1.  We have audited the attached Balance Sheet of TATA TELESERVICES
 (MAHARASHTRA) LIMITED (the Company) as at March 31, 2012, the
 Statement of Profit and Loss and the Cash Flow Statement of the Company
 for the year ended on that date, both 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 the 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 misstatements. An audit
 includes examining, on a test basis, evidence supporting the amounts and
 the disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and the significant estimates
 made by the Management, as well as evaluating the overall financial
 statement presentation. We believe that our audit provides a reasonable
 basis for our opinion.
 
 3.  Attention is invited to note no. 24.3 (i)(c), regarding setting
 aside of the Order of the Telecom Disputes Settlement & Appellant
 Tribunal (TDSAT) regarding computation of License fees (LF) by the
 Hon''ble Supreme Court of India (SC). The TDSAT Order stated that income
 from sale of securities is not related to the licensed activity and
 that bad debts written off, waivers and discounts are actual monies
 lost by service providers and hence should be deducted from Adjusted
 Gross Revenue (AGR) while computing the LF. The Company, has considered
 Rs.154.36 crores, being the LF on profit on sale of investment and bad
 debts written off during the previous year, as contingent liability and
 has also made payment of the same to Department of Telecommunications
 (DOT) under protest.  Prior to the aforesaid judgment, the Company had
 received provisional assessment orders from DOT, against which
 applications have now been filed with the TDSAT in line with the
 aforesaid judgment. Our opinion is not qualified in respect of this
 matter.
 
 4.  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 5 and 6 of the said Order.
 
 5.  Further to our comments in paragraph 3 above and Annexure referred
 to in paragraph 4 above, we report as follows:
 
 (a) 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;
 
 (b) 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;
 
 (c) the Balance Sheet, the Statement of Profit and Loss and the Cash
 Flow Statement dealt with by this report are in agreement with the
 books of account;
 
 (d) in our opinion, the Balance Sheet, the Statement of Profit and Loss
 and the Cash Flow Statement dealt with by this report are in compliance
 with the Accounting Standards referred to in Section 211(3C) of the
 Companies Act, 1956;
 
 (e) 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:
 
 (i) in the case of the Balance Sheet, of the state of affairs of the
 Company as at March 31, 2012;
 
 (ii) in the case of the Statement of Profit and Loss, of the loss of
 the Company for the year ended on that date and
 
 (iii) in the case of the Cash Flow Statement, of the cash flows of the
 Company for the year ended on that date.
 
 6.  On the basis of the written representations received from the
 Directors as on March 31,2012 taken on record by the Board of
 Directors, none of the Directors is disqualified as on March 31, 2012
 from being appointed as a director in terms of Section 274(1)(g) of the
 Companies Act, 1956.
 
 Re: Tata Tele services (Maharashtra) Limited
 
 (Referred to in Paragraph 4 of our report of even date)
 
 (i) Having regard to the nature of the Company''s activities, clauses
 (xiii) and (xiv) of CARO are not applicable.
 
 (ii) In respect of its fixed assets:
 
 (a) The Company has maintained proper records showing full particulars,
 including quantitative details and situation of the fixed assets.
 
 (b) All fixed assets have not been physically verified by the
 management during the year but there is a regular program 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) The fixed assets disposed off during the year, in our opinion, do
 not constitute a substantial part of the fixed assets of the Company
 and such disposal has, in our opinion, not affected the going concern
 status of the Company.
 
 (iii) In respect of its inventory:
 
 (a) As explained to us, the stocks of trading goods were physically
 verified during the year by the Management at reasonable intervals.
 
 (b) In our opinion and according to the information and explanation
 given to us, the procedures of physical verification of stocks followed
 by the Management were reasonable and adequate in relation to the size
 of the Company and the nature of its business.
 
 (c) In our opinion and according to the information and explanations
 given to us, the Company has maintained proper records of its
 inventories and no material discrepancies were noticed on physical
 verification.
 
 (iv) The Company has neither granted nor taken any loans, secured or
 unsecured, from companies, firms or other parties listed in the
 Register maintained under Section 301 of the Companies Act, 1956.
 
 (v) 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 with regard
 to purchases of inventory and fixed assets and the sale of goods and
 services. During the course of our audit, we have not observed any
 major weakness in such internal control system.
 
 (vi) In respect of contracts or arrangements entered in the Register
 maintained in pursuance of Section 301 of the Companies Act, 1956, to
 the best of our knowledge and belief and according to the information
 and explanations given to us:
 
 (a) The particulars of contracts or arrangements referred to Section
 301 that needed to be entered in the Register maintained under the said
 Section have been so entered.
 
 (b) Where each of such transaction is in excess of Rs.5 lakhs in
 respect of any party, the transactions have been made at prices which
 are prima facie reasonable having regard to the prevailing market
 prices at the relevant time except in respect of certain purchases for
 which comparable quotations are not available and in respect of which
 we are unable to comment.
 
 (vii) According to the information and explanations given to us, the
 Company has not accepted any deposit from the public during the year.
 
 (viii) In our opinion, the internal audit functions carried out during
 the year by firm of Chartered Accountants appointed by the Management
 have been commensurate with the size of the Company and the nature of
 its business.
 
