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May 2011

Tata Communications Ltd. (31-3-2010)

By Himanshu V. Kishnadwala Chartered Accountant
Reading Time 1 mins
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From Notes to Accounts:

4. In terms of the agreements entered into between Tata Teleservices Ltd. (‘TTSL’), Tata Sons Ltd. (‘TSL’) and NTT DoCoMo, Inc. of Japan (Strategic Partners-SP), TSL gave an option to the Company to sell 36,542,378 equity shares in TTSL to the SP, as part of a secondary sale of 253,163,941 equity shares effected along with a primary issue of 843,879,801 shares by TTSL to the SP. Accordingly, the Company realised Rs.424.22 crores on sale of these shares resulting in a profit of Rs.346.65 crores which has been reflected as an exceptional item in the profit and loss account for the current year.

11. On 27th August, 2008, the Arbitration Tribunal (the ‘Tribunal’) of the International Chamber of Commerce, Hague handed 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 Tribunal directed the Company to pay Rs.95.60 crores (US$ 21.45 million) (2008: Rs. NIL) as final settlement against US$ 385 million claimed by Reliance. The amount of Rs.95.60 cores has been charged to profit and loss account and has been disclosed as an exception item.

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