in our opinion, thenet unadjusted differences were not significant.

(c) The fixed assets disposed off during the year, inour opinion, do not constitute substantial part ofthe fixed assets of the Company and suchdisposal has, in our opinion, not affected thegoing concern status of the Company.

(ii) (a) As explained to us, the stocks of stores and spareshave been verified during the year by theManagement in accordance with the programmeof verification. In our opinion, the frequency ofverification is reasonable.

(b) In our opinion and according to the informationand explanations given to us, the procedures ofphysical 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 the book records were notmaterial having regard to the size of theoperations of the Company.

(iii) 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.

(iv) 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 need to be suitably strengthened. Exceptfor the foregoing, we have not observed any continuingmajor weakness in the internal control systems.

(v) (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 the 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.

(vi) In our opinion and according to the information andexplanations given to us, the Company has notaccepted deposits from the public to which theprovisions of Section 58A, 58AA or any other relevantprovisions of the Companies Act, 1956 are applicableduring the period covered by our audit report.

(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 thatprima facie, the prescribed accounts and records havebeen made and maintained. We have not, however,made a detailed examination of the records with aview to determining whether they are accurate orcomplete.

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(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, sales tax,wealth tax, service tax, customs duty, excise duty,cess and other material statutory dues applicableto 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, wealth tax, sales tax, service tax,customs duty, excise duty and cess were in arrears,as at 31 March, 2009 for a period of more than sixmonths from the date they became payable.

(c) According to the information and explanationsgiven to us, details of dues of sales tax whichhave not been deposited on account of anydispute are given below:

Particulars Period to Forum where Amount

which the the dispute (Rs. in

amount is pending crores)

relates

WBST 2005-06 Jt. Commissioner 48.86

CST 2005-06 Jt. Commissioner 0.78

(x) The Company does not have accumulated losses. TheCompany has not incurred cash losses during thefinancial year covered by our audit and 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, bank or debenture holder.

(xii) The Company has not granted any loans and advanceson the basis of security by way of pledge of shares,debentures and other securities during the year.Accordingly, the provisions of clause 4 (xii) of theCompanies (Auditor’s Report) Order, 2003 are notapplicable to the Company.

(xiii) In our opinion, the Company is not a chit fund or anidhi/mutual benefit fund/society. Accordingly, theprovisions of clause 4 (xiii) of the Companies (Auditor’sReport) Order, 2003 are not applicable to theCompany.

(xiv) In our opinion and according to the information andexplanations given to us, the Company is not dealingin or trading in shares, securities, debentures andother investments. Accordingly, the provisions ofclause 4 (xiv) of the Companies (Auditor’s Report)Order, 2003 are not applicable to the Company.

(xv) 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.

(xvi) To the best of our knowledge and belief andaccording to the information and explanations givento us, in our opinion, term loans availed by theCompany were prima facie applied by the Companyduring the year for the purpose for which the loanswere obtained.

(xvii) 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.

(xviii)According to the information and explanations givento us, the Company has not made any preferentialallotment of shares to parties and companies coveredin the register maintained under Section 301 of theCompanies Act, 1956.

(xix) In our opinion and according to the information andexplanations given to us, the Company has issuedsecured debentures during the period covered byour report and securities/ charges have been createdin respect of debentures issued.

(xx) During the period covered by our audit report, theCompany has not raised any money by way of publicissue.

(xxi) To the best of our knowledge and belief andaccording to the information and explanations givento us, no material instances of fraud on or by theCompany has been noticed or reported during thecourse of our audit.


P.R.RAMESHPartner

Membership No: 70928



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BALANCE SHEET AS AT 31 MARCH, 2009As at As at

Schedule 31 March, 2009 31 March, 2008Rs in crores Rs in crores

FUNDS EMPLOYED:1 SHARE CAPITAL 1 285.00 285.002 RESERVES AND SURPLUS 2 6,513.05 6,262.34

3 TOTAL SHAREHOLDERS’ FUNDS 6,798.05 6,547.344 SECURED LOANS 3 1,288.82 —5 UNSECURED LOANS 4 1,039.05 777.806 DEFERRED TAX LIABILITY (NET) 133.25 84.13

(Refer note B16, Schedule 20)

7 TOTAL FUNDS EMPLOYED 9,259.17 7,409.27

APPLICATION OF FUNDS:8 FIXED ASSETS: 5

(a) Gross Block 5,890.00 4,352.65(b) Less: Accumulated Depreciation/Amortisation 1,792.06 1,363.75

(c) Net Block 4,097.94 2,988.90(d) Capital work-in-progress 536.38 543.77

4,634.32 3,532.67

9 INVESTMENTS 6 2,723.67 2,103.7710 CURRENT ASSETS, LOANS AND ADVANCES

A. CURRENT ASSETS(a) Inventories 7 1.56 5.45(b) Sundry Debtors 8 1,343.22 1,063.13(c) Cash and Bank Balances 9 372.37 79.63(d) Other Current Assets 10 252.71 451.28

1,969.86 1,599.49B. LOANS AND ADVANCES 11 2,827.42 2,428.23

4,797.28 4,027.72

11 Less: CURRENT LIABILITIES ANDPROVISIONS(A) CURRENT LIABILITIES 12 2,607.49 1,994.91(B) PROVISIONS 13 288.61 259.98

2,896.10 2,254.89

12 NET CURRENT ASSETS [(10) less (11)] 1,901.18 1,772.83

13 TOTAL APPLICATION OF FUNDS 9,259.17 7,409.27

SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS 20

As per 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: 26 May, 2009 DATED: 26 May, 2009

41

C M Y K

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH, 2009Schedule Year ended Year ended

31 March, 2009 31 March ,2008Rs in crores Rs in crores

INCOME:1 REVENUES FROM TELECOMMUNICATION SERVICES 3,749.43 3,283.302 OTHER INCOME 14 172.85 166.043 INTEREST INCOME 15 61.98 15.99

4 TOTAL INCOME 3,984.26 3,465.33

EXPENDITURE:5 SALARIES AND RELATED COSTS 16 340.07 242.436 NETWORK COSTS 17 1,761.37 1,852.677 OPERATING AND OTHER EXPENSES 18 804.51 568.148 DEPRECIATION AND AMORTISATION 425.27 301.31

(Net of transfer from Capital Reserve)9 INTEREST EXPENSE 19 190.60 39.60

10 TOTAL EXPENDITURE 3,521.82 3,004.15

PROFIT BEFORE TAXES AND EXCEPTIONAL ITEMS 462.44 461.1811 EXCEPTIONAL ITEMS:

(a) Claim Settlement (Refer note B11, Schedule 20) 95.60 —(b) Profit on sale of long term investment

(Refer note B4, Schedule 20) (346.65) —(c) Fixed Assets written-off — 11.20

PROFIT BEFORE TAXES 713.49 449.9812 TAXES

(a) CURRENT TAX 150.36 114.15(b) DEFERRED TAX EXPENSE 41.68 26.65(c) FRINGE BENEFIT TAX 5.50 4.72

PROFIT AFTER TAXES 515.95 304.4613 BALANCE BROUGHT FORWARD FROM PREVIOUS YEAR 1,892.30 1,742.91

ADD: ADJUSTMENT FOR LOSSES FOR RETAIL BUSINESS HIVE OFF(Refer note B9, Schedule 20) — 37.50

LESS: TAX ADJUSTMENT ON RETAIL BUSINESS HIVE OFF(Refer note B9, Schedule 20) — 9.25

ADD: ADJUSTMENT FOR PROFIT FOR MERGER OFVSNL BROADBAND LIMITED (Refer note B10, Schedule 20) 2.72 —

LESS: DEFERRED TAX ADJUSTMENT ON MERGER OF VBL(Refer note B16, Schedule 20) 7.44 —

AMOUNT AVAILABLE FOR APPROPRIATIONS 2,403.53 2,075.62

14 APPROPRIATIONS :(a) PROPOSED DIVIDEND (Refer note B3, Schedule 20) 128.25 128.25(b) TAX ON DIVIDEND 21.80 21.80(c) GENERAL RESERVE 51.60 33.27(d) DEBENTURE REDEMPTION RESERVE 102.50 —

BALANCE CARRIED TO BALANCE SHEET 2,099.38 1,892.30

15 EARNINGS PER SHARE(a) Basic/Diluted earnings per share, before exceptional items (Rs.) 10.77 10.94

(Refer note B19, Schedule 20)(b) Basic/Diluted earnings per share, including exceptional items (Rs.) 18.10 10.68

(Refer note B19, Schedule 20)

As per our report attached For and on behalf of the BoardFor S.B.BILLIMORIA & CO.Chartered Accountants






42

COMMUNICATIONS


C M Y K

CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH, 2009Year ended Year ended

31 March 2009 31 March 2008Rs in crores Rs in crores

CASH FLOWS FROM OPERATING ACTIVITIES1 PROFIT BEFORE TAXES AND EXCEPTIONAL ITEMS 462.44 461.18

Adjustments for:Depreciation and amortisation 425.27 301.31Prior year depreciation and excess depreciation written back (0.07) —(Profit)/loss on sale of fixed assets 1.52 (1.58)Interest income (61.98) (15.99)Interest expense 190.60 39.60Fixed assets written down 3.37 1.20Interest on Income Tax Refund — (16.66)Dividend income on current investments (21.56) (29.98)Profit on sale and revaluation gain on current investments (34.15) (14.09)Profit on sale of long term investment — (1.89)Provision for Contingencies 1.39 —Bad Debts written off 151.35 11.87Provisions for Doubtful Debts (net) 2.41 29.04Exchange difference on cash and cash equivalents — 0.04Dividend income from long-term investments (3.96) —

OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 1,116.63 764.05Inventories 3.98 (0.73)Sundry debtors (408.88) (148.85)Other current assets 210.92 (320.63)Loans and advances 141.70 (25.55)Restricted cash (0.04) —Current liabilities and provisions 484.70 414.49

Cash generated from operations before tax and exceptional items 1,549.01 682.78Income tax (paid)/refunds (366.74) (396.36)Interest on income tax refunds — 16.66

Cash generated from operations before exceptional items 1,182.27 303.08Claim settlement (95.60) —

NET CASH FROM OPERATING ACTIVITIES 1,086.67 303.08

2 CASH FLOWS FROM INVESTING ACTIVITIESPurchase of fixed assets (1,315.11) (728.16)Advance paid against equity share capital (395.71) (221.51)Sale of current investments (net of mutual funds dividend re-invested) (net) (226.63) 617.05Proceeds from sale of fixed assets 3.85 5.14Proceeds from sale of long-term investment 424.22 —Sale of investments in subsidiaries — 2.72Loans to subsidiaries(net) (543.03) (399.17)Dividend income from long-term investments 3.96 —Dividend income from current investments — 3.27Fixed deposits (net) (7.22) —Interest received 49.96 3.97

NET CASH USED IN INVESTING ACTIVITIES (2,005.71) (716.69)

3 CASH FLOWS FROM FINANCING ACTIVITIESProceeds from short term loans 1,387.13 1,678.02Repayment of short term loans (1,232.42) (1,447.83)Proceeds from long term loans 1,700.00 350.00Repayment of long term loans (357.06) —Dividends paid including dividend tax (150.39) (150.21)Interest paid (142.88) (40.84)

NET CASH FLOW FROM / (USED IN) FINANCING ACTIVITIES 1,204.38 389.14

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 285.34 (24.47)CASH AND CASH EQUIVALENTS AS AT THE BEGINNING OF THE YEAR 78.53 103.04(Refer note B15, Schedule 20)Effect of exchange on cash and cash equivalents — (0.04)

CASH AND CASH EQUIVALENTS AS AT THE END OF THE YEAR 363.87 78.53(Refer note B15, 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 Banking ATM InfraSolutions Ltd. of Rs. 0.05 crores and VSNL SNOSPV Pte. Ltd. of Rs. 24.30 crores have beenconverted into equity shares.

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.

As per our report attached For and on behalf of the Board

For S.B.BILLIMORIA & CO.Chartered Accountants





43

C M Y K

SCHEDULES FORMING PART OF THE BALANCE SHEETAs at As at

SCHEDULE - 1 31 March, 2009 31 March, 2008SHARE CAPITAL Rs in crores Rs in croresAUTHORISED :300,000,000 (2008:300,000,000) Equity Shares of Rs.10 each 300.00 300.00

ISSUED, SUBSCRIBED AND PAID UP285,000,000 (2008: 285,000,000) Equity Shares of Rs.10 each, fully paid up 285.00 285.00

Of the above:1) 60,000,000 (2008: 60,000,000) shares have been fully paid up, pursuant to a contract without payment being received

in cash2) 210,000,000 (2008: 210,000,000) shares have been allotted as fully paid bonus shares by capitalisation of General

Reserve3) 15,000,000 (2008:15,000,000) shares are allotted as fully paid up by way of Euro issue, represented by 7,500,000

American Depository Receipts (ADRs)

SCHEDULE - 2RESERVES AND SURPLUS(a) CAPITAL RESERVE (Refer note B2, Schedule 20)

Balance at the beginning of the year 208.29 208.91Less : Depreciation on assets gifted transferred to Profit and Loss account 0.60 0.62

207.69 208.29(b) SECURITIES PREMIUM ACCOUNT

Balance at the beginning of the year 834.88 834.88Less: Adjustment pursuant to merger with VSNL Broadband limited

as approved by Honorable High Court (Refer note B10, Schedule 20) 109.87 —

Balance at the end of the year 725.01 834.88(c) GENERAL RESERVE

Balance at the beginning of the year 3,326.87 3,287.80Add: Transferred from Profit and Loss account 51.60 33.27Add: Adjustments pursuant to transitional provision of Accounting Standard - 15 — 5.80

3,378.47 3,326.87(d) DEBENTURE REDEMPTION RESERVE

Balance at the beginning of the year — —Add: Transferred from profit and loss account (Refer note B13, Schedule 20) 102.50 —

102.50 —(e) PROFIT AND LOSS ACCOUNT

Balance carried forward 2,099.38 1,892.30

6,513.05 6,262.34SCHEDULE - 3SECURED LOANSDEBENTURE (Refer note B13, Schedule 20)(a) 10000, 11.70% Rated taxable Secured Redeemable Non-convertible Debentures

of face value Rs. 10 lakhs each 1,000.00 —(b) 1900, 11.00% Rated taxable Secured Redeemable Non-convertible Debentures

of face value Rs. 10 lakhs each 190.00 —(c) 550, 11.20% Rated taxable Secured Redeemable Non-convertible Debentures

of face value Rs. 10 lakhs each 55.00 —(d) 50, 11.25% Rated taxable Secured Redeemable Non-convertible Debentures

of face value Rs. 10 lakhs each 5.00 —TERM LOANTerm - Loan Hongkong and Shanghai Banking Corporation Ltd (note 1) 38.82 —

1,288.82 —

Note 1: Secured by plant and machinery of Rs. 127 crores and office equipments of Rs. 0.50 crores and Furniture andfixtures of Rs.0.50 crores

SCHEDULE - 4UNSECURED LOANSShort - Term Loans from Banks (Repayable within one year) 589.05 427.80Other Loans from Banks 450.00 350.00

1,039.05 777.80


44

COMMUNICATIONS


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45

C M Y K

SCHEDULES FORMING PART OF THE BALANCE SHEETSCHEDULE - 6 Number of shares As at As at

31 March, 2009 31 March, 2008INVESTMENTS Rs in crores Rs in crores

I. TRADE INVESTMENTS (At Cost)

A. Fully Paid Equity Shares (Unquoted)

(a) Tata Teleservices Ltd. 439,863,622 933.75 1,011.32(Equity shares of Rs 10 each)(36,542,378 Equity shares of Rs. 10 each soldduring the year) (Refer note B4, Schdule 20)

(b) New ICO Global Communications (Holdings) Limited 180,373 0.01 0.01(Class A common stock of US$ 0.01 each)

(c) United Telecom Limited - Joint Venture 4,638,840 28.99 28.99(Equity shares of NRS 100 each)(Refer note B5, Schdule 20)

B. Investment in Subsidiary Companies

(i) Fully Paid Equity Shares (Unquoted)

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

(b) Tata Communications International Pte. Ltd. 110,810,000 474.23 265.77(Equity shares of US$ 1 each)(50,810,000 Equity shares of US $ 1 eachsubscribed during the year)(Refer note B6, Schedule 20)

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

(d) VSNL SNOSPV Pte. Ltd. 769,333 3.29 3.29(Equity shares of US$ 1.00 each)

(e) VSNL Broadband Ltd. (Refer note B10, Schedule 20) — — 202.09(Equity shares of Rs. 10 each)

(f ) Tata Communications Internet Services Ltd. 195,004,050 194.47 94.47(Formerly known as VSNL Internet Serivces Ltd.)(Equity shares of Rs. 10 each)(100,000,000 Equity shares of Rs. 10 eachsubscribed during the year)

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

(h) Banking ATM InfraSolutions Limited 50,000 0.05 —(Equity shares of Rs. 10 each)(50,000 Equity shares of Rs. 10 eachsubscribed during the year)

(ii) Fully Paid Preference Shares (Unquoted)

(a) 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)


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SCHEDULES FORMING PART OF THE BALANCE SHEETSCHEDULE - 6 Number of shares As at As at

31 March, 2009 31 March, 2008INVESTMENTS (Contd.) Rs in crores Rs in crores

(b) Tata Communications Internet Services Limited 19,000,000 190.00 -(Formerly known as VSNL Internet Services Ltd.)(Cumulative convertible Preference Shares of US$1 each)(19,000,000 preference shares of Rs. 100 eachsubscribed during the year)

(c) VSNL SNOSPV Pte. Ltd. 24,680,000 118.71 -(Cumulative convertible redeemablePreference Shares of US$1 each)(24,680,000 preference shares of US $ 1 eachsubscribed during the year)

2,092.04 1,754.48

II. OTHERS

INVESTMENTS IN MUTUAL FUNDS (Unquoted)

(a) Liquid Dividend Plan (including dividend reinvestment)

Deutsche Credit Opportunity Fund - Weekly DividendReinvestment Liquid Plus - 4.14

LIC MF Liquid Fund - Dividend Plan - 25.00

Principal Liquid Institutional Premium Plan Daily DividendReinvestment - 10.00

Principal Liquid Plus Regular Plan Daily Dividend Reinvestment - 20.08

Prudential Flexible Income Plan - Daily Dividend Reinvestment - 35.14

(b) Fixed Maturity Plan

ABN AMRO Fixed Maturity Plan -17 Months Growth - 10.00

Birla Fixed Term Plan 16 Months - 20.00

HDFC Fixed Maturity Plan 16 Months-December 06 - 24.99

HSBC Fixed Term Plan - Series 21-15 Months - 15.00

HSBC Fixed Term Series -22 - Institutional Growth - 10.00

ING Fixed Maturity Fund - 28 - Growth - 15.00

Kotak 16 Months Fixed Maturity Plan Series 1 - 10.00

Principal 540 Days Fixed Maturity Plan - 14.98

Prudential Fixed Maturity Plan 15 Months Growth 0207 - 10.00

Prudential Fixed Maturity Plan 18 Months - Series 34 - 19.99

Prudential ICICI Fixed Maturity Plan-Series 34 -17 Months Plan - 15.00

Reliance Fixed Horizon Fund II -16 Months Fixed Maturity Plan - 19.97

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SCHEDULES FORMING PART OF THE BALANCE SHEETSCHEDULE - 6 Number of units As at As at

