DIRECTORS' REPORT Dear Shareholders, The directors present the 30th Annual Report and audited financial statements of Tata Communications Limited (the Company) for the financial year ended March 31, 2016. The Company along with its subsidiaries wherever required is referred as 'we' or 'Tata Communications Group'. Dividend The directors are pleased to recommend a dividend of Rs.4.30 per share for the financial year ended 31 March 2016 (Rs.5.50 per share dividend in FY14-15), subject to the approval of the shareholders at the ensuing annual general meeting. The above rate of dividend is in accordance with what can be paid under the Companies Act, 2013 (Act) and the rules made thereunder considering the profits available for distribution and the reserves of the Company. Transfer to Reserves On a standalone basis, the Company proposes to transfer NIL amount to the general reserve out of the amount available for appropriation and the balance in the surplus in the statement of profit and loss stood at Rs.1,693.97 crores as on March 31, 2016. OPERATIONS Voice We continue to be one of the largest players worldwide in the voice business. The margins in this business continued to decline due to shift in traffic to VoIP based calling. During the year under review, total voice traffic declined by 12% over the previous year, EBITDA margins by 1.2% and EBITDA by 24%. Developing innovative commercial offerings and optimizing costs to maintain free cash flow generation remains the focus for this business. Data In the data services, we are the industry leaders in India and an emerging global challenger globally. We have made significant capital expenditure in 'Data' business to create a global infrastructure and a suite of growth products. Our ongoing focus and investment in brand, sales and marketing to scale up the global enterprise business have increased recognition for the Tata Communications Group in the market place. Over the years, the Company has moved from being a traditional connectivity services provider, largely in India, to a truly global services provider - offering a broad range of managed communication and collaboration services as well as IT infrastructure services. The data business has continued its robust momentum with revenues growing 17.9% during 2015-16. During the year, the Tata Communications Group launched the IZOTM Private Cloud service to bring to CIOs unprecedented control over their public and private clouds and entire data centre sphere. The new service, unveiled at Cloud Expo Asia, is the largest addition to our game changing IZOTM cloud enablement platform, and will empower enterprises to connect to the world's biggest cloud and to build a truly hybrid, high-performance IT infrastructure, where different cloud, co-location and managed hosting environments work together as one. The Tata Communications Group has also been strengthening its unified communications services portfolio encompassing all forms of communications, as well as its industry solutions for the media and entertainment sector and the banking & financial services sector. Our strategy of expanding into managed services continues to pay off, as these services now contribute 38% to the data services segment (36 % in FY14-15). Segment Distribution As explained above, we have been successful in our goal of diversifying revenues, to tap new opportunities and reduce any risks of an overtly concentrated portfolio. Our revenues are now broadly diversified across data and voice products. Taking advantage of the growing data market the Tata Communications Group has focused also on new segments such as media and entertainment, financial services, health care, etc. During 2015-16, consolidated revenue from operations from voice services contributed 40% (45% in FY14-15) of total revenue and data services contributed 49% (43% in FY14-15). This is discussed in detail in the Management Discussion & Analysis, which forms a part of this report. HUMAN RESOURCES Tata Communications Group has multicultural workforce, of which women constitute 18.7% employees. Tata Communications Group's compensation and employee benefit practices are designed to be competitive in the respective geographies where it operates. Employee relations continue to be harmonious at all our locations. The number of training person days provided to employees increased by 12% over the previous year. The Tata Communications Group has zero tolerance for sexual harassment and the Company has adopted a charter on prevention, prohibition and redressal of sexual harassment in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules made thereunder. During the financial year 2015-16, the Company received two complaints on sexual harassment. As on March 31, 2016, both the complaints were disposed of with appropriate action and no complaint remained pending. BUSINESS EXCELLENCE The Tata Communications Group has adopted the Tata Business Excellence Model (TBEM), which is formulated on the lines of Baldrige Excellence Framework, to enable the Tata Communications Group to improve performance and attain higher levels of efficiency in its businesses. The Company has been classified