By Himanshu V. Kishnadwala
Chartered Accountant
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Tata Communications Ltd. (31-3-2011)
From Notes to Accounts
The Board of Directors of the Company at its meeting held on 31st January 2011 had approved the merger of the Company’s wholly owned subsidiary, Tata Communications Internet Services Limited (TCISL) with the Company with effect from 1st April 2010. The Company had obtained the consent of the shareholders for the merger at Extra Ordinary General Meeting held on 27th April 2011.
In accordance to the final order dated 20th August 2011 as pronounced by the Bombay High Court the financials have been revised to reflect the merger of TCISL with the Company effective 1st April 2010.
In accordance to the said Scheme, the Company has accounted for this amalgamation in the nature of merger under the pooling-of-interest method. Consequently:
(i) All the assets, debts, liabilities and obligations of TCISL have been vested in the Company with effect from 1st April 2010 and have been recorded at their respective book values.
(ii) The net asset value of TCISL as on the date of amalgamation was Rs.15.28crore as against the investment of the Company of Rs.384.47 crore. The excess of the cost of investment of Rs.369.19 crore is adjusted against the general reserve to the extent of Rs.78.24 crore, Rs.0.56 crore against capital reserve and Rs.291.51 crore against the opening profit and loss account.
(iii) Consequent to the merger there has been a reduction in the current tax expense of Rs.37.97 crore and increase in deferred tax benefit of Rs.39.65 crore.
From Auditors’ Report
(3) The financial statements for the year ended 31st March, 2011 were audited by us and our report dated 29th May, 2011 expressed an unqualified opinion on those financial statements. Consequent to order dated 20th August, 2011 of the High Court of Bombay sanctioning the merger of Tata Communications Internet Services Limited with the Company, the audited financial statements for year ended 31st March, 2011 were revised by the Company to give effect to the said merger, effective from 1st April, 2010. We have accordingly carried out audit procedures and amended the date of our audit report in respect of this subsequent event. (Refer Note B9 of Schedule 19 to the financial statements.)
(1) As required by the Companies (Auditor’s Report) Order, 2003 (CARO) issued by the Central Government in terms of section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.
(2) Further to our comments in paragraph 3 . . .
For ………………… & Co. Partner (M. No. . . . . . . .)
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Chartered Accountants
Mumbai 29th May 2011 (30th August 2011 as to give effect the amendment discussed in paragraph 3 above).
