We have audited the attached Balance Sheet of Transport Corporation of
India Ltd. as at 31st March 2007, 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 and at Singapore as audited by other
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
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. 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
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.
ill. 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, 2007 and taken on record by the Board of Directors
none of the directors is disqualified as on 31st March, 2007 from being
appointed as a director under section 274(1) (g) of the Companies Act,
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 31 st March, 2007;
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
2. During the year the Company has not disposed off a substantial part
of its fixed assets.
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 granted unsecured loans to one company covered
in the register maintained under
Section 301 of the Act. The maximum amount involved during the year
aggregates to Rs.27.48 lakhs and was repaid during the year.
(b) In our opinion, the rate of interest and other terms and conditions
of such loan are not prima facie prejudicial to the interest of the
(c) There are no stipulations as to the dates for repayment of
principal and/or interest.
(d) The Company has not taken any loans, secured or unsecured, from
companies, firms and other parties covered in the register maintained
under Section 301 of the Act.
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
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
(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 firms of Chartered Accountants at certain
places to do the internal audit regularly. The in-house internal audit
department of the company conducts internal audit at other places. The
internal audit system is commensurate with the size and nature of
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
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
31,2007 which have not been deposited on account of a dispute are as
Nature of Dues Amount Forum where Pending
(Rs. In lacs
Income Tax 518.95 Commissioner (Appeals)
Income Tax 418.19 Income-tax Appellate Tribunal
Trade Tax 110.24 Trade Tax Officer
Employees State Insurance 29.00 High Court
Employees State Insurance 7.06 Civil Court
11. The Company has no accumulated losses as at March 31, 2007 and has
not incurred any cash losses in the financial year ended on that date
or in the immediately proceeding 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
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
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
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.
20. There are no debentures outstanding at the year-end.
21. The Company has not raised any money by public issues during the
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 and
explanations given to us, we have neither come across any instance of
material fraud on or by the Company, noticed or reported during the
year, nor have we been informed of such case by the Management.
For R S Agarwala & Co.
Camp: Gurgaon Partner
22nd May, 2007 Membership No.F-5534