as an "Emerging Industry Leader" following a rigorous assessment conducted by Tata Business Excellence Group (a division of Tata Sons) and continues to use the framework as part of its business excellence journey. ENTERPRISE RISK MANAGEMENT The Company has established an enterprise-wide risk management (ERM) framework to optimize the identification and management of risks globally and to comply with provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. In line with the Company's commitment to delivering sustainable value, this framework aims to provide an integrated and organized approach for evaluating and managing risks. There are no elements of risk, which in the opinion of the Board may threaten the existence of the Company. RISK-BASED INTERNAL AUDIT The risk assessments performed under the ERM exercise are a key input for the annual internal audit programme, which covers various businesses and functions of the Tata Communications Group. This approach provides adequate assurance to the management that the right areas are covered under the audit plan. CORPORATE MATTERS Subsidiary Companies a) The Company had 43 subsidiaries as on March 31, 2016 and two associate companies within the meaning of Section 2(6) of the Companies Act, 2013 (Act). There has been no material change in the nature of the business of the subsidiaries and associate companies. Pursuant to the provisions of Section 129(3) of the Act, a statement containing salient features of the financial statements of the Company's subsidiaries in Form AOC-1 is attached to the financial statements. Pursuant to the provisions of section 136 of the Act and General Circular no 11/ 2015 dated July 21, 2015 issued by the Ministry of Corporate Affairs, the financial statements of the Company, consolidated financial statements along with relevant documents and separate accounts in respect of subsidiaries, are available on the website of the Company. b) During the year under review, the Company acquired 100% stake in Wirefree Internet Services Private Limited after which its name was changed to Tata Communications Collaboration Services Private Limited. This company holds Audiotex licenses in Mumbai, Delhi, Chennai and Bangalore issued by the Department of Telecommunications, Government of India. Audiotex is a location based license which allows the licensee to offer audio conferencing services. c) As was reported last year, the shareholders of Neotel and Vodacom SA had concluded an agreement to acquire 100% of the shares of Neotel which was not pursued. Subsequently, Neotel and Vodacom SA had concluded a modified restructured transaction agreement which was submitted to the Competition Tribunal (Tribunal) of South Africa. In March 2016, the parties confirmed that the restructured agreement had lapsed due to regulatory complexities and the uncertainty in concluding the transaction as well as certain conditions could not be fulfilled. Accordingly, the parties agreed that the proposed restructured transaction could no longer be progressed. The Company is exploring other alternatives in this regard. d) In May 2016, the Company and Singapore Technologies Telemedia (ST Telemedia), a strategic global investor focused on the communications, media and technology sectors, have entered into definitive agreements whereby ST Telemedia, through ST Telemedia Global Data Centres, will upon closing of the transaction acquire a 74% majority stake in company's data centre business in India and Singapore. The Company will remain a significant shareholder, holding the remaining 26% stake in the businesses. Both parties will work in partnership to ensure service continuity for customers and employee engagement. Registrar & Transfer Agent Sharepro Services India Pvt. Limited (Sharepro) has been the registrar and transfer agents of the Company for both its equity and debt securities. The Securities and Exchange Board of India (SEBI) is conducting an investigation into the activities of Sharepro. Vide an interim order dated March 22, 2016, SEBI has cited serious irregularities in the conduct and activities of Sharepro with specific reference to payment of dividend to shareholders and transfer of securities. SEBI, vide the aforementioned order, has directed all companies who are clients of Sharepro to conduct a thorough audit of their records and systems as maintained by Sharepro and to submit a report to SEBI within three months from the date of the order. SEBI has further instructed companies to switchover all registrar and share transfer related activities being performed by Sharepro to another registrar and share transfer agent. In compliance with the directions issued by SEBI, the Company has appointed an independent agency to conduct the audit and investigation of Sharepro's activities and submit a report which is underway. The Company proposes to appoint TSR Darashaw Limited as the Registrar and Share Transfer Agent of the Company for securities related activities (debt and equity) in place of Sharepro w.e.f June 1, 2016. Investment in Tata Teleservices Limited In 2008-09, NTT DoCoMo Inc (Docomo) entered into an Agreement with Tata Teleservices Ltd (TTSL) and Tata