31 March, 2009 31 March, 2008INVESTMENTS (Contd.) Rs in crores Rs in crores

Sundaram 16 Months Fixed Maturity Plan Series - 21 - 15.00

Tata 16 Months Fixed Maturity Plan Series 7 Scheme D - IP - 10.00

Tata Fixed Horizon Fund (Fixed Maturity Plan) - 10.00Series 6 Scheme C -13 Months Growth

Tata Fixed Horizon Fund - Series 7 - - 25.00Scheme B Growth -13 Months

UTI 16 Months Fixed Maturity Plan - - 10.00Series II - Plan 16 - Growth

UTI Fixed Income Interval Fund - Monthly Interval Plan I - 13,208,527 15.00 -Institutional Plan - Growth

ICICI Prudential Interval Fund IV - Quarterly Interval Plan B - 24,397,147 25.00 -Institutional Plan - Growth

(c) Liquid Growth Plan

JM Money Manager Fund - Super Plus Plan - Growth 48,823,923 60.17 -

Kotak Long Term Floater Growth 43,483,791 60.28 -

ICICI Prudential Flexible Income Plan - Growth 37,538,139 60.88 -

TATA Floater Fund - Growth 19,150,479 25.00 -

Birla Sunlife Savings Fund - Institutional Plan - Growth 6,099,790 10.14 -

Fortis Money Plus - Institutional Plan - Growth 60,829,263 80.04 -

HDFC Floating Rate Income Fund -Short Term Fund -Wholesale Plan - Growth 40,306,223 60.06 -

IDFC Money Manager Treasury Plan B - Growth 17,862,600 25.04 -

LIC MF Liquid Fund - Growth 62,229,296 100.02 -

LIC Income Plus Fund - Growth 85,156,390 100.00 -

(d) Short Term Growth Plan

Canara Robeco Short Term Fund -Institutional Plan - Growth 10,000,000 10.00 -

631.63 349.29

2,723.67 2,103.77

(1) Book Value of unquoted investments 2,723.67 2,103.77

(2) All investments other than investments in Mutual Funds are long - term investments


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SCHEDULE - 7 31 March, 2009 31 March, 2008INVENTORIES Rs in crores Rs in crores

Equipment for resale 0.08 0.08Less: Provision for obsolescence (0.08) (0.01)

- 0.07Consumable stores and spares 1.56 5.38

1.56 5.45

SCHEDULE - 8

SUNDRY DEBTORS (UNSECURED)(a) Over six months

Considered good 549.67 290.76Considered doubtful 193.12 187.81

742.79 478.57

Less: Provision for doubtful debts (193.12) (187.81)

549.67 290.76(b) Other debts

Considered good 793.55 772.37

1,343.22 1,063.13

SCHEDULE - 9

CASH AND BANK BALANCES

(a) Cash in hand 0.06 0.07

(b) Cheques in hand 54.77 17.63

(c) Remittances in transit 0.28 17.26

(d) Current accounts with Scheduled Banks 54.10 44.67

(e) Deposit accounts with Scheduled Banks 263.16 -(Refer note B15, Schedule 20)

372.37 79.63

SCHEDULE - 10

OTHER CURRENT ASSETS

(a) Interest receivable (note 1) 26.50 14.48

(b) Service tax recoverable 95.82 53.08

(c) Pension contributions recoverable from Government of India(net of provision of Rs. 53.71 crores; 2008: Rs. 53.71 crores)(Refer note B7, Schdule 20) 7.44 7.44

(d) NLD licence fees reimbursement recoverable from Government of India 0.64 79.96

(e) Licence fees paid under protest (Refer note B12, Schdule 20) 120.85 295.00

(f ) Others 1.46 1.32

252.71 451.28

Note 1: Interest receivable includes interest due from subsidiaries of Rs. 23.54 crores (2008: Rs. 11.49 crores)

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SCHEDULES FORMING PART OF THE BALANCE SHEET

As at As atSCHEDULE - 11 31 March, 2009 31 March, 2008LOANS AND ADVANCES (UNSECURED) Rs in crores Rs in crores

(a) Considered good

(i) Prepaid expenditure 97.81 42.86

(ii) Staff advances (note 1) 2.59 7.25

(iii) Deposits

a) Public bodies 11.63 6.73

b) Others 34.41 34.50

(iv) Advance recoverable in cash or kind for value to be received 83.94 72.44

(v) Advance payment of tax (net of provision for tax) 1,417.70 1,205.16

(vi) Advance towards equity investments in subsidiaries and joint ventures - 221.51

(vii) Loans and advances to subsidiaries and joint ventures (note 2) 1,132.37 836.95

(viii) Others 46.97 0.83

2,827.42 2,428.23

(b) Considered doubtful

Other loans and advances 7.61 7.61

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

2,827.42 2,428.23

Notes: -

(1) Staff Advances includes loans due by an officer of the Company Rs. 0.01 crores (2008:Rs. 0.01 crores)(Maximum amount due at any time during the year is Rs. 0.01 crores (2008: Rs. 0.01 crores)

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

a) Tata Communications International Pte. Ltd. 834.17 429.00

b) VSNL Telecommunications(Bermuda) Limited 0.01 0.15

c) VSNL SNOSPV Pte.Ltd. 151.59 3.19

d) Neotel (Pty.) Ltd. 2.29 2.75

e) Tata Communications (Netherlands) BV 2.98 3.62

f ) VSNL Broadband Limited - 3.16

g) Tata Communications Lanka Ltd. 0.03 0.01

h) Tata Communications (UK) Limited 0.29 0.44

i) Tata Communications (US) Inc. 0.30 0.95

j) Tata Communications Internet Services Limted 138.70 393.07

k) Tata Communications Transformation Services Limited 0.06 0.61

l) Banking ATM InfraSolutions Limited 0.35 -

m) United Telecom Limited - -

n) Videsh Sanchar Nigam Spain Srl. 0.01 -

o) Tata Communications (America) Inc. 1.59 -


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SCHEDULE - 12 31 March, 2009 31 March, 2008CURRENT LIABILITIES Rs in crores Rs in crores

(a) Sundry Creditors:

(i) Creditors for interconnect charges 1,015.84 704.12

(ii) Dues of micro, small and medium enterprise (Refer note B31, Schdule 20) 0.64 0.19

(iii) Others (note 3) 794.88 500.07

(b) Deferred revenues and advance received from customers 498.36 380.28

(c) Liability towards Investors Education and Protection Fundunder Section 205C of the Companies Act 1956 (not due):Unpaid dividend (note 1) 0.78 1.12

(d) Government of India Current Account 20.57 20.57

(e) Other liabilities (note 2) 227.74 387.60

(f ) Interest accrued but not due on loans 48.68 0.96

2,607.49 1,994.91

Notes:

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

(2) Includes Rs.86.04 crores overdrawn book bank balance (2008: Rs. 58.60 crores)

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

a) VSNL Broadband Limited - 5.25

b) Tata Communications (Canada) ULC. 12.92 1.42

c) Tata Communications Lanka Ltd. - 0.02

d) Tata Communications Services (America) Inc. - 2.19

e) Tata Communications (US) Inc. - 1.60

f ) Videsh Sanchar Nigam Spain Srl. 0.18 0.18

g) Tata Communications (Hongkong) Limited 0.06 3.59

h) Tata Communications International Pte. Ltd. 5.02 1.97

i) Tata Communications Internet Services Limted - 0.51

j) United Telecom Limited 9.32 7.16

k) Tata Communications Transformation Services Ltd. 1.51 -

l) Tata Communications UK Limited 1.36 -

SCHEDULE - 13

PROVISIONS

(a) Provisions for employee benefits 120.46 86.07

(b) Provision for proposed dividend 128.25 128.25

(c) Tax on dividend 21.80 21.80

(d) Provision for contingencies (Refer note B23, Scehdule 20) 9.40 15.16

(e) Provision for taxes (net of advance taxes) 8.70 8.70

288.61 259.98

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

SCHEDULE-14 31 March, 2009 31 March, 2008OTHER INCOME Rs in crores Rs in crores

(a) Dividend Income from current Investments 21.56 29.98

(b) Dividend Income from investment in a subsidiary 3.96 -

(c) Profit on sale of current investments (net) 34.07 14.02

(d) Profit on sale of fixed assets (net) - 1.58

(e) Profit from sale of long term investment - 1.89

(f ) Rent 21.98 18.43

(g) Exchange gain (net) 46.56 -

(h) Provisions no longer required - written back 10.78 18.76

(i) Interest on Income Tax Refund - 16.66

(j) Other 33.94 64.72

172.85 166.04

SCHEDULE-15

INTEREST INCOME

(a) Bank Deposits 20.21 0.12[Tax deducted at source Rs. 1.67 crores (2008:Rs. 0.03 crores)]

(b) Other Loans and Advances (note 1) 41.77 15.87[Tax deducted at source Rs. 6.45 Crores (2008: Rs. 2.22 crores)]

61.98 15.99

Note:

(1) Interest on Loans and Advances includes Rs. 41.58 crores (2008: Rs. 14.36 crores) from subsidiaries. Tax Deducted atsource on such income is Rs. 6.45 crores (2008: Rs. 2.18 crores)

SCHEDULE - 16

SALARIES AND RELATED COSTS

(a) Salaries and related costs 262.84 195.94

(b) Contributions to provident, gratuity and other funds 31.69 10.07

(c) Staff welfare expenses 45.54 36.42

340.07 242.43

SCHEDULE-17

NETWORK COSTS

(a) Charges for use of transmission facilities 1,569.50 1,659.43

(b) Royalty and licence fee to Department of Telecommunications 125.76 101.80

(c) Rent of satellite channels 31.35 29.18

(d) Rent of landlines [net of excess provision written back Rs. 10.02 crores (2008: Nil)] 28.66 57.04

(e) Administrative lease charges 6.10 5.22

1,761.37 1,852.67


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Year ended Year endedSCHEDULE - 18 31 March, 2009 31 March, 2008OPERATING AND OTHER EXPENSES Rs in crores Rs in crores

(a) Consumption of stores 11.20 10.63

(b) Light and power 90.66 63.12

(c) Repairs and Maintenance:

(i) Buildings 10.97 7.28

(ii) Plant and Machinery 157.11 111.90

(iii) Others 14.48 8.12

(d) Bad Debts written off 151.35 11.87

(e) Provision for doubtful debts 2.41 29.04

(f ) Rent 40.61 42.19

(g) Rates and taxes 10.35 7.10

(h) Travelling expenses 22.17 23.42

(i) Telephone expenses 13.27 9.93

(j) Printing, postage and stationery 2.69 2.79

(k) Legal and professional fees 67.08 90.53

(l) Advertising and publicity 8.13 4.45

(m) Commissions 22.51 9.47

(n) Services rendered by agencies 80.30 53.96

(o) Insurance 7.82 9.82

(p) Donations 0.40 0.08

(q) Loss on sale of fixed assets (net) 1.52 -

(r) Exchange loss (net) - 7.07

(s) Prior period adjustments (net) 0.18 2.00

(t) Other expenses 89.30 63.37

804.51 568.14

SCHEDULE-19INTEREST EXPENSE

(a) Interest paid on loans (note 1) 143.19 36.97

(b) Interest on Debentures 46.06 -

(c) Other Interest 1.35 2.63

190.60 39.60

Note:

(1) Interest expense includes interest on fixed loans of Rs. 118.37 crores (2008: Rs. 35.44 crores)

(2) Interest expense is net of interest captialised during the year of Rs. 0.01 crores (2008: Rs. 0.07 crores)

SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT

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SCHEDULE 20

SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTSA. 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 lives 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 customs 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 intangiblestransfer substantially 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 capitalised 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.

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.


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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 recognised 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 recognised 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 arerecognised in full in the profit and loss account for the period in which they occur. Past service cost is recognisedimmediately to the extent that the benefits are already vested, and otherwise is amortised on a straight-linebasis over the average period until the benefits become vested.

The retirement benefit obligation recognised in the balance sheet represents the present value of the definedbenefit obligation as adjusted for unrecognised 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.

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 recognised when the right to receive payment is established and no significantuncertainty as to measurability or collectibility exists.

SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS (Contd.)

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CMYK

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 recognised 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. 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.

ii). Premium or discount on forward contracts and upfront premium payable on option contracts are amortisedover the life of such contracts and recognised in the profit and loss account. Forward contracts outstanding asat the balance sheet date are stated at exchange rates prevailing at the reporting date and any gains or lossesare recognised in the profit and loss account. Profit or loss arising on cancellation or enforcement/exercise offorward exchange and option contracts is recognised in the profit and loss account in the period of suchcancellation or enforcement/exercise. Option contracts outstanding as at the balance sheet date are marked-to-market with the values as reported by banks and any gains or losses are recognised in the profit and lossaccount.

13. 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 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 theirexistence 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-25015/6/86-OC dated27 March, 1986, transferred all the assets and liabilities of the Overseas Communications Service (“OCS”) (part of the



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Department of Telecommunications, Ministry of Communications) as appearing in the Balance Sheet as at 31 March,1986 to the Company with effect from 1 April, 1986. As per the letter no. G-25015/6/86-OC dated 23 October, 2001 ofGovernment of India, Department of Telecommunications, there was no requirement to register a formal transfer deedor deed of sale in the matter of such transfer of assets. During the year 2007-08, the Company changed its name to TataCommunications Limited and the fresh certificate of incorporation consequent upon the change of name was issuedby the Registrar of Companies, Maharashtra on 28 January, 2008.

2. Capital reserve includes Rs. 205.22 crores in respect of foreign exchange gains on unutilised proceeds from GlobalDepository Receipts credited to Capital Reserve in 2000-01 Rs. 203.70 crores and Rs. 1.52 crores in2001-02.

3. The Board of Directors have recommended a dividend of Rs. 4.50 (2008: Rs. 4.50) per share for the year ended 31March, 2009.

4. In terms of the agreements entered into between Tata Teleservices Ltd. (“TTSL”), Tata Sons Ltd. (“TSL”) and NTTDoCoMo, Inc. of Japan (Strategic Partner-SP), TSL gave an option to the Company to sell 36,542,378 equity shares inTTSL to the SP, as part of a secondary sale of 253,163,941 equity shares effected along with a primary issue of843,879,801 shares by TTSL to the SP. Accordingly, the Company realised Rs 424.22 crores on sale of these sharesresulting in a profit of Rs 346.65 crores which has been reflected as an exceptional item in the profit and lossaccount for the current 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 remote andindeterminable.

5. The Company has an investment of Rs. 28.99 crores (2008: Rs. 28.99 crores) in United Telecom Ltd. Nepal (“UTL”)representing an equity interest of 26.66 percent (2008: 26.66 percent) in the issued and paid-up capital of UTL. UTLhas accumulated losses, which have significantly eroded its net worth. In the opinion of the management, havingregard to the long gestation period inevitable to the nature of its business and future business projections, there isno permanent diminution in value of the investment.

6. The Company has an investment of Rs. 474.23 crores (2008: Rs. 265.77 crores) in Equity Shares and Rs.139.32 crores(2008: Rs. 139.32 crores) in preference shares of Tata Communications International Pte. Ltd (“TCIPL”), a wholly ownedsubsidiary. In the opinion of the management, having regard to the nature of its business and future businessprojections, there is no diminution in value of the investment.

7. As at 31 March, 2009 the proportionate share of pension obligations and payments of Rs. 61.15 crores (2008 : 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 (2008 : Rs 53.71 crores) thereby having a net amount due from the Government towardsits share of pension obligations of Rs. 7.44 crores (2008 : 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”).


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9. The Board of Directors of the Company in their meeting held on 14 March, 2007 had approved a Scheme ofArrangement (“Scheme”) to hive-off its Retail Business Undertaking (“RBU”) to its wholly owned subsidiary, TataCommunications Internet Services Ltd (“TCISL”) (formerly known as VSNL Internet Services Limited). The High Courtof Judicature at Bombay and Delhi approved the Consolidated Scheme vide their orders dated 25 April, 2008 and 27May, 2008 respectively.

In this respect the loss of RBU for financial year 2006-07 transferred to subsidiary as aforesaid amounting toRs 28.25 crores (net of tax) was adjusted in the opening balance of profit and loss account of the previous year.

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.

Consequent to the filing of the final certified order dated 3 April, 2009 of the Hon’ble High Court of juridicature atBombay with the Registrar of the Companies, Maharashtra the Scheme of Amalgamation between VSNL BroadbandLimited with the Company has become effective from the appointed date of 1 March, 2007.

The amalgamation has been accounted for based on the Scheme of Amalgamation approved by Hon’ble High Courtof juridicature at Bombay.

In accordance with the said Scheme:

i). All the assets, debts, liabilities and obligations of VSNL Broadband Limited have been vested in the Companywith effect from 1 March, 2007 and have been recorded at their respective book values.

Accordingly, to give effect to the scheme, VSNL Broadband’s net profit for the period 1 March, 2007 to 31 March2008 amounting to Rs. 2.72 crores (net of tax) (the item-wise break-up is given in (iv) below) has been includedin the Company’s opening balance of Profit and Loss account. There were no material difference in the account-ing policies of VSNL Broadband Limited and the Company.

ii). VSNL Broadband Limited being a wholly owned subsidiary of the Company, no securities have been issued andallotted as a part of purchase consideration.

iii). As on 1 March, 2007 Net Book value of total assets and Liabilities was Rs. 150.22 crores and Rs. 58.00 croresrespectively. The excess of the cost of investment held by the Company in VSNL Broadband Limited over the netbook value of assets taken over by the Company amounting to Rs. 109.87 crores has been transferred to theSecurities Premium Account.

iv). The item-wise break-up of VSNL Broadband’s income and expenditure for the period 1 March, 2007 to 31 March,2008 is:

Rs. in croresRevenues 43.87Other income 0.75

Total income 44.62Payment to and provision for employees 0.02Operation & Administration Expenses 17.59Interest & Finance Charges 5.92Depreciation 17.85

Total expenditure 41.38

Profit before tax 3.24Tax expense 0.52

Profit after tax 2.72



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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) (2008: Rs. NIL) as final settlement against US$ 385million claimed by Reliance. The amount of Rs. 95.60 crores has been charged to profit and loss account and hasbeen disclosed as an exceptional item.

