We have audited the attached Balance Sheet of Transport Corporation of
 India Ltd. as at 31st March 2011, the annexed Profit and Loss Account
 and the Cash Flow Statement of the Company for the year ended on that
 date in which are incorporated the audited accounts of the TCI Seaways
 division and the branches in Nepal as audited by other auditors.
 
 1.  These financial statements are the responsibility of the Companys
 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 misstatements. 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 statement
 presentation.  We believe that our audit provides a reasonable basis
 for our opinion.
 
 3.  As required by the Companies (Auditors Report) Order, 2003 (as
 amended) issued by the Central Government of India in terms of
 sub-section (4A) of section 227 of the Companies Act, 1956 and on the
 basis of such checks as we considered appropriate and according to the
 information and explanations given to us during the course of audit, we
 enclose in the Annexure hereto a statement on the matters specified in
 paragraph 4 & 5 of the said Order.
 
 4.  Attention is invited to note 4 on Schedule 23 regarding income- tax
 demands and note 6 on Schedule 23 regarding investments in overseas
 subsidiary and joint venture companies.
 
 5.  Further to our comments in the Annexure, referred to in paragraph 3
 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 purpose of our
 audit.
 
 ii. In our opinion, proper books of account as required by law have
 been kept by the Company so far as appears from our examination of the
 books and proper returns adequate for the purpose of our audit have
 been received from the branches not visited by us. The Branch Auditors
 Report has been forwarded to us and appropriately dealt with.
 
 iii. The Balance Sheet, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account
 and returns from the branches.
 
 iv. In our opinion, the Profit and Loss Account, the Balance Sheet and
 the Cash Flow Statement, comply with the accounting standards referred
 to in section 211 (3C) of the Companies Act, 1956.
 
 v. On the basis of written representations received from the directors
 as on 31st March 2011 and taken on record by the Board of Directors
 none of the directors is disqualified as on 31st March, 2011 from being
 appointed as a director under section 274(1) (g) of the Companies Act,
 1956.
 
 vi. In our opinion and to the best of our information and according to
 the explanations given to us, the said accounts read together with the
 notes and accounting policies thereon 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 Balance Sheet of the state of affairs of the Company
 as at 31st March 2011;
 
 b) In the case of Profit and Loss Account, of the profit of the Company
 for the year ended on that date and
 
 c) In the case of Cash Flow Statement, of the cash flows for the year
 ended on that date.
 
 ANNEXURE TO AUDITORS REPORT referred to in paragraph 3 of our report
 of even date:
 
 1.  The Company has maintained records showing full particulars
 including quantitative details and situation of fixed assets. We are
 informed that a test physical verification of these assets was carried
 out by the management during the year and no material discrepancies
 were noticed.
 
 2.  The Company has transferred a substantial part of fixed assets
 during the year under the Scheme of Arrangement for demerger of its
 real estate and warehousing division into its subsidiary company, TCI
 Developers Limited effective from 1st April 2010.  Such transfer has,
 in our opinion, not affected the going concern status of the Company.
 
 3.  Physical verification was conducted by the management in respect of
 inventories at reasonable intervals. The Company has maintained proper
 records of its inventories and no material discrepancies were noticed
 on physical verification. The procedures followed by the management for
 such physical verification are, in our opinion, reasonable and adequate
 in relation to the size of the Company and the nature of its business.
 
 4.  (a) The Company has during the year granted unsecured interest free
 loans to six wholly owned overseas subsidiaries. All the above
 companies are covered in the register maintained under Section 301 of
 the Act. The maximum amount involved during the year aggregate to Rs.
 555 lacs and the year end balances to Rs. 164 lacs. There are no
 stipulations as to the dates for repayment of the loans.
 
 (b) The Company has taken unsecured loans of Rs. 541 lacs during the
 year from one company covered in the register maintained under Section
 301 of the Act and was repaid during the year.
 
 (c) In our opinion, the rate of interest and other terms and conditions
 of the above loans are not prima facie prejudicial to the interest of
 the Company.
 
 5.  There is an adequate internal control system commensurate with the
 size and nature of the Companys business for the purchase of
 inventories, fixed assets and for the sale of goods and services.
 During the course of our audit, no major weakness has been noticed in
 the internal control system, nor we have been informed of any such
 instance.
 
 6.  (a) To the best of our knowledge and belief and according to the
 information and explanations given to us, the particulars of contracts
 or arrangements that need to be entered into the register in pursuance
 of Section 301 of the Act, have been so entered.
 
