1.  We S.R. Batliboi & Co. (SRB) and G.D.Apte & Co.  (GDA)
 have jointly audited the attached Balance Sheet of Shriram Transport
 Finance Company Limited (''the Company'') as at March 31, 2012 and
 also the Statement of Profit & Loss and the Cash Flow Statement for the
 year ended on that date annexed thereto.  These financial statements
 are the responsibility of the Company''s management. Our
 responsibility is to express an opinion on these financial statements
 based on our audit.
 
 2.  We conducted our audit in accordance with auditing standards
 generally accepted in India. Those Standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatement.  An audit
 includes examining, on a test basis, evidence supporting the amounts
 and disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made
 by management, as well as evaluating the overall financial statements
 presentation. We believe that our audit provides a reasonable basis for
 our opinion.
 
 3.  As required by the Companies (Auditor''s Report) Order, 2003 (as
 amended) (''the Order'') issued by the Central Government of India in
 terms of sub-section (4A) of Section 227 of the Companies Act, 1956
 (''the Act''), we enclose in the Annexure a statement on the matters
 specified in paragraphs 4 and 5 of the said Order.
 
 4.  Further to our comments in the Annexure referred to above, we
 report that:
 
 i.  We have obtained all the information and explanations, which to the
 best of our knowledge and belief were necessary for the purposes of our
 audit;
 
 ii.  In our opinion, proper books of account as required by law have
 been kept by the Company so far as it appears from our examination of
 those books;
 
 iii. The Balance Sheet, Statement of Profit & Loss and Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account;
 
 iv.  In our opinion, the Balance Sheet, Statement of Profit & Loss and
 Cash Flow Statement dealt with by this report comply with the
 accounting standards referred to in sub-section (3C) of section 211 of
 the Act.
 
 v.  On the basis of the written representations received from the
 directors, as on March 31, 2012, and taken on record by the Board of
 Directors, we report that none of the directors is disqualified as on
 March 31, 2012 from being appointed as director in terms of clause (g)
 of sub-section (1) of section 274 of the Act.
 
 vi.  In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts give the information
 required by the Companies Act, 1956, in the manner so required and give
 a true and fair view in conformity with the accounting principles
 generally accepted in India;
 
 a) in the case of the Balance Sheet, of the state of affairs of the
 Company as at March 31, 2012;
 
 b) in the case of the Statement of Profit & Loss, of the profit for the
 year ended on that date; and
 
 c) in the case of the Cash Flow Statement, of the cash flows for the
 year ended on that date.
 
 ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE
 
 RE: SHRIRAM TRANSPORT FINANCE COMPANY LIMITED (''THE COMPANY'')
 
 (i) (a) The Company has maintained proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 (b) All fixed assets have not been physically verified by the
 management during the year but there is a regular programme of
 verification which, in our opinion, is reasonable having regard to the
 size of the Company and the nature of its assets. No material
 discrepancies were noticed on such verification.
 
 (c) There was no substantial disposal of fixed assets during the year.
 
 (ii) The Company is a Non-Banking Financial Company (''NBFC'')
 engaged in the business of giving loans and does not maintain any
 inventory. Therefore the provisions of clause 4(ii) of the Order are
 not applicable to the Company.
 
 (iii) (a) The Company has granted unsecured loan to one party covered
 in the register maintained under section 301 of the Companies Act,
 1956. The maximum amount involved during the year was Rs. 299.99 lacs
 and the year- end balance of loans granted to such parties was Rs.
 186.76 lacs.
 
 (b) In our opinion and according to the information and explanations
 given to us, the rate of interest and other terms and conditions for
 such loans are not prima facie prejudicial to the interest of the
 Company.
 
 (c) In respect of loans granted, repayment of the principal amount is
 as stipulated and payment of interest have been regular.
 
 (d) There is no overdue amount of loans granted to companies, firms or
 other parties listed in the register maintained under section 301 of
 the Companies Act, 1956.
 
 (e) As informed, the Company has not taken any loans, secured or
 unsecured from companies, firms or other parties covered in the
 register maintained under section 301 of the Companies Act, 1956 and
 therefore provision of clause iii(f) and iii(g) are not applicable to
 the Company.
 
 (iv) In our opinion and according to the information and explanations
 given to us, there is an adequate internal control system commensurate
 with the size of the Company and the nature of its business, for the
 purchase of fixed assets and for rendering of services.  The activities
 of the Company do not involve purchase of inventory and the sale of
 goods. During the course of our audit, no major weakness has been
 noticed in the internal control system in respect of these areas and
 accordingly the question on commenting on whether there is a continuing
 failure to correct major weakness in the internal control system of the
 company does not arise.
 
 (v) (a) According to the information and explanations provided by the
 management, we are of the opinion that the particulars of contracts or
 arrangements referred to in section 301 of the Act that need to be
 entered into the register maintained under section 301 have been so
 entered.
 
 (b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of such contracts or
 arrangements exceeding value of Rupees five lakhs have been entered
 into during the financial year at prices which are reasonable having
 regard to the prevailing market prices at the relevant time.
 
 (vi) In respect of deposits accepted, in our opinion and according to
 the information and explanations given to us, directives issued by the
 Reserve Bank of India and the provisions of sections 58A, 58AA or any
 other relevant provisions of the Act and the rules framed there under,
 to the extent applicable, have been complied with. We are informed by
 the management that no order has been passed by the Company Law Board,
 National Company Law Tribunal or Reserve Bank of India or any Court or
 any other Tribunal.
 