Sons Limited (Tata Sons) to acquire 20% of the equity share capital of TTSL under the primary issue and 6% under the secondary sale from Tata Sons. In terms of the agreements with Docomo, Tata Sons, inter alia, agreed to provide various indemnities and a sale option entitling Docomo to sell its entire shareholding in 2014 at a minimum pre-determined price of Rs.58.05 per share if certain performance parameters were not met by TTSL. The minimum pre-determined price represented 50% of the acquisition price of 2008-09. The agreements are governed by Indian law. An Inter se agreement dated 25 March 2009, was executed by the Company with Tata Sons and other selling shareholders, including the Company. The Company sold 36,542,378 equity shares of TTSL to Docomo at Rs.116.09 per share, resulting in a profit of Rs.346.65 crores. Tata Sons has informed the Company that: i) Docomo had exercised the sale option in July 2014 and has called upon Tata Sons to acquire its entire shareholding in TTSL at the pre-determined price of Rs.58.05 per share. ii) The Reserve Bank of India has not permitted acquisition of the shares at the pre-determined price and has advised that the acquisition can only be made at fair market value (FMV) prevailing at the time of the acquisition. Tata Sons has conveyed to Docomo its willingness to acquire the shares at the FMV, however, Docomo reiterated its position that the shares be acquired at Rs.58.05 per share. iii) Docomo has initiated arbitration in the matter before the LCIA, London. The evidentiary hearing has been completed on May 6, 2016. The arbitral award is awaited. iv) The liability, if any, to the extent of the difference between the amount sought by Docomo and the fair market value is dependent upon the outcome of the Arbitration and prevailing FEMA Regulations. The Company is required to acquire shares, in the range of 158,350,304 to 180,280,389 of Tata Teleservices Limited in accordance with the terms of the inter-se agreement." Future cash flows in respect of the above matters are determinable only on receipt of judgements/ decisions pending at various forums/ authorities. Compliance under the Companies Act, 2013 (Act) and additional SEBI stipulations As on the date of this report, the Board comprised of ten directors out of whom three were independent. As reported to stock exchanges, in February 2002, when the Government of India (GoI) transferred 25% of its stake in the Company to the strategic partner, a shareholders agreement and a share purchase agreement were signed. The said agreements, inter alia, sets forth the rights and obligations of the Strategic Partner and the GoI including appointment of directors on the Board of the Company. The relevant clauses from the agreements were incorporated in the articles of association of the Company as per which the Board is to comprise of 12 directors, four of whom must be independent. The GoI and the Strategic Partner are entitled to suggest two independent directors each. The GoI has been in the process of suggesting the name of the other independent director. The Company and the Board have been vigorously pursuing with the GoI to suggest the name for appointment as independent director so as to fill in this vacancy. Until the recommendation is received from the GoI enabling the nomination and remuneration committee and the Board to appoint one more independent director, the Company will not be able to comply with provision of Section 149 (4) of Companies Act, 2013 and Regulation 17 (1) (b) of SEBI (Listing Obligations and Disclosure Requirements Regulations), 2015. PENDING MATTERS OF SIGNIFICANCE Surplus Land Under the terms of the share purchase and shareholders' agreements (SHA) signed between the Government of India (GoI) and the strategic partner (SP) at the time of disinvestment, it was agreed that certain land parcels identified as surplus would be demerged into a separate company. It was further provided that if, for any reason, the Company cannot hive off or demerge the land into a separate entity, alternative courses that were also stipulated in the SHA would be explored. A draft scheme of demerger was presented to the Board in April 2005, which was forwarded to the GoI with the observations of the Board. The Board/ management have been exploring other alternatives also with the GoI and SP. In response to Company's request for consideration of additional equity funding , the GoI has informed the Company that it is neither willing to invest in any further equity of the Company nor will it accept dilution of its stake in the Company. This has resulted in the Company not being able to avail of any non-debt funding through issue of equity since 1997. The Company has been regularly following up the matter with the GoI at the highest levels including the Prime Minister's Office and the senior officials/ministers of the concerned ministries and has also addressed several communications and held several meetings with both GoI and SP highlighting the urgency for resolution. To accomplish demerger of surplus land in accordance with such scheme of demerger, the SP incorporated Hemisphere Properties India Limited (HPIL) sometime in 2005-06 to hold the surplus land as and when demerged. In March 2014, the GoI has acquired ~51.12% shares in HPIL making it a Government company. Out of the total land purchased by the Company (then Videsh Sanchar Nigam Limited) in 1986 from the Government of India as the successor of Overseas Communications Service, 773.13 acres of land at different locations was identified as 'surplus' for demerger as per the SHA. As reported earlier, 32.5 acres of land situated at Padianallur was transferred in July 2009 to the VSNL Employees Cooperative Housing Society, Chennai (society) as per the order of the Hon'ble Delhi High Court. As this land was part of the identified surplus land, the strategic partner has written to the GoI to exclude the 32.5 acres of land so transferred to the society, from the 773.13 acres mentioned in the SHA as the land identified to be demerged. As mentioned below in this Report, Delhi Metro Rail Corporation Limited (DMRC) has acquired ~2.6. acres of land for the Delhi Metro work , out of which ~21% (i.e. ~0.55 acres) falls within surplus land. The Company owns at Dighi, Kalas and other villages near Pune ~774 acre of land. Out of this land (Pune Land), ~524 acres were identified as surplus as per the SHA. In 1940, approx. 94 acres out of Pune land were given to the Ministry of Defence on lease for duration of the war, part of which land could fall within the land identified as surplus. As then agreed, Defence had been paying annual rent for occupying this land till 31 March 2006. The Company has been following up with the Ministry of Defence for release of rent due, since 1 April 2006. On 31 July 2010 the said Ministry informed that the land in their possession was transferred to Defence in 2007 by the Collector of Pune and therefore rent cannot be paid. Defence claims that the land was transferred under "Pune Package Deal" by the Government and no compensation is payable. The Company continues to pursue the matter with the Ministry of Defence for compensation. In view of the above, the quantum of Surplus Land available for demerger has reduced. The book value of the Surplus Land is ~Rs.0.16 crores. Delhi Metro Rail Corporation Limited (DMRC) Land Acquisition In September 2013, DMRC conveyed that as part of the Delhi Metro work, DMRC needs a piece of Company's land at Greater Kailash-I, New Delhi. This land parcel measuring ~11622 square meters (~2.6 acres) also includes ~21% (~0.55 acres) surplus land. On 2 January 2014, the Company received an acquisition notice stating award announced by Land Acquisition Collector (LAC) on 30 December 2013 without giving any details of the award. The Company received the certified copy of the award on 6 February 2014 as per which, the total compensation determined by the LAC is Rs.188,80,168/- based on indicative price fixed by Govt. of Delhi for agricultural land. Aggrieved, the Company filed reference petition for proper determination of the compensation with LAC based on commercial usage of land. Simultaneously, the Company also filed a writ petition with the Delhi High Court. On 24 April 2014, the High Court directed DMRC to deposit the sum of Rs.247 Crores with the Court Registrar which has since been deposited by DMRC. This amount is approximately 80% of the estimated compensation valuation for ~11622 square meters. In the meantime, DMRC has commenced construction for the Delhi Metro work on the land. Premature Termination of Monopoly and Compensation As reported earlier, the GoI had allowed other players into the International Long Distance (ILD) business from 1 April 2002, terminating the Company's exclusivity two years ahead of schedule. The GoI gave the Company a compensation package as per its communication dated 7 September 2000; wherein, the GoI also gave an assurance that it would consider additional compensation, if found necessary, on a detailed review when undertaken. However, vide its letter dated 18 January 2002, issued just before the disinvestment of the Company, the GoI issued a further dispensation and unilaterally declared that the conditions stated in its said letter of 18 January 2002 were to be treated as full and final settlement of every sort of claim against the premature ILD de-monopolisation. The Company filed a claim in the Bombay High Court in 2005. The Bombay High Court, on 7 July 2010, ruled that it did not have the jurisdiction to entertain this suit, in view of the provisions of the Telecom Regulatory Authority of India Act, 1997 (TRAI). Since the Company holds a different opinion, it has preferred an appeal before a division bench of the Bombay High Court on various grounds including that the compensation granted was in breach of promise from the GoI, acting as a policy maker and not as a licensor under the Indian Telegraph Act as also the dispute did not relate to the provision of telecommunication services as envisioned under the TRAI and the suit was not under, pursuant to and consequent upon the license then granted to the Company. The appeal for hearing admitted by the Bombay High Court is yet to come up. STATUTORY INFORMATION AND DISCLOSURES Material Events After Balance-Sheet Date