 (ix) We have broadly reviewed the books of account maintained by the
 Company pursuant to the rules made by the Central Government for the
 maintenance of cost records under Section 209(1) (d) of the Companies
 Act, 1956 in respect of telecommunication activities and are of the
 opinion that prima facie the prescribed accounts and records have been
 made and maintained. We have, however, not made a detailed examination
 of the records with a view to determining whether they are accurate or
 complete. To the best of our knowledge and according to the information
 and explanations given to us, the Central Government has not prescribed
 the maintenance of cost records for any other product of the Company.
 
 (x) According to the information and explanations given to us in
 respect of statutory dues:
 
 (a) The Company has generally been regular in depositing undisputed
 dues, including Provident Fund, Investor Education and Protection Fund,
 Employees'' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service
 Tax, Custom Duty, Excise Duty, Cess and other material statutory dues
 applicable to it with the appropriate authorities.
 
 (b) There were no undisputed amounts payable in respect of Income-tax,
 Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory
 dues in arrears as at March 31,2012 for a period of more than six
 months from the date they became payable.
 
 (c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax,
 Custom Duty, Excise Duty and Cess which have not been deposited as on
 March 31, 2012 on account of disputes are given below:
 
 Statute   Nature of Dues    Forum where 
                             Dispute is
                             pending       Period to 
                                           which the         Amount
                                           amount relates    involved
                                                            (Rs. In 
                                                             Crores)
 
 The 
 Income-
 tax 
 Act,1961  Income tax 
           demand            Income Tax 
                             Appellate 
                             Tribunal      A.Y.1998-99          0.08
 
 The 
 Income-
 tax 
 Act,1961  Income tax
           demand            Commissioner
                             of Income
                             Tax (Appeal)  A.Y.2006-07         15.43
 
 The 
 Income-
 tax 
 Act,1961  Income tax
           demand            Commissioner
                             of Income
                             Tax (Appeal)  A.Y.2008-09          3.12
 
 The 
 Income-
 tax 
 Act,1961  Income tax demand Commissioner
                             of Income 
                             Tax (Appeal)  A.Y.2009-10         21.94
 
 The 
 Income-
 tax 
 Act,1961  Income tax demand Commissioner
                             of Income
                             Tax (Appeal)  A.Y.2010-11          9.44
 
 The 
 Income-
 tax 
 Act,1961  Income tax demand Commissioner
                             of Income
                             Tax (Appeal)  A.Y.2011-12         17.82
 
 The
 Income-
 tax 
 Act,1961  Income tax demand Commissioner 
                             of Income
                             Tax (Appeal)  A.Y.2012-13          2.83
 
 Service
 Tax Act   Service tax 
           demand            Commissioner
                             of Service 
                             Tax           Nov 2004 to
                                           April 2008          60.40
 
 Service 
 Tax Act   Service tax
           demand            Additional 
                             Commissioner  April 2005
                                           to March 2010        0.20
 
 Service 
 Tax Act   Service tax 
           demand            CESTAT        April 2004 to
                                           March 2010           6.36
 
 Sales 
 Tax Act   Sales Tax Demand  Joint 
                             Commissioner 
                            (Appeal) II    April 2001 to 
                                           March 2004           0.09
 
 (xi) The accumulated losses of the Company at the end of the financial
 year are more than fifty percent of its net worth and the Company has
 not incurred cash losses in the financial year and in the immediately
 preceding financial year.
 
 (xii) In our opinion and according to the information and explanations
 given to us, the Company has not defaulted in the repayment of dues to
 banks and financial institutions.
 
 (xiii) In our opinion and according to the information and explanations
 given to us, the Company has not granted any loans and advances on the
 basis of security by way of pledge of shares, debentures and other
 securities.
 
 (xiv) In our opinion and according to the information and explanations
 given to us, the terms and conditions of the guarantees given by the
 Company for loans taken by others from banks and financial institutions
 are not prima facie prejudicial to the interests of the Company.
 
 (xv) In our opinion and according to the information and explanations
 given to us, the term loans have been applied for the purposes for
 which they were obtained, other than temporary deployment pending
 application.
 
 (xvi) In our opinion and according to the information and explanations
 given to us and on an overall examination of the Balance Sheet, we
 report that funds raised on short-term basis have been used during the
 year for long-term investment to the extent of Rs 982.34 crores.
 
 (xvii) According to the information and explanations given to us, the
 Company has not made preferential allotment of shares to parties and
 companies covered in the Register maintained under Section 301 of the
 Companies Act, 1956 at a price which is prima fade not prejudicial to
 the interests of the Company.
 
 (xviii) The Company has not issued any debentures during the year.
 
 (xix) The Company has not raised any money by way of public issues
 during the year.
 
 (xx) To the best of our knowledge and according to the information and
 explanations given to us, no fraud by the Company and no fraud on the
 Company has been noticed or reported during the year.
 
 
 
                                           For Deloitte Haskins & Sells 
 
                                                  Chartered Accountants 
 
                                              (Registration No. 117366W)
 
                                                               A B Jani
 
                                                                Partner
 
 Mumbai, dated: May 4,2012                         Membership No. 46488