12. In January 2008, an amount of Rs. 295 crores (2008: Rs. 295 crores) was paid to the Department of Telecommunications(DoT) under protest, towards payment of licence fees, interest and penalty demanded by DoT before issue of certainlicences to the Company. Against this, the Company carried a provision of Rs. 174. 15 crores for license fees andinterest thereon which has been set off against the payment of Rs. 295 crores for the presentation in the financials.The Company has filed a petition in the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) challengingapplicability of penal provisions under ILD and NLD licence agreements. The Company believes that the DoT’s claimfor penalty and interest on penalty, aggregating Rs. 115.73 crores (included in the aforesaid Rs. 295 crores) will notbe sustained based on the terms of the license agreement. Consequently this amount of Rs.115.73 crores togetherwith the excess license fee paid of Rs. 5.12 crores (Payment of Rs. 295 crores minus license fees, interest thereon andpenalty all aggregating to Rs. 289.88 crores computed by the Company) totalling to Rs. 120.85 crores is retained asan asset in books.

13. Secured Debentures

During the year the Company has issued Rated taxable Secured Redeemable Non-convertible Debentures in dematform for cash at par on private placement basis aggregating to Rs.1,250 Crores (2008: Rs NIL). IDBI TrusteeshipServices Limited has been appointed as trustee to the debenture issue.

i). Nature of Security

Rs. 1,000 crores, 11.70% debentures (face value of Rs. 1,000,000 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.

Rs. 250 crores, debentures (interest ranging from 11.00% to 11.25%, face value of Rs. 1,000,000 each) are securedby a first legal mortgage and charge on the Company’s immovable property being the free hold land atParambur Barracks, Chennai and Plant and machinery represented by land cable network and equipments.

ii). Redemption Terms

These debentures are due for redemption as given below-

Date of redemption as per 11.70% 11.00% 11.20% 11.25%terms of issue Debentures Debentures Debentures Debentures

Rs. in Crores

25-11-2011 400

25-11-2012 400

25-11-2013 200

23-07-2014 190

23-01-2016 55

23-01-2019 5

Total 1,000 190 55 5

For facilitating the above redemptions, the Company has created Debenture redemption reserve and Rs.102.50crores has been appropriated during the current year.


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14. Employee Benefits:

Effective from 1 April, 2006 the Company adopted the revised Accounting Standard 15 “Employee Benefits” (AS–15).

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 TataCommunications Employees’ Provident Fund Trust. Under this scheme, the Company is required to contributea specified percentage of 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 para60 of the Employees’ Provident Fund Scheme, 1952 for the reason that the return on investment is less orfor any other reason, then the deficiency shall be made good by the Company. Having regard to the assetsof the Fund and the return on the investments, the Company does not expect any deficiency in theforeseeable future. There has also been no such deficiency since the inception of the Fund.

Provident fund contributions amounting to Rs.11.36 crores (2008: Rs.8.88 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 administeredby Trustees covering all eligible employees. The plan provides for lump sum payments to vested employeesat retirement, death while in employment or on termination of employment of an amount equivalent tofifteen days salary for each completed year of service or part thereof in excess of six months. Vesting occursupon completion of five years of service.

- Medical Benefit

The Company reimburses domiciliary and hospitalization expenses not exceeding specified limits incurredby eligible and qualifying employees and their dependent family members under the Tata CommunicationsEmployee’s Medical Reimbursement Scheme. The scheme provides for cashless hospitalization where theclaims are 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 ofRs 10.51 crores (2008 : Rs. 3.49 crores) to meet the additional pension obligation on account of increase inDearness Allowances.

The details in respect of the status of funding and the amounts recognized in the Company’s financialstatements for the year ended 31 March, 2009 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, 2009 31 March, 2008 31 March, 2009 31 March, 2008Projected defined benefit obligation,beginning of the year 27.41 29.42 31.54 28.48

Current Service Cost 2.33 2.45 4.03 4.23

Interest Cost 2.00 2.00 2.52 2.28

Liability transferred from / (to) other Company 0.46 (1.36) - -

Actuarial (gain) / loss 2.00 (3.81) 6.69 0.67

Benefits paid (1.49) (1.29) (9.10) (4.12)

Projected benefit obligation at theend of the year 32.71 27.41 35.68 31.54

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

As at As atParticulars 31 March, 2009 31 March, 2008

(Funded) (Funded)Fair value of plan assets, beginning of the year 30.73 30.03Expected return on plan assets 2.40 2.33Employer’s contribution - -Transfer (to)/from other Company 0.46 (1.36)Actuarial (loss)/ gain (2.00) 1.02Benefits paid (1.49) (1.29)

Fair value of plan assets at the end of the year 30.10 30.73

(iii) The amounts recognised in the Profit and Loss Account for the year ended 31 March, 2009:

(Rs. in crores)Defined Benefit Plans

Gratuity Medical Benefits(Funded) (Unfunded)

Year ended Year ended

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

Current service cost 2.33 2.45 4.03 4.23

Interest cost 2.00 2.00 2.52 2.28

Expected return on plan assets (2.40) (2.33) - -

Net actuarial loss/(gain)recognised in the year 4.00 (4.83) 6.69 0.67

Net Gratuity and MedicalBenefits Cost 5.93 (2.71) 13.24 7.18


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



As at As at


Liability at the end of the year 32.71 27.41 35.68 31.54

Fair value of plan assets at theend of the year (30.10) (30.73) - -

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

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

Category of assets As at As at31 March, 2009 31 March, 2008

Percentage PercentageGovernment of India Bonds - 8.33

Corporate Bonds 1.97 6.57

Special Deposits Scheme - 5.37

State Government Bonds 8.33 8.27

Insurer Managed Funds 89.70 65.11Others - 6.35

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


Discount rate 7.50 8.00 7.50 8.00

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:


As at As at31 March, 2009 31 March, 2008

1 Percentage point 1 Percentage point

Increase Decrease Increase DecreaseEffect on service cost 4.47 3.60 4.69 3.78Effect on interest cost 3.17 2.55 2.56 1.99Effect on post-employmentbenefit obligation 39.57 31.86 34.98 28.16

The Company expects to contribute Rs. 2.08 crores (2008: Nil) towards employers’ contribution for fundeddefined benefit plans in 2009-10.

15. Cash and cash equivalents represent:-As at As at

31 March, 2009 31 March, 2008Rs. in crores Rs. in crores

Cash and Cheques on hand and balances held with scheduled banks 108.93 62.37Remittances in transit 0.28 17.26Deposit accounts held with scheduled banks 263.16 -

372.37 79.63Deposits with original maturity over three months (7.68) -Restricted Cash Balance (0.04) -Current Account / Deposits held for unpaid dividends (0.78) (1.10)

Cash and cash equivalents 363.87 78.53

16. Deferred tax liability:As at As at


Deferred tax liability

Difference between accounting and tax depreciation 261.63 210.27

Deferred tax assetsProvision for doubtful debts 67.02 65.22Provision for post-employment medical benefits and leave encashment 8.83 8.83pursuant to transitional provision of AS-15Provision for leave encashment 9.39 5.12Expenditure on Voluntary retirement schemes 3.25 4.87Expenditure incurred on NLD license fees 21.47 23.26Unearned income and deferred revenues 14.28 15.64Others 4.14 3.20

128.38 126.14

Net deferred tax liability 133.25 84.13

Note: Amalgamation of VSNL Broadband Limited with the Company has resulted in recognition of net deferred taxliability of Rs. 7.44 crores as on 31 March, 2008 which has been adjusted against opening balance of the profit andloss account.


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17. Auditors’ Remuneration

Included in operating and other expenses:Year ended Year ended


Auditors’ remuneration and expenses @

(i) Audit fees 1.15 1.10(ii) Tax audit fees 0.22 0.20(iii) Other professional services 0.52 0.39(iv) Service tax * 0.23 0.21

@ Audit fee for current year includes fee for VSNL Broadband Ltd. which was amalgamated with the Company.

* Service tax credit has been availed.

Auditors’ remuneration excludes fees of Rs. 14.16 crores (2008: Rs. 6.00 crores) payable/paid for professional servicesto a firm of chartered accountants in which some partners of the firm of statutory auditors are partners. Thisincludes Rs. 4.89 crores in respect of services rendered for FY 2007-08 including for carrying out the audit of thesubsidiaries for inclusion in the consolidated financial statements of the company in compliance of the AccountingStandard 21.

18. Managerial Remuneration

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

The above is inclusive of :Year ended Year ended


Salaries 0.68 0.53Contribution to provident and other funds 0.04 0.03Estimated monetary value of perquisites 0.14 0.13Commission 0.45 0.45Non-executive directors’ Commission 0.27 0.25Non-executive directors’ sitting fees 0.21 0.14

1.79 1.53

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

Year ended Year ended31 March, 2009 31 March, 2008

Rs. in crores Rs. in crores

Profit before taxes as per Profit and Loss Account 713.49 449.98

Add: Managerial Remuneration 1.79 1.53

Provision for doubtful debts (net) 2.41 29.04

Total (A) 4.20 30.57Less: Profit on Sale of fixed Assets 2.06 1.58

Profit on Sale of Long term Investments 346.65 1.89

Total (B) 348.71 3.47

Net profit as per Section 309(5) of the Companies Act, 1956 368.98 477.08



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Maximum amount permissible for the Managing Directorunder section 309 of the Companies Act, 1956 18.45 23.85Remuneration to Managing Director including commission 1.31 1.14Maximum Commission permissible to Non-executive Directorsunder section 309 of the Companies Act, 1956 3.69 4.77Commission to Non-executive Directors 0.27 0.25

19. Earnings Per ShareYear ended Year ended

31 March, 2009 31 March, 2008Rs. in crores, Rs. in crores,

Profit before taxes and exceptional items 462.44 461.18Income tax expense on profit excluding exceptional items 155.46 149.32

Profit after tax excluding exceptional items 306.98 311.86Exceptional (expense)/ income (net) 251.05 (11.20)Income tax benefit/(expense) on exceptional items (42.08) 3.80

Net Profit after tax and exceptional items 515.95 304.46

Number of Shares 285,000,000 285,000,000Before exceptional itemsBasic EPS 10.77 10.94Diluted EPS 10.77 10.94After exceptional itemsBasic EPS 18.10 10.68Diluted EPS 18.10 10.68

20. Segment Reportinga) Business Segments

The reportable segments for the year ended 31 March, 2009 and 31 March, 2008 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 Leased

Circuits (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, 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) 1,341.21

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


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Rs. in croresYear ended 31 March, 2008


Revenue from Telecommunication Services 1,695.25 1,226.19 361.86 3,283.30

Segment Profits 198.75 998.39 189.13 1,386.27

Unallocable expenses (net) 925.09

Profit before taxes and exceptional items 461.18Exceptional Expenses/(Income) (net) 11.20

Profit before taxes 449.98Tax expense (net) 145.52

Profit after taxes 304.46

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 utilising 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 on locationof the customers and are as follows:

Segment revenues by Geographical MarketYear ended Year ended


India 2,905.84 2,493.48United Kingdom 183.41 181.54Saudi Arabia 136.03 159.24United States of America 97.37 148.48Singapore 103.83 120.12United Arab Emirates 48.97 97.66

Others* 273.98 82.78

3,749.43 3,283.30

*Others include amounts recorded as revenues from Tata Communication (Netherlands) BV of Rs 62.95 crores (2008: Rs.58.16 crores). Tata Communications (Netherlands) BV is a Central contracting party and a transfer pricingadministrator for inter-company transactions between Tata Communications Limited and its international subsidiaries(Refer note B8, Schedule 20)

21. Related Party Disclosures:

A. List of related parties and relationship:

I. Investing parties (Promoters)

1 Panatone Finvest Limited

2 Tata Sons Limited



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II. Subsidiaries (Held directly)

1 Tata Communications Internet Services Limited

2 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.

III. Other Subsidiaries (Held indirectly)

1 Tata Communications (Australia) Pty Limited

2 Tata Communications (Belgium) SPRL

3 Tata Communications Services (Bermuda) Limited

4 VSNL Telecommunications (Bermuda) Ltd (In Members Voluntary Liquidation)

5 Tata Communications (Bermuda) Limited

6 Teleglobe Bermuda Ltd (In Members Voluntary Liquidation)

7 Tata Communications (Canada) ULC

8 VSNL International (IPCO) LLC

9 Tata Communications (US) Inc.

10 VSNL International (ITXC) Corp.

11 Tata Communications (America) Inc.

12 VSNL International (Global) Corp.

13 Tata Communications (Middle East) FZ-LLC

14 Tata Communications (UK) Limited

15 Tata Communications (France) SAS

16 Tata Communications Deutschland GmbH

17 Tata Communications (Guam) L.L.C.

18 ITXC Global Hong Kong Limited (In Liquidation)

19 VSNL International (Hong Kong) Limited (In Liquidation)

20 Tata Communications (Hong Kong) Limited


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21 Tata Communications (Hungary) LLC

22 Tata Communications (Ireland) Limited

23 VSNL UK Limited (In Liquidation)

24 Teleglobe International Limited (In Liquidation)

25 Tata Communications (Italy) S.r.l

26 Tata Communications (Japan) KK

27 ITXC IP Holdings S.a r.l

28 Teleglobe International Luxembourg S.a r.l (In Liquidation)

29 TLGB Luxembourg Holdings S.a r.l (In Liquidation)

30 Tata Communications (Nordic) AS

31 VSNL International (Poland) Sp. z o.o.

32 VSNL (Portugal) Unipessoal Limitada

33 VSNL International (Portugal) Instalacao e Manutencao de Redes LDA

34 Tata Communications (Puerto Rico) Inc.

35 Tata Communications (Russia) LLC

36 Teleglobe Asia Pte Ltd

37 Videsh Sanchar Nigam Spain Srl

38 Tata Communications (Sweden) AB

39 Tata Communications (Switzerland) GmbH

40 Tata Communications (Netherlands) BV

IV. Joint Venture

United Telecom Limited

Cochin Submarine Cable Depot (INDIA) Private Limited

V. Joint Venture of wholly owned subsidiary

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

Neotel Pty Ltd. (Subsidiary of SEPCO Communications (Pty) Ltd.)

VI. Key Managerial Personnel

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

Mr. Vinod Kumar - Director of Tata Communications Ltd. and Managing Director of TataCommunications International Pte Ltd.



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B. Related party transaction(Rs. in crores)

Transactions Investing Subsidiaries Key Joint Joint TotalCompany Managerial Venture Venture

Personnel of whollyowned

subsidiary

Dividend PaidPanatone Finvest Limited 52.19 - - - - 52.19

52.19 - - - - 52.19Tata Sons Limited 10.92 - - - - 10.92

10.92 - - - - 10.92

Total 63.11 - - - - 63.1163.11 - - - - 63.11

BEBP ExpensesTata Sons Limited 5.66 - - - - 5.66

5.48 - - - - 5.48

Total 5.66 - - - - 5.665.48 - - - - 5.48

Revenue fromTelecommunicationservices

Tata Communications - 62.95 - - - 62.95(Netherlands) BV - 58.16 - - - 58.16

Tata Communications - 7.60 - - - 7.60International Pte. Ltd. - 9.59 - - - 9.59

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

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

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

Tata Communications - 1.11 - - - 1.11UK Limited - 2.22 - - - 2.22

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

United Telecom Limited - - - 2.19 - 2.19- - - 6.38 - 6.38

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

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

Neotel Pty Ltd. - - - - 49.95 49.95- - - - 27.02 27.02


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Tata Communications 37.63 - - - 37.63Internet Services Limited 7.36 - - - 7.36

Tata Communications 1.39 - - - 1.39Services (America) Inc. 3.42 - - - 3.42

Tata Sons Limited 2.53 - - - - 2.53

0.49 - - - - 0.49

Others - - - - -23.50 - - - 23.50

Total 2.53 126.72 - 2.19 49.95 181.390.49 104.25 - 6.38 27.02 138.14

Network Cost



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

Others - - - - - -- 6.20 - - - 6.20

Total - 69.10 - 36.99 - 106.09- 84.17 - 28.57 - 112.74

Purchase ofFixed Assets

Videsh Sanchar - - - - - -Nigam Spain Srl - 0.18 - - - 0.18

Total - - - - - -- 0.18 - - - 0.18

Sale of Fixed Assets

Tata Communications - - - - - -(US) Inc. - 0.20 - - - 0.20

Tata Communications - - - - - -International Pte. Ltd. - 0.13 - - - 0.13

Total - - - - - -- 0.33 - - - 0.33

Services renderedTata Communications - 5.64 - - - 5.64Netherlands BV - 4.84 - - - 4.84



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



subsidiary


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Tata CommunicationsTransformation Services - 1.16 - - - 1.16Limited - 3.69 - - - 3.69

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

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

Tata Communications - @ - - - -(Hongkong) Limited - - - - - -

Tata Communications - 0.05 - - - 0.05UK Limited - - - - - -


Tata Communications - 6.48 - - - 6.48Internet Services Limited - 4.20 - - - 4.20

VSNL SNOSPV Pte Ltd. - 0.34 - - - 0.34

- - - - - -

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

VSNL Broadband Limited * - - - - - -- 1.95 - - - 1.95

Others - - - - - -- 5.51 - - - 5.51

Total - 15.91 - - - 15.91- 20.53 - - - 20.53

Services received

Tata CommunicationsTransformation - 12.30 - - - 12.30Services Limited - - -

VSNL Broadband Limited * - - - - - -

- 2.61 2.61

Tata Sons Limited 0.09 - - - 0.09- -

Total 0.09 12.30 - - - 12.39- 2.61 - - - 2.61

Equity capital contribution(Refer Cash Flow Statement)

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


B. Related party transaction (Contd.)

(Rs. in crores)



subsidiary

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VSNL SNOSPV Pte Ltd. - - - - - -- 1.60 - - - 1.60

United Telecom Limited - - - - - -- - - 5.67 - 5.67


Banking ATM Infra - 0.05 - - - 0.05Solutions Limited - - - - - -

Total - 308.51 - - - 308.51- 1.60 - 5.67 - 7.27

Preference capitalcontribution


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

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

Interest Income


Tata Communications - 0.12 - - - 0.12(Netherlands) BV - - - - - -

Tata Communications - 0.17 - - - 0.17(Guam) L.L.C - - - - - -

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

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

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



VSNL SNOSPV Pte. Ltd. - 4.01 - - - 4.01- - - - - -


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



subsidiary


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

Videsh Sanchar Nigam - 0.06 - - - 0.06Spain Srl - - - - - -Banking ATM Infra - 0.01 - - - 0.01Solutions Limited - - - - - -Others - - - - - -