 (b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of contracts or
 arrangements entered into the register in pursuance of Section 301 of
 the Act, have been made at prices which are reasonable having regard to
 the prevailing market prices at the relevant time.
 
 7.  The Company has complied with the provisions of Sections 58A, 58AA
 and other relevant provisions of the Companies Act, 1956 and the rules
 framed thereunder with regard to deposits accepted from the public.
 
 8.  The Company has appointed a firm of Chartered Accountants at the
 TCI Shipping Division to do the internal audit regularly. At other
 places the in-house internal audit department of the company conducted
 internal audit. The internal audit system is being reviewed and
 strengthened to commensurate with the size and nature of Companys
 business.
 
 9.  We have broadly reviewed the accounts and records 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 Act in
 respect of Electricity generation. We are of the opinion that prima
 facie the prescribed accounts and records have been made and
 maintained. However we have not made a detailed examination of such
 records.
 
 10. (a) According to the information and explanation given to us and
 the records of the Company examined by us, in our opinion, the Company
 is generally regular in depositing the undisputed statutory dues
 including provident fund, investor education and protection fund,
 employees state insurance, income-tax, sales-tax, wealth tax, service
 tax, custom duty and other material statutory dues as applicable with
 the appropriate authorities.
 
 (b) According to the information and explanations given to us and the
 records of the Company examined by us, the particulars of dues of
 income- tax, trade tax and employees state insurance as at March 31,
 2011 which have not been deposited on account of a dispute and adjusted
 with the refunds due to the extent of Rs. 1503.77 lacs, are as under:
 
 Nature of Dues       Amount (Rsinlacs)         Forum where pending
 
 Income Tax            2263.41               Commissioner (Appeals)
 
 Income Tax            1506.25       Income-tax Appellate Tribunal
 
 Trade Tax              257.39                  Trade Tax Officer
 
 Trade Tax               10.11       Joint/ Assistant Commissioner, 
                                                       Sales Tax
 
 Trade Tax                5.03                     High Court
 
 Stamp Duty              39.69   Chief Controlling Revenue Authority
 
 Employees State 
 Insurance               29.00                     Supreme Court
 
 11.  The Company has no accumulated losses as at March 31, 2011 and has
 not incurred any cash losses in the financial year ended on that date
 or in the immediately preceding financial year.
 
 12.  According to the records of the Company examined by us and the
 information and explanations given to us, the Company has not defaulted
 in repayment of dues to any financial institution or bank or debenture
 holders as at the balance sheet date.
 
 13.  The Company has not granted any loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 14.  The provisions of any special statute applicable to chit fund /
 nidhi / mutual benefit fund / societies are not applicable to the
 Company.
 
 15.  In our opinion, the Company is not a dealer or trader in shares,
 securities, debentures and other investments. The investments in
 shares, securities, debentures etc. are held by the Company in its own
 name.
 
 16.  In our opinion, and according to the information and explanations
 given to us, the terms and conditions on which the Company has given
 guarantee for loans taken by others from banks or financial
 institutions, are not prima facie prejudicial to the interest of the
 Company.
 
 17.  In our opinion, and according to the information and explanations
 given to us, on an overall basis, the term loans have been applied for
 the purposes for which they were obtained.
 
 18.  On the basis of an overall examination of the balance sheet of the
 Company, in our opinion and according to the information and
 explanations given to us, funds raised on short-term basis have not
 been used for long-term investment.
 
 19.  The Company has not made any preferential allotment of shares
 during the year to parties and companies covered in the register
 maintained under section 301 of the Act.
 
 20.  There are no debentures outstanding at the year end.
 
 21.  The Company has not raised any money by public issues during the
 year.
 
 22.  During the course of our examination of the books and records of
 the Company carried out in accordance with the generally accepted
 auditing practices in India, and according to the information given to
 us, a case of misappropriation by an employee of funds of Rs. 45 lacs
 approximately has occurred.  A part of the amount has since been
 recovered. We have not come across any other instance of material fraud
 on or by the Company, noticed or reported during the year.
 
                                          For R S Agarwala & Co.
 
                                           Chartered Accountants
 
                                          Firm Regn. No.-304045E
 
                                                    R S Agarwala
 
 Camp: Gurgaon                                           Partner
 
 1st June 2011                              Membership No.F-5534