There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year 2015-16 and the date of this report except as below: a) Definitive agreements have been entered in to inter alia by the Company and Singapore Technologies Telemedia (ST Telemedia) on May 18, 2016 vide which upon closing ST Telemedia will acquire 74% majority stake in the Tata Communications Group's data centre businesses in India and Singapore for an estimated 100% enterprise value of INR 3130 crores and SGD 23.24 crores. b) The Company has acquired 5% stake in Smart ICT Services Private Limited making it an associate of the company. Deposits from Public The Company has not accepted nor does it hold any public deposits. Non-convertible Debentures (NCDs) The Company had Rs.155 Crores of outstanding NCDs as on March 31, 2016. The trust deeds for the debentures issued by the Company will be available for inspection by the members at the Company's registered office during normal working hours, 21 days before the date of the 30th annual general meeting. The Company redeemed Rs.55 crores of long term secured debentures during the year 2015-16. All debentures issued by the Company were rated AA+ by CARE. Particulars of Employees The provisions of Section 134 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, require the Company to provide certain details about the remuneration of the employees. According to the provisions of section 136(1) of the Act, the Directors' Report being sent to the shareholders need not include this information as an annexure. The annexure regarding the particulars of employees under section 134 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, will be available for inspection by any member at the registered office of the Company during working hours, for 21 days before the date of the AGM. Conservation of Energy To achieve optimal energy efficiency, we aim to employ continuous measurement of energy consumption, identify leakages and review our operating procedures. Our facilities / sites are designed to connect utilities such as chillers, un-interrupted power supply (UPS) air handling units (AHUs) to a customer's building management system (BMS) for maximizing efficiency and sourcing Renewable Energy (RE) from third party sources. We implemented several energy efficiency projects in 2015-16 across our operations, which further reduced our global emissions by 50,223 metric tons (India: 49,705; international: 517 metric tons). Our key projects include - wind power sourcing for Chennai, Ambattur-Chennai, KIADB-Bangalore, Sanjaynagar-Bangalore facilities, solar power sourcing for Hyderabad facility, setting up on-site solar power plants at Dighi-Pune, Ambattur-Chennai, and GK-1, Delhi (total capacity of all three plants is 3.6MW). For our Bangalore operations, 70% of the total energy requirement comes from wind energy. Wind energy also supports 64% of the requirements of our Chennai operations. Technology Absorption The Company continues to use the latest technologies for improving the productivity and quality of its services and products. The Company's operations do not require significant import of technology. Foreign exchange earnings and Outgo For the purpose of Form 'C' under the said rules, foreign exchange earning was equivalent to Rs.768.66 crores and foreign exchange outgo was equivalent to Rs.511.73 crores. Statutory Auditor's Report The consolidated financial statements of the Company have been prepared in accordance with Accounting Standard 21 on Consolidated Financial Statements, Accounting Standard 23 on Accounting of Investments in Associates and Accounting Standard 27 on Financial Reporting of Interest in Joint Ventures, issued by the Council of the Institute of Chartered Accountants of India. The auditors have given a qualified opinion on the consolidated financial statements of the Company, as listed below: "We draw attention to the following matter: In the case of a subsidiary not audited by us, as referred to in Note 6 of the Statement, pending ultimate resolution of certain matters resulting from certain transactions undertaken by such subsidiary in the previous year, we are unable to determine whether any adjustment may be necessary to the consolidated financial results." Note 6: "Based on the information provided to the Company by the Neotel Board, the matter resulting from certain transactions undertaken by Neotel during the previous year has been referred to the appropriate authorities. Based on the current facts, the Company is of the view that this matter will not have a material adverse impact on its consolidated financial results. Pending ultimate resolutions of this matter, the statutory auditors report on the consolidated financial results for the year ended March 31, 2016, contains a qualification in this respect expressing their inability to determine whether any adjustment may be necessary to the consolidated financial results." Board's Comment: Based on the information provided to the Company from the Neotel Board, the Company understands that the matters identified by the statutory auditors have been referred to the appropriate authorities in South Africa and that, to the best of