- 0.21 - - - 0.21

Total - 41.64 - - - 41.64- 14.57 - - - 14.57

Dividend Income


Total - 3.96 - - - 3.96- - - - - -

Loan given



VSNL SNOSPV Pte. Ltd. - 218.37 - - - 218.37- - - - - -

Tata Communications 6.22 - - - 6.22Internet Services Limited - - - - - -

Total - 570.95 - - - 570.95- 500.21 - - - 500.21

Loan repaid



Others - - - - -- 1.29 - - - 1.29

Total - 102.16 - - - 102.16- 100.98 - - - 100.98

Advances given bythe Company

VSNL SNOSPV Pte. Ltd. - 10.67 - - - 10.67- 0.47 - - - 0.47


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



subsidiary

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subsidiary


Tata Communications - 21.42 - - - 21.42Services (Bermuda) Limited - 0.31 - - - 0.31


Neotel Pty Ltd. - - - - 0.01 0.01- - - - 0.12 0.12




Videsh Sanchar Nigam - 5.18 - - - 5.18Spain Srl - - - - - -


Tata Communications - 13.11 - - - 13.11(US) Inc - - - - - -

Tata Communications - 8.48 - - - 8.48(Japan) KK - - - - - -

Tata Communications - @ - - - -(Hong Kong) Limited - - - - - -



Others - - - - - -- 1.47 - - - 1.47

Total - 601.63 - - 0.01 601.64- 8.44 - - 0.12 8.56

Advances repaid to theCompany/Adjustments



74

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subsidiary

Tata Communications - 21.56 - - - 21.56Services (Bermuda) Limited - 1.73 - - - 1.73

VSNL SNOSPV Pte. Ltd - - - - - -- 0.05 - - - 0.05

Neotel Pty Ltd. - - - - 0.02 0.02- - - - 4.21 4.21

Tata Communications - 11.30 - - - 11.30(Canada) ULC - - - - - -







Tata Communications - @ - - - -Services (America) Inc - - - - - -


Tata Communications - 8.48 - - - 8.48(Japan) KK - - - - - -

Others - - - - - -- 1.44 - - - 1.44

Total - 857.65 - - 0.02 857.67- 3.49 - - 4.21 7.70

Managerial Remuneration

N. Srinath - - 1.31 1.31- - 1.14 1.14

Total - - 1.31 - - 1.31- - 1.14 - - 1.14

BalancesReceivables


75

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subsidiary




Tata Communications - 0.12 - - - 0.12Deutschland GmbH - - - - - -


Tata Communications - 1.14 - - - 1.14Services (America) Inc - - - - - -

Tata Communications - 52.25 - - - 52.25Internet Services Limited - @ - - - -


Neotel Pty Ltd. - - - - 24.10 24.10- - - - 23.23 23.23

Tata CommunicationsTransformation Services - 3.66 - - - 3.66Limited - - - - - -

Tata Sons Limited 0.34 - - - - 0.340.19 - - - - 0.19

Tata Communications - - - - - -UK Limited - 3.96 - - - 3.96

Others - - - - - -- 19.96 - - - 19.96

Total 0.34 112.18 - 0.04 24.10 136.660.19 96.38 - 0.43 23.23 120.23

Payables


Tata CommunicationsTransformation Services - 1.51 - - - 1.51Limited. - - - - - -

Videsh Sanchar Nigam Spain Srl - 0.18 - - - 0.18- - - - - -

Teleglobe Canada ULC - - - - - -- 1.42 - - - 1.42


76

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subsidiary

Tata Communications - - - - - -(Hong Kong) Limited. - 3.59 - - - 3.59

Tata Communications - - - - - -Services America Inc - 2.19 - - - 2.19


Tata Communications - 0.06 - - - 0.06(Hongkong) Limited - - - - - -


N. Srinath - - 0.45 - - 0.45- 0.45 - - 0.45


Tata Sons Limited 6.88 - - - - 6.885.57 - - - - 5.57


Others - - - - - -- 4.28 - - - 4.28

Total 6.88 9.14 0.45 9.32 - 25.795.57 16.54 0.45 7.16 - 29.72

Loans Given


VSNL SNOSPV Pte Ltd. - 137.28 - - - 137.28- - - - - -


Total - 971.80 - - - 971.80- 440.25 - - - 440.25

Advance Receivable

Tata CommunicationsTransformation Services - 0.06 - - - 0.06Limited 0.61 - - - 0.61

VSNL SNOSPV Pte.Ltd. - 14.31 - - - 14.313.28 - - - 3.28

VSNL Telecommunications - 0.01 - - - 0.01(Bermuda) Limited 0.14 - - - 0.14

Neotel(Pty)Ltd - - - - 2.29 2.29- - - - 2.29 2.29

Tata Communications - 138.70 - - - 138.70Internet Services Limited 393.07 - - - 393.07

77

CMYK





subsidiaryTata Communications - 1.59 - - - 1.59(America) Inc. - - - - - -


Tata Comminications - @ - - - -(Hong Kong) Limited - - - - - -




Tata Communications - @ - - - -Services America Inc - - - - - -



Others - - - - - -- 8.16 - - - 8.16

Total - 158.28 - - 2.29 160.57- 405.41 - - 2.29 407.70

Advance Payable



Total - 11.92 - - - 11.92- - - - - -

Advance against equity

VSNL SNOSPV Pte. Ltd - - - - - -- 13.04 - - - 13.04


Total - - - - - -- 221.51 - - - 221.51

Interest Accrued-otherdeposits

VSNL SNOSPV Pte. Ltd - 3.10 - - - 3.10- - - - - -



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subsidiary

Banking ATM Infra - 0.01 - - - 0.01Solutions Limited - - - - -

Total - 23.54 - - - 23.54- - - - -

Guarantees on behalfof subsidiaries

Tata Communications - 2,389.48 - - - 2,389.48(Netherlands) BV 1,880.94 - - - 1,880.94

Tata Communications - 1,786.82 - - - 1,786.82International Pte. Ltd. 360.90 - - - 360.90

VSNL SNOSPV Pte. Ltd - 588.88 - - - 588.8852.02 - - - 52.02

Tata CommunicationsTransformation Services - 22.00 - - - 22.00Limited 22.00 - - - 22.00

Tata Communications - 15.76 - - - 15.76(US) Inc. - - - - -

Tata Communications UK - 18.17 - - - 18.17Limited - - - - -

Tata Communications - 35.00 - - - 35.00Internet Services Limited - - - - -

Others - - - - - -25.35 - - - 25.35

Total - 4,856.11 - - - 4,856.11- 2,341.21 - - - 2,341.21

Letter of Comfort on behalfof subsidiaries

Tata Communications (US) Inc - 89.48 - - - 89.48- 200.10 - - - 200.10

Tata Communications - 30.50 - - - 30.50Transformation Services Limited - 24.01 - - - 24.01



Total - 170.82 - - - 170.82- 284.11 - - - 284.11

Note: Figures in italics are in respect of the previous year* Refer note B 10, Schedule 20@ Represents transaction of Less than Rs. 50,000.

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22. Operating lease arrangements:

(a) As lessee:


Rs. in crores Rs. in croresMinimum lease payments under operating leasesrecognised as expense in the year 24.06 49.12

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 17.28 40.78Due later than one year but not later than five years 18.90 42.13Later than five years 2.25 -

38.43 82.91

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 (2008: Rs.84.33 crores) andRs. 22.30 crores (2008: Rs.16.79 crores ) respectively as at 31 March, 2009. Depreciation expense of Rs. 5.51crores (2008: Rs. 5.50 crores) in respect of these assets has been charged in the profit and loss account forthe year ended 31 March, 2009.

In case of certain lease agreements aggregating to Rs. 278.33 crores (2008: Rs. 198.97 crores) for theyear ended 31 March 2009, the gross block, accumulated depreciation and depreciation expense of theassets given on IRU basis is not readily determinable and hence not disclosed. The lease rentalsassociated with such IRU arrangements for the year ended 31 March, 2009 amounts to Rs. 23.39 crores(2008: Rs.15.33 crores).

In respect of such leases, rental income of Rs. 30.24 crores (2008: Rs. 22.13 crores) has been recognised inthe profit and loss account for the year ended 31 March, 2009.

Future lease rental receipts will be recognised in the profit and loss account of subsequent years as follows:


Rs. in crores Rs. in croresNot later than one year 29.09 24.81Later than one year but not later than five years 116.38 99.43Later than five years 145.43 137.03

290.90 261.27

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 0.71Later than one year but not later than five years 0.01 0.49Later than five years - 0.39

0.02 1.59



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Lease rental income of Rs. 0.01 crores (2008: Rs. 1.80 crores) in respect of the above leases has been recognisedin the profit and loss account for the current year.

23. Provision for Contingencies:Rs. in crores

31 March, 2009 31 March, 2008Asset Asset

Retirement RetirementObligation Others Total Obligation Others Total

Opening Balance 6.16 9.00 15.16 6.16 12.58 18.74Addition - - - - - -Utilisation (4.23) - (4.23) - - -Provision written back (1.53) - (1.53) - (3.58) (3.58)

Closing Balance 0.40 9.00 9.40 6.16 9.00 15.16

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.

24. Contingent Liabilities and Capital Commitments

A. Contingent Liabilities:As at As at


i. Guarantees given on behalf of subsidiaries (Refer note 1) 4,941.03 2,341.21

ii. Claims for taxes on income (Refer note 2 )

(a) Income tax disputes where the department is inappeal against the Company 310.61 94.15

(b) Income tax disputes where the Company has afavorable decision in other assessment year for the same issue 22.39 2.43

(c ) Income tax disputes other than the above 1,544.18 1,405.85

iii. Claims for other taxes 49.80 0.53iv. Other claims 788.71 727.45

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 materialise in this respect.

(2) Significant claims by the revenue authorities in respect of income tax matters are in respect of:

(a) Deductions claimed under Section 80 IA of the Income Tax Act, 1961 from Assessment years 1996-97onwards have been disallowed by the revenue authorities. The Company has contested the disallowanceand has preferred appeals which are pending.

(b) Reimbursement by the Department of Telecommunications (DoT) of income tax paid by the Companyon the DoT levy during Assessment year 1994-95, that was taxed by the revenue authorities. TheCommissioner of Income Tax (Appeals) has upheld the disallowance. The Company is in appeal beforethe Income Tax Appellate Tribunal.

(c) The Company has taken appropriate professional advice in respect of the claims / appeals and hastaken all necessary steps to protect its interest. Based on expert opinion, no provision is required inrespect of these claims / appeals.


81

CMYK


(3) As on 31 March, 2009, the Company has issued Letters of Comfort for the credit facility agreement,aggregating Rs. 89.48 crores (US $ 17.60 million) (2008 : Rs 200.10 crores ( US $ 50 million)), Rs. 30.50 crores(US $ 6 million) (2008 : Rs 24.01 crores (US $ 6 million)), Rs. Nil (2008 : Rs 60 crores) and Rs. 50.84 crores (US$ 10 million) availed of by Tata Communications (US) Inc. (“TCU”), a wholly owned subsidiary of TCIPL, TataCommunications Transformation Services Limited, (“TCTSL”), VSNL Broadband Limited * (“VBL”) and TataCommunication International Pte Limited (TCIPL) respectively.

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.

(* Refer note B10, Schedule 20 )

(4) The Company has issued a support letter to Tata Communications International Pte Limited (TCIPL), regardingproviding financial support enabling, in turn, TCIPL to issue such support letters to certain subsidiarieshaving negative net worth as at 31 March, 2009 aggregating Rs. 1,417.55 crores (2008 : Rs 1,594.71 crores)in various geographies in order that they remain going concern with reference to the provisions of applicableinsolvency laws in their country of incorporation.

The letters of comfort / support mentioned in (3) and (4) above have been provided in the ordinary course ofbusiness and no liability on the company is expected to materialise in these respects.

(5) Contingent liabilities, if any, in respect of sale of shares of Tata Teleservices Limited has beeen stated innote B4, Schedule 20.

B. Capital commitments:

Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 792.37crores (2008: Rs. 568.40 crores). The Company has subscribed the capital clause of Memorandum of Associationof a new company Cochin Submarine Cable Depot (INDIA) Private Limited which is intended to be 40% Jointventure of the Company.

25. Value of Imports on C.I.F. basisYear Ended Year ended


Stores and Spares 11.42 1.14Capital Goods 458.39 312.77

26. Earnings in foreign currencies

Year Ended Year ended31 March, 2009 31 March, 2008

Rs. in crores Rs. in croresRevenue from telecommunication services 865.32 1,001.71Interest income 41.58 14.58Dividend Income 3.96 -Other income 22.34 18.98

933.20 1,035.27

27. Expenditure in foreign currenciesYear Ended Year ended


Charges for use of transmission facilities 790.76 652.76Rent of satellite channels 24.16 25.33Administrative lease charges 6.10 5.22Repairs and maintenance 81.01 60.90Legal and professional fees 28.21 32.97Settlement of claims 95.60 -Interest 5.12 -Others 6.36 6.24

1,037.32 783.42


82

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SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS (Contd.)28. Value of imported and indigenous stores/spares consumed

Year Ended Year ended31st March, 2009 31st March, 2008

Rs. in crores Rs. in crores Value Percentage Value Percentage

Imported 1.45 12.95 1.14 10.72Indigenous 9.75 87.05 9.49 89.28

11.20 100.00 10.63 100.00

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 of UTL for the Year Ended 31 March, 2009 and yearended 31 March, 2008 are as follows:


Rs. in crores Rs. in croresIncome 30.86 13.75Expenses 32.15 13.65


Rs. in crores Rs. in croresAssets 69.93 41.15Liabilities 34.56 26.82Contingent liability in respect of claims of taxes and duties Rs. Nil (2008: Nil).

30. 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, 2008 paid to non-resident shareholders are as under:


Number of non-resident shareholders 794 512Number of shares held by them 23,089,178 23,521,800Year to which dividend relates 2007-08 2006-07Amount remitted net of tax (Rs. in crores) 10.39 10.58

31. Micro, Small and Medium Enterprises

As at As atParticulars 31 March, 2009 31 March, 2008

Rs. in crores Rs. in croresAmount due to Vendor 0.64 0.19Interest due thereon 0.05 0.05Principal amount paid (includes unpaid beyond the appointed date) 12.02 6.63Interest accrued and remaining unpaid ( including interest disallowable) 0.05 0.05

32. Previous year’s figures have been regrouped and reclassified wherever necessary. The results for the current yearended 31 March, 2009 include the operations of VSNL Broadband Limited. In view of this, the results for the currentyear are not comparable with the corresponding period of the previous financial year.

83

CMYK

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 0 9

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

9 2 5 9 . 1 7 9 2 5 9 . 1 7

Source of FundsPaid-up Capital Reserves & Surplus

2 8 5 . 0 0 6 5 1 3 . 0 5

Secured Loans Unsecured Loans

1 2 8 8 . 8 2 1 0 3 9 . 0 5

Deferred Tax Liabilities

1 3 3 . 2 5

Application of FundsNet Fixed Assets Investments

4 6 3 4 . 3 2 2 7 2 3 . 6 7

Net Current Assets Misc. Expenditure

1 9 0 1 . 1 8 N I L

Accumulated Losses

N I L

IV. Performance of Company (Amount in Rs. Crores)Turnover Total Expenditure

3 7 4 9 . 4 3 3 5 2 1 . 8 2

P Profit/Loss Before Tax P Profit/Loss After Tax

+ - 7 1 3 . 4 9 + - 5 1 5 . 9 5

(Please tick appropriate box + for Profit, - for Loss)Earning per Share in Rs. Dividend%

1 8 . 1 0 4 5


84

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V. Generic Names of Three Principal Products/Services of Company (as per monetary terms)

Item Code No. (ITC Code)*

Product Description I N T E R N A T I O N A L 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: 26 May, 2009

85

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87

CM Y K

AUDITORS’ REPORT ON CONSOLIDATED FINANCIAL STATEMENTS

TO THE BOARD OF DIRECTORS OF TATA COMMUNICATIONS LIMITED

1. We have audited the attached Consolidated BalanceSheet of TATA COMMUNICATIONS LIMITED (‘theCompany’), and its subsidiaries (the Company and itssubsidiaries constitute “the Group”) as at 31 March,2009, the Consolidated Profit and Loss Account andthe Consolidated Cash Flow Statement of the Groupfor the year ended on that date annexed thereto.These financial statements are the responsibility ofthe Company’s Management and have been preparedby the Management on the basis of separate financialstatements and other financial information regardingcomponents. Our responsibility is to express anopinion on these financial statements based on ouraudit.

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 material misstatement.An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in thefinancial statements. An audit also includes assessingthe accounting principles used and significantestimates made by the management, as well asevaluating the overall financial statementpresentation. We believe that our audit provides areasonable basis for our opinion.

3. (a) We did not audit the financial statements of asubsidiary, whose financial statements reflecttotal assets of Rs. 58.86 crores as at 31 March,2009, total revenues of Rs. 67.17 crores and netcash inflows amounting to Rs. 44 crores for theyear ended on that date as considered in theConsolidated Accounts. This financial statementand other financial information have beenaudited by other auditor whose report has beenfurnished to us, and our opinion is based solelyon the report of other auditor.

(b) As stated in Note B11, Schedule 20, the financialstatements of a subsidiary which represents totalassets of Rs. 389.72 crores as at 31 March, 2009,total revenues of Rs. Nil and net cash inflowsamounting to Rs. 3.3 crores for the year thenended and joint ventures whose financialstatements represents Company’s share of totalassets of Rs. 607.15 crores as at 31 March, 2009,total revenues of Rs. 247.96 crores and net cash

inflows amounting to Rs. 102.91 crores for theyear then ended and the share in loss of associateof Rs. 8.01 crores for the year then ended havebeen incorporated in the consolidated financialstatements on the basis of unaudited financialstatements as provided by the management ofthat subsidiary, joint ventures and associate.

4. Subject to our remark in paragraph 3 (b) above:

(a) We report that the consolidated financialstatements have been prepared by theCompany’s management in accordance with therequirements of the Accounting Standard (AS)21, Consolidated Financial Statements,Accounting Standard (AS) 23, Accounting forInvestments in Associates in ConsolidatedFinancial Statements and Accounting Standard(AS) 27, Financial Reporting of Interests in JointVentures as notified under the Companies(Accounting Standard) Rules 2006.

(b) Based on our audit and on consideration ofreports of other auditor’s on separate financialstatements and on the other financial informationof the components, and to the best of ourinformation and according to the explanationsgiven to us, we are of the opinion that theattached consolidated financial statements givea true and fair view in conformity with theaccounting principles generally accepted in India:

(i) in the case of the Consolidated BalanceSheet, of the state of affairs of the Group asat 31 March, 2009;

(ii) in the case of Consolidated Profit and LossAccount, of the profit of the Group for theyear ended on that date; and

(iii) in the case of the Consolidated Cash FlowStatement, of the cash flows of the Groupfor the year ended on that date.


