1.  We have audited the attached Balance Sheet of TUBE INVESTMENTS OF
 INDIA LIMITED (the Company) as at 31st March, 2011, the Profit and
 Loss Account 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 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 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.  As required by the Companies (Auditors 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.
 
 4.  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 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, the Profit and Loss Account and the Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account;
 
 (iv) in our opinion, the Balance Sheet, the Profit and Loss Account 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;
 
 (v) 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 31st March, 2011;
 
 (b) in the case of the Profit and Loss Account, of the profit of the
 Company for the year ended on that date and
 
 (c) in the case of the Cash Flow Statement, of the cash flows of the
 Company for the year ended on that date.
 
 5. On the basis of the written representations received from the
 Directors as on 31st March, 2011 taken on record by the Board of
 Directors, we report that none of the Directors is disqualified as on
 31st March, 2011 from being appointed as a director in terms of Section
 274 (1) (g) of the Companies Act, 1956.
 
 Annexure to the Auditors Report (Referred to in paragraph 3 of our
 report of even date) (i) Having regard to the nature of the Companys
 business/ activities/result, clauses vi, x, xii, xiii, xiv, xv, xviii
 and xx of CARO are not applicable for the current year.
 
 (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) The fixed assets were physically verified during the year by the
 Management in accordance with a regular programme of verification
 which, in our opinion, provides for physical verification of all the
 fixed assets at reasonable intervals. According to the information and
 explanation given to us, the discrepancies noticed on such
 verification, which were not material, were appropriately dealt with in
 the books of account.
 
 (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 inventories 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 inventories
 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 the discrepancies noticed on verification between the
 physical stocks and the book records, which were not material having
 regard to the size of the operations of the Company, have been
 appropriately dealt with in the books of account.
 
 (iv)The Company has neither granted nor taken any loans, secured or
 unsecured, to/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, having regard to the explanations that some of the items
 purchased are of special nature and suitable alternative sources are
 not readily available for obtaining comparable quotations, 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 in 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.
 
 (vii) In our opinion, the internal audit functions carried out during
 the year by the Internal Audit Department of the Company as well as
 some external agencies appointed by the Management have been
 commensurate with the size of the Company and the nature of its
 business.
 
 (viii) 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 manufacture of bicycles and tubes 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.
 
 (ix) 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 31st March, 2011 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
 31st March, 2011 on account of disputes are given below:
 
                                       Amount       Period to which the
 Name of 
                Nature of the Dues    involved           Amount Relates
 Statute                              (Rs. in Crores)
 
                Sales Tax #             0.00              2000-01
 
                Sales Tax               0.11              2003-04
 
                Sales Tax               0.09          2002-03, 2003-04,
 
 Local Sales Tax                                      2004-05 & 2010-11
 Laws - Various
                Sales Tax               0.01          2005-06 & 2006-07
 States
 
                Sales Tax               0.03          2009-10 & 2010-11
 
                Sales Tax               0.05              2005-06
 
 Central Sales  Sales Tax               0.37          1990-91, 1991-92,
 Tax Act, 1956                                        1999-00 & 2001-02
 
                Sales Tax               1.15              2002-03
 
                Sales Tax               0.38          1999-00, 2003-04,
                                                      2004-05 & 2005-06
  
                Sales Tax               0.11          2005-06 & 2006-07
 
 Central Excise Excise Duty             1.22          2000-01 to 2005-06
 Act, 1944
 
                Penalty                 1.22          2000-01 to 2005-06
 
                Excise Duty             0.11          2001-02 to 2002-03
 
 Service Tax    Service Tax             0.13          2000-01 to 2004-05
 (Chapter V of
 the Finance
                Service Tax             0.16          1999-00 to 2004-05
 Act,1994)
 
 Income Tax     Income Tax              6.05          2007-08 to 2010-11
 Act, 1961
 
 
 
 
 Name of Statue             Forum where Dispute is Pending
 
                            Sales Tax Appellate Tribunal
                            Sales Tax Appellate Tribunal
 Local Sales Tax
 Laws - Various
 States                     Deputy Commissioner (Appeals)
 
                            Deputy Commissioner (Appeals)
                            Deputy Commissioner (Appeals)
                            Joint Commissioner
 
 Central Sales
 Tax Act, 1956              Sales Tax Appellate Tribunal
 
                            Joint Commissioner (Appeals)
                            Joint Commissioner (Appeals)
 
                            Deputy Commissioner (Appeals)
 
 Central Excise
 Act, 1944                  Customs, Excise & Service Tax
                            Appellate Tribunal
 
                            Customs, Excise & Service Tax
                            Appellate Tribunal
 
                            Joint Secretary,
                            Government of India
 
 Service Tax
 (Chapter V of
 the Finance
 Act,1994)                  Customs, Excise & Service Tax
                            Tribunal
 
                            Customs, Excise & Service Tax
                            Tribunal
 
 Income Tax
 Act, 1961                  Commissioner (Appeals)
 
 # Amount involved is Rs.8,562/.
 
 (x) 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, financial institutions and debenture holders.
 
 (xi) 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.
 
 (xii) 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 not been used during
 the year for long- term investment.
 
 (xiii) According to the information and explanations given to us,
 during the period covered by our audit report, the Company has issued
 8.75% debentures of Rs.150 Crores each having a face value of Rs.1 Crore.
 The Company has created security in respect of the debentures issued.
 
 (xiv) To the best of our knowledge and according to the information and
 explanations given to us, no fraud by the Company and no material fraud
 on the Company has been noticed or reported during the year.
 
                                      For Deloitte Haskins & Sells
 
                                             Chartered Accountants
 
                                          (Registration No.008072S)
 
                                             Geetha Suryanarayanan
 Place : Chennai                                          Partner
 
 Date : 2nd May, 2011                         (Membership No.29519)