 (vii) In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 (viii) To the best of our knowledge and as explained, the Central
 Government has not prescribed maintenance of cost records under clause
 (d) of sub-section (1) of section 209 of the Companies Act, 1956 for
 the products of the Company.
 
 (ix) (a) The Company is regular in depositing with appropriate
 authorities undisputed statutory dues including provident fund,
 investor education and protection fund, employees'' state insurance,
 income-tax, sales-tax, wealth-tax, service tax, cess and other material
 statutory dues applicable to it. The provisions relating to customs
 duty and excise duty are not applicable to the Company
 
 (b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of provident fund, investor
 education and protection fund, employees'' state insurance,
 income-tax, wealth-tax, service tax, sales-tax, cess and other material
 undisputed statutory dues were outstanding, at the year end, for a
 period of more than six months from the date they became payable. The
 provisions relating to customs duty and excise duty are not applicable
 to the Company.
 
 (c) According to the records of the Company, the dues outstanding of
 income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
 duty and cess on account of any dispute, are as follows:
 
                            Amount    Years to 
                                      which the   Forum where dispute is
 Name of the 
 statute      Nature of 
              dues         (Rs in 
                            lacs)     amount
                                      relates     pending
 
 Income 
 Tax Act,     Income Tax   4,126.01   A.Y 2009-10 CIT (Appeals)
 1961         demands
 
 Income 
 Tax Act,     Income Tax     500.25   A.Y 2004-05 CIT (Appeals)
 1961         demands
 
 Finance 
 Act, 1994    Service 
              tax on hire  8,406.10   2003-04 to
                                      2009-10     Commissioner of 
                                                  Service Tax.
 (Service 
 Tax)         purchase
              and lease                          (Refer Note 7 to the
                                                  financial
              transactions                        statements)
 
 Finance 
 Act, 1994    Service Tax    315.00   2003-04 & 
                                      2004-05     Commissioner of Central
 (Service 
 Tax)         demands                             Excise and Customs
 
 Andhra 
 Pradesh      Value Added 
              Tax            348.41   2004-05 to
                                      2008-09     Andhra Pradesh
                                                  High Court.
 Value 
 Added Tax
 
 (x) The Company has no accumulated losses at the end of the financial
 year and it has not incurred cash losses in the current and immediately
 preceding financial year.
 
 (xi) Based on our audit procedures and as per the information and
 explanations given by the management, we are of the opinion that the
 Company has not defaulted in repayment of dues to a financial
 institution, bank or debenture holders.
 
 (xii) Based on our examination of documents and records, we are of the
 opinion that the Company has maintained adequate records where the
 Company has granted loans and advances on the basis of security by way
 of pledge of shares, debentures and other securities.
 
 (xiii) In our opinion, the Company is not a chit fund or a nidhi /
 mutual benefit fund / society. Therefore, the provisions of clause
 4(xiii) of the Order, are not applicable to the Company.
 
 (xiv) In respect of dealing/trading in shares, securities, debentures
 and other investments, in our opinion and according to the information
 and explanations given to us, proper records have been maintained of
 the transactions and contracts and timely entries have been made
 therein. The shares, securities, debentures and other investments have
 been held by the Company, in its own name.
 
 (xv) According to the information and explanations given to us, the
 Company has given guarantee for loans taken by others from bank or
 financial institutions, the terms and conditions whereof in our opinion
 are not prima- facie prejudicial to the interest of the Company.
 
 (xvi) To the best of our knowledge and belief and according to the
 information and explanations given to us, in our opinion, term loans
 availed by the Company were applied by the Company during the year for
 the purposes for which the loans were obtained other than funds
 temporarily invested pending utilization of the funds for the intended
 use.
 
 (xvii) According to the information and explanations given to us and on
 an overall examination of the balance sheet of the Company, we report
 that no funds raised on short- term basis have been used for long-term
 investment.
 
 (xviii) The Company has not made any preferential allotment of shares
 to parties or companies covered in the register maintained under
 section 301 of the Act.
 
 (xix) According to the information and explanations given to us, during
 the period covered by our audit report, the Company had issued 32,066
 and 99,999.93 secured non convertible debentures of Rs 1,000,000 and
 Rs.1,000 each respectively. The Company has created security or charge
 in respect of debentures issued, expect for 5,000 secured non
 convertible debentures of Rs.  1,000,000 each which have been issued
 recently in the month of March.  We are informed by the management that
 the company is taking steps to create security for the debentures
 issued.
 
 (xx) We have verified that the end use of money raised by public issues
 is as disclosed in the notes to the financial statements.
 
 (xxi) Based upon the audit procedures performed for the purpose of
 reporting the true and fair view of the financial statements and as per
 the information and explanations given by the management, we report
 that no fraud on or by the Company has been noticed or reported during
 the course of our audit.
 
 
 For S.R. BATLIBOI & Co.             For G. D. Apte & Co.
 
 Firm registration number: 301003E   Firm registration number: 100515W
 
 Chartered Accountants               Chartered Accountants
 
 per Viren H. Mehta                  C.M. Dixit
 
 Partner                             Partner
 
 Membership No.: 048749              Membership No: 17532
 
 Mumbai                              Mumbai
 
 May 08, 2012                        May 08, 2012