P.R.RAMESHPartner

Membership No. 70928



88

COMMUNICATIONS


CM Y K

CONSOLIDATED BALANCE SHEET AS AT 31 MARCH, 2009Schedule As at As at

31st March 09 31st March 08Rs. In crores Rs. In crores

FUNDS EMPLOYED:1 SHARE CAPITAL 1 285.00 285.002 RESERVES AND SURPLUS 2 4,821.44 4,866.98

3 TOTAL SHAREHOLDERS’ FUNDS 5,106.44 5,151.984 MINORITY INTEREST LIABILITY 4.97 3.215 SECURED LOANS 3 1,781.76 105.246 UNSECURED LOANS 4 4,883.62 3,241.387 OBLIGATIONS UNDER FINANCE LEASE 43.64 42.268 DEFERRED TAX LIABILITY (NET) (Refer Note B15, Schedule 20) 155.90 99.82

9 TOTAL FUNDS EMPLOYED 11,976.33 8,643.89

APPLICATION OF FUNDS:10 FIXED ASSETS: 5

(a) Gross Block 12,878.48 8,900.08(b) Less: Accumulated Depreciation/ Amortisation 3,940.18 2,644.38

(c) Net Block 8,938.30 6,255.70(d) Capital work-in-progress 2,667.57 2,040.63

11,605.87 8,296.33

11 GOODWILL (ON CONSOLIDATION) 57.54 167.41(Refer Note B10, Schedule 20)

12 INVESTMENTS 6 1,676.04 1,204.3813 CURRENT ASSETS, LOANS AND ADVANCES

A. CURRENT ASSETS(a) Inventories 7 17.83 9.29(b) Sundry Debtors 8 2,862.97 2,074.56(c) Cash and Bank Balances 9 875.93 294.07(d) Other Current Assets 10 391.68 611.45

4,148.41 2,989.37B. LOANS AND ADVANCES 11 2,407.71 1,673.44

6,556.12 4,662.8114 Less: CURRENT LIABILITIES AND PROVISIONS

A. Current Liabilities 12 7,430.74 5,297.03B. Provisions 13 488.50 390.01

7,919.24 5,687.04

15 NET CURRENT LIABILITIES [(13) less (14)] (1,363.12) (1,024.23)

16 TOTAL ASSETS (NET) 11,976.33 8,643.89

SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS 20

As per 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


89

CM Y K

CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 2009Schedule Year ended Year ended

31st March 09 31st March 08Rs. In crores Rs. In crores

INCOME:1 REVENUES FROM TELECOMMUNICATION AND OTHER SERVICES 9,963.17 8,297.412 OTHER INCOME 14 210.28 229.123 INTEREST INCOME 15 49.39 11.23

4 TOTAL INCOME 10,222.84 8,537.76

EXPENDITURE:5 SALARIES AND RELATED COSTS 16 1,227.30 895.006 NETWORK COSTS 17 5,300.22 4,763.477 OPERATING AND OTHER EXPENSES 18 2,086.08 1,759.358 INTEREST EXPENSE 19 350.69 175.419 DEPRECIATION, AMORTISATION AND IMPAIRMENT

(Net of transfer from Capital Reserve) 1,102.27 784.41

10 TOTAL EXPENDITURE 10,066.56 8,377.64

PROFIT/ (LOSS) BEFORE TAXES AND EXCEPTIONAL ITEMS 156.28 160.12

11 EXCEPTIONAL ITEMS:(a) Profit on sale of long tem Investments

(Refer Note B4, Schedule 20) (362.08) —(b) Claim Settlement (Refer Note B6, Schedule 20) 95.60 —(c) Fixed Assets written-off — 11.20

PROFIT/ (LOSS) BEFORE TAXES 422.76 148.92

12 TAXES(a) CURRENT TAX 179.36 133.72(b) DEFERRED TAX EXPENSE 44.25 37.78(c) FRINGE BENEFIT TAX 7.12 5.39

NET PROFIT/ (LOSS) BEFORE MINORITY INTEREST 192.03 (27.97)

13 MINORITY INTEREST (Share of Loss) (net) 131.78 38.2714 SHARE IN LOSS OF ASSOCIATE (8.01) —

NET PROFIT 315.80 10.3015 BALANCE BROUGHT FORWARD FROM PREVIOUS PERIOD 444.81 627.08

LESS: TAX ADJUSTMENT ON RETAIL BUSINESS HIVE OFF. — (9.25)LESS: TAX ADJUSTMENT ON MERGER OF VSNL BROADBAND LTD. (0.10) —LESS: DEFERRED TAX ADJUSTMENT ON MERGER OF VSNL BROADBAND LTD. (7.44) —

16 AMOUNT AVAILABLE FOR APPROPRIATIONS 753.07 628.13

17 APPROPRIATIONS :(a) PROPOSED DIVIDEND / DIVIDEND PAID (Refer Note B3, Schedule 20) 128.25 128.25(b) TAX ON DIVIDEND 21.80 21.80(c) GENERAL RESERVE 51.60 33.27(d) TRANSFER TO DEBENTURE REDEMPTION RESERVE 102.50 —

BALANCE CARRIED TO BALANCE SHEET 448.92 444.81

EARNINGS PER SHARE (EPS)18 Basic/Diluted earnings per share, excluding exceptional

items (Rs.) (Refer Note B16, Schedule 20) 3.21 0.6219 Basic/Diluted earnings per share, including exceptional

items (Rs.) (Refer Note B16, Schedule 20) 11.08 0.36SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS 20As per 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




90

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CM Y K

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2009Year ended Year ended

31st March, 2009 31st March, 2008Rs. In crores Rs. In crores

1 CASH FLOWS FROM OPERATING ACTIVITIESPROFIT BEFORE TAXES AND EXCEPTIONAL ITEMS 156.28 160.12Adjustments for:Depreciation, amortisation and impairment 1,102.27 784.41Loss /(Profit) on sale of fixed assets 1.55 (0.39)Interest income (49.39) (11.23)Interest expense 350.69 175.41Fixed assets written down 3.37 1.21Interest on income tax refunds — (16.66)Provision for Doubtful debts 12.13 32.25Bad Debts written off 208.88 27.78Provision for contingency (0.41) (4.08)Dividend income / profit on sale of current investments (59.92) (46.58)Valuation loss on current investments (0.08) (0.07)Loss on sale of long-term investments (2.88) 0.36

OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 1,722.49 1,102.53Inventories (5.73) (1.13)Sundry debtors (667.86) (543.57)Other current assets, loans and advances (69.34) (554.41)Restricted cash (0.04) —Current liabilities and provisions 1,174.55 1,687.01

Cash generated from operations before tax and exceptional items 2,154.07 1,690.43Claim Settlement (Refer Note B6, Schedule 20) (95.60) —

Cash generated from operations before taxes 2,058.47 1,690.43Income tax (paid)/refunds (377.41) (421.94)Interest on income tax refunds — 16.66

NET CASH FROM OPERATING ACTIVITIES 1,681.06 1,285.15

2 CASH FLOWS FROM INVESTING ACTIVITIESPurchase of fixed assets (3,222.31) (2,543.86)Stake purchase in Neotel Pty. Ltd. (Refer Note B7, Schedule 20) (61.61) —Business Acquisition (Refer Note B24(ii), Schedule 20) (58.02) —Amount paid towards Joint Venture with China Enterprise Communications (59.77) —(Refer Note B8, Schedule 20)Amount paid towards Investments in Bit Gravity (Refer Note B9, Schedule 20) (48.56) —Sale/ (Purchase) of current investments (net of mutual funds dividend reinvested) (net) (247.36) 601.92Proceeds from sale of fixed assets 4.43 10.67Proceeds from sale of long-term investment 427.10 2.71Dividend income from current investments 0.14 3.75Fixed deposits (net) (10.70) 2.82Interest received 25.18 8.42

NET CASH USED IN INVESTING ACTIVITIES (3,251.48) (1,913.57)

3 CASH FLOWS FROM FINANCING ACTIVITIESProceeds from unsecured loans 2,849.94 2,499.13Repayment of unsecured loans (1,891.78) (1,457.11)Proceeds from secured loans 1,692.50 13.73Repayment of secured loans (16.26) (27.12)Payment for finance lease (10.05) (9.77)Dividends paid including dividend tax (150.38) (150.21)Dividends paid to Minority (0.45) —Interest paid (313.56) (174.65)

CASH FLOW FROM FINANCING ACTIVITIES 2,159.96 694.00

NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS 589.54 65.58CASH AND CASH EQUIVALENTS AS AT THE BEGINNING OF THE YEAR 288.40 220.56(Refer Note B14, Schedule 20)Effect of exchange on cash and cash equivalents (14.52) 2.26

CASH AND CASH EQUIVALENTS AS AT THE END OF THE YEAR 863.42 288.40

(Refer Note B14, 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, an amount of Rs. 73.52 crores receivable from these shareholders

against a binding agreement has been adjusted against the carrying value of Investment in Associate (Refer Note B7, Schedule 20).

As per 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



91

CM Y K

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEETAs at As at

31st March, 2009 31st March, 2008SCHEDULE - 1 Rs. In crores Rs. In croresSHARE CAPITALAUTHORISED :300,000,000 (2008: 300,000,000) Equity Shares of Rs.10 each 300.00 300.00

ISSUED, SUBSCRIBED AND PAID UP285,000,000 (2008: 285,000,000) Equity Shares of Rs.10 each, fully paid up 285.00 285.00

SCHEDULE - 2RESERVES AND SURPLUS(a) Capital Reserve 217.84 208.15(b) Securities Premium (Refer Note B10, Schedule 20) 725.01 834.88(c) General Reserve 3,378.46 3,326.90(d) Debenture Redemption Reserve 102.50 —(e) Profit and Loss Account 448.92 444.81

4,872.73 4,814.74(f ) Exchange Translation Reserve (net) (51.29) 52.24

TOTAL 4,821.44 4,866.98

Note:1. Depreciation on gifted assets of Rs. 0.60 crores (2008: Rs. 0.62 crores) has been transferred from Capital Reserve to

the Profit and Loss Account for the year ended 31 March, 2009.2. Capital reserve includes Rs. 205.22 crores in respect of foreign exchange gains on unutilised proceeds from Global

Depository Receipts credited to Capital Reserve in 2000-01 Rs. 203.70 crores and Rs. 1.52 crores in 2001-023. Capital reserve includes Rs. 10.15 crores which represents Group’s share in capital reserve of Joint Venture SEPCO

Communications (Pty) Ltd arising on acquisition made during the year (Refer Note B24(ii), Schedule 20)4. As at 31 March, 2009 Rs. 51.60 crores (2008: Rs. 33.27 crores) has been transferred from Profit & Loss Account to

General Reserve

SCHEDULE - 3SECURED LOANS(a) From Banks

(i) Term-Loan from Hongkong and Shanghai Banking Corporation Limited(Secured by hypothecation of movable properties of Rs. 128.00 crores) 38.83 45.88

(ii) Term-Loan from Punjab National Bank (Refer Note1) 9.04 9.99(iii) Term-Loan from Everest Bank Limited (Refer Note 1) 0.47 0.51(iv) Term Loan from Everest Bank Limited and Nepal SBI Bank Limited (Refer Note 1) 4.20 —(v) Term Loan from Consortium led by Nedbank Ltd. (Refer Note 1) 475.01 —(vi) 11.00% Rated taxable Secured Redeemable Non-convertible Debentures of

face value Rs. 10.00 lakhs each (Refer Note B12, Schedule 20) 135.00 —(vii) 11.20% Rated taxable Secured Redeemable Non-convertible Debentures of

face value Rs. 10.00 lakhs each (Refer Note B12, Schedule 20) 5.00 —(b) From Others

(i) 11.00% Rated taxable Secured Redeemable Non-convertible Debentures offace value Rs. 10.00 lakhs each (Refer Note B12, Schedule 20) 60.00 —

(ii) 11.20% Rated taxable Secured Redeemable Non-convertible Debentures offace value Rs. 10.00 lakhs each (Refer Note B12, Schedule 20) 50.00 —

(iii) 11.70% Rated taxable Secured Redeemable Non-convertible Debentures offace value Rs. 10.00 lakhs each (Refer Note B12, Schedule 20) 1,000.00 —

(iv) Others 4.21 48.86

TOTAL 1,781.76 105.24

Note:1. Secured against fixed assets of Joint Ventures

SCHEDULE - 4UNSECURED LOANS(a) From Banks 4,742.89 3,171.23(b) From Others 140.73 70.15

TOTAL 4,883.62 3,241.38

Note:1. Loans repayable within one year Rs. 654.08 Crores (2008: Rs. 438.35 crores)


92

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CM Y K

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93

CM Y K


31st March, 2009 31st March, 2008SCHEDULE - 6 Rs. In crores Rs. In croresINVESTMENTSI. Trade Investments - Long Term (At Cost) (Unquoted)

A. Fully Paid Equity Shares(a) Tata Teleservices Ltd. (Refer Note B4, Schedule 20) 748.03 810.17(b) New ICO Global Communications (Holdings) Limited 0.01 0.01(c) Wmode Inc. 2.88 2.27

B. Convertible Bonds of China Enterprise Netcom Corporation Ltd. 35.59 —(Refer Note B8, Schedule 20)

C. Convertible Promissory Note and warrants of Bit Gravity 58.47 —(Refer Note B9, Schedule 20)

D. Investment in Associate (Refer Note B7, Schedule 20)Equity Shares (at cost) 90.16 —Less: Share in Loss during the year (8.01) —

82.15 —Preference Shares 49.77 —

TOTAL 131.92 —

TOTAL (A+B+C+D) 976.90 812.45

II. Current Investments (Unquoted)Investments In Mutual Funds 699.14 391.93

TOTAL 1,676.04 1,204.38

SCHEDULE - 7INVENTORIESEquipments for resale 0.08 0.70Less: Provision for obsolescence (0.08) (0.01)

— 0.69

Consumable stores and spares (at cost) 18.29 8.60Less: Provision for obsolescence (0.46) —

TOTAL 17.83 9.29

SCHEDULE - 8SUNDRY DEBTORS(a) Over six months (unsecured)

Considered good 388.22 326.39Considered doubtful 360.55 285.87

(b) Other debts (unsecured)Considered good 2,474.75 1,748.17Considered doubtful 36.02 —

3,259.54 2,360.43Less: Provision for doubtful debts (396.57) (285.87)

TOTAL 2,862.97 2,074.56

SCHEDULE - 9CASH AND BANK BALANCES (Refer Note B14, Schedule 20)(a) Cash in hand 0.94 0.17(b) Cheques in Hand 55.17 17.91(c) Remittances in transit 0.28 17.26(d) Current accounts with banks 487.04 192.33(e) Deposit accounts with banks 332.50 66.40

TOTAL 875.93 294.07


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31st March, 2009 31st March, 2008SCHEDULE - 10 Rs. In crores Rs. In croresOTHER CURRENT ASSETS(a) Interest receivable 29.46 5.24(b) Service tax / VAT recoverable 107.24 176.54(c) Pension contributions recoverable from Government of India

(net of provision of Rs. 53.71 crores; 2008: Rs. 53.71 crores)(Refer Note B5, Schedule 20) 7.44 7.44

(d) Licence fees paid recoverable from Government of India 0.64 81.96(e) Licence fees paid under protest 120.85 295.00(f ) Others 126.05 45.27

TOTAL 391.68 611.45

SCHEDULE - 11LOANS AND ADVANCES(a) Unsecured - Considered good

(i) Staff Advances 5.63 10.37(ii) Deposits with public bodies and others 84.63 67.71(iii) Prepaid expenditure 524.38 285.16(iv) Advance payment of tax (net of provision for tax) 1,422.08 1,207.92(v) Other loans and advances 370.99 102.28

2,407.71 1,673.44

(b) Unsecured - Considered doubtfulOther loans and advances 8.51 7.61Less: Provision for doubtful advances (8.51) (7.61)

TOTAL 2,407.71 1,673.44

SCHEDULE - 12CURRENT LIABILITIES(a) Sundry Creditors:

(i) Creditors for interconnect charges 1,926.19 1,876.73(ii) Others 2,089.76 1,056.17

(b) Unearned income and deferred revenues 2,378.94 1,395.90(c) Investor Education and Protection Fund - unpaid dividend 0.78 1.12(d) Government of India current account 20.57 20.57(e) Interest accrued but not due on loans taken from banks 48.68 11.55(f ) Deposits / Advances from customers 662.06 379.60(g) Other liabilities (Note 1) 303.76 555.39

TOTAL 7,430.74 5,297.03

Note:1. Includes Rs. 105.35 crores overdrawn book balance (2008: Rs. 27.61 crores)

SCHEDULE - 13PROVISIONS(a) Provisions for employee benefits 246.38 184.67(b) Provision for proposed dividend 128.25 128.25(c) Tax on dividend 21.80 21.80(d) Provision for contingencies (Refer Note B21, Scehdule 20) 42.86 29.41(e) Provision for tax (net of advance taxes) 49.21 25.88

TOTAL 488.50 390.01

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

31st March 2009 31st March 2008SCHEDULE-14 Rs. In crores Rs. In croresOTHER INCOME(a) Dividend income from current investments 22.52 31.68(b) Profit on sale of current investments (net) 37.40 14.91(c) Profit on sale of fixed assets (net) — 1.68(d) Profit from sale of long term investment 2.88 —(e) Rent 14.84 14.93(f ) Exchange gain (net) — 8.72(g) Provisions no longer required written back 23.92 22.95(h) Interest on income tax refund — 16.66(i) Other 108.72 117.59

TOTAL 210.28 229.12

SCHEDULE-15INTEREST INCOME(a) On Bank deposits (Tax deducted at source

Rs. 1.80 crores; 2008: Rs. 1.40 crores) 30.94 4.56(b) On Other loans and advances (Tax deducted at source

Rs. NIL; 2008: Rs. 0.04 crores) 18.45 6.67

TOTAL 49.39 11.23

SCHEDULE - 16SALARIES AND RELATED COSTS(a) Salaries and bonus 1,102.54 808.01(b) Contribution to provident, gratuity and other funds 56.34 23.18(c) Staff welfare expenses 68.42 63.81

TOTAL 1,227.30 895.00

SCHEDULE-17NETWORK COSTS(a) Charges for use of transmission facilities 5,090.87 4,506.03(b) Royalty and licence fee to Department of Telecommunications 131.89 110.28(c) Rent of satellite channels 31.47 29.84(d) Rent of landlines 39.89 112.10(e) Administrative lease charges 6.10 5.22

TOTAL 5,300.22 4,763.47


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

31st March 2009 31st March 2008SCHEDULE-18 Rs. In crores Rs. In croresOPERATING AND OTHER EXPENSES(a) Consumption of stores 14.70 10.63(b) Light and power 173.99 120.95(c) Repairs and Maintenance:

(i) Buildings 32.76 29.20(ii) Plant and Machinery 480.05 394.28(iii) Others 25.88 22.84

(d) Bad Debts written off 208.88 27.78(e) Provision for doubtful debts 12.13 32.25(f ) Rent 218.17 191.08(g) Rates and taxes 60.78 32.12(h) Travelling expenses 77.95 87.54(i) Telephone and telex 41.27 36.93(j) Printing, postage and stationery 15.06 14.90(k) Legal and professional fees 135.85 420.82(l) Advertising and publicity 67.62 41.52(m) Commissions 51.64 35.03(n) Insurance 15.36 16.30(o) Donations 0.62 0.27(p) Loss on sale of fixed assets (net) 1.55 —(q) Exchange loss (net) 16.30 —(r) Services rendered by third parties 239.61 101.51(s) Other expenses 195.91 143.40

TOTAL 2,086.08 1,759.35

SCHEDULE - 19INTEREST EXPENSEInterest on:(a) Bank Loans 202.31 133.85(b) Debentures 46.06 —(c) Others 102.32 41.56

TOTAL 350.69 175.41

Note:1) The above interest expense is net of interest capitalized during the year of Rs. 57.83 crores (2008: Rs. 40.95 crores)

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SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS

SCHEDULE 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), and its subsidiaries (“theGroup”) are prepared under the historical cost convention and the requirements of the Companies 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 financial statement on that basis as the Company has provided asupport letter regarding providing financial support to enable those entities continuing as a ‘going concern’ withreference to 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 associate which has been accounted as per “EquityAccounting” Method as per Accounting Standard 23 –”Accounting for investments in Associate in ConsolidatedFinancial 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, interest costs incurred tofinance construction and all incidental expenses incurred to bring the assets to their present location andcondition.