their knowledge, no investigation is currently ongoing with respect to this matter. As such, based on the current facts known to management, the Company believes that this matter will not have a material adverse effect on its business, financial condition, results of operations or cash flow of the Company. The statutory auditors have not reported any incident of fraud to the Audit Committee of the Company in the year under review. Secretarial Auditors' Report Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. U. C. Shukla a Practicing Company Secretary (FCS No- 2727/CP No- 1654) to undertake the Secretarial Audit of the Company. The report of the Secretarial Audit in Form MR 3 for the financial year ended March 31, 2016 is annexed to the report. There are no qualifications, reservations or adverse remarks made by secretarial auditor in his report. Particulars of loans, guarantees and investments under Section 186 The particulars of loans, guarantees and investments have been disclosed in the financial statements which also form part of this report. Significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future During the year under review, there were no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company's operations in future. Financial Controls The Company has adequate internal financial controls with reference to the preparation and presentation of financial statements which are operating effectively. Subsidiaries A statement in Form AOC-I pursuant to first proviso to Section 129 of the Act read with rule 5 of Companies (Accounts) Rules, 2014 containing salient features of the financial statement of subsidiaries/ associate companies/ joint ventures forms a part of this report. The consolidated financial statements of the Company and its subsidiaries, prepared in accordance with accounting standard 21 (AS 21) prescribed by the Institute of Chartered Accountants of India, form part of the annual report and accounts. The accounts statements of the subsidiaries will be provided on request to any shareholder wishing to have a copy, on receipt of such request addressed to the company secretary at the Company's registered office. These documents will also be available for inspection by any shareholder at the Company's registered office and will be available on the Company's website. Changes in the Board of Directors and Key Managerial Personnel Mr. Ajay Kumar Mittal stepped down from the Board with effect from November 30, 2015. The Board places on record its sincere appreciation for his contributions and guidance to the Company. The Company has received nomination from the Government of India for appointment of Mr. G. Narendra Nath, Deputy Director General (Security), Department of Telecommunications, for appointment as director on the Board of the Company in place of Mr. Mittal. As per the TV uplinking permission that the Company has from the Ministry of Information and Broadcasting, Government of India (I&B Ministry), it is obligatory on the part of the Company to take prior permission from the I&B Ministry before effecting any change in the CEO/ Board of Directors. Accordingly, the Company has applied to the I&B Ministry and is awaiting its clearance for appointment of Mr. G. Narendra Nath as director of the Company. In accordance with the provisions of Sections 197, 198 and 203 read with schedule V and other applicable provisions, if any, of the Companies Act, 2013 and subject to requisite approvals, Mr. Vinod Kumar was reappointed as Managing Director & Group CEO of the Company for the period of five years commencing from February 1, 2016 till January 31, 2021. In accordance with the provisions of the Act and the Company's articles of association, Mr. Kishor A Chaukar and Mr. Saurabh Kumar Tiwari retire by rotation at the ensuing annual general meeting and being eligible, offer themselves for reappointment. Mr. Satish Ranade stepped down from the position of Company Secretary and Compliance Officer with effect from October 1, 2015 and Mr. Manish Sansi joined as Company Secretary and Compliance Officer with effect from October 1, 2015. None of the Company's directors are disqualified from being appointed as a director as specified in Section 164 of the Act. For details about the directors, please refer to the Report on Corporate Governance. Declaration of Independent Directors The independent directors have provided necessary disclosures to the Company that they comply with all the requirements stipulated in Section 149(6) of the Act for being appointed as an independent director which forms part of the Directors' Report. Particulars of contracts or arrangements with related parties referred to in Section 188 of Act There have been no materially significant related party transactions between the Company and the directors, the management, the subsidiaries or the relatives except for those disclosed in the financial statements. Accordingly, particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Act along with the justification for entering into such contract or arrangement in Form AOC-2 do not form part of the Directors' Report. Number of Meetings of the Board Nine meetings of the