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 on “Borrowing Costs” (AS-16)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%

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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 period.

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 recognised over the period of sucharrangements.

d) Revenues from Internet services are recognised based on usage.

e) Dividend from investments is recognized when the right to receive payment is established and no significantuncertainty as to measurability or collectibility 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 recognised 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 recognised 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 recognised 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.

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.

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b) Premium or discount on forward contracts and upfront premium payable on option contracts is amortised overthe life of such contracts and is recognised in the Profit and Loss Account. Forward contracts outstanding as atthe balance sheet date are stated at exchange rate prevailing at the reporting date and any gains or losses arerecognised in the profit and loss account. Profit or loss arising on cancellation or enforcement/exercise of aforward exchange and option contracts is recognised in the profit and loss account in the period of suchcancellation or enforcement/exercise. Option contracts outstanding as at the balance sheet date are marked-to-market with the values as reported by banks and any gains or losses are recognised in the profit and lossaccount.

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 foreign exchange forward and option contracts and interest rate swaps to manage it’s exposureon foreign exchange rate risk and interest rate risk globally. Exposures to currency and interest rate risk are monitoredon an ongoing basis and the Group endeavours to keep the net exposure at acceptable levels.

These derivatives are initially recognised 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 recognised 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 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 theirexistence 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. Particulars of subsidiaries, associate and joint ventures are as follows:

Country of Incorporation Percentage of voting power

As at 31 As at 31March, 2009 March, 2008

Subsidiaries (held directly)

Tata Communications Internet Services Limited India 100.00 100.00

Tata Communications TransformationServices Limited India 100.00 100.00


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Country of Incorporation Percentage of voting powerAs at 31 As at 31

March, 2009 March, 2008

Tata Communications Lanka Limited Sri Lanka 90.00 90.00

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

Banking ATM InfraSolutions Limited India 100.00 -

Subsidiaries (held indirectly)

VSNL Telecommunications (Bermuda) Limited(in liquidation) Bermuda 100.00 100.00

VSNL UK Limited (in liquidation) United Kingdom 100.00 100.00

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 Global Hong Kong Limited (in liquidation) Hong Kong 100.00 100.00

Teleglobe Global Japan YK Japan - 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 Data Transport Pte. Ltd. Singapore - 100.00

Teleglobe Asia Pte. Ltd. Singapore 100.00 100.00

Teleglobe Bermuda Limited (in liquidation) Bermuda 100.00 100.00

Tata Communications (Canada) ULC Canada 100.00 100.00

Tata Communications (Belgium) S.P.R.L.(formerly known as Teleglobe InternationalBelgium S.P.R.L) Belgium 100.00 100.00

VSNL International (Hong Kong) Limited(in liquidation) Hong Kong 100.00 100.00

Teleglobe International Limited (in liquidation) United Kingdom 100.00 100.00

Teleglobe International Luxembourg S.A.R.L(in liquidation) Luxembourg 100.00 100.00

Tata Communications (Italy) SRL Italy 100.00 100.00

Teleglobe Netherlands B.V Netherlands - 100.00

TLGB International Germany GMBH. Germany - 100.00

TLGB Luxembourg Holdings S.A.R.L.(in liquidation) Luxembourg 100.00 100.00

TLGB Netherlands Holdings B.V Netherlands - 100.00

VSNL (Portugal) Unipessoal Lda Portugal 100.00 100.00

VSNL Belgium BVBA Belgium - 100.00

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Country of Incorporation Percentage of voting powerAs at 31 As at 31


Tata Communications (France) SAS (formerlyknown as VSNL 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) L.L.C.(formally known as VSNL International(Guam) LLC) Guam 100.00 100.00

VSNL International (Portugal) InstalacaoE 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

Tata Communications (Puerto Rico) Inc.(formerly known as VSNL InternationalPuerto 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 -

Tata Communications (Hungary) LLC Hungary 100.00 -

Tata Communications (Ireland) Limited Ireland 100.00 -

Tata Communications (Russia) LLC Russia 100.00 -

Tata Communications (Switzerland) GmbH Switzerland 100.00 -

Tata Communications (Sweden) AB(formerly known as VSNL International(Sweden) AB) Sweden 100.00 100.00

Joint Ventures

United Telecom Ltd. Nepal 26.66 26.66

SEPCO Communications (PTY) LTD(Held through VSNL SNOSPV PTE LTD) South Africa 43.16 43.16

Associate

NEOTEL PTY LTD(Held through VSNL SNOSPV PTE LTD) South Africa 27.00 -


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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 1 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. 4.50 (2008: Rs. 4.50) per share to itsshareholders for the year ended 31 March, 2009 based on the financial results of the Company.

4. In terms of the agreements entered into between Tata Teleservices Ltd. (“TTSL”), Tata Sons Ltd. (“TSL”) and NTTDoCoMo, Inc. of Japan (Strategic Partner-SP), TSL gave an option to the Company to sell 36,542,378 equity shares inTTSL to the SP, as part of a secondary sale of 253,163,941 equity shares effected along with a primary issue of843,879,801 shares by TTSL to the SP. Accordingly, the Company realized Rs. 424.22 crores on sale of these sharesresulting in a profit of Rs. 362.08 crores which has been reflected as an exceptional item in the profit and lossaccount for the current 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 31st March, 2007 proportionate share of pension obligation and payments to erstwhile OCS employees ofRs. 61.15 crores (2008 : Rs. 61.15 crores) were recoverable from the Government of India (“the Government”). Pursuantto discussions with the Government, the Company had made a provision of Rs. 53.71 crores (2008 : Rs. 53.71 crores)thereby having a net amount due from the Government towards its share of pension obligation of Rs. 7.44 crores(2008 : Rs. 7.44 crores).

6. On 27 August, 2008, the arbitration tribunal (the “Tribunal”) of the International Chamber of Commerce, Hague handeddown a final award in the arbitration proceedings brought by Reliance Globalcom Limited (“Reliance”), formerly knownas ‘FLAG Telecom’, against the Company relating to the Flag Europe Asia Cable System. The Tribunal has directed theCompany to pay Rs. 95.60 crores (US$ 21.45 million) (2008: Rs. Nil) as final settlement against the claim amount ofUS$ 385 million claimed by Reliance. The amount of Rs. 95.60 crores has been charged in the Profit and Loss Accountand has been disclosed as exceptional item.

7. During the year, TATA Communications entered into an agreement with Eskom and Transnet (two South African stateowned enterprises) to acquire their 27% interest in Neotel, the second telecommunications operator in South Africafor a consideration of Rs. 135.13 crores which is valued at Rs. 139.93 crores as at balance sheet date in the form ofRs. 90.16 crores in equity shares and Rs. 49.77 crores in preference shares. The consideration comprises of a payment

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of Rs. 61.61 crores and adjustment of receivable of Rs. 73.52 crores from these shareholders under a binding agree-ment. The effective date of the transaction is 19 January 09. The Goodwill, being the difference between cost ofacquisition and the Company’s share of the negative networth in Neotel is Rs. 264.30 crores.

8. The Group through its Hong Kong subsidiary entered into an Equity Joint Venture (EJV) Agreement with theshareholders of China Enterprise Communications Limited (CEC). The Group will be acquiring a 50% equity interestin CEC subject to the approvals of the requisite governmental and regulatory bodies in China.

The Group has advanced an amount of Rs. 59.77 crores (US$ 14 Million) towards the investment in the joint-venturewhich represents:

• two bonds of Rs. 15.04 crores (US$3.5 million) each, subscribed on 16 June, 2008 by the Group’s Hong Kongsubsidiary in CEC’s Hong Kong subsidiary viz. China Enterprise Netcom Corporation Ltd., (Valued at Rs.35.59crores at balance sheet date) and

• Rs. 29.69 crores (US$ 7 million) paid into an escrow account on 13 August, 2008.

The bonds will be redeemed and paid to the Group’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 will be releasedto CEC in partial satisfaction of the purchase price of the shares in CEC.

The bonds are classified under Investments and the amount paid into escrow is classified under Loans andAdvances in the financials.

Capital commitment, if any, arising from agreement with CEC is stated in Note B22, Schedule 20.

9. On 6 August, 2008, the Group, through its Dutch subsidiary entered into a series of agreements, including a “ConvertibleNote and Warrant Purchase Agreement” and “Investors Right Agreement” with BitGravity Inc. a Delaware corporation.In connection therewith, an amount of Rs. 48.56 crores (US$11.5 million ) was paid to BitGravity in exchange for aconvertible note and warrants which is disclosed under Investments (Valued at Rs.58.47 crores at balance sheetdate). The convertible note and warrants are exercisable in exchange for shares in BitGravity at the discretion of theGroup based on certain performance factors after an initial maturity of nineteen months (extendable upto sixmonths). The quantum of shares will be determined in accordance with Warrant Purchase Agreement.

Capital commitment, if any, arising from agreement with BitGravity Inc. is stated in Note B22, Schedule 20.

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 (VBL) with effect from 1 March, 2007.

Consequent to the filing of the final certified order dated 3 April, 2009 of the Hon’ble High Court of juridicature atBombay with the Registrar of the Companies, Maharashtra the Scheme of Amalgamation of VBL with the Companyhas become effective from the appointed date of 1 March, 2007.

Under the scheme, the shortfall in net book value of assets as compared to investment value is to be debited toSecurities Premium Account. To give effect to this, Rs. 109.87 crores has been debited to the Securities PremiumAccount by crediting the balance in Goodwill on Consolidation which was accounted in the consolidated financialstatements on 31 October, 2005 the date when VBL became a subsidiary of the Company.


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11. Financial Statements for the following companies considered in the consolidated financial statements are based onmanagement accounts and are therefore unaudited:

(Rs. in Crores)Subsidiary Total Assets Total Revenues Cash flows

included in included in included inConsolidation Consolidation Consolidation

VSNL SNOSPV Pte. Ltd 389.72 — 3.30

Joint Ventures Share in Total Share in Total Share in Cash FlowsAssets included Revenues included included in

in Consolidation in Consolidation Consolidation

United Telecom Ltd 32.51 2.90 3.11SEPCO (Pty.) Ltd 574.64 245.06 99.80

Total 607.15 247.96 102.91

Associate Share in lossincluded in Consolidation

Neotel (Pty.) Ltd 8.01

12. Secured Debentures:

During the year the Company has issued Rated taxable Secured Redeemable Non-convertible Debentures in dematform for cash at par on private placement basis aggregating to Rs. 1,250 Crores (2008 : Rs. NIL). IDBI TrusteeshipServices Limited has been appointed as trustee to the debenture issue.

i) Nature of Security

Rs. 1,000 crores, 11.70% debentures (face value of Rs. 1,000,000 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.

Rs. 250 crores, debentures (interest ranging from 11.00% to 11.25%, face value of Rs. 1,000,000 each) are securedby a first legal mortgage and charge on the Company’s immovable property being the free hold land atParambur Barracks, Chennai and Plant and machinery represented by land cable network and equipments.

ii) Redemption Terms

These debentures are due for redemption as given below-

Date of redemption 11.70% 11.00% 11.20% 11.25%as per terms Debentures Debentures Debentures Debenturesof issue Rs. in Crores

25-11-2011 40025-11-2012 40025-11-2013 20023-07-2014 19023-01-2016 5523-01-2019 5

Total 1,000 190 55 5

For facilitating the above redemptions, the Company has created Debenture redemption reserve and Rs 102.50crores has been appropriated during the current year.

13. Employee Benefits:

(A) Domestic

Effective from 1 April, 2006 the Company adopted the revised Accounting Standard 15 “Employee Benefits”(AS – 15).

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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.

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. 14.46 crores (2008: Rs. 11.47 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.

- Medical BenefitThe 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 PlanThe 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. 10.51 crores(2008: Rs. 3.49 crores) to meet the additional pension obligation on account of increase in Dearness Allowance.

The details in respect of funded status and the amounts recognised in the Company’s financial statement as at31 March, 2009 and 2008 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, 2009 March, 2009 March, 2009Rs. in crores Rs. in crores Rs. in crores

Projected defined benefit obligation, beginningof the year (1 April, 2008) 28.54 0.19 31.54Current Service Cost 2.65 0.25 4.03Interest Cost 2.05 0.03 2.52Liability transferred from other companies 0.46 - -Actuarial (gain) / loss 1.94 0.27 6.69Benefits paid (1.59) (0.08) (9.10)

Projected benefit obligation at the end of the year 34.05 0.66 35.68


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Defined Benefit PlansGratuity Gratuity Medical

Benefit(Funded) (Unfunded) (Unfunded)

As at 31 As at 31 As at 31March, 2008 March, 2008 March, 2008Rs. in crores Rs. in crores Rs. in crores

Projected defined benefit obligation, beginningof the year (1 April, 2007) 29.76 - 28.48

Current Service Cost 2.63 - 4.23

Interest Cost 2.03 - 2.28

Liability transferred to other companies (1.36) - -

Others 0.33 - -

Actuarial (gain) / loss (3.30) - 0.67

Benefits paid (1.35) - (4.12)

Projected benefit obligation at the end of the year 28.74 - 31.54

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

Particulars As at 31 As at 31March, 2009 March, 2008

(Funded) (Funded)Rs. in crores Rs. in crores

Fair value of plan assets, beginning of the year 30.82 30.17

Expected return on plan assets 2.41 2.34

Employer’s contribution 0.15 -

Transfer from other company 0.46 (1.36)

Actuarial (loss)/ gain (1.99) 1.02

Benefits paid (1.56) (1.35)

Fair value of plan assets at the end of the year 30.29 30.82

(iii) The amounts recognised in the profit and loss account for the year ended 31 March, 2009 and 2008:



Year ended 31 Year ended 31 Year ended 31March, 2009 March, 2009 March, 2009Rs. in crores Rs. in crores Rs. in crores

Current service cost 2.65 0.25 4.03

Interest cost 2.05 0.03 2.52

Expected return on plan assets (2.41) - -

Net actuarial loss/(gain) recognised in the year 3.94 0.27 6.69

6.23 0.55 13.24

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Current service cost 2.63 - 4.23

Interest cost 2.03 - 2.28

Expected return on plan assets (2.34) - -

Net actuarial loss/(gain) recognised in the year (4.32) - 0.67

(2.00) - 7.18

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


Benefits(Funded) (Unfunded) (Unfunded)


Present value of funded obligations 34.05 - -

Fair value of plan assets (30.29) - -

Present value of unfunded obligations - 0.65 35.68

Net (asset)/liability in balance sheet 3.76 0.65 35.68

Defined Benefit PlansGratuity Medical

Benefits(Funded) (Unfunded)

Year ended 31 Year ended 31March, 2008 March, 2008Rs. in crores Rs. in crores

Present value of funded obligations 28.74 -

Fair value of plan assets (30.82) -

Present value of unfunded Obligations - 31.54

Net (asset)/liability in balance sheet (2.08) 31.54


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Category of assets As at 31 As at 31March, 2009 March, 2008

Government of India Bonds - 8.33%

Corporate Bonds 1.96% 6.57%

Special Deposit Scheme - 5.37%

State Government Bonds 8.28% 8.27%

Insurer Managed Fund 89.76% 65.11%

Others - 6.35%

Total 100.00% 100.00%

The Company’s policy and objective for plan assets management is to maximize return on plan assets to meetfuture benefit payment requirements while at the same time accepting a low level of risk. The asset allocationfor plan assets is determined based on investment criterion approved under the Income Tax Act, 1961 and isalso 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 31March, 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%

Gratuity MedicalBenefits

(Funded) (Unfunded)Assumptions As at 31 As at 31


Discount rate 8.00% 8.00%

Expected return on plan assets 8.00% -

Increase in compensation cost 5.00 % – 7.00% 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, 20091 Percentage point

Increase DecreaseRs. in crores Rs. in crores

Effect on service cost 4.47 3.60

Effect on interest cost 3.17 2.55

Effect on post-employment benefit obligation 39.57 31.86

31 March, 20081 Percentage point

Increase DecreaseRs. in crores Rs. in crores

Effect on service cost 3.88 4.28

Effect on Interest cost 2.38 1.96

Effect on post-employment benefit obligation 28.78 31.93

As the present value of the plan assets is less than the present value of funded obligations, the Companyexpects to contribute Rs. 3.77 crores to its funded defined benefit plans in 2009-10.

(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 U.K and USA employees, a Registered Retirement SavingsPlan (RRSP) for Canadian employees and a Group Stakeholder Pension plan (GSPP) for UK employees. Anamount of Rs. 11.50 crores (2008: Rs. 8.06 crores) is charged to Profit and loss account for the year ended31 March, 2009.

In addition to above the Group has made a contribution of Rs. 8.14 crores in respect of Sepco, a jointventure 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.