Board were held during the year. For details of the meetings of the board, please refer to the report on corporate governance, which forms part of this report. Board Evaluation The Board of Directors of the Company carried out an annual evaluation of its own performance, of committees of the Board and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Inputs were sought from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of and contribution to Board processes, adequacy, appropriateness and timeliness of information and the Board's overall functioning, etc. In a meeting of independent directors, the performance of the Board as a whole, its Committees and the Chairman was evaluated. The conclusions were discussed in a meeting of the Nomination and Remuneration Committee where the performance of the Board, its committees and individual directors were reviewed. Thereafter, the Board based on the briefing by the Chairman, NRC discussed the assessment of the Board, its Committees and the Chairman . The Chairman of the Board met each individual director to share and take the relevant feedback. Policy on Directors' Appointment and Remuneration and Other Details The Company's policy on directors' appointment and remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the Report on Corporate Governance, which forms part of this Report. Audit Committee The details pertaining to composition of the audit committee are included in the Report on Corporate Governance, which forms part of this Report. Corporate Social Responsibility The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company and the initiatives undertaken on CSR activities during the year are set out in Annexure I of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The policy is available on the website of the Company. Extract of Annual Return As provided under Section 92(3) of the Act, the extract of annual return is given in Annexure II in the prescribed Form MGT-9, which forms part of this report. Corporate Governance Pursuant to Regulation 24 and Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Management Discussion and Analysis, Business Responsibility Report, Report on Corporate Governance Certificate regarding compliance with conditions of corporate governance form part of this Report. DIRECTORS' RESPONSIBILITY STATEMENT Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors and external consultant(s), as applicable, including audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by management and the relevant Board committees, including the audit committee, the Board is of the opinion that the Company's internal financial controls were adequate and effective during the financial year 2015-16. Accordingly, pursuant to Section 134(5) of the Act, the Board of Directors, to the best of their knowledge and ability, confirm that: • In the preparation of the annual accounts, the applicable accounting standards were followed and there were no material departures; • the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period; • the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; • the directors had prepared the annual accounts on a going concern basis; • the directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; • The directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively; • Reviewed and approved the Annual Operating Plan (including the strategy and resource plan) of the Company; • Overseen maintenance of high standards of Tata values and ethical conduct of business; • Reviewed TBEM (Tata Business Excellence Model) findings and monitored the action plan; • Protected and enhanced the Company and Tata brand, where companies are using the same. Awards & Recognitions A 2016 Best Employer in India by Aon Hewitt - Aon Hewitt, the global talent, retirement and health solutions business of Aon Plc (NYSE: AON) recognized the company as a 2016's best employer in India. Gartner's Magic Quadrant for Network Services, Global - Tata Communications has been positioned in the Leaders Quadrant in the Magic Quadrant Third year in a row Frost & Sullivan 2016 Best Practices Award - India ICT Awards - Enterprise Telecom Service Provider of the Year- Large Enterprise Segment, Second year in a row - Enterprise Ethernet Provider of the Year, Third year in a row - Hosted Contact Centre Service Provider of the Year, Fifth year in a row - Enterprise Data Service Provider of the Year, Eighth year in a row - Third Party Datacentre Service Provider of the Year - Enterprise VOIP Provider of the Year ACKNOWLEDGMENTS The directors would like to thank each one of our customers, business associates and others located in different parts of the world for their valuable contribution to the Company's growth and success. The directors recognize and appreciate the passion and commitment of all the employees around the world. The directors are grateful to the Company's other stakeholders and partners including its shareholders, promoters (strategic partner and GoI), bankers and others for their continued support. On behalf of the Board of Directors Subodh Bhargava Chairman Dated: May 27 2016 Registered Office: VSB, MG Road, Fort, Mumbai - 400001. |