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The details in respect of funded status and the amounts recognised in the Company’s financial statementas at 31 March, 2009 for these defined benefit schemes are as under:

(i) Changes in the defined benefit obligation:Pension Plans Health care

and Lifeinsurance

Plans

Non-Contributory contributory SERP

As at As at As at As at31 March, 31 March, 31 March, 31 March,

2009 2009 2009 2009Rs. in crores Rs. in crores Rs. in crores Rs. in crores

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)

Effect of foreign exchange rate changes 13.11 11.12 0.42 0.31


Pension Plans Health careand Life

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, 2007) 355.76 327.56 8.67 8.98

Current Service cost 2.91 10.02 0.35 0.14

Interest cost 18.98 17.20 0.49 0.48

Benefits paid (17.49) (41.32) - (0.73)

Actuarial (gain) / loss (22.29) (28.23) 1.32 (0.79)



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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, 2009 March, 2009 March, 2008 March, 2008Rs. in crores Rs. in crores Rs. in crores Rs. in crores

Fair value of plan assets, beginningof the year 460.90 321.79 446.84 321.64

Actual return on plan assets 25.82 18.29 26.03 18.46

Contributions - 15.42 - -

Benefits paid (21.89) (21.18) (17.49) (41.32)

Actuarial gain / (loss) (40.66) (28.92) (11.45) (8.28)


Fair value of plan assets, endof the year 440.95 317.06 460.90 321.77

(iii) The components of pension expense recognised in the Profit and Loss account for the year ended31 March, 2009 and 2008:

Year ended 31 Year ended 31March, 2009 March, 2008Rs. in crores Rs. In crores

Current service cost 10.69 13.42

Interest cost 39.40 37.15

Actual return on plan assets (44.11) (44.49)

Net Actuarial loss/(gain) recognized (92.68) (30.26)

Effect of foreign exchange ratechanges (Net) 34.65 (8.61)

(52.05) (32.79)


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(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 283.70 238.03 7.84 7.33Fair value of plan assets (440.95) (317.06) - -Present value of unfunded obligations - - - -

Net (asset)/liability in balance sheet (157.25) (79.03) 7.84 7.33


insurancePlans


Year ended Year ended Year ended Year ended31 March, 31 March, 31 March, 31 March,


Present value of funded obligations 351.30 297.46 - -

Fair value of plan assets (460.90) (321.77) - -

Present value of unfunded obligations - - 11.17 8.41

Net (asset)/liability in balance sheet (109.60) (24.31) 11.17 8.41


Category of assets As at 31 As at 31March, 2009 March, 2008

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.

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(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, 2009 March, 2008

Discount rate used for benefit costs 5.75% 5.25%

Discount rate used for benefit obligations 8.00% 5.75%

Expected long-term return on plan assets 5.50% 5.75%

Inflation 2.50% 2.50%

Rate of compensation increase 3.50% 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, 2009 is 9.32% (2008: 9.38%). A one-percentage-point change in assumed health care costtrend rates would have the following effects:

31 March, 2009 31 March, 20081 Percentage point 1 Percentage point

Increase Decrease Increase DecreaseRs. in crores Rs. in crores Rs. in crores Rs. in crores

Effect on service cost 0.03 0.02 0.03 0.02

Effect on interest cost 0.04 0.04 0.04 0.04

Effect on post-employmentbenefit obligation 0.47 0.42 0.65 0.58

The Group expects to contribute Rs. 18.94 crores (2008: Rs. 15.16 crores) to its defined benefit plansin 2009-10

14. Cash and cash equivalents represent:-


Rs. In crores Rs. In crores

Cash and Cheques on hand and balances held with banks 543.15 210.41

Remittances in transit 0.28 17.26

Deposit accounts held with banks 332.50 66.40

875.93 294.07

Deposits with original maturity over three months (11.65) (0.95)

Current Account / Deposits held for unpaid dividends (0.78) (1.10)

Deposit accounts held as margin money (0.04) (3.62)

Other restricted cash (0.04) -

Cash and cash equivalents 863.42 288.40


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15. Deferred tax:



Deferred tax liability/(assets) (Net)

Difference between accounting and tax depreciation 363.25 282.86

Provision for Leave Encashment (9.39) (5.12)

Provision for doubtful debts (67.02) (65.22)

Expenditure on VRS and VSS (3.25) (4.87)

Expenditure incurred on NLD license fees (21.46) (23.26)

Unearned income / deferred revenues (83.86) (75.93)

Provisions for post employment benefit and Leave encashmentpursuant to the transitional provisions of AS-15 (8.84) (9.07)

Others (13.53) 0.43

Net Deferred Tax Liability 155.90 99.82

16. Earnings per ShareRs. in crores

except Number of Shares andEarnings per share data


Profit before taxes and exceptional items 156.28 160.12

Income tax expense on profit excluding exceptional items (188.65) (180.70)

Profit after tax excluding exceptional items (32.37) (20.58)

Exceptional (expense)/ income (net) 266.48 (11.20)

Income tax benefit/(expense) on exceptional items (42.08) 3.81

Minority Interest - share of loss (net) 131.78 38.27

Share in loss of Associate (8.01) —

Net Profit after tax and exceptional items 315.80 10.30

Number of Shares 285,000,000 285,000,000

Earnings per share excluding exceptional items Rs. 3.21 Rs. 0.62

Earnings per share including exceptional items Rs. 11.08 Rs. 0.36

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17. Segment Reporting

Business Segments

The reportable segments for the year ended 31 March, 2009 and 31 March, 2008 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 and other services.

Year ended 31 March, 2009Rs. in crores


Revenues from Telecommunications and Other Services 5,696.38 2,982.65 1,284.14 9,963.17

Segment Results 1,494.92 2,171.13 996.89 4,662.94

Unallocable expenses (net) (4,506.66)

Profit before taxes and exceptional items 156.28

Exceptional Items 266.48

Profit before taxes 422.76

Tax expense (230.73)

Profit/(Loss) after taxes 192.03

Minority interest – share of loss (net) 131.78

Share in loss of Associate (8.01)

Net Profit 315.80

Year ended 31 March, 2008Rs. in crores


Revenues from Telecommunications and Other Services 5,075.70 2,294.91 926.80 8,297.41

Segment Results 1,143.75 1,688.79 712.25 3,544.79

Unallocable expenses (net) (3,384.67)Profit before taxes and exceptional items 160.12Exceptional Items (11.20)Profit before taxes 148.92Tax expense (176.89)Profit/(Loss) after taxes (27.97)Minority interest – share of loss (net) 38.27

Net Profit 10.30

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”.


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

Geographical Segment:

Segment revenues by Geographical Market



India 3,242.30 3,530.45United States of America 1,657.13 1,781.72United Kingdom 676.11 560.02Canada 397.17 434.89Germany 314.10 98.33South Africa 293.09 69.74Saudi Arabia 211.02 268.30Singapore 191.11 305.32Bermuda 135.29 26.02Hong Kong 115.90 100.20Vietnam 151.33 0.52Spain 124.21 16.79United Arab Emirates 109.93 168.97Netherlands 82.86 97.14Others 2,261.62 839.00

9,963.17 8,297.41

18. 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 ofTata Communications Limited.

III. Joint Ventures

• United Telecom Ltd.

• SEPCO Communications (Pty.) Ltd.

(including its direct and indirect subsidiaries - Neotel (Pty.) Ltd. and Neotel Business Support Services(Pty.) Ltd.

IV. Associate

• Neotel (Pty.) Ltd.

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(b) Related party transactions(Rs. in crores)

Investing Key Joint TotalCompany Managerial Venture

PersonnelTransactions

Dividend Paid

Panatone Finvest Limited 52.19 - - 52.1952.19 - - 52.19

Tata Sons Limited 10.92 - - 10.9210.92 - - 10.92

Total 63.11 - - 63.1163.11 - - 63.11

BEBP ExpensesTata Sons Limited 15.47 - - 15.47

5.48 - - 5.48

Total 15.47 - - 15.47

5.48 - - 5.48

Revenues fromTelecommunication servicesTata Sons Limited 2.53 - - 2.53

0.49 - - 0.49

United Telecom Limited - - 1.60 1.60- - 4.68 4.68

Neotel(Pty.) Ltd - - 41.69 41.69- - 28.15 28.15

Total 2.53 - 43.29 45.820.49 - 32.83 33.32

Network CostUnited Telecom Limited - - 27.13 27.13

- - 20.96 20.96

Neotel(Pty.) Ltd - - 11.12 11.12- - 3.15 3.15

Total - - 38.25 38.25- - 24.11 24.11

Services receivedTata Sons Limited 0.09 0.09

- -

Total 0.09 - - 0.09- - - -

Interest IncomeSEPCO Communications (Pty.) Ltd. - - 7.63 7.63

- - 2.26 2.26

Neotel (Pty.) Ltd. - - 3.06 3.06- - - -

Total - - 10.69 10.69- - 2.26 2.26


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(Rs. in crores)Investing Key Joint TotalCompany Managerial Venture

PersonnelLoan givenSEPCO Communications (Pty.) Ltd. - - 49.09 49.09

- - 12.47 12.47

Neotel (Pty.) Ltd. - - 131.58 131.58- - - -

Total - - 180.67 180.67- - 12.47 12.47

Advances given by the CompanyNeotel (Pty.) Ltd - - 0.01 0.01

- - 0.07 0.07

Total - - 0.01 0.01- - 0.07 0.07

Advances repaid to the CompanyNeotel (Pty.) Ltd - - 0.01 0.01

- - 2.39 2.39

Total - - 0.01 0.01- - 2.39 2.39

Managerial Remuneration - 8.90 - 8.90- 7.73 - 7.73

Total - 8.90 - 8.90- 7.73 - 7.73

Balances

Receivables

Tata Sons Limited 0.34 - - 0.34

0.19 - - 0.19


Neotel (Pty.) Ltd. - - 27.17 27.17- - 19.16 19.16

SEPCO Communications (Pty.) Ltd - - 10.04 10.04- - 2.09 2.09

Total 0.34 - 37.24 37.580.19 - 21.56 21.75

Payables

Neotel(Pty.)Ltd - - 2.77 2.77- - 3.02 3.02

Managerial Remuneration - 0.45 - 0.45

- 4.23 - 4.23


Tata Sons Limited 16.68 - - 16.68

5.48 - - 5.48

Total 16.68 0.45 9.61 26.745.48 4.23 8.27 17.98

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Loans Given

SEPCO Communications (Pty.) Ltd. - - 69.99 69.99- - 20.90 20.90

Neotel (Pty.) Ltd. - - 131.58 131.58

- - - -

Total - - 201.57 201.57- - 20.90 20.90

Advance receivablesNeotel (Pty.) Ltd. - - 1.30 1.30

- - 1.30 1.30

Total - - 1.30 1.30- - 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.

19. Operating lease arrangements:

(a) As lessee:



Minimum lease payments under operatingleases recognized as expense in the year 355.38 252.19

At the balance sheet date, minimum lease payments under non- cancellable operating leases fall due as follows:



Due not later than one year 295.17 210.20

Due later than one year but not later than five years 731.04 539.23

Later than five years 447.25 461.99

1,473.46 1,211.42

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.22.17 crores (2008: Rs 25.35 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. 8.60 crores (2008: Rs. 7.65 crores)was recognised in the current year as minimum sublease rental against the same.

(Rs. In crores)Investing Key Joint TotalCompany Managerial Venture

Personnel


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(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 (2008: Rs. 50.45 crores) and Rs.14.89 crores (2008: Rs. 11.53 crores) respectively as at 31 March, 2009. Depreciation expense of Rs. 3.36crores (2008: Rs. 3.36 crores) in respect of these assets has been charged in the profit and loss account forthe year ended 31 March, 2009.

In case of certain lease arrangements aggregating to Rs. 278.33 crores (2008: Rs. 198.97 crores) for the yearended 31 March, 2009, 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, 2009 amounts Rs. 23.39 crores (2008: Rs. 15.33 crores).

In respect of the above, rental income of Rs. 27.39 crores (2008: Rs. 19.64 crores) has been recognised in theprofit and loss account for the year ended 31 March, 2009.

Future lease rental receipts will be recognised in the profit and loss account of subsequent years as follows:



Not later than one year 26.24 21.95

Later than one year but not later than five years 104.98 88.02

Later than five years 124.65 114.26

255.87 224.23

(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:



Not later than one year 0.01 0.71

Later than one year but not later than five years 0.01 0.49

Later than five years - 0.39

0.02 1.59

Lease rental income of Rs. 0.01 crores (2008: Rs. 1.80 crores) in respect of the above leases has beenrecognised in the profit and loss account for the current year.

20. Finance Lease arrangements:

(a) As Lessee

As on 31 March, 2009, assets under finance leases with gross carrying amount and accumulated depreciation ofRs. 85.66 crores (2008: Rs. 33.35 crores) and Rs. 46.48 crores (2008: Rs. 15.61 crores) respectively, are included inthe total fixed assets. The net carrying amount of each class of asset under finance leases is as follows:


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Gross carrying Accumulated Net carryingamount Depreciation amount

As at 31 March, As at 31 March, As at 31 March,

2009 2008 2009 2008 2009 2008Rs. In crores Rs. In crores Rs. In crores

Building 7.79 1.84 0.99 0.13 6.80 1.71

Plant and Machinery 57.67 22.93 32.14 11.31 25.53 11.62

Furniture and Fixtures 4.81 3.78 1.51 0.81 3.30 2.97

Computers 15.39 4.80 11.84 3.36 3.55 1.44

85.66 33.35 46.48 15.61 39.18 17.74

Minimum lease payments and the corresponding present value are as follows:

Minimum lease Present Value of Difference representingpayments (“MLP”) MLP Interest

Year ended 31 March, Year ended 31 March, Year ended 31 March,

2009 2008 2009 2008 2009 2008Rs. In crores Rs. In crores Rs. In crores

Not later than one year 0.30 5.48 0.30 5.25 - 0.23

Later than one year but notlater than five years - 0.23 - 0.23 - -

Later than five years - - - - - -

0.30 5.71 0.30 5.48 - 0.23

21. Provision for Contingencies:31 March, 2009 31 March, 2008

Asset AssetRetirement RetirementObligation Others Total Obligation Others Total


Balance as at beginningof the year 20.41 9.00 29.41 20.91 12.58 33.49

Provision made during the year 1.12 - 1.12 - - -

Payment made during the year (4.23) - (4.23) - - -

Liabilities related toacquired businesses 14.11 - 14.11 - - -

Effect of change in foreignexchange rate 3.98 - 3.98 - - -

Provisions no longer requiredwritten back (1.53) - (1.53) (0.50) (3.58) (4.08)

Balance as at end of the year 33.86 9.00 42.86 20.41 9.00 29.41

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.


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22. Contingent Liabilities and Capital Commitments

Contingent Liabilities:As at As at

31 March, 2009 31 March, 2008Rs. In crores Rs. In crores

i. Claims for taxes on income (Refer Note 1)

(a) Income tax disputes where the department isin appeal against the Company 314.70 94.15

(b) Income tax disputes where the Company has afavourable decision in other assessment year for the same issue 22.39 2.43

(c) Income tax disputes other than the above 1,544.18 1,405.85

ii. Claims for other taxes 51.46 2.20

iii. Other claims 847.64 778.27

Notes:

(1) Significant claims by the revenue authorities in respect of income tax matters are in respect of:

(a) Deductions claimed under Section 80 IA of the Income Tax Act, 1961 from Assessment years 1996-97onwards have been disallowed by the revenue authorities. The Company has contested the disallowanceand has preferred appeals and which are pending.

(b) Reimbursement by the Department of Telecommunications (DoT) of income tax paid by the Company onthe DoT levy during 1994-95, that was taxed by the revenue authorities. The Commissioner of Income Tax(Appeals) has upheld the disallowance. The Company is in appeal with the Income Tax Appellate Tribunal.

(c) 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 B4,Schedule 20.

(3) 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.


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(4) 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 the Company and / or its subsidiaries received preferentialpayments from such companies prior to their bankruptcy filings. While management currently believes thatresolving such suits and claims, individually or in aggregate, will not have a material adverse impact on theCompany’s consolidated financial position, the FCPA investigation noted above is subject to inherent uncertaintiesand management’s view of this matter may change in the future. Were an unfavorable final outcome to occur,such an outcome could have a material adverse impact on the Company’s consolidated financial position andresults of operations for the period in which the effect becomes reasonably estimable.

Capital commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 3,508.54crores (2008: Rs. 3,023.95 crores).

The Company has entered into Joint Venture (40:60) with IOCPL Singapore for investment in M/s CochinSubmarine Cable Depot (India) Private Limited. However no amount has been invested as of balance sheet datefor the said joint venture.

As per the Equity Joint Venture (EJV) Agreement entered between the Group through its Hong Kong subsidiaryand the shareholders of China Enterprise Communications Limited (CEC) (as stated in Note B8, Schedule 20)additional amount of Rs. 33.05 crores (US$ 6.5 million) will be payable to CEC subject to audit and regulatoryapprovals.

As per the “Convertible Note and Warrant Purchase Agreement” and “Investors Right Agreement” entered by theGroup with BitGravity Inc. (as stated in Note B9, Schedule 20) BitGravity may issue further convertible promissorynotes and warrants up to Rs. 17.79 crores (US$ 3.5 million) and the group may invest based on mutual agreementbetween the parties.

23. 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 for the year ended 31 March, 2009 and 31 March, 2008 are asfollows:


LIABILITIES: Rs. In crores Rs. In crores

1 Reserves and Surplus (25.77) (23.54)

2 Secured Loan 13.72 10.50

3 Unsecured Loan 8.76 8.81



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ASSETS:

4 Fixed Assets

(a) Gross Block 41.77 29.14

(b) Less: Accumulated Depreciation 15.80 12.24

(c) Net Block 25.97 16.90

(d) Capital work-in-progress - 4.39

25.97 21.29

5 A. Current Assets

(a) Inventories 0.78 2.20

(b) Sundry Debtors 5.84 4.94

(c) Cash and Bank Balances 3.11 3.32

(d) Other Current Assets 1.96 0.18

11.69 10.64

B. Loans And Advances 12.42 4.46

24.11 15.10

6 Less: Current Liabilities 17.57 7.50

7 Net Current assets 6.54 7.60


INCOME Rs. In crores Rs. In crores

1 Traffic Revenue 2.90 5.89

2 Other Income 0.06 0.09

3 Interest Income 0.22 0.15

Total Income 3.18 6.13

EXPENDITURE

4 Salaries and Related Costs 0.73 0.51

5 Network Costs 1.46 1.42

6 Operating and Other Expenses 3.85 5.48

7 Interest Expense 2.13 1.62

8 Depreciation 3.40 2.92

Total Expenditure 11.57 11.95

CONTINGENT LIABILITIES Rs. In crores Rs. In crores

(i) Claims for other Taxes - -

(ii) Other Claims - -

- -

SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS (Contd.)As at As at

31 March, 2009 31 March, 2008Rs. In crores Rs. In crores

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SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS (Contd.)SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS (Contd.)

24. As at 31 March, 2009, the Company through it’s wholly owned subsidiary, VSNL SNOSPV Pte. Ltd., has 43.16 percent(2008: 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-up sharecapital of Neotel, the licensed second network operator in South Africa. The Group’s share in income, expenses,assets and liabilities of SEPCO based on the uniform accounting policy adopted by the Company and after inter-company eliminations for the year ended 31 March, 2009 and 31 March, 2008 are as follows:


LIABILITIES Rs. In crores Rs. In crores

1 Reserves and Surplus (145.23) (57.93)

2 Secured Loan 479.22 48.86

3 Unsecured Loan 140.74 283.03

ASSETS

4 Fixed Assets

(a) Gross Block 401.84 177.01

(b) Less: Accumulated Depreciation 83.90 19.07

(c) Net Block 317.94 157.94

(d) Capital work-in-progress 159.85 74.13

477.79 232.07

5 A. Current Assets

(a) Inventories 15.41 0.93

(b) Sundry Debtors 64.26 24.36

(c) Cash and Bank Balances 99.80 39.72

(d) Other Current Assets 65.22 36.05

244.69 101.06

B. Loans And Advances 25.97 0.89

270.66 101.95

6 Less: Current Liabilities and provisions

(a) Current Liabilities 159.62 77.84

(b) Provisions 14.19 5.38

173.81 83.22

7 Net (Current Liabilities)/Assets 96.85 18.73


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SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS (Contd.)SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS (Contd.)


INCOME Rs. in crores Rs. in crores

1 Traffic Revenue 245.06 43.82

2 Other Income 1.82 8.01

3 Interest Income 8.15 2.71

Total Income 255.03 54.54

EXPENDITURE

4 Salaries and Related Costs 84.87 30.25

5 Network Cost 124.36 38.37

6 Operating and Other Expenses 136.28 52.06

7 Interest Expenses 73.08 9.13

8 Depreciation 61.70 20.55

Total Expenditure 480.29 150.36

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. 46.08 crores. Group’s share in the consideration and capital reserve isRs. 58.02 crores and Rs. 10.15 crores respectively.

25. Previous year’s figures have been regrouped and reclassified wherever necessary.

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BOARD OF DIRECTORS

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 23 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 mid 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 the

project implementation of Tata Teleservices fixed linetelecom 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, Mr. Srinath was named as the world’s eighth mostinfluential telecom personality by the Global TelecomsBusiness magazine as well as the ‘Telecom Person of theYear’ by the India-based Voice and Data magazine.

Since February 2007 Mr. Srinath has been the ManagingDirector of Tata Communications Limited & CEO of the TataCommunications global group of companies.

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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 one of the two principal holding companies of theTata Group, India’s largest and best-known conglomerate.TIL acts as the new projects promotion arm of the Group,and spearheads the entry of the Group in the emerginghigh-tech and sunrise sectors of the economy.

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 is on the Board of various companies like TataTeleservices Limited, Tata Autocomp Systems Limited, TataInvestment Corporation Limited, among others. He alsooversees the functions of the Department of Economicsand Statistics (DES).

Mr. Chaukar is the chairman of Tata Council for CommunityInitiatives (TCCI) – the nodal forum of the Group on mattersrelated to social development, environmental management,bio-diversity restoration and conservation of wild life.

Mr. Chaukar is also a Board member of Global ReportingInitiative (GRI), which has spearheaded the concept of triplebottom line reporting (financial, environmental andsocietal), and is engaged in evolving formats for corporatesto follow. GRI is an international organization founded bythe United Nations and funded by internationalfoundations such as the Ford Foundation, Mott Foundationand others, and is headquartered in Amsterdam. He is alsoa member of Social Accountability International (SAI)Advisory Board, based in New York. SAI is a non-governmental, international, multi-stakeholderorganization dedicated to promote human rights andimproving workplaces and communities by developing andimplementing socially responsible standards. Mr. Chaukaris also a member of the Shell Foundation Breathing SpaceIndia Advisory Board. The Breathing Space programmeaims at achieving a significant long-term reduction inIndoor Air Pollution by designing more emission and fuelefficient stoves by developing a sustainable way to getthem into people’s homes.

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 ICICILimited from February 9, 1995 to October 15, 1998. Hisother experiences include stints in Bhartiya Agro IndustriesFoundation, a public trust engaged in rural developmenton a no-profit no-loss basis and Godrej Soaps Limited.

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 1983.

An advocate by profession, Mr. Kalyanasundaram was alegal advisor for Pallavan Transport Corporation, Chennai,a government of Tamil Nadu undertaking, and legal advisorto the Chennai Metropolitan Water Supply and SewerageBoard. He was trustee of the Jawaharlal Nehru Port Trust,Mumbai, and a member of the Censor Board, Chennai.

Mr. Kalyanasundaram has played a leading role in variouspublic activities. As the managing trustee of the Green PeaceWorld Charitable Trust, Chennai, he took an active part inthe various welfare measures organized by the trust. Theseinclude organizing free eye camps to treat poor people.

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 journal 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 Ltd.,Hyderabad, a joint venture project of India and Malaysia.

He studied Master of Arts in History, Master of Law in

International Law and Comparative Constititional Law. After

that, he was engaged in research programme on Judicial

History and awarded Doctor of Philosophy (Ph.D) by the

University of Madras. He holds a Post Graduate Diploma in

Tourism.

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Dr. V.R.S. Sampath has participated in the followingInternational Certificate 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, U.S.A.

Dr. V.R.S. Sampath has been nominated for the followingGovernment Committees

• 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 of

Corporate Affairs, Government of India.

• Member of the Tamil Nadu State Library bookselection committee of Govt. of Tamil Nadu. (A gradeCommittee)

• Member of the best Tamil book selection committeeGovt. of Tamilnadu.

Dr. Sampath has served on various government committeesand, is chairman of various non-governmentalorganizations. He is a member of the Indian Council ofArbitration 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. V.R.S. Sampath has travelled to many countries toparticipate in seminars, workshops and conferences on law,human rights, 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 Institute ofInternal Auditors, Florida, U.S.A. He was the Chairman andSenior Partner of PricewaterhouseCoopers (PWC), India tillhis retirement on 31st March, 2003. Besides hisqualifications in the area of accounting and auditing, Mr.Ganguli is an alumnus of IMI, Geneva.

Mr. Ganguli, trained in the UK to become a CharteredAccountant. He was seconded as a Partner to PWC, UK/USA for a year in 1972-73. During his career spanning over40 years, Mr. Ganguli’s range of work included InternationalTax advice and planing, cross border investments,Corporate mergers and re-organisation, financial evaluationof projects, management, operational and statutory auditand consulting projects funded by International fundingagencies. In the course of his professional career, he hasdealt with a variety of clients including US AID, World Bank,

ADB, NTPC, Alcatel, GE, Hindustan Lever, STC, HewlettPackard 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 Ltd., Aricent Technologies (Holdings) Ltd., AVTECLtd., ICRA Ltd., Maruti Suzuki India Ltd. and TriveniEngineering and Industries Ltd.

Mr. Ganguli is a member of the Audit Committees of HCLTechnologies Ltd., Century Textiles and Industries Ltd., TubeInvestments of India Limited and ICRA Ltd. He is thechairman of the Audit Committees of HughesCommunications India Limited, New Delhi TelevisionLimited, Aricent Technologies (Holdings) Ltd. and MarutiSuzuki India Ltd. and a member of RemunerationCommittees of Tube Investments of India Limited and NewDelhi 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 CommunicationsInternational’s roadmap and charter into the globalcommunications market. Enhancing the service capabilities

and customer facing activities in strategic markets beyondthe shores of India in a nut shell sums his mandate. Besidesheading these strategic initiatives, Mr. Kumar is alsoresponsible for the Wholesale Data, Global Mobile andInternational Enterprise lines of business and meeting thecompany’s ambitious targets.

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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,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 Chief

Executive 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, multinationalaccount 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, Chief Executive Officer andManaging Director of Tata Consultancy Services Limited,has been associated with the Company for the past 37years. Joining as a trainee engineer, Ramadorai took overas CEO in 1996 and has been instrumental in building TCSto a $6 Billion global software and services company. Witha talent base of over 140,000 associates, a geographicalreach of 42 countries and an enviable client list whichincludes six of the Top Ten Fortune companies. Ramadoraihas now set his sights on ensuring that TCS is among theglobal Top Ten software companies. In October 2006, TCSwas recognized by Economic Times as the Company ofthe year, a fitting tribute to its increasing global presence.Recently Ramadorai was awarded CBE (Commander of theOrder of the British Empire) by Her Majesty QueenElizabeth II for his contribution to Indo-British economicrelations.

Ramadorai’s vision is evident through the active role heplayed in establishing Offshore Development Centers(ODCs) in India to provide high-end quality solutions tomajor corporations. With a view to remain abreast withchanging technologies at all times, Ramadorai set upTechnology Excellence Centers in India that have acquiredknowledge, expertise and equipment in specializedtechnology areas.

His key initiatives include his relentless pursuit ofexcellence in quality. Under his leadership TCS was awardedthe CII-Exim Bank Quality Award for 2006. In August 2004,TCS became the world’s first organization to achieve anintegrated Enterprise wide Maturity Level 5 on bothCapability Maturity model and People Capability Maturitymodel, these are frameworks conceptualized by theSoftware Engineering Institute at Carnegie MellonUniversity, to benchmark and appraise the software processand people management process of an organization.Ramadorai firmly believes that learning is a continualprocess, which does not end with formal education.

Ramadorai continues to maintain strong links with theworld of academia. He is a member of the CorporateAdvisory Board, Marshall School of Business (USC) as wellas other Boards of reputed Indian academic institutions.Among his other distinctions, Ramadorai is a Fellow of theInstitute of Electrical and Electronics Engineers (IEEE) andof the Indian National Academy of Engineering.

Ramadorai was recently conferred the Nayudamma Awardfor 2008 for his outstanding contribution to informationtechnology. He was also International CEO of the Year(2008) at the 14th Annual LT Bravo Business Awards, whichare widely acknowledged as the Oscars of Latin Americanbusiness, organised by Latin Trade Magazine. At the 7thCNBC Asia Business Leaders Awards (ABLA)-2008Ramadorai was awarded the ‘Asia Talent Management ofthe Year’ for his personal involvement in supporting andnurturing leadership within TCS. Ramadorai was recentlyhonoured by the Institution of Engineers, India (IEI), for hisoutstanding contribution to Engineering in India.

In November 2006 Ernst & Young awarded Ramadorai theEntrepreneur Manager of the Year award. In recognition ofRamadorai’s commitment and dedication to the IT industryhe was awarded the Padma Bhushan in January 06.

He is also increasingly being recognized as a leader ofglobal standing. Mr Ramadorai was presented by PrimeMinister Blair, the UK Trade and Investment SpecialRecognition Award in September 2005 for TCS’ exemplarycontribution to India – UK economic ties.

Dataquest has recognized him as the “IT Man of the year”for 2004. Business India recognized him as the Businessmanof the Year (2004). Computer Business Review has namedhim among the top 10 most influential movers and shakersin the IT sector for 2005 and 2006. The Indo AmericanChamber of Commerce recognized him with an award forpromoting Indo-US Business Excellence in 2004. He wasconferred Honorary Doctorate (Honoris Causa) by Anna

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University and the Sastra University of Tamil Nadu.

During 2003, Ramadorai was honoured with theDistinguished Achievement Award from the Indian Instituteof Science, Bangalore. In 2002, he was awarded with CNBCAsia Pacific’s prestigious ‘Asia Business Leader of the Year’Award. He has been honoured with the position of ‘ITAdvisor to Qingdao City’, People’s Republic of China. As aformer Chairman of the National Association of SoftwareCompanies (NASSCOM), Ramadorai continues to extendhis support to the Indian IT Industry.

As an individual deeply committed to the House of Tatas,

Ramadorai holds Chairmanships and Directorships of otherGroup companies. He is also on the Board of Directors ofpremier companies such as Hindustan Lever Ltd andNicholas Piramal India Ltd.

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, Ramadorai attended theSloan School of Management’s highly rated 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 Department

of Telecom, ONGC, TCIL and has a wide experience in thetelecommunications industry in Operations/ProjectsManagement/Licensing and Regulations.

Mr. Srivastava is currently the Deputy Director General(Access Service), Department of Telecommunications,Government of India.

Mr. Arun Gandhi

Mr. Arunkumar Ramanlal Gandhi born in 1943 is a directoron the Board of Directors of Tata Sons Limited and is amember of the Group Corporate Centre of Tata Companies.He is 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 companies inacquiring diverse assets and companies across the globe.This has enabled the Tata companies to acquire criticalassets, resources and 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.

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.

Mr. H.P. MISHRA

Mr. H.P. Mishra, born in 1950, currently senior deputydirector general in the department of telecommunications,Government of India, is an alumnus of the Indian Instituteof Technology, Delhi with a degree in MechanicalEngineering. He also holds degrees of Master of BusinessAdministration specializing in finance (1983) and Bachelorof Law (2008) from the University of Delhi.

He began his career as an engineer with a machine toolsmanufacturer on the outskirts of Delhi before moving tothe Rourkela Steel Plant of Hindustan Steel Limited (nowSAIL). In 1975 he changed path and joined the State Bankof India, before settling for the Indian P&T Accounts and

Finance Service of the Government of India in July 1976.He has since held several positions, including as financedirector in Delhi Telephones and financial advisor intelecom circles of the department of telecommunications.He has managed the department’s accounts, introducedcomputerized accounting in over 670 units all over Indiain less than 2 years, been instrumental in finalizing thereporting structure for telecom service providers, andformulated the Government’s defense in several high-valuecourt cases involving telecom licensees.

He has been on deputation to the Ministry of Environment& Forests as finance director, where he established a

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comprehensive system to formulate and evaluate feasibilityreports etc., and effected huge savings of time and cost invarious schemes under the prestigious Ganga Action Plan.As a professor at the National Institute of FinancialManagement (NIFM), Faridabad, Haryana, he designed andtaught general and financial management courses tosenior government officers and organized the Institute’sFirst International Course on Financial Management. Hehas also contributed to the course material of IGNOU onProject Management.

As deputy director general, revenues, in Bharat SancharNigam Ltd. (BSNL), he oversaw its nation-wide billing andcollections, helped develop the operating billing manualfor cellular services and was involved in finalizing thespecifications for its CDR-based billing system.

Mr. Mishra has been responsible for bringing out the firstpost-BSNL Telecom Accounts Manual (electronic format)for the department of telecommunications in October2007. He has participated in or headed several committees

including those on reorganization of finance functions,spectrum valuation & pricing, introduction of calling cards(for long distance services), internet telephony, MVNO, etc.He has also served as a Government nominee director onthe board of HTL Ltd.

Mr. Mishra has been the recipient of fellowships awardedby the BADC and the USAID for internationaltelecommunication programs in Belgium and USA, and hasparticipated in workshops of the InternationalTelecommunications Union (ITU) at Geneva and Australia,and in study groups of the Asia Pacific Telecommunity(APT). He is a member of All India Management Association,Indian Institute of Public Administration and Indian Councilof Arbitration and is particularly interested in managementcontrol systems and ethics in management. He is stronglymotivated by a desire to improve existing systems andprocedures with a view to prevent problems and thus helpall stakeholders achieve their goals more easily andefficiently.

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 Research

Award 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, recently warded Honorary Doctorate by theinstitute of Blekinge Institute of Technology Sweden andExcellence in Science and Technology Award. He is a Fellowof World Wireless Research Forum, IEEE and Indianacademies including INAE, IAS, INSA and NAS.

Dr. Jhunjhunwala is a Director in the Board of State Bankof India, TTML, BEL, Polaris, 3i Infotech, Sasken, Tejas, IDRBTand Exicom. He is a member of Prime Minister’s ScientificAdvisory Committee.

C M Y K

Registered office : VSB, M.G. Road, Fort, Mumbai - 400 001.

TWENTY THIRD ANNUAL GENERAL MEETING - 7 AUGUST, 2009 AT 1100 HRS.

ATTENDANCE SLIP

I, Mr/Mrs./Miss................................................................................................. LF/Client ID. No ........................................................... hereby

record my presence at the 23rd 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 23rd Annual General Meeting of the Company to

be held at 1100 Hrs on Friday, the 7 August, 2009, and at any adjournment thereof.

IN WITNESS whereof I/We have set my/our hand/hands this...................day of..........................2009.

(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

�



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TATA Communications subsidiaries

OFFICE LOCATIONS

Corporate Office

Registered Office

Regional Office

Corporate Offi ce


C-21 and C-36, Bandra Kurla Complex,

Mumbai 400 098, Tel +91 22 66578765

Registered Offi ce

Tata Communications Limited, VSB, Mahatma Gandhi Road,

Fort Mumbai 400 001, Tel +91 22 66578765

Regional Offi ce Locations

IndiaTata Communications, LVSB, Kashinath Dhuru Marg

Prabhadevi, Mumbai 400 028, Tel +91 22 6657 8765

Tata Communications, Global Customer Service Centre,

Alandi Road, Dighi, Pune 411 015, Tel +91 20 66357001

Tata Communications, VSB, Bangla Sahib Road,

New Delhi 110001, Tel +91 11 66501111 / 66501234

Tata Communications, VSB 1/18, C.I.T. Scheme VII-M,

Ultadanga, Kolkata 700054, Tel +91 33 66116660

Tata Communications, VSB, No 4, Swami Sivananda Salai,

Chennai 600 002, Tel +91 44 66774103

Asia

Tata Communications, 5 Shenton Way #34-10 UIC Building

Singapore 068808, Tel +65 6551 3600

Tata Communications, 2402 Bank of America Tower,

12 Harcourt Road, Central, Hong Kong, Tel +852 3693 8888

Middle East & North Africa

Tata Communications, Hamdan Street, City Center Building

Block – A, 2nd Floor, Offi ce #204, P.O. Box 41660,

Abu Dhabi, United Arab Emirates, Tel +971 2 626 6223

Australia

Tata Communications, King Street Wharf, Suite 503,

35 Lime Street, Sydney NSW 2000 Australia, Tel +61 2 9299 2014

North America

Tata Communications, 2355 Dulles Corner Blvd, 7th Floor,

Herndon, VA 20171, USA, Tel +1 703 547 5900

Tata Communications, 90 Matawan Rd – 3rd Floor,

Matawan, NJ 07747, USA, Tel +1 732 888 6700

Tata Communications, 1555 Rue Carrie-Derick, Montreal,

Québec H3C 6W2, Canada, Tel +1 514 868 7272

EuropeTata Communications, Exchange Tower, Suite 7.03,

2 Harbour Exchange Square, London E14 9GE,

England, Tel +44 20 7519 4610

Tata Communications, 131 Avenue Charles de Gaulle,

92200 Neuilly-sur-Seine, France, Tel +33 1 41 43 4200

Tata Communications, Avenida de Europa 4, Bajo A,

Parque Empresarial “La Moraleja” 28108 Alcobendas, Madrid,

Spain, Tel +34 916 57 48 90

Tata Communications, Bettinastrasse 30,

D-60325 Frankfurt am Main, Germany, Tel +49 69 97461 123

OFFICE LOCATIONS

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Tata Communications Limited VSB, Mahatma Gandhi Road, Fort Mumbai, 400 001 India

23rd

Documents

Tata Anual Report